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commission as two new commissioners prepare to join the agency that regulates communication by radio, television, phones, satellite and cable and that oversees aspects of the internet. >> host: well, for the first time in nearly a year, the federal communications commission will have a full complement of commissioners, ajit pi and jessica voten worse l were -- rosing worse l were finally confirmed this week. the chairman of the senate commerce committee, senator jay rockefeller, had this to say. >> these are huge nominations, and they have vast effect on the future of our country. for better or for worse. i think it's hard to overstate the importance of the federal communications commission and its reach. >> host: well, here to discuss the nominations and the confirmations of the two new fcc commissioners are two very well

known be technology reporters, cecilia kang with "the washington post," amy schatz with "the wall street journal." amy schatz, senator rockefeller seemed to hit this really hard, that this was very important and that these nominations were important. what was his goal with that? >> guest: well, jessica has worked for him for the past five years, so i think he had a vested interest in this in a way that most senate commerce committee chairmen don't. they really want to have five people at this commission because it's a hot harder to find consensus when you've only got three bodies there. when you're looking at doing mergers, you'd like to have five people in there. this has been something that's been holding on for a while, and they were excited to get it finished this week. >> host: cecilia kang, what do we know about jessica

rosenworcel? >> guest: we've been seeing her sitting behind the senator in many meetings on the hill. she is, as is her colleague-to-be, ajit pai, they've worked at the fcc before, they know tech policy inside and out, so they're not coming -- they're coming with very thick and padded pedigrees when it comes to the subject matter, and what's interesting is they're coming at a time when the communications industry is going through a tremendous transformation from legacy technologies like just the plain old phone and dsl internet to broadband internet and wireless, and that's sort of the future. and in many ways these two nominees represent this generation that's really lived it more so than maybe other members in the past. and so they're coming not only with expertise, but from being kind of straddling this generation that's also living the transition of legacy to

broadband internet. >> amy schatz, ajit pai worked for senator brownback, they both worked in the senate. is that significant? >> guest: sure. one of the things that's different about apsychiatry is he has a slightly broader resumé. jessica had worked for chairman rockefeller, before that, she spent eight years at the fcc in various roles. ajit has been at jenner and block doing litigation for the last couple of years because he was waiting to get confirmed, but he was also depp te counsellen -- deputy counsel at the fcc and had work inside a couple different committees over on the hill. so he brings slightly, i think, broader experience than perhaps commissioner rosenworcel will in that he has more intellectual property experience, so it'll be an interesting mix. cecilia's right, they're both actually very young, early 40s

maybe, and it'll be interesting to see how they interact. >> host: nomination hearings were held last november. remind us why we're now here in may talking about their being processed. >> guest: well, they got, these two nominees -- ajit pai and jessica rosenworcel -- got caught up in an investigation that another senator, senator chuck grassily, charles grassley, has been pursuing with the f creditcc trying to underss decisions on licensing and waivers. so senator grassley's been investigating this, and he has felt the fcc was not cooperative in handing over documents related to his investigation. and so to keep pressure on the fcc, he threatened to withhold his vote so, essentially, holding up the nominations, the nominees from going through the

process of actually being confirmed and heading into the agency. so the two, essentially, got caught up in politics. >> host: how does that effect the work of the fcc? they've had three commissioners now for several months, michael copps leaving in january, etc. >> guest: they don't seem to have done too much. i'm not sure if that has to do with the fact that they were down two bodies or that they don't have a particularly ambitious agenda right now. but it's certainly something that, you know, everybody wants to see five commissioners over at the agency. they like to have more people there in the room, they like top more people to bounce ideas off of, and when you're dealing with mergers, you like to have different people bringing in different perspectives when you're talking about conditions and things like that. so it's something that the industry definitely wanted to have these two get through the process, and at the confirmation hearing there weren't a lot of real objections -- >> host: they've been very well supported.

>> guest: they were. >> guest: there has not been a lot of activity at the, fcc, probably the biggest item will be the auction. but this is also an election year, and even though there's a full commission now, you may not necessarily see a jump-start at the agency when pa, and i rosenworcel join. and going forward and also at the end of the election, who know bees whether there'll be more shakeup at the fcc. very well could see transition at the top as well. so for the time being, there might be major changes really at the fcc to the agenda as well as seeing much activity at all. >> host: well, cecilia kang mentioned or incentive auctions, and senator snowe during the confirmation hearing asked about that. >> one of the issues, of course, is incentive auctions and, obviously, i think there's been a disproportionate reliance on

incentive auctions to provide, you know, and i understand that the fcc believes it'll yield up to 24% of the 500 megahertz. on the other hand, that's just a very small amount of what's going on required -- going to be required by 2020 in terms of the demand and the explosive growth in wireless broadband. so how best to develop these technological innovations? do you, you know, what should be done in order to establish, you know, a better approach than otherwise just relying on incentive auctions? >> thank you for the question. i know that you've done a lot of work on this, and i would say that we have a real demand for spectrum, but we would be foolish if all we did was rely on things like incentive auctions and the auctioning of spectrum. we have to start devoting our intelligence and our resources towards developing better technologies that use spectrum more efficiently and also

studying the topology of networks so we can be more efficient with the networks we do have to today. >> but in what time frame should that happen in. >> oh, it should happen immediately. >> can it happen immediately? >> if confirmed, i can tell you that i would certainly make it a point of trying to do my best to do so. >> thank you. mr. pai? >> senator, i also think i would urge the commission to do whatever it could to create a regulatory framework that incentivizes that development as quickly as possible. >> host: amy schatz. >> guest: well, they're preaching to the choir if you're talking to the fcc, because thai all about sniff -- they're all about incentive auctions. not just incentive auctions. the problem that really both the new commissioners are going to face is they don't really set the agenda at the fcc so they, basically, have to do and look at the issues that the chairman asks them to look at. there's only so much they can do individually to push this forward, but it's certainly an

issue that the agency's looking at. olympia snowe thinks there's too much reliance on incentive auctions. >> guest: and it seemed that at least commissioner rosenworcel agreed. there are a lot of different pieces to the sort of puzzle and trying to figure out how to get more spectrum out. one includes mergers as well. verizon is trying to buy spectrum from cable companies, and this is on the heels of the fcc's, um, pretty, you know, audacious, if you will, um, decision to block another her injure that was really big and created a loot of headlines. a lot of head liens. so there's going to be a lot of interest on how they stand on that merger, i think that's probably one of the biggest issues wall street's going to look at right away. and also there's a lot of questions to how successful incentive auctions can be k. if terms are right for

broadcasters, if they want to give up spectrum for auction. by the time the auctions are put in place, the chairman may not even be there anymore, he's the one that designed this. jessica rosenworcel and ajit pai are adopting a plan they didn't conceive in many ways although jessica worked on this quite a bit, the idea of incentive auctions and spectrum on the hill. so there's a lot of questions as to how far this goes, these incentive auction plans, how spectrum plans in general will pan out over the next couple years given what's predicted to be a lot of change. >> guest: cecilia's right, you know, it's going to take years for any kind of auction planning. it takes a couple years at the fcc. and that wasn't anywhere near as complex as what you're talking about with incentive auctions. already you've got broadcasters hemming and hawing about whether they'll do this. the whole thing is going to be

very, very complex, and she's right that we may not see a chairman genachowski for much longer even if president obama is reelected. >> host: now, you've both kind of alluded to that, that we might not see a chairman genachowski if president obama's elect today a second term. are we hearing things? is there rumors going around? >> guest: well, i think if you ask the chairman directly, and i think we both have, he will say that he plans to fulfill his full term. [laughter] that said, you know, if you look back in history, when there's transition even if, even if president obama, again, is reelected there's often times sort of a changing of guards in a lot of the different positions and appointees that he's, from different agencies. i think that's widely expected, and he's served a full four years, so that's, you know? >> host: amy schatz, have we seen any leaning by these two nominees toward cable or wireless or broadcast or any

kind of a maybe a perceived bias? >> guest: um, i haven't. um, i don't think people really know as much about ajit pai perhaps as jessica rosenworcel, and even with jessica, you're not really sure where she stands on issues and if it was her belief or if she was just being a good staffer and conveying the beliefs of her boss, whether former chairman mike copps or senator rockefeller. ten years ago ajit pai worked for verizon for a few years, but be he left, and after that it's not clear that they really do. >> host: were there any, um, any of the industries opposed to these two? >> guest: no, they were widely supported -- across the industries? >> guest: both nominees, that's right. and i do think, and amy makes a good point, that ajit pai in particular has a broad private sector background. i believe i've heard he worked

for verizon, he represented ncta at one point. it'd be interesting to see if he has to recuse himself from certain positions. when he was at the fcc, he was advising the chairman at the time, i believe, on the xm/sirius merger, so he's worked in satellite as well and communications. just because you work on an issue doesn't mean you have a conflict or you have a particular bias. i think amy makes a good point, sometimes you're being a good foot soldier in delivering the policy goals of whoever it is you work for or the body or the private sector that you work for. so it will be interesting. i think there's probably a few more questions as to the private sector experience that ajit pai brings to the commission which will also with a new -- be a new thing because there aren't a lot of commissioners who have work inside the private sector in the past and currently. >> host: well, senator jim demint is another member of the commerce committee and another issue that the two new

fcc commissionersing is potential usf reform. senator demint at the hearing back in november asked about that. >> do you think the fcc has the authority to expand the contribution base, um, for universal service fund to internet service providers? >> under the communications act, the commission has authority to assess on interstate telecommunication services, but it has discretionary authority on a component of information services which could be described as broadband. so i think that is the state of the current statute, and i would certainly commit to abide by the statute. >> so you think that internet services fall under the telecommunications? >> i think a portion of it could. i think at present the system is sub sitized by internet, by, excuse me, interstate telecommunication services. i think the challenge going

forward is making sure that the revenue base is strong enough to support the type of universal service reforms that the agency just adopted last month. >> so you think fcc now has the authority to assess fees to internet service providers to fund the universal service fund? >> it has the authority under the statute to assess on telecommunications, not information services. >> okay. um, can you really divide an internet service provider that provides both, you're talking about assessing fees to part of their services and not to others? >> i apologize, i'm getting fairly legal on you right now, so why don't i say more simply that the current system is supported by telecommunication services, long distance services as we commonly know them. >> right. >> i think the challenge going forward is making sure we have a system that can support universal service in rural

areas. i think that the agency is going to look at new systems like the ones proposed in the last administration that involved connections and not necessarily internet or broadband services, but connections. >> connections. mr. pai, any thoughts on the subject? is. >> senator demint, i can scarcely improve on my colleague's interpretation, but, of course, the commission having recently released the universal service order and indicated that it intends to look at the contribution mechanism next year, i do think they should take a close look at the nature of statutory authority before assessing fees in the manner you suggest. >> host: cecilia kang. >> guest: that was a jumble, wasn't it? [laughter] and i think it points to, um, and not really the fault of the commissioners to be, it points to sort of this underlying question and tension that exists at the fcc, what's its role these days?

it clearly has authority as the regulator or telephone services, telecommunication services, but its role over broadband internet services is under question, and that's what created a firestorm over the last few years to what is the fcc's ability to regulate, you know, rates or, you know, nondiscrimination statutes or what have you on internet broadband providers. and, um, there's big battles that have taken place, and they currently are. they're still in court over whet net neutrality, the big issue that seemed so passe today but just a couple of years ago was the hottest issue at fcc. i think as long as there's any sort of regulation over internet service providers, you'll have some parties saying the fcc doesn't have the ability to regulate those services, and you'll have ores that say they absolutely do, and others still will say let's try to settle this once and for all and redefine who we are.

and rewrite our rules. so that's, that's why, that's sort of the tension going forward at the fcc is to, you know, how it can carve out its agenda and execute its agenda when these really basic questions are still being debated as to what the role is of fcc. >> host: anything to add to that, amy schatz? >> guest: that was a great clip to show the difference between the two commissioners. >> host: what was the difference? >> guest: commissioner rosenworcel seemed to come down on the side that the fcc does have authority to increase the base of people who pay into usf. i'm not sure i kind of understand where she was going with some of that, but she sort of felt that they have that authority to extend it to the internet, whereas ajit pai was taking more of the free market approach, and it shows that ideological divide between them.

>> host: and where was senator demint going with that question? be did he have an agenda with that question? >> guest: i could be wrong, i don't think he necessarily wants usf contributions paid for by be internet lines. >> host: senator amy klobuchar asked about competition and mergers. >> what role do you think the fcr should play to insure adequate competition in the communications market? >> guest: i think that increasingly we're going to see more and more intermodal competition, so making sure more wireless spectrum is available so there can be more competition from wireless is a good place to start. >> okay. want to add anything? >> senator, i would build on that by saying to the extent the commission can do so, it should make sure the rules of the road don't differentiate between the particular technology that is used. i think a lot of times the commission is dealing with regulations that apply to telecommunications carriers but not to cable providers, to cable providers but not to wireless

providers, and to the extent those industries are competing in the same space, i think it's important to have technological neutrality in order to insure everyone is competing on a level playing field. >> host: amy schatz, what have we learned from that video? >> guest: it was something i think you saw throughout that hearing was that commissioner rosenworcel had very defined, very well-articulated views on these issues because she's been doing this for a long time, very comfortable in front of the senate commerce committee, and in a lot of ways commissioner pai was getting to draft off her in a lot of these issues because there is, actually, quite broad support amongst these commissioners no matter what their party is on some of these things, and they feel like, you know, the communications law hasn't kept up with technology. they are struggling to figure out how to apply these old rules to new technologies. >> host: one thing, cecilia kang, that ajit pai said, he thought the rules of the road

should apply uniformly across different technologies. did i catch that correctly. >> guest: yeah, and i wasn't sure exactly what he was referring to, if he had anything in mind, a particular order, a particular rule. i think that goes along more with the general spirit of his support for free markets and evenness and level playing fields. i think he's by saying one thing you hear quite a bit from republicans is by, for example, deciding if certain big companies should not participate in an auction, let's say. in that way you are inadvertently pick being favorites in the -- picking favorites in the private sector. i think generally most republicans would agree that it's better to let the market decide on these things. so i think it was more of a comment on the general free market sort of principles that he has. i don't know, i didn't get much from that particular comment. >> host: what's another issue that the commission and these two will be facing in the near

future? >> guest: i think spectrum auctions and sort of the deployment of that. it is going to be a long slog, as we talked about before. that will be the biggest issue going forward. i think net neutrality will always percolate on the side as to what the authority is. i think there'll be questions over media ownership going forward as to what the fcc's rule, and i think in 2007, if that still stands and if current slate of commissioners would support, um, trying to reestablish that rule. um, i think one issue that's very interesting going forward, and commissioner rosenworcel's own committee addressed this, is -- recently in a hearing -- is the role of federal government in online video going forward, whether data caps, bandwidth, restrictions by internet service providers should be regulate inside any particular way that feeds into its net neutrality rule.

you have a lot of companies -- you have companies, some companies like netflix that's really lobbying and increasing their lobbying efforts to try to make sure that companies like theirs don't get sort of caught or suppressed because of data caps imposed on the wire line or wireless side. so i think sort of the whole role of internet service providers and the fight over the future of tv and online video is going to be really interesting going toward. i don't know exactly how they would address that, but i'm sure that's something people lobby around. >> host: amy schatz, what other issues do you see out there? >>ing i agree with all those. i think another one that's going to be fascinating to watch is the indecency issue, because we're still waiting for the supreme court to decide whether the fcc has the authority, and in the meantime we've had six or seven years of complaints that have been piling up over there because the, 3 cc hasn't -- fcc hasn't been able to act on them -- >> host: why? >> guest: because their legal

authority has been challenged, so just the foundation of it had been challenged by the broadcasters who were upset with former chairman kevin martin and his sort of reign of what they considered terror in terms of the things they would oppose. we're expecting the court to rule any monday now on that, so that's going to be fascinating particularly with commissioner rosenworcel because both of her former bosses were very, very hard core in their belief that the fcc should be very strict about how they enforced indecency rules. commissioner copps was song on this as was chairman rock ferrell, and we really don't know -- rockefeller. >> host: so, jessica rosenworcel worked for chairman rock feller and for daniel inouye, is that correct? >> guest: yes. >> host: senator pat toomey was at the hearing, and this was his question and the answer from the

nominees. >> december a year ago the commission adopted the open internet order, currently the subject of litigation. i think it's before the d.c. circuit court of appeals. in the event that the commission loses that case which is a possibility, of course, um, would you each comment on whether or not you would support the idea of reclassifying broadband as a telecommunications service under title ii of the act? >> as i noted earlier, the commissions has had a practice during the past decade of treating those services as information services pursuant to title i. the supreme court upheld that approach. i think there's been a fair amount of reliance on it. but i think the ultimate decision will depend upon the findings of the d.c. circuit, and i would certainly as commissioner f confirmed, agree to abide by that. >> mr. pai? >> senator, if i'm fortunate to

be confirmed, i would have some concerns about reclassification to the extent that the imposition of those types of common carrier regulations might dampen economic investment, the willingness to take racings, and that is -- risks, and so to that extent i would be a little hesitant, especially if it came as posed in your hypothetical in the wake of two cases that the commission lacks authority elsewhere to pursue that route. >> host: amy schatz, what'd you hear? >> guest: that is the biggest issue that they're facing next year because we're not doing thinking on net neutrality right now, we're still waiting for the d.c. circuit to decide. but when they do, and if they come down and decide like they did in the last case with comcast and basically throw out the fcc's rules, the fcc's in a real bind because the whole basis of their rules are based on title i, and if that gets tossed, the only way really they can do this unless congress

gives them new authority is look at going under title ii which is horribly arcane, but i'm sure all the telecom attorneys in the audience understand this, but this brings a lot of other regulations on top of broadband providers that they don't want. >> host: and, cecilia kang, you mentioned earlier that this is an election year. is anything going to happen? does this have to happen? >> guest: not necessarily, although i think you'll see a lot of private companies arguing, continuing to argue that the fcc does not have authority. the fcc won't take this up. i will say one thing that's very interesting is jessica's answer is not to say i do not think we need to reclassify, she's saying as things stand i feel pretty good with how things are. but like amy said, if title i is tossed out or the understanding of the authority under title i and the fcc were to have to decide, if they were to decide to try to reclassify under title ii, she's not saying that she

disagrees necessarily. ajit park ai is -- pai is sort of saying he does disagree. so her thinking aligns much more with the chairman's office which is sort of back and forth. they came up, it was just going back and forth, we do think, we don't -- we're not sure, we found a third way. it's unclear, and i think that's been strategic, actually. they don't want to do something that controversial at this point. >> i think too, though, the one thing you would say about jessica, she's not a waffler. she definitely has very strong points of view on things, and can on net neutrality she's been -- even when she was a staffer for commissioner copps, i remember when they were doing the at&t/bell south merger, she was really arguing to get a condition imposed o thanker her -- imposed on that merger. this is one that i think she would at least explore. final question.