from a faulty there. ivan invites we may have vote as early as 10:15 and so that being the case, just to figure out how we will do it, we will recess and then come back after, immediately after the last series of votes. mr. fienberg has to leave by noon, but i'm advised we can have boats as early as 10:15 so with that i recognize mr. lamborn. >> thank you mr. chairman. thank you for the work you are doing. i'm not from a gulf coast state and i know they have some burning questions. just a procedural question mr. fienberg, and to to to stand for it to their testimonial claim determinations are made without interference from from the or bp. i know the department of justice has sent several letters making suggestions on the administration of the fund but does this mean the white house is not contacted you once about the fund since president obama announced this creation last june? >> that as greg. >> and as a is the follow-up would eat do with suggestions when people send them to you

such as from the department of justice or from whomever? >> we take, we take very seriously any suggestions from the department of justice, from members of congress, from interested citizens. we have made changes. based on constructive criticism. it is always constructive. we welcome it, and we do our best in this difficult assignment to move the process forward and improve its day to day today. >> thank you. mr. chairman i yield back. >> mr. holt is recognized for five minutes. >> thank you mr. chairman, and thank you pfister find burke and i appreciate mr. markey for clarifying that you are from massachusetts. who would have guessed? [laughter] and i thank you for doing work that i'm sure many days seems >> ahead of the gulf coast oil spill compensation fund says new guidelines will be issued soon

thankless and so, we have heard to allow additional aid for from many that the six-month louisiana shrimpers. kenneth feinberg testified drilling moratorium and economic before the house natural resource committee for two hours about the fund that was created impact was worse than the impact by the energy company, bp, to of this bill itself. but mr. chairman i would like to settle claims from the deepwater horizon spill. introduce in the record a letter from the baton rouge area foundation, which administered the 100 million-dollar oil rig workers assistance fund over which mr. fienberg i believe has >> the committee will come to order and the chairman notes the presence of a quorum which under no control, no responsibility and no direct association. i would like to introduce this rule three is to members. the committee on natural to the record. resources is meeting today to the oil rig workers assistance hear testimony on an oversight hearing on gulf coast recovery, fund was set up as you will recall to help individuals who worked on the deep water rigs president obama's sister be p. compensation fund and how is was that might have been affected by it working. under committee of rule for f4f the moratorium and experienced statements are limited -- that financial losses. to receive the assistance under any member wish to have an that baton rouge fund, the rig workers had to submit some opening statement do so before the close of business today and without objection so ordered. simple documentation, their w-2

forms, pay stubs, unemployment i also note several members from forms forms and so forth. the gulf coast that are not at the time of the moratorium, members of this committee have the fund expected that maybe requested an opportunity to sit on this committee on the dais 9000 workers from the deep water and ask questions during that rigs would apply for financial timeframe. we have got requests from assistance. in reality it was 357. mr. bernard of alabama and mr. miller florida and mr. -- 357 applications were completed by the rig workers seeking financial assistance or a total mississippi mr. scully solis and in ms. jackson-lee of texas and without objection, those members of $5.3 million in financial will be able to sit on the dais assistance. and ask questions at the appropriate time. without objection so ordered. you know, i am not saying that the oil rig workers financial i will now recognize myself for my opening statement and hopefully the ranking member losses are unimportant, i am will be here in a very timely just saying that it doesn't manner and i am sure that his appear that they are anything staff is frankly e-mailing him right now on that regard. like the losses that mr. markey and others were documenting in nearly a year and a half ago the fishing industry and the other associated industries. president obama call bp to the white house for a meeting that because over 90 million from the resulted in the president fund was still available, the personally announcing an agreement to establish a funds eligibility was expanded to individuals who were

20 billion-dollar presidential indirectly affected, or might bp compensation fund. at the time the president have been affected by the assured those affected by the moratorium's, support vessels, deepwater horizon disaster and oil spill that legitimate damages would be paid in a quote those who transport food or supply ice or supplies or whatever it is and during this round an additional 428 quickly, fairly and transparently last goodwin applications for financial president obama announced the assistance were completed. appointment of mr. ken feinberg is administrator of the compensation fund there was no doubt mr. feinberg at a difficult task ahead. so, if we just look at the the impact to the gulf's local numbers people who have applied economy as well as the to mr. fienberg and people who environment was very real and apply to the baton rouge area there are certainly many moving foundation, it looks pretty pieces involved in evaluating clear that the effects of the oil oil spill on tourism, on real damage to victims filing claims. to date, nearly 1 million claims have been filed by over 500,000 fisheries, are well, greater than the effect on the oil claimants while roughly 95% of all the claims have been industry. processed. process demeans rejected, >> i think you are accepted or turned back to the claimant for more information. characterizing it fairly congressman. the problem is i don't know how process does not mean age. that foundation in louisiana is of the over half a million

claimants that have filed claims with the gulf close -- coase treating not rig workers that these other vendors. claims facility a little over i have got 1600 claims that i am 200,000 have been paid, or sending to that foundation in new orleans, and it is not clear around 39% and quite frankly i have heard from many of my to me that the foundation is colleagues on both sides of the aisle in the gulf states that honoring all of those moratorium the numbers simply unacceptable claims. somebody should be honoring to the people whose livelihoods those claims, and i hope you are was disrupted by this disaster. right that the foundation is more receptive to claims that during the aftermath of the deepwater horizon we constantly are prohibited from paying, but i'm not sure that foundation is heard from president obama and doing as well as it should with bp, from president obama, that bp would be held fully responsible for the damages in all those types of moratorium the gulf. claims. i just don't know the answer. yet that does not appear to be the case with the claims filed with the compensation fund. >> real. under the terms of the agreement mr. landry just a moment. is there something we should be agreed to and announced at the doing to see whether that white house, bp appears to have foundation -- i realize it's not no responsibility further than a government foundation and is simply writing a check. not a government institution. is there something we should be doing to see that they are in president obama announced the creation of the compensation giving sufficient attention to fund he accepted bp's people who might be herding? $20 billion, held a press >> you might inquire and find out as you are with the gulf

conference in exempted the company of responsibility to coast claims facility just make certain goal families and exactly what the rules are, what small businesses remain whole. the eligibility criteria are. i know is i'm hearing from in announcing this fund, the president specifically heralded moratorium businesses impacted by the moratorium, -- that it was an independent body, countable of if no one am the sole responsibility of >> mr. chairman would you care to join me in a letter asking mr. feinberg. however, the congress has an for that information? i realize we can't demand it. i suppose we could. obligation to ensure that this >> we are going to have a lot of fund is operating properly and questions that have come out of this hearing i suspect, and i fairly so that the people in the will say this right now instead gulf remain whole for the harm of at the end of the committee, caused to them and that the economy of the gulf is to get we will continue to have oversight into this and i am back up and running again. more than happy to work with the it is not absolutely clear if gentleman. the fund is actually under the >> just sounds as if the effect really has been on these other jurisdiction of this or any industries. other congressional committee, i am sorry mr. landry. i intended to get to you but i and i is chairman appreciate see my time has expired. your willingness of mr. feinberg to, and to sit before this committee today. >> the time has expired. i recognize the gentleman from today there is a large hole in louisiana. proper oversight and >> thank you is her fienberg and accountability to ensure legitimate claims are getting appreciate your willingness to the attention they deserve, and take either the credit or that the process of the ministry discredit, whichever.

that is a model for us here in of payments is conducted in a timely manner. washington. there is an appropriate effort we generally have it 50% right in congress to direct an open here. we accept the credit but not the discredit, so we thank you serve transparent funds and i certainly hope and expect the for being willing to take the fund will comply. heat on that. just a couple of quick questions and it can be expected the committee will continue to to before i get into something properly conduct oversight into deeper. do you have or will you have a the process, payments and operations of the fund in order to ensure that there is a metric for satisfaction among people compensated? >> i have said from day one as with is with a 9/11 victim transparent and fair pay system. compensation fund, i would hope so this hearing than as an that at the end of this program opportunity to peer into that process that for the most part at least 90% of all eligible has flown under the radar of proper public oversight. individuals and businesses opt we are pleased to have into the program. i think that is sort of an mr. feinberg as our witness and objective measurement that i've i look forward to hearing his used i have used over the years and other contexts. comments and discover if there's >> but i mean will you have a anything congress can do to help questionnaire or a survey? make his job easier and get i mean obviously somebody might agree to something but not be deserving legitimate claimants their due compensation. and with that i yield to the satisfied. do you have any way of measuring distinguished ranking member that? >> maybe we should measure that. mr. markey. >> thank you mr. chairman very i'm pretty confident that people much. the focus of today's hearing is who accept compensation aren't to examine compensation fund set up for the residents of the gulf satisfied. i think that is human nature.

coast who were harmed by the bp >> i would ask that you consider spill. that again. is sounding like to me that however, we addressed that there may be money left over at question, think it would be the end of the day, and that instructive to consider what doesn't work when it comes to might be reason to go back and conference saving people affected by an oil spill. reopen just a little bit some of these cases. you mentioned fraud. the 1989 exxon valdez ran aground in prince william sound is there any prosecution or do you plan to prosecute people who alaska. a ruptured single-hulled tankers provide fraudulent claims? belched up to 750,000 barrels of >> there certainly is and it has been pretty effective. we have received out of 1 million claims, about 10,000 oil into the frigid waters, killing wildlife and harming the fishing industry. claims that we think are fraudulent. we have sent after we do an for the citizens of alaska who live near this bill, the event internal investigation with our itself was just the first part of an ongoing nightmare. anti-fraud team, if it still appears fraudulent we send it to the department of justice in the commercial fishing businesses shuttered, recreation and criminal division, lanny brewer. tourism dollars were lost. they have been fabulous were exxon meanwhile immediately king with u.s. attorneys in the entered into a position of gulf. they have indicted people. aggressive litigation rather than financial mitigation for there've been guilty pleas. there've been convictions i believe and they think fraud is the people affected. exxon bought the initial an ever-present concern. 5 billion-dollar judgment by nothing will undercut the alaska's courts for years all credibility of this program.

the way to the united states supreme court. >> thank you, sir. what i want to turn to in my remaining time is you may well in 2008 nearly two decades after the spill the supreme court finally held exxon accountable be aware that louisiana has been for about $500 million in the biggest oyster production state in the union. punitive damages to the victims and an additional 500 billion of 40% of the total yield has been interest on those damages. the litigation went on for so in louisiana. washington state is now taking long that nearly 20% of the this because it appears that it 32,000 victims seeking compensation had passed away wasn't this bill itself but the before the final ruling against downstreaming of freshwater that exxon. and to top it all off, the first has now changed this credit default swap ever created stemmed out of the exxon valdez salinization of the water in the beds which which were heretofore spill. perfect for growing oysters. jpmorgan, chase bankers created the now infamous as i understand that there is a financial mechanism to hedge their own viability after multiyear rebuilding of that. you have to recede the beds and staking nearly $5 billion in i'm not sure if i have all the credit to exxon to cover the terminology correct. can you kind of walk walked company's potential payouts. through that and see where we subsequent credit default swaps are. we do think they're a special went on to play a critical role in igniting the financial crisis issues on compensation. >> there clearly are special issues. of 2008. now let's take a look at the bp we treat oyster separately from any other industry. compensation fund. within two months of the start

oysters are different. of this the spill the president and what we have decided is that obama secured a commitment from an oyster claim, if somebody bp to set aside $20 billion to wants interim damage and can begin immediately calm and saving the american people and businesses affected by the show their media damage we will spill. pay it. if somebody wants a final ken feinberg manage the victim payment, if someone says to us we are filing a claim and we funds following the 9/11 attacks want a final payment and we will be gone, we give them four times and the virginia tech shootings and was asked to take charge of the fund and he was given complete independence to run it. their 2010 damage. and, if a claimant leases oyster i late august of last year mr. feinberg works epping claims ensign paying for lost wages and beds, currently harvested his -- other economic impacts. through this fund people were harvest oysters but has a lease compensated in timeframes closer to days rather than decades. in the beds themselves there's a special additional payment that we will make. we have tried with oysters to the exxon valdez led to the invention of the credit default recognize the unique s. that you swaps but with the bp compensation fund, the only reference referenced in your questioning. question is how quickly could >> the four times as a reference to the four years, that it takes this -- mr. feinberg find a way to deal with these issues? to build these beds back up and get them in no know back. is there any -- and this may be a little bit outside your

purview but is there any unfortunately, there were some who said that this fund evidence that the sailing accounted to a chicago style shakedown politics but in a content of that area is beginning to return to normal? >> outside of my bailiwick i difficult time in our nation's history when an oil rig sank to the bottom of the ocean and oil washed up on our shores, this think. the independent evidence at fund kept families and least from what i'm hearing in businesses afloat. terms of the oysters being good to eat and encouraging people to more than 200,000 residents and businesses have been paid come back to the gulf and eat those oysters, i think the roughly $5.5 billion so far this predictions are pretty positive, but i agree. year. thousands of new claims are i agree. still coming in every week as nobody knows for sure. people see their neighbors being it is an uncertain biology, and made whole. i've been quite critical of bp people who want to wait it out for many things associated with and see have every right to do the spill but here i believe the so. company did the right thing. >> alright. just one final question if i have time. and i really would like to how many lawsuits are out there thanked the work done by ken or how many do you expect at the end of the day? feinberg. i think it is a model for how >> i really don't know. i think, as a lehman reading the newspaper, think they're about tragedies basically bring out 130,000 lawsuits that have been the best in people and mr. feinberg you demonstrated filed, but i haven't checked to that as you did in creating the see how many of those that have

been filed havarti been paid ies climate that brought out the best and the people in the gulf of mexico and trying to resolve and release. so i can't come i can get you these issues as well. that information but i don't finally i would like to thanked have it at my fingertips. the chairman for scheduling the >> thank you and i yield back additional day of testimony that i and my democratic fellow mr. chair. >> thank you very much and members on the committee recognize the gentleman from requested on the bp spill and the governments joined in south carolina. >> thank you mr. chairman and mr. feinberg thank you for investigative team report the answering these questions here minority has requested that the for us today. it was interesting to hear that company invite the ceos of the you can't pay moratorium claims because i think that it's been a companies involved in the significant impact on the gulf deepwater horizon disaster, bp region with the loss of halliburton transocean and cameron. it is up -- we received businesses, the domino effect not just the oil rigs but the whole industry servicing testimony from the top executives from these companies oilfield servicing industries of is this committee evaluate the findings and recommendations in welders and pipefitters and the governments reported and i people haulers and food services thank you for working with us and it just goes on and on as you delve into it. mr. chair. >> i thank the gentleman for his i do know that from talking to opening statement and we have only one witness today. mr. landry the batteries we have mr. ken feinberg here foundation that pays the moratorium claims is closed now. close now. and mr. feinberg you are the the remaining money went to ministry of the gulf coast claims facility as both of us another charitable organization versus paying folks that were noted.

you have a very difficult task heard in the moratorium. and we look forward to your i don't have a unique specific questions and i want to yield testimony. you have been here before and the balance of my time to someone who knows this issue, you know it works about the same mr. landry from louisiana. way. your full statement will appear >> mr. feinberg how are you? in the record but if you could i am concerned about the hold your oral arguments to five moratorium fund because is it not correct, very short for my minutes, we will probably have votes before then but the green limited amount of time, that the light means you are doing fine fun that you administer, you in the yellow light means you cannot pay out to companies who have one minute and the red light means -- b. mr. chairman and i thanked the ranking were affected by the moratorium? is that not correct? minority. i very much appreciate the >> that is correct. invitation. >> okay so they have to go do a it took me about two seconds to agree to appear. 100 million-dollar fund. you have a 20 billion-dollar i think it is important that fund they think and i'm going to these issues be explored by congress and by this committee. visit with you because i don't have a lot of time but i will it is about my sixth visit to tell you that is a disaster as the house and senate i'm glad to be here to talk about the fund. well. let me give a few statistics the problem i'm having, do you which i think are very telling. know how many claims were in the 14 months we have settled in regards to the administered this fund we have shrimping industry that were paid to shrimpers who were received just about 1 million louisiana certified commercial

claims from 50 states and 38 fishermen? >> i can probably get you that foreign countries. number. >> okay because the concern i build it and they will calm. have is that once you open that there are some very creative fund, there was a blue light claims. we have processed 95%. special on white boots down in you are correct mr. chairman, louisiana, and to me, that not paid that we have -- allowed, that allowed people to claim that they were shrimpers process, we are current in processing 95% of the claims. that they were not shrimpers or it takes the initial contact to were not traditional commercial the claimant about 10 days to two weeks in almost all cases. shrimpers and of course i have heard stories where there were we have distributed over 5.5 shrimpers i got paid very little and there are hobby and lien dollars if you include outstanding offers we are shrimpers i guess you would call waiting to hear from claimants them, or tourism shrimpers i got it is closer to $6 billion in just over one year. paid a lot. and to me, it is very simple. we have paid over 200,000 people wildlife and fisheries in louisiana certified our and we have honored 380,000 commercial fishermen, but you all are not using that in the claims from all over the gulf of mexico. matrix when you all are paying as evidence of the success of out and that concerns me because this program, we received still it seems as though, when i go back on the ground, i continued every week over 2000 claims per

to hear stories of people who really need this money, people week, still rolling into the who have been in the shrimping gulf coast claims facility. industry for generation after generation that are not getting this on average demonstrates i the help, but the fly-by-night think there is a lot of support people are getting a check and in the gulf by residents who see maybe it is not as much as the that the program is working and actual traditional shrimper are filing claims. in the first three months, and would be eligible for, but you this is important, we paid over know, a five, 10 or $50,000 check for a guy who just puts up a troll in this boat, that is a $2.5 billion in interim emergency claims, no release concern of mine. can you address that? >> akin address of a couple of required, no waiver of any ways. first, we are paying commercial rights against -- a gift. shrimpers, large shrimp companies, individual shrimpers, where the claimant receive compensation and in return could we do not discriminate against sue, could come back to the fund commercial shrimpers. again and again. this was in the first three but i want to agree with you months during the critical emergency period. congressman, i think that if since then we have paid another there is one area where the gulf $3 billion to claimants in the coast claims facility has to be form of quick payments, interim more receptive and generous it payments, final payments.

we get the claimant a choice. is with the commercial shrimping industry in louisiana. 130,000 people have chosen a >> okay, so you said this a quick payments. second time and i appreciate that. the question is, what are you 63,000 people a final payment, going to do about it? >> here is what we are doing 30,000 interim payment with no about it. within the next few weeks, obligation and they can keep coming back as long as they can weeks, we hope to announce document the damage. rules, new rules to deal any praise about this program or any criticism about this program particularly with louisiana's really should he directed at me shrimpers. i have been down to new orleans and me alone. in the past few weeks to meet the administration has largely with the whole group of taken a complete hands-off shrimpers. one of them is here today in the attitude as the ranking member audience, and i'm listening points out. bp has in no way interfered with cusack to the point you or make you. i hear from them which is my processing of these claims. mr. feinberg we don't regret i am out there on a limb and if sure thing people who are shrimpers but we are the real it works, thank you and if it historical shrimping industry and the gulf and we think you fails, i would be at the brunt are not paying sufficient of that criticism. the claims not only in terms of attention to our -- of -- but in terms of complexity >> let they make this suggestion are apparently thing to anybody in the 20 seconds i have because who examines the program. you are a very very bright

now why don't we pay every lawyer and you have a great claim? reputation. there is an absence of it is simple, go go-go to documentation with many claims. wildlife and fisheries down in louisiana. nevermind no tax returns, no that is your client. they have the records. much of anything. you don't need to visit with we receive thousands of claims anyone else other than those mr. chairman with no proof, just a request to be paid. that are from louisiana, certified, commercial fishermen. sometimes claims come in from i would appreciate if you took massachusetts or minnesota or that and built that into your matrix and mr. chairman i yield sweden where there is simply no eligibility, i don't care what back. people attached. >> the chair recognizes the gentleman from arizona they are simply so far removed from the spill that the claim is mr. coffman. >> thank you very much mr. chairman. to tangential. we cannot pay by agreement when researchers discovered a potentially dangerous change we did not made an agreement following this spill and one of the most abundant fish marshes between the administration and bp. we can't pay government claims. i've no jurisdiction over of the gulf, an indicator many government claims. unfortunately i can't pay believe of the health of the ecosystem which may indicate the moratorium claims. now this is unfortunate. presence of a much larger we have got 1600 moratorium problem. claims. in fact, researchers concluded i have to send them to a special that there maybe some of the moratorium in no new orleans set same early warning signs that we up by bp. saw in the years following the i've nothing to do with that and exxon valdez oil spill in alaska it is unfortunate but i can't pay those claims.

in terms of transparency, 1500 before pink salmon suffered population, severe population people unhappy with my decisions declines. if in fact there are those either as to eligibility or ticking environmental time bombs, it may lead to damage, have gone to the united states coast guard under the oil longer-term impacts on fish and result in future losses by pollution control act and asked fishermen and shrimpers. the coast guard to review my claim and make an independent can they be compensated in the determination. in every single case, everyone, years to calm on the assumption the coast guard has agreed with my determination, so i think we assumption -- if this ticking are doing something right. clock goes off? >> that is an excellent in conclusion, the program is question. we are around, the gulf coast not perfect. congressman bonner is here, my claims facility until august of most constructive admired clinic 2013. and congressman bonner knows so, alleged damage between now better than most the program is not perfect. and then caused by this oil, by we are doing our best. my final point and i'm done, the verizon explosion, people compensate. want to reiterate what we will also -- daily weekly congressman markey said. there has never been a program monitoring what the experts tell like the gulf coast claims facility. us about the impact of the i know in my experience of no spill, as you point out. so when we make a final offer in

example. president bush did get the 9/11 victim compensation fund enacted some 60,000 individuals and to his credit, but that was businesses that it accepted the public taxpayer money. final offer, we are trying to factor in with the best experts this is the only program i know of in history where an tell us about the future. administration succeeded in if somebody doesn't agree convincing a corporation to admit wrongdoing and put out congressman with our estimation $20 billion. of long-term damage, they don't it isn't perfect but i think need to accept a final payment. overall we are doing our job, we are delivering on the president's promise and i'm 30,000 people have accepted an proud to be here today. interim payment for immediate damage and they want to wait and see as you point out, what the >> thank you very much mr. fienberg for your testimony and now we will try to get future holds and then they come back at that time. once august 2013 expires, there through these questions here. is no more gulf coast claims i just have a couple of them and you alluded to the fact that, facility and they will have to alluded to the fact that i just go to bp itself. >> and so after 2013 if there want to make sure there has been no oversight from the white house at any time since the are still impacts being felt or june 16 when this fund was impacts that it have developed in that interim, the source of created and so forth. is that correct? >> that is largely correct if you say the white house. their making themselves hole in some ways would be with the

the department of justice monitors what i'm doing i am company? doing just like bp monsters it >> or a courtroom i guess. >> one other point if i may, that often has suggestions like sir. for those people that have been an independent audits but there harmed by this spill, is new is no oversight as to how i true that the documentation decide individual claims that requirements in place to receive appear before me for processing. compensation from the claims >> in that regard and this is fund are much more inclusive than it would be in a court probably them more speculation, but it would be interesting to proceeding? when you say inclusive, think we hear what the responses. are much more liberal and much in hindsight and since hindsight more generous in recognizing a is 2020 and he said this is a valid claim than would be the unique fund, do you think, let's case in court but that could be argued i suppose. i'm confident that we obtain hope we don't have to go through this again as another disaster claims on a record that is much but his is a proper model? less rigorous than would be >> that is for policymakers to required in a courtroom. decide. i would say that at least with >> i appreciate it. the gulf coast claims facility you back. mr. chairman, the united states >> the gentleman yields back. coast guard is at least there mr. flores from texas. >> mr. feinberg thain for under the federal oil pollution joining us today. i'm going to yield the first control act to review any one of four minutes to mr. landry and ask him -- nevermind i'm not my claims determinations. going to yield to him. but i think it is relative, this in any event, i want to thank you for your candor in the buck congress 10 years ago you will

recall when it enacted the 9/11 stops here statements that you made. that is in the words of mr. fleming, refreshing here victim compensation fund and we enacted it six months ago during the lame-duck session expressly around washington d.c.. i have a couple of questions. i noticed in going to the prohibiting any oversight without fund. expressly, said you cannot go to statistics, the metrics you included in your testimony, that the board to review 9/11 there are 17,000 claims that determination so everything is relevant but i must say it is problematic when one person is were all for final settlements that were offered but were not accepted. what happens with those and can delegated this type of authority you tell me roughly, does that mean that the offer he did not with limited oversight so why accept them or you rejected share your concern but i leave them? that to the policymaker. what does that mean? >> we are have a debate in this >> most of the 17,000 final country on whether the claims that were not accepted, definition of a dictator is and they have 90 days to make a decision. maybe this falls under that i will bet you the great bulk of category. you mentioned the doj and part those 17,000 claims are within of that interaction has been an the 90 days period and the claimant hasn't decided yet audit. when can we expect to have the results of that audit that you whether to accept the final offer or not. have agreed to be made public to if they don't want the final offer, they don't have to take us? >> that independent audit timing it. should be directed to the they can take in lieu of that, department. and interim payment for their the department, not the gulf coast claims facility is going immediate damage and come back to determine who that auditor

and every quarter and seek should be and how quickly that additional compensation. process will begin, but i will say one thing. ultimately, congressman, if they you can't win on this just can't get satisfaction, independent audit. i know that on the one hand, they ultimately always have the right eventually to get to court there is a request for members and file a lawsuit as if the of congress and others to get that audit going. correct, i will come the audit. gccf had never been established. >> how many of the 17,000 have we should do it as fast as possible. on the other hand, as many of actually gone to litigation. you know there are interest >> very few. groups, elected officials in the i know that about 1500 gulf, lawyers, organizations, individuals were dissatisfied all clamoring for some input with what we decided and went to into the nature of the audit, the coast guard. the coast guard independently the scope of the audit, and much reaffirmed that we had done. of that input has just arrived now how many of those people who at the department of justice didn't get satisfaction from the this month. so on the one hand, speed and on coast guard then went on to file the other hand a demand on the a lawsuit i do not know the part of interest groups to answer to that. >> it looks like a process is participate. i think the department is moving working. 1400 claims that folks didn't as fast as they can considering like when the coast guard upheld it doesn't want to be accused of delay and on the other hand and what doesn't want to be accused so it looks like you are doing of high handedness i think that all right. i'm going to yield the balance

of my time to mr. landry. is something not to be >> thank you. addressed. i think this is important >> when exactly was the audit because it has come up twice. requested? my question to you is, if the >> was at july of this your or last year? claim process is dragged out, >> occo now, this year. i think the audit was requested for the first time i think around august of a few months there is a prescriptive period by which those claimants would have to file a suit in federal ago. court against bp if that is >> okay, good. thank you very much and i correct. >> yes but i think that recognize the ranking member. prescriptive period is not a >> thank you very much. barrier. i think bennie people have made that filing in court. mr. fienberg, can you briefly lay out for us what's what the >> how would they? are you saying that there are situation is with people who people who let the made the live decided that they would application and still filed? rather litigate than move >> i think there are many people, many thousands of people through the compensation fund? >> everybody has a right to who f. filed with the gccf and filed with the court as well. litigate. in fact, claimants come to the >> wind you believe that prescriptive period actually fund. ends? in louisiana that would be a if they don't like what they see tort claim, is that correct? in a way of my determination so >> again the statute of limitations i don't know what that determinations of the gccf they have a voluntary choice to the period period is in opt out and head to court louisiana. >> in louisiana it would be one year but my question to you is through the united states coast in your legal analysis, with guard after the coast guard

reviews as they want. they ultimately have a right to go to court. that period have expired already now, the first trial, the first because -- trial arising out of the >> no. anyone who presents their claim i think under the oil pollution control act and i'm not an explosion is scheduled for february of 2011 -- 2012. expert, but i think ultimately they preserve their right to file a claim in federal court. by that time, i will have already, the gccf would have >> and so the period when they come to you in the fund, q. say distributed in the vicinity slightly over $6 billion, and i give say that the prescriptive period is the timing is must say a first trial in february of 2012 is miraculous. suspended? >> either suspended or extended so that they are not going to be i think that what the judge has precluded from filing but again done in new orleans and what the i want to emphasize i'm not an lawyers have done in expert in how you litigate accelerating the trial schedule federal oil pollution cases. is a real tribute to them >> mr. chairman toomey that is the biggest concern is that frankly. there are people out there that they pulled it off. as they try to navigate their still, implicit and congressman markey's question, we have way through the complex legal system and what i think is somewhat of a complex application to the bp funded between the explosion and the date of this first trial we will mr. feinberg administers is that have distributed over $6 billion. >> so how long in contrast to going to court and of the first time is moving against them and

i would hate to see that at the case doesn't begin until end of the day, and i know february of next year, how long does it take for it to work mr. feinberg would not set up a system by which claimants would through the process with you? or just drag on and on and on to >> on average, the claimant gets an initial determination, a the point where we get to the point where they lose their response from us within two right to court, but only because they have done what he and bp weeks. 10 days to 14 days. it wasn't like that at the and the a lot of us have asked beginning. as congressman bonner will i'm sure will remind me but we have through that process. so that is a concern greatly accelerated this process so it claimant has the file. mr. chairman. i yield back. >> you have 22 seconds. it seems in order, we can cut >> i yield the balance of my you a check, here are your options, we need more time. information, but we have greatly >> next when the gavel dropped we had a nonmember the committee shortened the time for an here and i'm going to recognize him, mr. bonner, for five initial contact with the minutes. >> thank you chairman for allowing me to be a member of claimant. the committee. >> okay, so earlier this week i voice wanted to be and i'm abc news returned to the gulf of glad to fulfill that promise today. for the record, as has been mexico to interview shrimpers affected by the vp oil spill. noted i've had an opportunity to have a lot of experience with when asked about experiencing mr. feinberg and, while there the has been effusive trays and at

times even sympathy for the task he has been assigned, i would provide everyone that mr. feinberg -- $1.4 million a month. >> 1.250. i just lop top 150,000. >> regardless it is a generous amount of money to administer, and while it is sick obligated process i think mr. feinberg is realized it is even more competition than the 9/11 project in many ways with 1 million claimants. it is not a perfect system. if anything, it is a very -- in so many promises have been made by mr. feinberg himself to people who live along the gulf coast not just in alabama but louisiana, mississippi, florida and texas. so many broken promises and foresight so i'm grateful for the opportunity to be here but i will obviously have our

questions than will be time for and i would lie to ask and i mentioned to this to the chairman. if mr. feinberg has no objection i would like to invite the people who live along the gulf coast to take advantage of this time where we traditionally have i want to say one other thing. i think we have to do better by five days for additional questions for the record that the shrimpers. i was down in new orleans last week and we are now reviewing ways to make the probe i'm even mr. feinberg would respond to. i would like to get people who more generous for the shopping live in alabama chance to have met with me before and who were industry in louisiana in promised certain things and they particular. >> okay, so the indications are didn't get those promises that this is a real, real fulfilled, would you have any objection to letting us get catastrophe hitting the shrimpers down there. those questions submitted to and it seems to be related to you? >> no, i would welcome it. >> thank you. a couple of questions. the spill. now, if this continues next vice president biden said the year, the year after, what $20 billion is a floor, not a happens to the shrimpers? ceiling. out many times can they come is that correct? back in order to be compensated >> that is correct. >> let's just rounded up, for what could be damaged that $6 billion. goes on for years? how much do you think before august the 2013, based on the trends you have seen thus far, >> gccf by agreement isn't around for years and years and how much you think you will years. it expires automatically in august of 2013. exhaust?

>> i would be reluctant a shrimper, a shrimp company are congressman to take an estimate of that, but i remind you as you an individual shrimp company can know, that $20 billion is used decide, i am uncertain. it seems that it is not going to for purposes other than the gulf come back, as you put it. a shrimper can decide to file coast claims facility. interim claims, take a check local cleanup costs come out of the 20 billion, government from the gccf, wave no rights, claims that are being paid in alabama by bp comes out of the keep coming back until the 20 billion. so i can't venture a guess as to shrimper either has a sense that it is okay now or we have want a how much the total amount will be that will be spent. final payment, or the shrimper i would like to think that the can take a final payment, or 20 billion would be adequate to until the program expires in the shrimper can of course go to compensate eligible claims, but court if the program isn't extended. bp has made it clear that if >> mr. chairman, mr. fienberg is 20 billion is not enough, they from boston massachusetts, the home of rocky marciano and while will honor all additional he doesn't shy away from a fight financial obligations. >> you also indicated that you were independent of bp. mr. fienberg, he actually tries his best to find a peaceful your quote in july 2010, i work resolution or every one of the issues that he has been with the people of the gulf confronted with not just here region.

but in the 9/11 fund in all of i am totally independent the other very tough situations although the federal judge has now questioned that. that he has been tasked with trying to resolve. i want to try to maximize as much compensation as i can fairly and consistently to the >> marciano was 49-0 so it people i'm trying to serve down sounds like he didn't back away there. do you still stand by that statement? >> i do, and a. >> but does bp not have the final say of these large settlement claims? do they not have to approve or disallow? >> absolutely not. absolutely not. what bp can do under the protocol, if it so desires for claims that are over -- overpaid by the gccf and amounts of $500,000, they have the right to seek to appeal if they want to a three-judge panel that was set up not by me, but was set up to review the claim. bp to my knowledge has exercised that right in one single case. >> well, that is not the information we have received but we will take that up separately. u. of also indicated in an answer to an earlier question

that there is basically 1% of the claims that are fraudulent. is that right? >> we have received i think i have got this. we have received what we think are 14,000 raw chile claims and we have sent 2800 to the department of justice. >> regardless, data we got from your own web site, the auditor and accounted in my district has collected every day to compare shows that 116,000 of the 331,560 claims processed have been refused payment which would mean 35% of the claims have been refused payment. according to your date are you stating that 35% of those that have been refused payment or because of fraud? >> no, not at all. if we have refuse claims, could be for a number of reasons, no documentation, insufficient documentation, ineligible. it might be a claim from idaho,

i don't know. i am just throwing this out. government claims are ineligible. moratorium claims are of course ineligible. there are all sorts of reasons that we either denied claims or dean claims to be deficient. >> thank you mr. chair. ..

we received more claims in a week than we received in the entire life of the 9/11 victim compensation fund. -year-old and a 2 of the claims will result in some inconsistency. it is inevitable. what we do when we find in consistency, either we find on our own or the claimant bring that to our attention or the client's account or lawyers bring it to our attention. we will look at it. if we made a mistake, if it is inconsistent we will pay the difference. we are not looking to promote inconsistency. it is a problem we don't want to have magnified. >> i yield the balance of my time. >> thank you. i have a few more questions. according to data collected from your web site everyday and

analyzed individually by the medical doctor and city officials in alabama, 95% of the claims that have been processed and reviewed, 54% have been processed issued for final payment, 46% have not received final payment. 69% paid of the quick paid for a variety that require no additional documentation to process. 3% pay for the final payment. i throw those numbers out because basically you would lead us to believe that this has been a success because so many people apply. 2,000 we continue to apply and yet is it not true that the burden you have placed on many of these individuals and businesses for additional requests for information even when they submitted their claims

with certified accountant and shown the documentation, that there has been great inconsistency in the payment process and more people were not paid and have been paid. >> i don't think there has been great inconsistency. that is why you are promoting the notion of the independent audit to get some answers to that question. i think the people that take a quick payment take a quick payment because they don't have any additional documentation to show or have already been adequately paid during the emergency payment period. i point with pride to the fact that overall almost $6 billion have gone out in one year. we are doing something right. when you say people are applying 2200 new claims a week because they are being tricked or deceive i don't think that is

the case. they see their next-door neighbor getting paid and they file a claim and make the same argument and hope they get paid as well. >> you mentioned audit. i contacted you in the spring of last year and asked you to initiate an audit on your own and i don't believe the qaddafi agreed to do that. we had the appropriation bill demanding an audit requiring the justice department to do it because the assistant attorney general who came to our district realized this was not adding up as intended and even the attorney general when he was along the gulf coast earlier this year, then contacted mr. feinberg and said an audit is necessary. this has not begun yet.

they are not even named to do the audit. >> that is correct. i just want to say i don't speak for the department. the department will choose the auditor and move your demand. i want to point out the independent audit it is my understanding. i mentioned this earlier. on the one hand there is a demand for department move forward with great speed to get this over do. on the other hand the department as i understand it from letters, copies of which i get, there are various public interest groups, lawyers, elected officials who want input into that process and some of them in the last few weeks got to the department with their suggestions so the tension between speed and inclusiveness is partly the reason there has been a delay in your view. thank you. >> we have less than ten minutes to vote. if you look at the number of

people that haven't voted we have more time than that. i will recognize mr. whitman. this will be the last question and then we will recess. the time of getting back here is approximately 11:30. we only have a half-hour or so. for those of you that want to engage please get back here after last vote. you are recognized for five minutes. >> mr. feinberg, i want to follow up on dr. fleming's assertion about the worst industry in louisiana. as you know the united states this year be its shallow oysters and interconnected processors in one state rely on harvesters and dealers in other states to have their market needs met in those areas. the mid-atlantic is part of that. you heard this nonsense about west coast also. in that vein there are processors out there that have

these relationships with producers that have contracts that have to deliver a certain number of wasters. in this realm of you considering claims, is it reasonable to consider a claim from somebody that processes wasters in virginia that relies on those oysters from the gulf as a legitimate claim under your process? >> absolutely. if there is a direct link between virginia oyster processing company that depends its livelihood on gulf coast shrimp by all means i can go back and see but i am sure we paid some of those claims. in maryland we are paid a couple of oyster restaurants that we paid that were dependent on gulf shrimp for their livelihood. we say that the seafood industry is interconnected with shrimp and oysters and in some instances even fish. to make sure you are keeping in mind the impact of secondary

impact on states and producers is critical. i would like to yield the balance of my time. >> thank you for allowing me to sit in today. mr feinberg, i share the same frustration as other gulf state colleagues have expressed from bonner to congressman landry. we are frustrated. we are tired. many of us feel hopeless in the whole process. we also feel in salted. we have some very smart people. we have accountants and lawyers trying to help people along the gulf coast provide claims and support and documentation. as they do it they feel like they are given the best information, the claim center once and is still reject it or there are delays in processing

so the comment congressman landry made is stonewalleding to drag it out or not pay out the $20 billion which was supposed to be the 4. not the ceiling on making sure those effected by the worst man-made disaster in our nation's history hold again. but people don't feel like they see inconsistency. they -- a perfect example is omega protein. a large company that got a $45 million pay out in their first year and when you have shrimpers and charter boat captains and others who have made a living for generations off of the gulf coast have yet to receive a first payment or payments being offered or insulting and embarrassing and leaves them with the option to take what they can, cut their losses or go to litigation. people in mississippi litigation is the last thing we really like

to go to suppose some people will go to it. the main thing is i am expressing what south mississippi and my colleagues all along the gulf states, this is what we are seeing and feeling. going forward, you have $14 billion left. give these people -- you are going to send out a massive bailout. if you have your paperwork come in and keep communicating that to the public and letting people know they can receive reimbursements or they have the right to come in and do a claim. also listen to the people who have made living out of the gulf war made a living the fifth court six or 7 generations if your methodology for reimbursement is not acceptable to them try to come in and find common ground.

find that place because these are the experts. i don't expect you to know how to reimburse. you probably have an idea but that is not what you are doing especially going to the cities and municipalities that is not in your range but you have been on ground zero for a long time. the methodology being offered cities and municipalities are in solving. the city was offered $79,000. may be $79 million would be acceptable. $1 per resident. i share the same concern as my colleagues. i appreciate the chairman allowing me to come in. please take that home and make it right. >> i thank the gentleman. for quick question. i am sympathetic to mr. landry on this shrimping question. the question of how we deal with these fishermen. this is a huge unprecedented

science experiments that took place with bp dumping all the chemicals in with the oil and now we're seeing the worst shrimping in 40 years. if it continues past 2013 my understanding is after 2013 all the money goes back to bp. do you have a recommendation to us in terms of how to handle an issue like that given that the science might be pointing to longer-term economic catastrophe brought to shrimpers and that the funds in 2013 -- do you have any words of wisdom how we should handle it? >> i would say two things. one is what happens after august of 2013 is a subject that the congress should raise with bp and are suppose the administration which is part of that escrow agreement. as you pointed out, congressman,

this is a rather unprecedented situation. bp in putting up as you pointed out this $20 billion is a rather unique contribution by a private corporation to try to create a system that is not required by existing law. i think bp deserve some credit. >> i am giving them credit. i did that in the opening statement. it is only what happens given the fact that there is a causal connection between what bp did and what could continue to be happening in the gulf in 2013-14-15 in terms of ensuring there is some capacity to compensate people of the hardest occurring in a significant way particularly for the fishermen. >> one option would be if bp ones to extend the deadline of the program past august of 2013 or the foreseeable future that is something congress might

raise directly with bp. >> we are going to break and i will simply sarah reference this in my opening statement simply this is unprecedented and repeated several times but the fact this initiative did come from this administration without any semblance of oversight is somewhat problematic and this is maybe an experience of something in progress. we will have to see how it works. we are getting close to votes. mr. feinberg, we anticipate the votes will be done at 11:30 and we will reconvene at that time. please stand for recess. [silence]

[silence] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> usually what we do is post it on the web site and invite comment. [inaudible conversations] >> everywhere i turn the shrimpers -- the elected officials are concerned particularly about the future of what shrimp harvesting in louisiana area, that is where

we're hearing the most. it is rather unanimous. we have always said in the gulf coast facility that we will monitor events and reserve the right to modify our methodology as we learn more about what is going on in the gulf and this is an example of the committee. something to be said here about doing something about the shrimp industry. >> have they not been fairly compensated? >> i think they have been fairly compensated and a problem is we are hearing now in 2011 that what we have seen in the way of harvesting is problematic. >> in regards to the independent audit, you expressed support of doing that. does congress have to approve that? i am sorry if this is a question from someone who has not been following this closely but has this been started or is there

any idea -- >> i am waiting for the top of the justice's decision as far as to how -- it is the department's call. >> are you expecting that? >> if you are a shrimper that except a final payment can reapply? >> you thought was the right thing to do you released it. >> the shrimpers -- >> that is one of the problems. i want more from prison the system. >> leftover money from 2013, this money left over to congress to deal with. >> leftover money in the congress is congress's. >> the administration and bp signed and escrow agreement. money that is not extended of the $20 billion -- >> if congress wants to do something or someone wants to change where the money goes it would be the administration or

congress. >> i would have nothing to do with that. thank you. [inaudible conversations] [inaudible conversations] >> the chairman notes we have a quorum and will resume. we thank you, mr feinberg for hang in with us. we are back in session. i believe mr. sutherland, you are up for five minutes. >> thank you. mr. feinberg, thank you for

coming up. i have some questions i called you several months ago and you were kind enough to discuss my concerns on the phone. some of -- some follow-up on the dialogue -- can you hear me ok? okay. i want to ask as far as determining how do you determine loss based on the documentation that you have required and should require in order to pay a fair claim to restore the damage small-businesses have incurred. talk to me for a moment about what your examiners look at as far as how far you go back and if someone asked you this question i apologize.

addresses that for a moment for me. >> we will look, congressman, to income statement, wage statement free still. we will go back and look before the spill in 2009. will look at the beginning of 2010. inappropriate cases 2008. we will try to get a composite picture. what was this small business doing before the spill. what did the trend look like. how were they doing? what does it look like toast still? sometimes a business will say be careful. that was during katrina and that is a bad example and we will take that into account. we try to come up with a fair picture pre-post. >> if i may address that little deeper. are live in panama city, florida. one of the larger coastal

communities along the gulf coast. we had a significant event that occurred in the history of not just our county but our region. we opened our brand new airport in bay county just a month or so prior to the oil spill. the reason i bring this up is that was done in 2010. the ten years preceding that as you can imagine, incredible effort to get this project done. there has not been an airport built from scratch since denver. it was a pretty big deal. we have bounced back and we have bounced back soundly. 2011, taxes were great, businesses were starting to recover and really had a wonderful year. i could make an argument that

you have to factor in 2009 and 2011 if you are going to determine what 2010 would have been like with that significant event. what we have done in securing other airlines into that airport, delta and southwest, airlines we never enjoyed, i can make a pretty good argument that if you just look backwards and not forward then the small businesses that will file those claims will not have the benefit of the doubt of recovering a fair and equitable amount of money. >> these small businesses out to have you representing them. we welcome that type of dialogue to try and get before the gccf, to try and get a good, fair composite picture. let me just say it sounds to me that is probably if it is an

airport damage claim it is probably a government claim. if the airport can show it lost revenue because of the spill because people didn't fly in because of fear of the spill that sound like a government claim that i wouldn't handle. >> we have been meeting with bp representatives regarding government claims and that is another effort for the office. i want to say that our small businesses can have especially around the geographical area of the airport, it's served multiple counties. i have walton -- i am pleased to hear you say that. >> if you want to convene that group or you want me to meet with a group that can explain the situation and make sure we do it the right way i will respond immediately to your suggestion. >> we will do our homework and try to gather those individuals that have that concern and reach out to your office. you will hear from me.

i yield back. thank you. >> the gentleman yields back. you have one more question? >> mr. landry retains -- [inaudible] >> mr. landry, you are up for five minutes. >> i want to go back and clarify a couple things. i noticed directly your responsibility but going to the moratorium, that fund is being closed off. is that correct? you have -- >> until i heard this morning the representation that was closed off i didn't know it was closed off. i doubt that it is closed off but i don't know. i have enough problems of my own with the gccf. >> the problem i am having is to

me it concerns me because i believe the oil and gas companies and fishermen and everyone else, the moratorium was a direct impact from the spill. so there are a lot of businesses directly tied to the oil and gas industry or indirectly tied to the oil and gas industry have been impacted that were impacted by the moratorium and i am concerned that they are not getting paid as well. i visited an oil and gas company, business is down 75% and yet when they send their information over all of their accounting information, they were denied. that falls into or dovetails into another problem that mr.

bonner alluded to. i am hearing across the gulf coast from people who applied to your fund that when they check in, when a claimant checks in and says where are we? we lost some paperwork. could you resubmit this? could you resend this to us? what i am telling you is is too coincidental that the person in louisiana is having the same problem as the person in mobile or pensacola when it comes to the gccf losing their paperwork. it doesn't happen that coincidental. i know that you have set up in louisiana the long law firms that assist people in trying to put their paperwork together and that helps as well. but it just seems like the process is taking away, wade too

long. >> three and his. one. there is no misunderstanding here. i share your concern over the moratorium claims. i wish i could pay those claims. i have no jurisdiction from day one. you are preaching to the choir. i think have 1600 claims that are would like to pay and i can't. >> do you move those to the other fund? >> are move them to the other fund that as far as i can tell it has shown no inclination in paying these claims because -- has congressman holt pointed out an hour ago even if the memorial fund will pay some of those as he cited, they will not broaden it sufficiently so are amish sharing that view. second, we are not losing any paper. when we started congressman landry, when we spoke over for

bp last summer into the early fall paying the emergency payments, transitioning from bp paid acclaims over to the gccf taking over, then we did but the idea that we processed 95% of the claims, the idea that we're losing paper. i don't buy that. >> i don't believe people in the district are being disingenuous as well. of course i have seen a lot of times when we're being told in washington and with you being told in boston is different from exactly what goes on to the ground. i would just put in a request that we look for it in both -- with mr. holt and mr. marky and

chairman hastings that we look somewhere in between. maybe we will split the difference between florida and louisiana. feinberg, if you would come with us and we could hear directly from before we put you up, we will give you the benefit of the doubt and put them up and listen to them and bring you on and somewhere in the middle we will find what the truth is. >> i have received since we took over last august sixty million pieces of paper. it is conceivable. i would suggest if there are particular constituents who claim lost the arguments you get me their name and claim number i will personally get back to you with the status board of those claimants who claim losses documentation. the other thing i want to mention before you depart, i checked during the break and i have an answer for you. if somebody files their claim

with the gccf, they are protected by the federal statute of limitations. >> thank you so much. that is important. thank you so much. i yield back. >> the gentleman yields back. next is mr. holt for five minutes. >> thank you again for the work you are doing and no one here is surprise you are a good witness and very forthcoming. we appreciate that. to some extent following what mr. landry was talking about, if there is money remaining in the fund that hasn't been extended by 2013, what happens to it? do you happen to know although it is not your responsibility, what about the moratorium relief fund? this baton rouge foundation

fund? what happens to that money? does it go back to bp? if so, what are the safeguards built into the system to prevent what would you call it? an intentional tendency not to give it out? >> you ask the same tough questions you did when we were doing the 9/11 fund and i thank you again for what you did ten years ago. ten years ago to get those new jersey constituents to understand how of the 9/11 fund worked. during the break i checked on this because i wanted to make sure i am accurate. in august of 2013 when the gccf was ready to close by agreement between the administration and bp there are three independent trustees in charge of the

overall escrow, $20 billion. if those trustees conclude that there are more than $1 billion worth of claims that appear to be outstanding even though they are beyond 2013 they have the power to keep the fund open and every six months those trustees will review the state of the claims. only if the total claims fall under $1 billion will that money then revert back to bp. so the independent trustees have some say. on the one hundred million dollar moratorium fund my understanding is that is forever gone from bp's dominion. they have no control over it. where the $100 million is used for $20 million is used, that

money is going to be distributed by the trustees administering that fund. that money will not go back to bp has are understand it. finally if anybody in my day to day administration feels that i am not spending the money the way i should, that a claimants feel they are not being paid adequately they have the right to check their claims to the united states coastguard and have the coastguard do an independent review of how our rules on their claim, 1500 people have done that and the coast guard has agreed with the gccf every single time so far. >> thank you. just to be clear, to whom the money would return if there was money left over,

fewer than $1 billion of claims remain they have no say in how it is administered so there's no hidden bias for them to hold onto it. >> absolutely correct. >> could be p, apart from the trustees ruling on whether there is outstanding billions of dollars could be pea voluntarily keep alive your function? >> i think they could. bp would technically need the support of the united states government to do it but that is up to b p. i must say as congressman markey whatever criticism one wants to level at bp i know of no case in history, i can't think of one where a company voluntarily put up $20 billion to resolve claims. i think the criticism ought to

be tempered by the fact that this is a rather extraordinary -- i think the administration just as the bush administration was able to promulgate this 9/11 victim compensation fund ten years ago i think the administration in getting bp to do this was a major positive step. >> thank you. with the chair's indulgence for 15 seconds the reason i am following this line of questions, the shrimping grounds, that looks as if there will be hard times for years to come. we want to make sure people aren't left out so to speak in the cold. a fairly warm climate but you get my point. the shrimping industry and perhaps others look like they

will be hard hit for a long time. thank you. >> the gentleman yields back. the chair notes we're up against a hard time soon and it is going to work out perfectly because we only have one of your questionnaire. my colleague from louisiana has five minute and that should get us out right on time. >> thank you, mr. chairman. appreciate the courtesy of the committee to allow me to participate and i think mr. feinberg for coming and have a few questions in five minutes. when we talk about the trustees, who appointed the two trustees? >> i have enough problems. i am not sure how those trustees were appointed pursuant to the escrow agreement. was between the administration and bp. >> we will try out specifically how that came about. when we talk about the agreement

between the administration and bp an earlier question by mr. landry who ask about issues related to the moratorium. people who have not gone back to work because of the lack of timely issuance of permits and you said if you can't pay those is there something in the agreement between bp and the administration? >> when the gulf coast claims facility was established it was understood whether it is in writing or an agreement between the administration and bp or bp unilaterally declared this before bringing me on board that the moratorium claims would not be part of my jurisdiction or with government claims be part of my jurisdiction. >> a few months ago i asked you for detailed information and broken down metrics on claims paid out and claims rejected. i was able to get some of the information on claims paid out of the right didn't get it broken-down by state and region and that was one of those things i requested. i would like to ask about that and we were not able to get

information on claims that had been rejected. >> i have your staff take a look at attachment b on my testimony today which breaks out the overall statistics by state including the we see an and under louisiana how much has been paid out and how many denied and accepted and how much paid out. >> do we have that by industry so we want to go into seafood processors? that is my next question. >> i can get you that. don't even send me a letter. have your staff e-mail me and i will get you that information. i do know that approximately as of the middle of this month $1 billion in the aggregate has been paid to the seafood industry but i can get you more information. >> i am sure the e-mail has gone out but the specific request we want to know within the seafood

industry how is it broken down by region and if you give it at the state level but if possible even at the local level. >> i will try to get that to you. >> the complaints we are getting from some shrimpers that have processing facilities and some brought more people in advance of the macondo well explosion and had severe layoffs, still dealing with severe problems from the industry not coming back. you met with a few individually and they have not been an answer. can you tell me what the holdup is with shrimp processors? may be just southeast louisiana. other colleagues might experience along the gulf coast too. >> we have processed and paid plenty. i can get you the numbers as you requested. from processors and harvesters and the shrimp industry but you are absolutely on to something

here. earlier i mentioned this. up and down the gulf as you know to your district it is clear that the gccf has to be more responsive to the shrimpers. there are a lot of shrimpers that haven't filed a claim yes with the gccf because they are watching and waiting to see how the gccf will treat the shrimp industry. you have been very constructive and very vocal with me about the need to do something about those shrimpers. we will in a matter of weeks take another look at how we deal with the shrimpers but i assure you that your concern about the shrimpers is not going unnoticed. we are going to try to find a way to be more generous towards the shrimpers in louisiana. >> i will continue to work with you because there are a few specific shrimp processing processors who filed a formal

paperwork with gccf and have not gotten an answer yet. i will push to make sure we get those results that may provoke others to get involved. only a couple seconds left so i will give a plug for the restore act because this is a separate issue not in your shop but all five gulf coast state of come together in the house and filed legislation a few weeks ago that would dedicate 80% of the finds bp have in the water act to allow us to restore environmental and economic damage not covered by your operation that we may have for years to come. >> if you can get me the name of those shrimper's i will look at those. no one is a more constructive critic than you. i hope to continue to work with you. your people have been very forthright and i appreciate your concern. >> that will be included in the e-mail. the other one went out but i appreciate your coming before our committee and appreciate the chairman and members for their discretion and allow me to ask questions. >> the gentleman yield back.

mr. feinberg, we have one more member who has appeared in an effort to be as fair as possible to both sides if you indulge one more question her i would appreciate that. i now recognize miss lee from texas. >> i thank you for your kindness and i will be pointed. i am an interested neighbor who has worked with your constituents because of my role in the homeland security committee and my familiarity with the or original work mr. feinberg was assigned to and i thank him for that. and however, express i am likewise a boy scout serving on the boy scout board having a husband boy scout and a son boy scout so i am an unhappy camper.

i would like to ask how much of the money have you spent of the $20 billion? >> we have authorized about $6 billion. >> the life of this fund you have a period of time? >> august of 2013. >> i am disappointed that the pace when asking whether or not you heard the discussion of shrimp -- shrimpers and i did not know if i came in too late to listen about the oyster men. have you engaged with the oyster blue -- men? >> we created a methodology to take into account oyster men concerns. >> as you know i have attempted to meet with you. it has been frustrating and i would like to make a request to meet with u.s. and as possible in my office.

who should we reach out to to get that done? >> i will get in touch with you in the next day or so to set a date. i will be in houston monday, tuesday and wednesday. one of those dates, november 28th through 30 i am working with congressman green of accused and to get community leaders together in houston and i will be glad to meet with you as well. >> if we can work on that i would -- we are in different jurisdictions. there is a group led by dr. william s.. i would like to ensure you meet with her. i may ask her to come to houston for the meeting or how we can arrange that meeting and so we will work together on that. let me just proceed with line of reasoning. one of the points as you well know that is may be played the

shrimpers people will be oyster persons and others is the documentation questions and that is a challenging question about individuals working in a different kind of work and not having the documentation. how are you responding to that? they still exist? there's the issue of collateral damage. how are you dealing with that? >> we work with these claimants to try to come up with proof, some proof that their claim is linked to the spill and they can show some damage. i don't need -- as you know from my 9/11 work -- i don't need a full panoply of tax returns and profit and loss statements that a minimal amount of documentation and we continue to work with claimants in trying to

get the bare minimum that will allow us to pay damage. >> we will meet with some of those you may be able to give them courage or encouragement because you may say what they already have. the reason i know some communities, i see dick gregory -- have not reached out because they are intimidated by the process. you got $15 billion left. we were talking about 2013. that is a long road for somebody to have their doors closed. the reason i came to this hearing is to indicate my region is impacted as well. i lived through not only the bp oil spill but hurricane katrina and rita. that is not your responsibility but there are those who can connect present status to this incident that occurred. we want to make sure these funds

that rebuild communities, so as i close respecting the time you have to leave we need to reconstruct or have some of your staff work with these community organizations so they can present documentation to be compensated. >> i completely agree. >> i yield back. >> the gentlelady yields back. i thank the gentlelady and also thank you so much bleaker turtle mr. feinberg for appearing. thank you for holding over. you are obviously a very sincere person, very candid and doing the best job possible and we appreciate that in louisiana, texas, mississippi, alabama, of the state that are affected. with that members of the committee may have additional questions for the record and i ask you respond to these in writing. if there is no further business without objection the committee stands adjourned.

[silence] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] [inaudible conversations] [inaudible conversations] >> in a few moments the federal communications commission votes to provide funding to extend broadband service to rural areas. in a less than two hours a hearing with fema director craig

few gave looking at the emergency management reform act passed after hurricane katrina. after that we will air the update on the gulf coast oil spill compensation fund from administrator feinberg. a couple live events to tell you about tomorrow on c-span2. the urban institute hosts a forum on the state of children in the u.s. at noon eastern. at 7:30 p.m. eastern vice president joe biden will be the keynote speaker at the of florida convention in orlando. other speakers include florida rep debbie wasserman schulz, chairman of the democratic national committee and senator bill nelson. >> i don't want every story to be 1800 words. >> last month jill abramson became the first woman to hold the post of executive editor at the new york times. she believes the times is more

irreplaceable than ever but also envisions a few changes. >> there is a certain lack of discipline. a point is repeated too many times in a story and there are three quote making the same point where one would do and i would like to see a variety of story lines. >> she will discuss her career, her new book and the future of the time sunday night on cue and day. every weekend on american history tv the people at the events that document the american story. this weekend picketing and protests and arrests. occupy wall street? no. the national woman's party and a woman's right to vote. the propaganda used by advocates for women's suffrage. tribal films from abc and the army signal corps. the big picture. why vietnam? look at the young harry truman and the 12 years he spent working on his family farm. look for the complete weekend

schedule and c-span.org/history or for schedules in your in box click the c-span alert button. >> the federal communications commission has voted to provide funding to extend broadband service to rule areas. this portion of thursday's fcc meeting is an hour and a half. afterwards chairman julius ge k genakowski speaks with reporters. >> whenever you are ready. thank you. >> good morning, mr. chairman and commissioners. wireline competition in wireless communication bureaus are pleased to present fundamental reforms to the commission's universal service fund and the inter carrier conversations system. when the national broadband plan was released you issue a joint

statement saying they should be comprehensively reform to increase accountability and emphasize the importance of broadband to the future of these programs. today we present you with a report order accomplishing exactly that. today's or recognizes they have complemented each other in supporting availability of phone service in rural america. the order holistically reforms both programs to eliminate waste and inefficiency, targets the point where it is needed and transitions from voice only to broadband connections capable of supporting voice as well as other applications. the order would establish a connect america fund for supporting voice and broadband communications in role, insular and high-cost areas of the country. for the first time such support would be allocated according to a budget set at $4.5 billion

annually based on the existing level of service. up to $2 billion would be available for areas served by rate of return carriers and up to $1.8 billion for areas served by broadband carriers. $500 million would be dedicated to ensuring ongoing support for mobile, voice and broadband coverage in private sector areas not likely to reach including up to $100 million for tribal areas and $100 million dedicated to a new remote areas fund as described in an accompanying further notice proposal making. a reform of this magnitude, only be accomplished through collaboration and team work. we have acquired two slides to acknowledge many dedicated legal drafters, financial analyst speaker economists and others who contributed their expertise to this roughly 500 page item. the leadership team included

many of these folks seated behind me. randy clark, patrick callie, kevin king, how lewis, jenny prime, eric rolfe and mark woods. in addition to those joining me at the table today rick kaplan, chief of wireless bureau and his deputy bureau chief and options division chief marty winner. wireline bureau deputy chief carol mackie, rebecca goodheart and steve rosenberg, pricing deputy division chief amy bender and marcus mayor and advisers. amy and mark will present a wireless portions and victoria will present the icc reform. >> today's order establishes rigorous public interest obligations for all elements including broadband performance and build out requirements. we maintain a strong partnership with state commissions who will

continue to play an important role for estate carrier last resort obligations and by designated the pcs meaning carriers eligible to receive support. recipients will be required to submit annual reports to the fcc and state commission to assure effective oversight and accountability. this will provide support for broadband in two faces. in phase 1 all existing price cap legacy high-cost support will be frozen and subject to obligation to advance our broadband goals. an additional $300 million in funding will be made available to price cap carriers that will commit to expediently deep for a broad band to a specified number of and served locations in their service area. for phase ii a price cap territory, the order establishedes are framework that

will provide support in the first instance based on a forward looking cost model and direct the bureau to undertake a public process to developed the specific model. in each state and territory incumbent price cap carriers will be asked to undertake a state level commitment to surf high-cost location in their service territories in that state with police and broadband excluding areas where there's an unsubsidized competitor, extreme lehigh cost areas and low-cost locations served without support. kerri is accepting the state level commitment will be obligated to meet robust, available broadband service requirements. in areas where the incumbent declined to state level commitment competitive bidding mechanism will be used to distribute support. the further notice proposal structure and operational details for the competitive bidding mechanism in which any broadband provider that has been designated etc may participate.

4 rate of return carriers the order of reforms rules to support continued broadband investment while increasing accountability and incentives for efficient use of public resources. the reforms recognize the nature of bravery tearing carriers and allow them the predictability of remaining on the current system in the near term. further notice seeks comment on establishing a long-term broadband focused mechanism for rate of return carriers and adjusting the interstate rate of return from its current level of 11.25%. as a transition to the new support mechanism for mobile broadband service the order eliminates identical support rules that determine the amount of support from mainly mobile competitive e t cs today and phases down existing support over a five year period. ..

for ongoing support to extend and maintain the availability of mobile voice and broadband, including up to $100 million for tribal areas. phase one of the mobility fund will provide one-time support to

enable swift deployment of mobile and broadband services in areas unserved by current generation mobile network or 3g, this report will be provided to generally not more than one provider per area. the auction will maximize coverage for unserved miles in the budget, reflecting the val our of mobile voice and broadband coverage. auction winners will be required to deploy 4g service in three years or 3g service in two years attention sure that important public interests are met, recipients will be responsible for a variety of obligations, including voice and data rooming, and it provides a one-time tribal mobility fund, to aired 50 minimum in funding for tribal lands including

alaska and hawaiian homeland. the order provides several mechanisms to help ensure that mobility fund support address tribes' needs for service or their tribal land. phase two will provide 500 minimum per year in ongoing support. as part of this budget, phase two of the mobile fund will include dedicated ongoing support for tribal areas up to $100 million per year. the funds available in phase two will expand and sustain mobile voice and broadband service in places where service would be unable absent federal support. the further notice of proposed rulemaking proposes structural and operational details for phase two of the mobility fund, including a distribution methodology, eligible jay graphic areas and providers, and public interest obligations. finally, the order dead indicates at least $100 million in annual support

to provide voice and broadband to the fewer than 1% of americans living in remote areas where the cost of providing traditional terrestrial services is extremely high. the further notice we comment on how to award the support as part of a dedicated remote areas fun. victoria goldberg will now discuss icc. >> i cc is a regulated federal system of payments between carriers for delivering phone calls. the system, created in the 1980s, reflects geography based permanent chances and subsidies. the system is erode rapidly as the demand for traditional wireline service falls and consumers opt for other services, including wire, voice, texting, and e-mails. this order reforms the ittc

system to benefit consumers, including reduced rates for telephone and broadband services and improves the fairness and efficiency subsubsidies and transforming the network into the broadband network of the future. it accommodates rules for fan tam traffic, combating schemes that avoid loopholes that cost consumers millions. the next order tackles the system generally and don'ts a methodical for all traffic. this new methodology provide a unified national framework with states leveraging localized expertise to hell implement the framework and oversee the transition of intrastate, this

involves capping interstate and extra state rates,; the order also adopts and transitional recovery mechanism to mitigate the effective revenues reduced by the forms and providing greater certainty and predictability going forward. productions are adopted to ensure any increases in residential and business rates are minimal and capped. where necessary, some carriers will be eligible to receive cap support, subject to requirement to use the funs to advance our goals for universal service and broadband. the order addresses the treatment of voice, pstn traffic. clarifying that traffic exchanged over pstm facilities that originates and or terms in it format is subject to transitional itc and makes clear

that all carriers originating and terminating voice calls will be on equal footing in their ability to obtain compensation for this traffic. certain packets of cmrs compensation are also addressed to resolve existing ambiguity and address a few. the order promotes the deployment and use of ip networks and the accompanying further notice seeks comment on the policy framework for ip and ip enter connection. the order also makes clear that even while the further notice is pending we expect all carriers to gauche in good faith in response to requests for exchange of voice traffic. the bureau's recommended option on this oil. >> i don't know where to begin to thank you. first let's hear from the commissioner cobbs, please. >> thank you all. a lot of folks we cooperate get

here today. they said universal service was too complicated and too convoluted to permit comprehensive reform universal service was sadly out of step with the times and was broken beyond away. yet here we are this morning, making telecommunications history with comprehensive reform of both universal stories and intercarrier compensation so i want to at the chairman for the leadership be brought to bear to get us to a place where no previous chairman has managed to go. today, thanks to his leadership, we build a framework to support the infrastructure that our consumers and citizens and country so-under -- urgently need. so join in the thanking him for his commitment, his courage, and his effort to make this happen.

in the face of the complex systems we modernize today, it's all too easy to forget the simple timeless goal behind our policies. all of us benefit when more of us are connected. the prim of universal service is the life blood of the communications act, clarion call and a legislative mandate to bring affordable and comparable communication services to all americans no matter who they are, where they live, or the particular circumstances of their individual lives. so, is it all together fitting as we move away from support designed for voice to support for broadband, and we bear witnesses to accomplishments ucf has made to connect america with telephone service. the fund has achieved laudable success. ey how have penetration rates in excess of 59%. no instruction buildout in our history has done so much to bind

the nation together. additionally, it has enabled minimums of jobs and brought new opportunities to just about every expect of our lives. some stark challenges remain, particularly in native areas. the shocking statistic in indian country is a telephone penetration rate that hovers in the high 50th america tile. getting broadband to native areas is a singh singh which will challenge to imminents reform, and it's the only way we can stenthe full range of advanced communication services to places where those services will not otherwise go. the big news here, of course, is that universal service finally going broadband. this is something i have an advocated for along time. it's something a decade or more overtie and something strongly

backed. it's essential to prosperity and well-being for our country. they are the essential tools of this generation, like hoe and he partly cloudy the shovel and the saw were to our forebearers, where he welcome in a factory or on a farm, whether we're affluent or economically disadvantaged, fully able or living with a disability, every citizen, has a need for and a right to advance communication services, access denied is opportunity denied. that applies to us as individuals, and as a nation. america cannot afford access denied unless we want to consign ourselves and our children to growing, not shrinking, digital divides. we already skating around the wrong side of the global digital divide in many ways when we should have learned by now that the rest of the world is not going to wait for america to catch up. here's the good news. if we seize the power of this

technology, and build it out to every corner of the country, and make it truly accessible to every american, there's no telling what we can accomplish. america would be back at the front of the pack. the current system for all the good it has accomplished has outlived its time. it has trade from what congress intended and consumers deserve. inefficiencies and waste creped in where efficiency and oversight should have been standard operating procedural as problems arose they were minimized or allowed to compound. at best we settled for band-aids that never managed to staunch think. seems we didn't try band-aids, and the mission made things worse by calling communication technologies and services things they were not. engaging in linguistic changes with a fury that even the most intense biblical scholars of ol' were capable of achieving. we lost sight of both the original purposes of the telecommunicationses act of 1996

in general and the universal service fund in particular. whatever the causes -- and we could debate them for hours -- the current regimes are brokenful legacy access rates encourage carriers to maintain yesterday's technology instead of reaping the benefits of ip networks. manipulation of payments cost consumers bills of -- billions of dollars, and. in some areas of the country we subsidize four or more wireless carriers based on a wireline network. all reflected in inflated rates consumers pay. the old saying, if i ain't broke, don't fix it, but this is

broken. no tinkering around the edges is capable of putting the systems back on a solid footing. some will claim we attempt too much today, that we ought not to reconstruction the systems as they arose and worsened over the years. it's not we didn't see the writing on the wall. many people did. years ago, as one example, i proposed putting universal funds to work supporting broadband buildout, like other countries. four years ago four of my colleagues were ready to vote to put usf on competitive footing, and we were ready to vote for lowered rates and an end to traffic and fan from tasking. the commissioner will remember this well because we worked closely on it. what we are doing today is repairing two broken systems and putting in place a more credible and efficient framework that will benefit consumers, carriers

and the country. we're improving and mitigating communication shortfalls. a framework that should gave all stakeholders a clearer picture how systems work and provide predictable for rate pairs, businesses and policymakers. i would have preferred a higher budget, a budget i believe consumers would accept because of its importance putting this nation back to work and providing kids with the tools they need for their futures. that being said, we step down a road that will make a huge difference and that's why i'm able too approve the item, that it would come to no -- price to no one it's not what i would have written. our tarring is areas much needing it most. there's much to said because of the harsh budget reality the nation faces and because of the perceive to limit university.

but i hope and expect our actions today will have spillover effects in underserved areas, too because america will not be broadband sufficient until the underserved become fully served. inner cities can be just has andy capped as remote areas. here, too access denied is opportunity denied. so i welcome the new approach that takes us from scatter-gun and focuses on -- where private investment refuses to go, this means targeting areas where consumers would not otherwise have service, and this is the first time we can really say that about the fund. acting on another long-standing recommendation of the joint board, we for the first time are creating specific funding mechanism to support mobility. this is an historic accomplishment. clearly there are areas, many areas where mobile broadband providers are doing very well in delivering services and profiting handsomely and where

support is not needed. but there are a areas that are strangers to reviable voice coverage and where the market will otherwise not go. the mechanism through which we propose to do this, reverse auctions, is i in call for the commission, this is a new species of auction and we will need to be careful how we approach and evaluate it. i hope it will live up to the high expectations people have for and it become a way to expand our limited universal service dollars to reach unserved areas. i expect we'll learn a lot from the first auction and apply the lessons to the future. let me also say how much i appreciate the items prohibition on package bidding in the mobilities fun. this is a sufficient saveguard against gamesmanship and can only benefit consumers and all consumers. i'm also pleased we are adopting

another safeguard to encourage stability. the auction has two auction phase with the second dependent upon further commission decisionmaking. understandingunderstanding the r predict ability will will halt support if the sect auction phase did not take place as planned. given the financial constraintses we imposed on usf, i'm pleased we were able to grow the mobility fund from the initial proposal. i would have supported and encouraged a larger number given the scope of challenges we face but the the increase is a down payment. i am also encouraged we launched a tribal mobility fund specifically to target support for mobile service in tribal areas. the state of broadband in indian country is a national disgrace. somewhere in the embarrassingly

low single digits. getting this right will take more money than is being proposed today, but also hinges on more than money alone. it hinges also on the commission taking prompt action on other proceedings and spectrum issues pending before us. even in addition to all this, there are a host of confidence-building and cooperation-building challenges confronting us. i do believe the current commission is on the right path to rebuilding our consultive mechanisms with native nations. we have new dialogues and new commitments to working together and working to appreciate tribal sovereignty and the need too accord tribes the more fuller and active role they must have to ensure the most effective deployment strategies for their areas and populations. i feel encouraged we're at long last positioning ourselves to make progress by working more

closely and creatively together. the sad history here, as we all know, is many promises made, many promises broken. we need to turn the page, and i think we are beginning to do that now. i also applaud the strong buildout bench marks that will be a condition of receiving mobile fund dollars and indeed support from any of our new programs with meaningful enforcement and consequences if providers do not meet their obligations to consumers. this injects much needed discipline into the system. it's another really important component of our actions today and one that will enfire much more confidence in the new system than we if had in the old. today is also hoytic because we finally take on the challenge of intercarrier compensation. we take meaningful steps to transform what is badly, sadly broken. this item puts the brakes on gamesmanship that have playinged icc for years and diverted

private capital away from real investment in real networks and cost stimulation a half a billion dollar a year and phantom traffic, -- affects one-fifth of the traffic on carrier networks. today we say no more and adopt rules to address these schemes head on and rid the system of these inventive entirely. my enthusiasm here is tempered by the fact that end user charges under the label of access recovery charges are allowed to increase, albeit incrementally, for residential consumers. my first preference was to prevent any encroachment alternatively we could require carriers to prove the need. props the most profitable companies should not be able to charge the fee. however the commission protects consumers even as it allows

charges. consumers already paying local phone rates of $30 or more cannot be charged the arc. the use of this recognizes some early adopter states have tackled intrastate access rates and their citizens may already be footing a reasonable part of the bill inch the end i'm grateful that the additional charges to end users are not as big, are spread over a longer period or time, and should be offset and hopefully matched by savings by programs we have put in place, and i'm hopeful the commission will do everything it can to make sure the savings are passed on to consumers, although i la moment we don't have a more competitive tell communications environment that would ensure consumer friendly outcomes. while the inside the beltway crowd and the armies of analyst

will be parsing today's oils over who games the most and who begins the least and all the other issues that will cause for rests to be chopped down and vat0s ink drained i hope we can keep the focus on consumer benefits. i would not, could not support what we do today unless the expected consumer benefits are real enough to justify the effort and, yes, the risks, of so sweeping a plan. much will depend upon our implementation and enforcement and i'm sure some mid-course corrections but i believe there are real and takable benefits in the items before us. more broadband for more people is at the top of the list. as just one example we anticipate significant investment with 7 million consumers getting broadband win six years. means more service, more jobs, it means more opportunities.

building critical infrastructure and broadband is our most critical infrastructure challenge -- has to be a partnership. the states are important and central partners as we design and implement new usf and icc programs. i have been a strong advocate for federal-state partnerships since i arrived here ten years ago. i have had the opportunity to serve on the joint boards with our state colleagues to be part of their deliberations to appreciate the tremendous expertise and dedication they bring to their regulatory responsibilities and to have learned so much from them. it is just simple good sense to maximize our working relationships with them. and more even than my permanent preference, which is deeply held, this is the mandate of the law. section 254 of the act is clear, the states have a critical role in the preservation and advancement of universal service. while i understand the need for

predictionibility in an icc regime, i am pleased my colleagues have retained a key role for state, including arbitrating connection agreements, mob tearing tariffs during the transaction, and helping to implement the universal service fund as well as their own state universal service funds. state regulators are by definition closer to the needs of their consumers than fed regulators can be, and they maintain the roll as the venue for consumer complaint. i urge the entire team and stakeholders to think creatively how to expand the state role as we implement these systems. i would hope that carriers would see the benefits of this federal-state cooperation, too. but it is unfortunate, and highly counterproductive to consumers, when some companies exercise their huge lobbying machines to encourage state will goers to cut state public utility commissions out of

telecommunications oversight. this makes everyone's job, except the industry's giants, more difficult, and it harms the nation. on the legal front, some of the calls made on this item are necessarily and unfortunately more circuitous than i believe they need to be. we taught be long past declaring ip obligations are required. we had a chance to do that and declare voice is a tell communication service in gowt 2005, and our failures to do so have had tangibly perverse consequences. inaction delays building our infrastructure and ensures america will continue to be down the global broadband rankings in a world where that just doesn't cut it for us. we need to lead the world, not so that we can pin a medal on our chest. we need lead the world to regain

our prosperity and our competitiveness our capacity to provide jobs and opportunities to every one of our citizens. broadbandded option is as great or greatary challenge than deployment. i will continue to push for doing more on adoption, but we are limited here by the reality that today's emphasis is on reforming infrastructure, deployment in high-cost areas that said i worked with my colleagues to include adoption in this preceding and. these entities often are the places where unconnected consumers get their first exposure to broadband and learn how to use it. i am similarly pleased universal service programs include a real spend forcible requirement affordability. it's only logical and consistent with the mandate of section 254 that carriers whose networks are funded by federal university

support should be required to offer service at foodable rates. much of the importance adoption items are still ahead of us. we have an imminent opportunity to update our lifeline and linkup programs i and think we could do that before the sent set on the year 2011. so there's still much two, be done. the success of the framework depends on getting policy calls right. we have to -- this is a situation with huge spillover on the excessive rates consumers are forced to pay, and it has simply wait years too long. similarly, we must act on contributions methodology. the distribution of funds is only part of the broadband challenge of equal importance is the contribution of funds going

into usf. i would have preferred to see such an tonight in front of us. there is inherent inequity in a system that deploy broadband off interstate telephony. once we ensure that quadruple plays that service from universal service bear their fair share. we will not be so subject to the unnecessary constraints our present system imposed. we need decisions that avoid putting too much spectrum in too few hands. that would drive better mobility options. successful implementation of the steps we present today will demand a degree of stakeholder cooperation that we have not seen in many, many years. consumers, states, businesses, the fcc, congress, and the administration, each has a vital role to play, but stakeholder partnering is how we managed to build america's infrastructure over the past two and a quarter

centuries. from the bridges and canals, up to the superhighways and leverage now is the time to practice that american way one more time. and i believe here the process has started off commend blue. when we approved this in february. everyone would be asked to give up a little so the country could gain a lot. that spirit of shared sacrifice has made this action possible. ...

at the expense of the greater public good. if the generally cooperative spirit of the past several months ursus archive going forward, we can avoid those pitfalls. lots of people made a row to get us today's historic achievement. i don't imagine the remarkable leadership of chairman genachowski appeared our internal team put together by the chairman worked mightily and expertly on a whole host of unbelievably complex issues. the data experts and wireline and wireless carriers, cheryl, sharon, carol comer becca, roots, jim, everybody on the two-page list spent many, many hours answering our questions and discussing our request and they were back by dozens barber

typically brilliant and dedicated sec team. my commissioner colleagues spend weeks and months immersed in the tall weeds, taking hundreds of meetings, talking with one another in developing constructive proposals. these are advisers including andrew kronberg and commissioner clyburn staff, christine kurth and commissioner mick dowell worked long days, nights and weekends to make this happen. in my own office, margaret mccarthy and mark stone provided not only great analysis by previous suggestions for getting us to better outcomes. i should note all all of my staff felt the weight of this ml performed at the start of model. it is than professional after by world-class agent b. to which i am proud to be a member. thank you. >> thank you, commissioner copps. commissioner mcdowell. >> train to a high pass subsidy

program to support next-generation members of purification technology while keeping a lid on monday and is truly money mental. as the action today is a vital first step in reforming u.s. to ensuring rural consumers benefit from needed advanced services. as i said several times before come the communications needs of rural america is personal to me. her family has deep roots in rural america. my father spent part of his boy hit on the tex-mex border without electricity, running water or phone services. with a background in mind, i'm committed to paying a congress' intent of ensuring the most upright or country are tonight is. the challenge of solving seemingly retractable universal service compensation puzzle. however cast a long shadow over the fcc for more than a decade. an archive and a half years here at travel across america to

learn more about the practical realities of the program. i hope productive policy roundtable discussions with multiple stakeholders in the least populated state, wyoming, south dakota appeared a traverse tribal lands and some of the least densely populated areas of our country, including alaska appeared have also learned from consumers in urban and suburban areas who pay rates above cost to subsidize sooners. and i know that my colleagues have diligently concluded similar field investigations as well. and trying to encapsulate what the sec is accomplishing today, i turned to one of north america's best telecommunications policy minds. none other than the great one. when greg v. he said without any of us realizing, by implication he predict what we do today when he said a good hockey player plays where the puck is. a great hockey player plays with

a puck is going to be. today the fcc is repurposed in the high-cost program to support unserved use of communications technologies from where they are to pray they are going to be about the technological and geographical sense. october 27, 2011 is the day that marks a tremendous departure from nearly a century old policy of opaquely, opaquely subsidizing analog circuit switched voice communications to using the efficiencies of market-based incentives to support product and connectivity in those areas where economic realities have stalled market penetration. under both republican and democratic administrations, the high-cost fund has become and inefficient. today the republican and democrats are taken a giant leap together to fix that. i commend the chairman for his leadership and fortitude throughout this process. i also think commissioner copps

and clyburn for their graciousness and collegiality throughout the entire proceeding. since i arrived at the commission in 2067 calling for the fcc to achieve five primary goals when focusing on uss reform. the most important of which is to contain the growth of the fund. while our efforts today are not perfect, today we are largely achieving this goal in the town known for its inability to control spending. while i'm on that subject, someone should just be scrapped the usf program altogether. others can have that debate. in the meantime, we're mindful created this program and its ultimate survival is not early for congress to determine. we are duty bound to operate within the statutory constructs and handed to us. in the spirit of being fiscally responsible, we are mandating that the high-cost portion of the universal service fund lived under a definitive budget for

the first time in history. functionally, the budget serves as an annual cap through 2017. until then, the fund may not rates higher than $4.5 billion per year on average after churros about commission approval. after that time it's my hope competitive forces will flourish on the development of new technologies will create efficiency throughout the system. so much of the vacuum will of been filled and the need for future subsidies will decline substantially. perhaps the deal, congress can determine subsidies are no longer needed. of course there's nothing we can do to prevent future commissions from voting to comprehensively alter what we have done and spend our money later. dowd beecher is a matter of law, whether you call fiscally prudent action today a definitive budget cab from a beret some borough.

if the sec of tamara wants to undo it undone today however, good luck with that. you're going to need it. the alacrity with which the commission can accomplish comprehensive usf reform is nothing short of holy show. nonetheless, i hope future commissions will keep their cats on out of respect for fiscal responsibility and the consumers who pay for the subsidies. also today we are only addressing the high-cost portion of the distribution side of the universal service fund is commissioner copps pointed out. we're not addressing universal service on which distributes over $8 billion per year. to put the figure into context, usf is larger than the annual revenues of major league baseball. in separate proceedings, we also reformed the other uss spending programs and i cannot stress enough that all of the fiscal efficiency we realized in today's reforms will be lost if

similar discipline is not apply to all universal service programs as well. moreover, we are only addressing part of the distribution or spending cited the universal service program. in fact, despite all of the exhaustive efforts to get to this point, our work on comprehensive universal service reform is not even half finished. equally important is the need to reform the contribution methodology or how we are going to pay for all of this. it is the secret for years i've been pushing for contribution reform to be carried out at the same time as distribution reform. obviously that is not happening today. therefore we must act quickly. the contribution back here, a type of tax paid by consumers has risen each year from approximately 5.5% in 1988 -- 1998 to an estimated 15.3% in the fourth quarter of this year.

this trend is simply unacceptable. we must debate this automatic tax increase without further delay. accordingly i strongly urge that we work together to complete proceeding to reform the contribution methodology in the first half of next year. in the meantime, today we are undertaking significant reforms. although time does not allow me to discuss each one, and like to mention a few of my favorites. first, it may surprise some observers the figure and breadth to which we give life to competitive bidding, you market-based approaches to begin subsidies also known as reverse auctions. this is more than i could've hoped for in 2008 when a republican-controlled fcc teetered on the cusp of comprehensive reform before our efforts were scuttled and i'm delighted that commissioner copps in the year at this point. supporting provisions was likely not easy for some of my colleagues and i thank them for

their spirit of compromise. secondly, we are eliminating the official identical support role, the lethal air of subsidizing competitors in the same place has come to an end. third, we are finally giving consumers the benefit of more transparency by phasing out hidden subsidies. albeit 15 years after congress told us to do so in the telecom act of 1996. better late than never. as the veil is lifted, industry and government will have to do their best to keep consumers possibly educated on what they will see on their phone bills than what it all means. for the vast majority of consumers, rates should decline or stay the same. so i will look with skepticism by many news stories that claimed the fcc is raising rates. the simple truth is we are not. forcefully, we are creating a frugally minded, barry's the bull waiver process for highly

unlikely cases where carriers are experiencing extreme hardship to chewer reforms. did i say that narrowly enough? said, and i'm going to stop at five. don't worry. in the further notice, we propose means testing to identify qualified recipients in remote areas such as screening process could save money and maximize effect is that the fund. as legal matter, some question whether the commission has the authority to use universal service funds to support broadband directly. as i said many times before, i believe the commission does have broad authority to repurpose support to advance services is handed to us by the plain language section 254. i have a much longer legal argument in my folded statement, but in the observance of time and time and mall blockers, i will not go on. it has become as no surprise

that i cannot support the view that section 706 provides commission with the authority to support broadband to universal service fund. section 706 is narrower in scope than as not provide specific or general authority to do much of anything. we respectfully agree to disagree on this analysis. finally, given the breadth of magnitude of today's actions committee effects will not be fully apparent in the near term. certainly there would be varied opinions regarding what we've accomplished. that said, universal service reform is in intricate process. we will constantly monitor implementations and quickly make adjustments as needed. in sum, i would like to thank all the people sacrificed countless family dinners, weekends, vacations, birthday anniversary celebrations in such of the past many to make this day possible. i was going to start naming names, but then i'd revise that

might be impossible task because i will leave people out. i do notice that a thing for the record i'd like to reflect this is the longest people we've had in front of us in the history of the fcc to the point were often it's in the press section. [laughter] i know you would've that of our tables, but that would've been on the other side of the wall controlling the cameras. but i do want to make special mention not only everyone who sees it front of us, but the legions who stand behind each one of you to abolish it your blood, sweat, toil and tears to make this endeavor possible today. i think perhaps we should really have held this meeting at fedex field, perhaps it is raining today. i do want to commend the fat cats for his tireless efforts, patience and leadership throughout this process. furthermore, what you think commissioner copps' advisors and commissioner clyburn says well for your collegial efforts to this process.

for my office, christine kurth deserves a special mention. when i hired her two years ago from the senate, i said your main mission is to fix universal service. and she accepted my offer anyway. but she is a complete a pass that mission today and i want to thank her for it. many thanks to each and everyone of you and my colleagues. this is an historic day for the fcc. congratulations, mr. chairman. >> commissioner clyburn. >> we are taking a moment to set today, moving ever so close to fulfilling the goal congress set forth for universal service in the 1996 telecommunications act. to ensure all americans have access to affordable voice and advanced communication services. we would not be here but for the incredibly hard work of the sec staff under the direction and leadership of chairman genachowski in his office as well as you can input from congress, state partners,

industry and consumer representatives. i believe we have drawn from many competing sources to form a balanced framework that will create significant broadband appointment as quickly as possible to those consumers currently unserved. the painful truth of the matter is there are 18 million americans who have not fully benefited from our current universal service policies and that is unacceptable. they remain the have-nots of the broadband world forum determined will benefit from the most common than those from what iraq should -- this action is today. as i have considered these reforms, it is the unfair to consumers who are first and foremost in my mind. this claim provides for speedy broadband appointment to many consumers and with an injection of capital in 2012, for both fixed and mobile technologies.

in addition to these immediate needs, i carefully considered how much those consumers are being asked to shoulder when it comes to the cost of intercarrier compensation reform as well as the impact of those consumers who are to have service. it also shouldn't surprise anyone that he was similarly important to me that we give service providers and their investors time to adjust our proposal for this because from day one i made a firm commitment to know flash has. a reasonable transitional. will help ensure providers can navigate these reforms successfully. for those providers who require additional time to adjust, we have in place a waiver process that is for, predict it will yet fear. another benefit of the processes that it provides his commission with the safety net so that we can adjust support is needed in order to avoid my higher mean this is fast we ever be achieved

through a legacy system. overall, i believe the chairman proposals -- the chairman's proposal carefully balances the centrist and will result in a meaningful difference for many americans and they want to commend him and my colleagues for the significant process that is reflected in this order. accordingly, i offer my full support for the actions we take today. as you all know, i have a deep connection to rule america. without comparable modern communication services enjoyed by urban counterparts, those citizens will never adequately compete in the global economy. they need and deserve reliable fixed as well as mobile broadband in order to thrive. without this critical broadband infrastructure, rural americans would forever be left behind. we are where the financial need to provide advanced services in

these areas are significant and yes, i appreciate the fact that setting a budget for the high cuts program will provide overall certainty and predictability. however, it is equally important that we have the flexibility to adjust as needed within and between these high-cost programs. i want to thank the good friends and colleagues were working with to ensure that we have not unduly limited our ability to revisit our current estimate of the funding needed for the high-cost programs in the future. an underlying theme of today's reform is shared sacrifice for the common good. after all, we are talking about the people's money. we are accountable to them and i am confident the adjustments being made to the legacy u.s. support and the funding mechanisms been about good or the new connect america funds are sent to rule. these reforms will put out the

usf and icc regimes on a sounder footing so we may better accomplish our goal in congress' mandate to serve more americans with advanced communications networks matter if they live, work or travel in this nation. for a number of years from the federal state joint board in universal service in the state and federal members have called for this commission to provide for the direct funding a broadband. early on, they recognize the importance of both broadband and mobility service. i am proud that this commission has heeded this call and is formally adopting the principle advanced by the joint board last year and its recommended decision that universal service support should be directed where path well nowhere to provide these services as well as voice services. moreover, upon the advice of the council of her estate members and colleagues, we are adopting the mobility fund to refuse

$300,000,000.3 g and 4g networks in addition, we are adopting a mobility fund to ensure that consumers have access to mobile broadband services, providing support to providers in our desert areas and eliminating identical support. we owe a great gratitude to her estate members. they have been a significant resource for this commission in our reform process. we sat and numerous workshops and meetings to gather, hashing out ideas and concepts. they spent countless hours trapped in a proposal for consideration and they have been more than generous with time and a place. i think them for the good counsel in this precedent for service to our nation. the fcc has heavily relied on the suggestions in the plan. we are requiring uss recipients to meet brad and build

milestones to annually report on service requirements and file reports strictly at the sec and state utility commissions. we also are implementing a cap on total purblind support another fiscally responsible measures to eliminate waste and inefficiency in assistance. in addition, we are clarifying and our order that we expect our carriers to negotiate in good faith and response to request for ip interconnection for the exchange of voice traffic. not only do we hear from the states about how important it is to ensure that ip interconnection occurs, we also receive significant comment from competitive voice providers at the lack of ip interconnection is impeding the development of ip networks, including voice services. as such, the order confirms that

the duty to negotiate in good faith does not depend upon the network technology underlying the interconnection, whether it cdm, ip or otherwise and we expect good faith negotiations to result in interconnection arrangements ip networks for the purpose of exchanging voice traffic. another topic i spent a great deal of time on was state commission colleagues of the intercarrier compensation regime. today's decision says for the national approach or icc reform for both intrastate and interstate access rates. it's probably not surprising that i naturally gravitated to the proposal and notice for proposed rulemaking that would've had the states reformed their intrastate access rate and left to interstate reform to this commission. but after much discussion and consideration, i will accept the

chairman's proposal that a federal approach is afraid outcome in this instance. a multistate process reform would be long and arduous, costly and demanding of the states with the predict the ball and perhaps inconsistent results. in the meantime, the pressure would continue to build for us, to intervene and stabilize the icc regime to provide the companies they predict ability and certainty they need to continue to invest and innovate for the benefit of consumers. however, i think it's only appropriate that our actions today carefully preserved and recognize the reform that some states 30 have undertaking. most importantly, we've provided for replacement funding is intrastate access rates decline as a result of our reform, which released the financial burden that would have been on state in their own attempts at reform.

to that end, we also have carefully balance the icc revenue replacement for providers with the important goal of not hurting consumers with significant increases in their bills or overburdening the uss, which is ultimately paid for by consumers. as indicated by our staff analysis, we believe the overall benefits that will flow to consumers as a result of this reform or fall airwaves a minimal price increases they may experience on the phone does due to icc reforms. i also want to be clear that states will continue to have an important role with respect to the arbitration and interconnection agreements in the operation of the uss. with respect to uss, states will continue to designate eligible telecommunications carriers for usf purposes and will continue to protect consumers through carrier of last resort

application. as technology evolves, so too must the roles of regulators. we are experiencing a significant technological evolution as networks are transitioning to internet protocol and consumers are using multiple modes of communications , sometimes simultaneously. indeed, the underlying cause of reform to implement today is due to the enormous technological shift that has occurred over the last 10 years. one constant i have seen however is that consumers expect the state regulators to serve and protect them. moreover, those of us that the fcc's need the states expertise and knowledge on the ground to properly execute and operate our new universal funding mechanisms for instance, we need the state's assistance in identifying those areas by broadband. got to talk and i eliminated

resources who do not have any broadband provider offering their service. likewise, we will need the states held assessing that those providers who receive funding meet the public interest obligations to build and serve. as such, i am confident these reforms are an opportunity for us to continue working hand-in-hand with our state colleagues to assure that broadband is available to partnership at the states in this important endeavor. the communications marketplace such changed dramatically in one significant reason is the explosion of mobile services in the u.s. more and more americans are relying upon their smartphones to access the internet and almost 30% of americans have cut their court tecumseh service. i work closely to ensure that we are providing significant support for mobile services of a

particularly in rural america. certainly, will consumers and those who travel a non-urban areas expect they will have access to mobile services that are comparable to anywhere else in the nation. we want and expect our devices to work wherever we are. as such, i believe the budget which reflects the current importance of mobility to americans is important that we should offer ongoing support for those areas that would not be served otherwise. i was grateful that the fund is ongoing for mobility support, the mobility fund has been increased 25% over what was originally proposed and circulated draft, reflecting the fact mobility for rule areas is a priority. i also want to thank the chairman for agreeing with me that while the identical support should be phased out, we need to ensure that mobility fund is

operating and funded before the faison is completed for wireless etcs. the pause in the face down i suppose is now fully reflect good so while it can have some confidence that they won't does more than 40% of funding before they know what support they may qualify for and mobility fund. broad deployment of networks to reach individual consumers has been paramount -- the paramount purpose of the high-cost fund, it is also provided for service to community and institutions including schools, libraries cannot care facilities and public safety agencies. in order to ensure these vital and dictation can obtain the modern services essential for service to their communities, we have provided an opportunity to engage with usf for recipients and network planning stage. as such, communication is

carefully considered by providers. similarly, recipients would detail in their annual reports to the sec of the state commissions those community anchored and institutions that have received service as a result of the fund. accordingly, we will be able to account for all of the benefits local communities receive as a result of usf support. although the reforms we adopt today are extremely important for ensuring that basic and advanced service -- communication services are physically available to all americans, those services cannot be surely available if consumers cannot afford to purchase them or of devices they need to access some are not available r