>> a look inside the u.s. capitol at 10:00 on the east coast the house working on a bill authorizing water resources projects run by the u.s. army corps of engineers. when they were waiting for remarks from house democrats their meeting with ralf and human services secretary kathleen sebelius talking about problems encountered a with the health care website. the secretary agreed to testify as early as next week and according to the house energy and commerce committee the secretary is expected to appear before the committee members next wednesday october 30th.

we will continue to update you as more details become available. the senate is out this week so on c-span2 we are going to bring live coverage of a number of events including a house hearing at 10:30 that examines the future of why your communication networks and how technological advancements could impact consumers and businesses. >> host:

>> host: welcome back. we are joined by congressman joe barton, a republican member of the house energy and commerce committee. thank you for joining us. later this week the committee will have the first hearing on the web site healthcare.gov. tell us what are your biggest questions? >> guest: my biggest question is why they put that much money into something that flat out doesn't work. there's been lots of so-called which is over the years and other web sites in the private sector, but we've never had a website that almost no one gets through the first time without any problems. so we have the contractors this their stay and the next thursday the secretary kathleen sebelius. it's a full committee meeting.

chairman up ten will chair of a hearing and there will be lots of questions. certainly on the republican side and on the democrats' side about how they could spend that much money and get almost nothing that is workable. >> host: an article out of the new republic made the case that by holding a hearing on the healthcare.gov glitches republicans are saying they want this to work and for a very long time they've been against the health care law. is that true, do you agree with that argument? >> guest: i voted against it in the committee, subcommittee, on the floor i voted to repeal it and believe it. i have a bill that by introducing either today or tomorrow or maybe monday next week called the obama choice act which would make it voluntary for a year and let the american people choose whether they want to use it or not. not delay it, go ahead and start it but instead of making it mandatory, but people decide on a voluntary basis.

so, you know, obamacare is well intentioned. there are some people that are benefited, the people who don't have health insurance with a pre-existing condition. but for the vast majority of americans, it's a very bad deal and will ultimately fail. the question is not if it's going to fail. it's when it's going to fail. >> host: hhs is bringing in extra help. but they haven't really been forthcoming as to who goes helpers are carried to you think the administration should detail who they are bringing in and if they don't do you think it is a conflict of interest for them? >> guest: they are definitely conflicted. there is no question about that. they started the initial contract with a canadian company to be a fight on think it was competitively bid. it was 50, $60 million. we don't know the number now that the spent but it's north of

300 million. the thing still doesn't work so they can bring in all the experts they want but the basic premise -- they weren't letting people look at the pricing until you joined up sometime later this week the began to let people look at something. koln chris mann murphy of pennsylvania said he went on the blue cross blue shield site in pennsylvania in a private sector and within a minute he was given options with prices without giving any personal information at all. on the official web site you have to give a lot of history and commit to purchase something and then they will let you look at it, if you get through. so it's not working. they can bring in all the contractors they want, but i think they've got a real turkey on their hands.

>> host: the "washington post" reported last evening the senior hhs officials who briefed democratic lawmakers on obamacare ask the department of health and human services house democrats wednesday about the implementation of affordable care act. the closed door session happening this morning in just a couple hours. have you heard anything whether you and your republican colleagues will get a similar briefing? [laughter] >> guest: first i have a feeling this person is going to get an earful from the democrats especially behind closed doors. they've tended to be very supportive and, you know, act like this is the greatest thing since sliced bread. but i have a feeling behind-the-scenes people like john dingell and henry waxman and anna eshoo, even nancy pelosi and steny hoyer i think they are going to roast this guy or girl that is going to do the

briefing. it's unlikely the president is going to give the republicans is another option. but again, we are the majority. we can hold hearings and invite whoever we want to with the support of the democrats to come to these public hearings. >> host: we want to make sure we get in calls. the republican number is 202-737-0002. democratic callers to 025-85-3880 and independent your number is 202-58-5382. he mentioned that you will hear health and human services secretary come and. what are your questions for her specifically? >> guest: when did she know this was going to fail and why didn't she do anything about it would be one question to be buying the chairman and the caucus and i have questions about the lack of privacy of the individual data. i'm told there is a disclaimer somewhere in the synnott process

where it tells you any information that you give them any web site is not proprietary and does not have to be confidential. and they can share that with anybody in the government or anybody in the private sector that they want to. to me, that is totally unacceptable. even on a government-run website umar sharing details of your history and family's history and have the right to privacy. that information should only be seen by somebody come at the insurance community and at some point in time perhaps in the medical community for treatment decisions and it shouldn't be shared with any third parties, period. >> host: the secretary said that she is committed to continuing her job despite calls for her resignation to read to you believe secretary sebelius should resign? >> guest: she should have punishment in my mind she wants to keep in that job.

i give her credit for being an honest public servant. i think she's trying to do the best that she can. i think that she hasn't performed well. in fact i don't think she has performed at all. in obamacare whether you're for or against it is an absolute disaster. i think it could be appropriate for her to resign. i am not yet ready for her to call for her resignation and chairman upton said he wants to have to wait and see attitude next weekend and then we will see. her performance in this is not something that's going to make the textbooks about, you know, out to start a new program. just the opposite. >> host: starting in mississippi on the line for

republicans. >> caller: i am thoroughly disgusted at the way the media and the republican party is tearing at and keeping the tea party down i'm not a member but it represents the general public to get from people i talk to our local community who are all fed up with the business as usual in washington. and the tea party is doing nothing but the country wants and that is a change in washington, d.c.. people have had absolutely no concern for the constituents. all they think about is the money involved and lining their own pockets so far as obamacare is it is going to fail on its

own. i certainly believe it should because it is a total disaster to the average human being out here on the street. thank you very much. the academy of -- >> guest: i agree with the caller. the name tea party comes from the patriots and what we now call war for independence and in boston harbor they want to pay the tax said they had a party and they threw all of the tea into boston harbor. the tea party in texas are people just like the caller said they want more freedom, less government intervention and in the traditional family values. i'm a charter member of the tea party caucus.

i don't have and always amicable relationship with my tea party friends in my district and in the texas part that i represent but it's a very positive relationship. and as he said, the tea party isn't an extension of the republican party. they are primarily independent who want to be involved from a conservative standpoint. i think that is very appropriate and i am proud to be a member of the tea party caucus on the obamacare issue i think it will fail like he said but i don't want to have to wait three or four years if we don't have to. in some of these hearings they will point out some of the false and i think the american people are going to demand either changes on the repeal or in the case of my bill lets me get a voluntary for a year and let the people choose. >> host: next a democratic

call. go ahead. >> caller: good morning. how're you doing? please let me get my thoughts out. i heard you say that he would ask kathleen sebelius when did she know the rollout would be a disaster. when did you know that the shutdown would cause thousands of people to lose the job and cost the country 24 billion with a b, $24 billion to destroy this country with obamacare and you knew it wasn't going anywhere. i don't understand you republicans. from a number one you said that nobody wanted -- the american people don't want this. like you speak for everybody. but it's amazing. even though this program happened, people are still being registered. this is what people want. and then 20 million hit the website. now you act like you are concerned because people can't get through.

don't you know american people are not stupid? we know what you are doing. you see it that people are interested in this insurance and now you want people to forget about it. you shot this government down -- >> host: thank you. we will have the congress and respond to your thoughts. >> guest: i don't have a problem listening to beverley. from her point of view she makes a lot of sense. my first comment is if she happens to be a constituent of one of my best friends in congress, congressman bobby rush, i know that his wife has had some surgery and the congressman has been with his life in chicago so she's a constituent or even maybe a member of the church and sees the congressmen telling the two-party republicans he's praying for his wife and hopes that she gets better. but this $24 billion that beverley spoke of, that is

federal money that wasn't spent. that's the federal money and there's good news and bad news. the bad news is that money didn't go out in the economy. the good news from my standpoint is some of that money would have been wasted. it wasn't the goal of the republicans to shut the government down. it was too slow down or possibly stop obamacare and i think it's a fair criticism. are we ready? morning. i'm the chairman of the democratic caucus pleased to be joined by vice chair crowley and pleased to be joined by two of our colleagues conagra's woman of nevada and the congressman of

texas. we are here to talk principally about health care and the fact that so many americans will now have access to it. we have a good caucus meeting today where we discussed a number of issues including of course moving forward with our economic challenges in making sure that we don't go through the same manufactured crisis of watching the government shut down and the potential of america desalting for the first time in its history indicating its past dent and we and we can build after last week's agreement on the types of measures that are necessary to get americans back to work. some 50,000 americans have jobs in the last month. we want to see that improve because we have to make up from the bush year of recession where we sell eight to 9 billion americans lose their jobs and so a lot of progress has been made. more than 3.5 million jobs

created, and sorry, 7.5 million created but we still have a lot more to do because americans want to know that there's going to be a good job waiting for them that helps them with securing the american dream for their families. on the affordable care act, a lot of us want to see this move forward as quickly and as well as possible because for many of us, the issue is real about making sure that americans have access to quality affordable health care. it's time for americans, all of americans to have the security that they need in knowing a health care bill will not push them into bankruptcy and that is the duty of the affordable care act. the health security law makes sure that americans finally can rest assured they will have access to indecent doctor in the hospital should they need either

of those for their kids, for their family to so we are here to ensure that americans get to enroll in these plans that are being made available throughout the country. we are concerned about the process. we are not happy of the process doesn't work well. we are not interested in hearing about glitches. we are interested in moving forward but for us while the process should not be a problem, our biggest problem is with the product. we won the product to be there for many americans. and you have before you three of the four of us have been to know what we mean when it comes to trying to get americans affordable health care insurance because we haven't represented the three most on injured

districts in mechem when it comes to having affordable health care. so while the glitches are upsetting, it would be a travesty if on january 21st we didn't see that americans got to start using their health care insurance the was made available. we want the process to improve but we are not interested in trying to torpedo the process. we want to improve the process as quickly as we can because a lot of the folks that need to have the process and therefore gain a quality health insurance plan for their family and i know that mr. crowley's district has a lot of americans who are interested and accessing good quality affordable health care. so, we are here and ready to work and we have some individuals from the administration from the health and human services department

come to tell us what the latest was and they told us of all that is being done to try to deal with some of the errors that were occurring with the website, how they have improved that and how they are moving forward with more access to phone coverage to get people access to the information and of course from person-to-person communication is interested with those applying for the health care plans. we believe that come january 21st, a lot of our constituents will have access to quality affordable health plan and we are going to do everything that we can working with our colleagues and the administration to make sure that is what happens because of the end of the day no process should bogged down people getting a good product to make sure the have good quality coverage on health insurance for their families. with that let me yield to the vice chair. >> thank you, xavier.

i'm glad i'm not in the top three. but there is no question there were still 155,000 constituents in my district who were currently uninjured and look forward to the opportunity many of them for the first time in their lives to afford health insurance. it's not just about a website. health insurance is about health security for millions and millions of americans who cannot afford or haven't had the ability to afford health insurance. under the offer will care act that is about to change for them. as i said, this will give millions of americans of the access to quality affordable health care. also the diabetics and care survivors will no longer be denied coverage for pre-existing conditions. the medical decisions will be made by the patients and their

doctors. millions of americans will finally be able to get insurance. and in fact, july constituents need the small is that more new yorkers have completed an application and received an eligibility determination more than any other state, no offense to my colleagues here. new york is doing quite well so there's something that needs to be done to fix the technical issues absolutely. but we can't lose sight of the fact this is getting millions of americans options for quality affordable health insurance for the first time in their lives. republicans are looking for problems to exploit. we democrats are looking for problems to fix the solutions. we saw the shutdown of the united states government, the shut down in an effort to undermine the trouble care act

to redefault and on our debt to undermine the implementation of a law. one has to start to question the motivation behind much of what you're seeing out there with the republican party today. with that, i will now turn this over to dena titus from nv's first district. >> i'm dena titus and i represent a loss of adis valley. as you heard, nevada is always one of the top states for the percentage of people who are on injured. some 200,000 people in that area don't have insurance. in nevada is also one of the states that has its own exchange, the silver state exchange and what has been overlooked in some of the criticism of the system is that the states are working well. we've had about 1500 applications and about 140,000 people have gone to the website and looked at it.

i held a round table this past weekend with organizations that are also helping us on the ground and that is something we shouldn't forget. we are acting like semi navigators to bring people into the system. you have aarp going between 50 to 65 to be sure they have information. you have campus organizations and community college going after young people planned parenthood is reaching out to women and navigators and the hispanic areas are going after hispanic women. las vegas has a population that is working but not ensured and a lot of those people are women and dancers and a lot of them are in salons they do nails and hair and they would like to have insurance. we are not waiting for them to come to the website pity we are going out there after them and

it's making a difference. it's very important that they have coverage, that preexisting conditions will the longer mean that they can't get insurance. that's the word that we are spreading and it is being very effective. as we look at what has happened with the website and we are trying to fix it don't fall prey to the ecological fallacy. don't forget you can see the forest just don't get bogged down in the trees. i will turn this over to mark. >> thank you very much. representing fort worth, arlington and dallas and i have the highest on injured rates in the entire country about 40% of the constituents about 265,000 don't have insurance. when you combine them together you have a million uninjured and contrary to what you may be hearing from republican leaders

in the state, i can assure you that texans particularly in the district i represent in the dallas-fort worth area of the affordable care act work for them. they want to enroll and then they want insurance. i'm happy to report when i read an article in the paper today she was having trouble on the computer but she went on the phone and was able to enroll in 15 minutes. we want people to continue to try to enroll. it's very important that people get enrolled. as many of you know texas decided not to opt for the medicaid expansion. many consider that to be a mistake by the governor and the republican controlled legislature. because of that particular decision we are still going to have a huge gap that is going to occur and texas is one of the

states that has these problems but it is in very important people continue to try to enroll the bugs in the system will be worked out and we feel like we are making headway and i know the people in my district are truly anxious for this to work. i'm going to do everything i can. i've already been a part of two different programs in the congressional black caucus to inform people about this and i've been a part of town hall meetings in the district and going out into the community to inform people about the affordable care act. i know i'm doing my part and i'm going to continue to do so because there have been problems. but i believe that they can be worked out and believe people will continue to enroll. >> i just want to mention in california we have our own

exchange and in california it's called california covered. i want to mention that in california, we have seen over 95,000 people apply for health insurance coverage in the first two weeks. in the first two weeks we saw over 95,000 apply for health insurance in the exchange. we have over 1.6 million unique visits to the web site in california and over 100,000 people call the service center. people are interested. people are anxious and we want it to work well for everyone. we would hope some of the states where you have the federal exchange would actually stop hindering the progress. we see that happening in places like texas we know there is outright hostility on the part of the state authorities when it comes to people finding out information about the insurance coverage that they will get.

that is probably one of the reasons people haven't had the best experience. it would help the local and the state officials wouldn't get in the way and would try to help americans get back access to what they have as the right and so it's very disturbing to see that the west side hasn't performed as well as we would like i think it is even more disturbing when individuals intentionally work against the american people and their rights that they have now secured to access quality affordable health care so we urge the government who may not have agreed with the affordable care act completely to please at least let their constituents back home understand what the affordable care act will provide them and let them decide. let everyone of us as americans decide what we want to do but don't hinder the process and then complain that the website isn't working. let's work together to improve the website and make sure people

have all the information they need so they can then make their own informed decision. with that we will take some questions. >> we have heard on the other side of the aisle some say well we told you. what assurances if any did you get from the officials that things are getting better convincing things that they said yes this is going to get solved quickly and as you will mengin you are uninjured constituents that this would work for them come january? >> we heard it's not from the individuals that are here from cms. we heard them from the president yesterday who said that he's probably the most and the happiest american when it comes to the fact the websites didn't work as well as we all had hoped. i don't believe the the president is going to allow days and weeks to go by without marked improvement in the websites capabilities and the ability of americans to gain the information they need.

i know they are working hard and we were told today folks are working hard in the administration and the department of human services to make sure that they have the resources in the right places. remember as well part of this is converse responsibility. we have to make sure that the department of health and human services has the resources it needs to make sure the people and the infrastructure is there to continue to have millions of people transition to getting quality affordable health care. so we will see what happens. >> should somebody be held accountable for the missteps in the website not performing? >> i will let my colleague's answer but i absolutely believe somebody should be held accountable. we should find out as best possible where the glitches were and what we should do but absolutely. when you hold a position you should be held accountable just as the folks responsible for the government shutdown should be held responsible for having cost some $24 billion we are told in

economic capacity and generation during the two to three weeks we were shut down just as we saw 800,000 plus americans not being able to go to work as a result of the government shut down. those folks responsible should be held responsible and those that might be responsible for the website not working as well as they should should be held responsible as well. >> let me add to that first one of the responsibilities in congress is to hold people accountable. what's more important than anything else is taking to the system working properly, not to be diverted. get the system up and running and there will be ample opportunity in months to come to see how could it have been done better and hold accountable those who were not up to par in the immediacy of the rollout. the other thing is to make sure that any american who wants to be covered is covered and that's

the prime responsibility. it ought to be the prime responsibility of members of congress as well. >> go back to medicare when it was passed. there were some factual or some incorrect information that had an unfavorable rate and seniors love that program. had a 91% rating compared to the 21% one was first ruled out by republicans and the biggest difference it's been pointed out that while republicans have done absolutely nothing to try to help out and make this even better than it is, they have just be me and the program. democrats on the other hand that was on congress at the time the democrats went into their district and talked to senior citizens and had a committee meetings and showed them how they could enroll in medicare part b and that is what america is looking for or those sensible

solutions on how we can make this program work better for people and not try to tear it down. >> i would say if there is a silver lining that there's a problem with the web site is that so many people went to it. they want this insurance, they want to get information, they want to sign up for its so that the allies all of the argument you heard on the other side that people think this is a terrible way to go. it is a perfect way to go and it is a way to provide insurance to so many people who are obviously very hungry for it or you wouldn't have had such a crash at the very beginning of people rushing to sign up and to get more information. >> they said they would like to see the individual mandate penalty either delete or e raced -- >> we are going to break away from the last few minutes of this briefing. you can watch it on our web site, c-span.org. you might have heard a couple of

questions about the healthcare.gov. president obama has brought his former budget director in to take the lead of fixing the website. he's also the cash for clunkers website and the sign up for the latest a g.i. bill. let's take you back to capitol hill just under way a moment ago the house energy subcommittee on communications and technology talking about wired communication networks. that is mr. greg walden. live coverage on c-span2. >> -- netflix and hulu. the lawyer communication networks language this is and because of a lack of innovation but rather than declining user base. high cost and unique regulatory mandates conspire to make the

economics of upgrade unattainable. today we stand on the cusp of to transitions in the wired network. the ip transition and the upgrade of networks to fiber. these transitions are a natural evolution as technology advances come a greater capabilities develop, prices drop and forces the market to respond. while some of the costs of upgrading and wireline providers are reaching out from the route the all dated regulations once enacted to break up a monopoly remain. consumers have come to expect as well as they should competition among providers and the innovation, innovative offerings that result from that competition. the question we face today is what is the appropriate role for the federal government in this transition? we should be looking not only on a theoretical impact of the policies on the market as the exist today but also to the practical impact of the rules in an uncertain future.

i look to invest in future technology to be able to do so without maintaining legacy networks. those in the competitive community should be able to look to the future with a certainty that they have the opportunity to serve their customers and consumers should be able to embrace this without interruption in the services they already enjoy. we must strike the appropriate balance between protecting consumers, promoting competition and not slowing the pace of needed innovation. the internet and wireless worlds have thrived without heavy regulation. the last thing we want to do is stifle the growth and innovation of the internet by subjecting it to complicated outdated government imposed rules of the plain old telephone networks. it's time to take a look at the role of regulation and allow your communication network marketplace and witnesses are here to help us deutsch us that. i think the witnesses for their testimony and now i would yield to my colleague from texas,

mr. barton. >> that is perfect timing. i just walked in. want to thank you for holding this hearing on the transition of the internet protocol. it's a topic we haven't discussed but we need to discuss in s. con. res. if i was serving on the subcommittee and full committee back in 1996 and participated in many conversations and debates and hearings and markups regarding that act. i remember discussing how we could make the marketplace more competitive and at that time at&t did basically have a monopoly and we believe that creating the incumbent local exchange and the competitive local exchange was a good solution for competition. that marketplace them and the marketplace today as you know are not the same. i do question now whether we need the title to protections

that we put in place back in 1996 and i think this hearing is a good start to the answering that question. >> i now recognize the congressman from ohio. >> thank you mr. chairman for holding this hearing today and i appreciate the witnesses for being here today. in the last three decades we enter the digital age of the ecosystem replacing the public's which telephone networks and internet protocol platforms. as we continue to see the convergence of evolution of the telecommunications marketplace the future of regulations is a top pick for the future investment in the innovation our economic growth. we need to ensure the current laws and regulations reflect the technologies and competitive dynamics of today's marketplace or protecting consumers' ability to access the communications services of their choice

safeguarding the reliability of the services. i've also asked to submit the chart for the record showing the share of u.s. households with which the service has a primary line in the service of the last ten years and look forward to hearing from witnesses today and i yield back. >> without objection the chart will be submitted for the record. i turn to my friend and colleague from california ms. anna eshoo. >> welcome to all of the witnesses in this packed hearing room. 17 years ago the 1996 act stated its intention, quote, to promote competition and encourage the rapid development or deployment of new telecommunication technologies. in the years that have followed, hundreds of and trends have emerged and with their creativity billions of dollars have been invested in the

thousands of new jobs have been created. so there's been a lot of good things that have come from that. as the title of today's hearing suggests and i underscore the word evolution in wired communication networks is under way creating new ways of delivering a familiar service. for over a decade, communications companies have been making the transition to ip. i think it's incumbent upon all of us here to decide why we would remove rules that have helped pave the way for greater competition and innovation in the marketplace and it's a worthy examination. changes in technology and infrastructure do not alter the national goals that have always guided our communication policies. as the commissioner has public knowledge articulate our conversation should begin by laying out the core values or principles that will guide the

transaction to all of the voice networks. fundamentally the fcc must ensure universal service to all americans. the rules of the road for competition as well as strong consumer protections and access to 911. consumers and businesses have to have confidence in the reliability and functionality of the services particularly during times of emergency and i sure it's an area that we are going to hear about it and concentrate on today. the reality is that consumers don't consider whether a phone call is delivered through its traditional switch network or ip. they just expect the phone call to connect as it always has. we all support investments that enable companies to offer their consumers new and innovative services and doing so more efficiently and reliably. the changes in technology don't

automatically make the markets more competitive. i look forward to the witnesses perspective on how we can ensure the transition results in more competitive choices. finally, it's important that the investment and job creation to remember that the investment and job creation do not come from just two or three companies. but rather in the ecosystem and we are blessed to have that in the country that includes hundreds of communication companies both small, medium and large. earlier this year the study found that updated competition policies would stimulate the hiring of up to 650,000 new employees in the telecom sector over the next five years and $184 billion of private funds in the u.s. telecommunications networks. so the topic of today's hearing raises first of all it's an important topic and also raises

important questions that it's our responsibility to have fairly answered. as a migration to all networks continue, the testimony of the witnesses and we had a sterling panel today will help insure that all laws and regulations promote new investment, competition and consumer choice. i would like to ask unanimous consent that this letter from the competitive carriers association reiterating the importance of long standing neutral interconnection requirements be submitted for the record. i yield back. >> of the chair now recognizes the vice chair of the full committee from tennessee. >> thank you mr. chairman and i want to thank you for holding this hearing. it is important and timely and we want to welcome our witnesses and thank you for being here. as you have heard each of us talk about competition and

looking at how that has changed in the communications marketplace. today we have that intermodal competition among the cable satellite and others. but these competitive serve services are based on outdated assumptions. and i think it's not easy for regulators and the federal government and here in d.c. to change how they think about the treatment towards communications in today's marketplace. and i do feel it is our responsibility to look at how we create the appropriate environment, put some regulatory certainty in place and then encourage that private capital and investment and focus on creating jobs. there are three things i want to drill down on a little bit today with you all. number one is it fair to tell someone who wants to invest in

tomorrow's technology that they need to a slowdown in order to maintain an old network that they don't want to invest and anymore? number two, does it still makes sense for the old rotary dial the model and yes some of us do remember that model to hold back the communications revolution that is before us now? number three, how can we make the transition to the internet protocol as seamless and dependable as possible? those are questions worthy of discussion. thank you all for your time and at this time i will yield to any other member. i do not have anyone in the queue. >> is their anyone on the republican side? the gentlelady yields back and recognize as my friend the gentleman from california mr. waxman. >> thank you mr. chairman. since the days of the black rotary phone, americans have

been able to count on the phone network to call friends and family come conduct business and reach emergency services when needed a. today thanks to innovation and competition consumers can connect to the phone network in more ways than ever before. when we pick up a wider list smartphone or dial in number over voice-over internet pravachol service, few of us pause to consider the technology why we simply expect our phone calls to go through. there is a technical backdrop for today's hearing. but our phone network is more than a system of wires, switches and technical protocols. is a part of the social and economic fabric of the united

states. as we consider this network evolution we must continue to protect the core values that have guided our communications policy for nearly a century. many of today's witnesses have articulated some version of these values and there is widespread agreement on principles. our commitment to universal service is a recognition that all of us benefit when everyone is connected. we protect competition because it is the most efficient way to generate new products at lower prices with the added benefit of limiting regulation. we have rules for consumer protection in because it needs oversight to ensure that services like 911 are provided even at the market is not yet demanding them. this is the mandate, chris has entrusted to the fcc and it doesn't change with new generations of technology.

i think we all recognize the transition to the ip based networks is already happening and this is a good thing. the transition needs more investment and opportunities for economic growth and new services that can improve everything from health care delivery to energy efficiency. the challenge we face is how to manage the transition and the ways that does not disrupt businesses and consumers that rely on traditional services today. i agree with mr. cicconi that we need the fcc as an agency to help guide the evolution to the all ip network. but i caution against using the advent of the ip based services as the vehicle to try to undermine the fcc's authority to preserve competition and protect the public further addressing

the concerns about ensuring the network reliability during disasters we need the fcc to address the impact of the ip transition a vibrant and vital fcc is critical to ensuring that the transition ultimately achieve the goal that we share which is a world class network that delivers greater benefits for consumers and our economy. i think the chairman for holding this important hearing and working with us to assemble a balanced panel. mr. chairman i would like to ask unanimous consent to enter into the record a paper by professor kevin am i rock entitled no dial tone the end of the public switched telephone network. >> without objection. >> and at this time i wish to yield the balance of my time to the gentleman from vermont mr. welch. >> thank you very much. i have the privilege of

introducing john burke from castle ten vermont from dartmouth college and a 12 year member of the public service board which is our public service utility commission. john serve on the committee on telecommunications with the national association of utility commissioners. one of the things he is so good that is talking about the impact on the rural areas of telecom policy. the congressman and by as you know started a caucus to try to take a specific look at how the policies we have to implement are going to be affecting of our rural areas and there is no person with more experience and wiser counsel the and the person we are good to hear from, john burke from the greek town of castled in vermont thank you. >> the gentleman yields that his time. the gentleman from virginia yields back so now we can move forward with our panel of witnesses. thank you for your testimony.

its most enlightening even if there's a conflict among you which is why you are all here. with that we will start with jim cicconi for legislative affairs for at&t. thank you for being with us and we look forward to hearing your comments. we are still on an old warrior copper network so if you can turn on that microphone. [laughter] that's embarrassing. >> chairman, ranking member, distinguished members of the subcommittee, thanks for the opportunity to testify and for holding this hearing. four years ago as you know the fcc issued the national broadband planas directed by you. that plan concluded bringing modern problem and services to all americans as a vital and to do so we must have communication policies rooted in the future, not the past. in my testimony today i want to focus on four points concerning this important transformation. first, transition to all ip

networks is happening today and i think the charts that you have up here demonstrates that that's over a ten year period and the smallest part of that at the end of that is -- >> is that for you to see or us to see? >> i had hoped the kennedy would have it -- the committee would have it. it shows by the end of this year only about 25% of americans will actually be taking advantage of the legacy wireline services. three-quarters of americans would have moved alternatives. the national broadband plan i think recognizes this transition is well under way. it's happening today and all of my fellow panelists recognize this as well. communications marketplace changed dramatically and so has my company in response to that. we provide broadband communications services in robustly competitive markets

where consumers have an overwhelming array of choices and believe me the exercise those choices on a daily basis. consumers and businesses are abandoning the old circuit switch wireline network and moving to idp mobile services offered by a host of different providers. in fact it is estimated that what we lovingly call plan of telephone service as i mentioned earlier in the chart demonstrates would become final only 25% of u.s. households. in fact in florida and michigan, two states that are not in the wire line footprint only about 15% of homes are still connected to the legacy wireline network today. second point, this transition to the ip network is a good thing and it should be embraced. this is a huge and crucial undertaking for the country. we are replacing their network to serve us well for 100 years with far more advanced and cable networks that we hope will serve us well for the next hundred

years. national broadband plans concluded the networks are vital to the nation's economic development and maintaining our global competitiveness. but these networks don't have and guidance. companies must be able to retire old infrastructure in order to make the investments in new infrastructure just like any other business would do. to do otherwise makes little sense and would indeed with the national broadband plan as made in paris. a third point, we have the time to do this right. this is not a flash cut. transition to the networks will take place over the course of this decade but we have to use that time wisely. the technical lead advisor committee suggested that the old legacy networks be retired by 2018 and the fcc should in any event set a date certain for retirement. the company believes it will take until 2020 to accomplish that and even that will require

a maximum effort on our part. in the meantime we've asked the fcc to come back to the industry-wide trials. in our case we suggested converting the pilot y wired centers in our footprint all idp. we feel the trials are critical. as careful as our planning is, no one can anticipate any issue in one week transition of the wireline structure. the trials will help us learn while we have a safety net in place and while we learn all of the industry, government, customers and stakeholders can then work together over the coming years to address any problems we find. this leads to my final plan which is the importance of an overall framework of values and principles to guide us during the transition to the all ip networks and in that regard some of our friends in the public-interest community including one of my colleagues on the panel today have served us very well. they stressed that the transition from the old to the new should consider things we

have all come to see as fundamental universal connectivity, consumer protection, reliability, public safety, interconnection. we know that there will want to be a regulatory freeze zone nor are we seeking that. but we do feel that any regulation should be rooted in the problems of today, not the problems of a bygone era. regulations should also recognize and give deference to the traces of consumers and what are now highly competitive markets and treat all providers equally regardless of technology or the company's lineage. this is not the first time they've planned for the communications transmission. as it is noted by the national broadband plan we need wise government policies to ensure the legacy regulations do not impede the investments the country needs and that the interest of consumers are protected as the new technologies are devoid. thank you for holding this hearing today. i will look forward to your questions. >> thank you for the testimony. we appreciate your testimony.

we will now go to mark iannuzzi. we are thankful that you are here today to represent the industry and yourself and please turn on that microphone, pulled up close and we look forward to your comments as well. thank you for joining. german, chairman upton, ranking member anna eshoo comer making member waxman and each member of the committee thank you for the opportunity to speak with you today. i am mark iannuzzi of telnet providing telecommunications and broadband services headquartered in jolie michigan. we are also very privileged and proud to be the communications service provider to chairman upton's district offices in kalamazoo michigan. we offer a range of essential communications services for small to middle sized businesses including classic boies come ip telephony, host of ip applications and advanced data and network services.

in this increasingly connected world, we help unify and simplify all the ways that business is communicate and collaborate providing them big business solutions to small businesses at prices they can afford. today i am pleased to appear on behalf of comtel. nearly two-thirds are small or medium-sized businesses that have $10 million or less in revenues if he were than 100 employees. it is about entrepreneurs serving entrepreneur. a background about myself. i was born and raised in detroit. i'm an american engineer and entrepreneur i built telnet with my brothers 15 years ago from the dirt out of the basement of our home. to this day however since that time we have invested upward of

$100 million employee now over 100 careers associates in our company and we are very proud to have created the first network in the state of michigan that integrates the vast majority of the state with a service area greater than at&t and frontier combined. one of the things that is in the long pull upon me was a conversation i had with my father when i was about 5-years-old when i had to do a book report on poverty. i asked my father what is poverty? my father paused and he told me poverty is about persons without trace -- choice. i thought it was about not having a lot of money. but it was his pride of being and i tell the immigrant, u.s. citizen to be part of this great land of opportunity that he had a choice for himself and our family. ..

some things never change. one of which is the enduring truth of free functioning competitive markets the bring about the greatest goods for the widest array of people the world has ever seen. we are for the rule of law, which means trust. it means certainty in keeping our collective, including those in the capital markets who have invested their cells in our endeavors.

and, finally, we are for ensuring that there are no artificial barriers to progress. not only for those of us are currently in the market today, but for all those are yet to be born who will take up the mantle that we have set forth. so let us begin, let's start the beginning, the 1996 act. the 1996 act unleashed the greatest advancement in communication history since the history of history. improvement store typically today in terms of the capability, the competitive position and the productivity in this country are mind-boggling. and to that extent i would like to extend my sincere salute to chairman upton, congressman dingell and all the members here who are participatory and 96 act, because your leadership was in snow in a bipartisan seen for this landmark legislation which has revolutionized the industry of communications.

at the very soul of that act, the very soul, was designed specifically to open up competition. including the ability for the incumbent dominant companies to expand their service offerings. and they have done very well. ultimately the baby belt bought ma bell. there are some here who would say there are technical limitations in the act. i say to them as i say to you, the act is not and cannot be about technological limitations. it is rather about technology inspiration through a simple framework for free functioning competitive markets to exist. why this matters. we understand small businesses i believe, and that's why telnet

came into be because this is where we thrive. small businesses seek to be relevant in what they do. not necessarily experts in technology. small businesses cannot afford to go out and pay for the consultant to sort out the alphabet soup of technology. rather it's often it's their next-door neighbors nephew's cousin who comes and helps them figure out some of the things going on here. the competitive industry can touch these small businesses. we sit across the table. we examined their needs, we established a solution that tailored to them and helps them go from crawl, walking, to run. god has blessed them but this is not the at&t's forte. our goal, effect are promised or customer is to be the last service provider that they ever need. because we want them for life. to do this we must ensure that we can future proof their investments and deliver ongoing

value. so let's get to the heart of the matter. there are three things that are key to what this conversation about the next generation of networks. the last month is the essential business building block for functioning competitive markets, regardless of technology. our networks is the best in the world but it is only as good as its latest wink -- weakest link. secondly, it's important networks arthesenetworks are in, that we can exchange traffic at just and reasonable rates and in terms of conditions regardless of technology. third, we need to make sure the business agreements and pricing between the dominant and competitive our negation of the and adjudicate with the fire law backstop of our local public utility commissions. spent on going to have to had to wrap up. you are about to announce the members over. >> in conclusion, i came into the is is 15 years ago with a driving desire to make things better them to make things less

expensive, the business practice, proving technology investment. if i ever had any doubt that there's going to be a technological limitation in a tech business, that would've been a nonstarter. telnet of the world make him go but must never perish from this great nation is that we do not erect barriers which impoverished but we stay true to our competitive spirit as americans for those in greatest to promote prosperity and well being for all. thank you very much for the opportunity to testify. >> mr. iannuzzi, thank you for comments and we appreciate your testimony. we'll go now to harold feld, senior vice president of public knowledge. we welcome you back before our subcommittee and we look forward to your summary of your testimony as well. mr. feld, go ahead. >> thank you for inviting me to testify today. the transition of our wireline network to internet protocol-based services is a tremendous opportunity for our nation. we must make sure the transition

result in an actual upgrade in technology without a downgrade in the services upon which americans depend. for decades our country has used the recent rules based on fundamental principles to build a phone network that became the envy of the world. we are the country that brought the phone to every farm, the country that built the network you can count on. we accomplish this by moving certain values with us as our networks evolve as we now face opportunities and challenges of implementing the next generation of communicacommunica tions technology. we must continue to leave no one behind. americans are so used to rely on the protections of the phone networks that often don't even notice them. we conduct our business and personal communications as if we can always trust the phone network will just work. he gets it has. during emergencies we can always call for help for police, firefighters and hospitals. when someone calls a friend on another phone network, that call will always go through regardless of which carriers they subscribe to or where they live. in the rare instance that any part of the system breaks down,

government authorities at the local, state and federal levels will swiftly act as if our lives depended on it, because they do. every one of these benefits is the result of deliberate policy choices that serve specific basic values. our phone network begin in the of the world because our policymakers value what public knowledge called the five fundamental principles. one, service to all americans. two, competition and interconnection. three, consumer protection. four, network reliability. and five, public safety. there are some who believe the ip transition should be a path to eliminate fcc over our site but i can't begin the transition we have concrete examples that many of the essential services we take for granted are at risk. in rural and not so rural areas, for individuals and for small businesses. one of the worst problems is a continuing inability of rural residents to receive telephone calls reliably. as kerry's switch to ip technology they can route calls

to least cost router systems creating latency and sometimes trapping calls and perpetual loops. in a world where you simply allow the marketplace to work, this doesn't get fixed. as one carrier told a complaint subscriber, due to living in a rural area you will experience service issues. the fcc will address this at the open meeting next monday that in a world where the fcc could only regulate based on market power and response to unfair or deceptive practices, and some have urged, world america would be out of luck which brings me to my larger point. ip technology brings the potential for new services but it brings the potential for new ways to crash the system. ip doesn't with a lot of legacy equipment or services. it brings in all of the cybersecurity issues like malware and cyber attacks with any of the existing defenses. i'm not alone in worrying that things could go wrong. the department of defense and the federal aviation administration have both filed with the fcc to express concern

the ip transition if not handled properly could interfere with vital government operations. as with roll call completion we may find we need the fcc to use its is the authority to solve these problems. rather than thinking of the fcc as an obstacle that stands in the way, we should think of it as our last defense against a total train wreck. at the end of the day the measure of success for the transition will not be how many regulations the killed, but does the phone networks to work for everyone. or all these reasons i'm glad to hear jim acknowledge the importance of doing this right of avoiding any kind of flash cuts that cause major disruption effort knowledge in this will not be a regular threesome. to everyone's surprise public knowledge and at&t a great on a lot because what the same thing, competitive modern networks for all americans. unfortunately, we still debate decisive we worke were for or at upgrading our phone system or even for or against at&t. this is absurd. we want at&t and every other

care to invest in its network. no limits racing suggesting at&t or any other carrier could -- to the end of time. liabilities of december on how to make this work we all want to make this work and we know that the stakes are high. most importantly we need to stop thinking of this as at&t's transition where at&t proposes something everyone else reacts. we need to plan out a transition that reflects our values. this is the transition of the phone system of the united states of america on which 300 billion people depend every single day. we need to recognize we all have assured benefit from making this network reac reach everyone and, therefore, is your responsibility to make it work for everyone. thank you. >> thank you, mr. phil. maybe we can create a government website they can all work through and -- never mind. just kidding. >> we all learn from our mistakes. >> oakley. we go now to mr. john burke was back before our subcommittee.

we appreciate your participation. he is board member and public service board of the state of vermont. mr. burke, we're delighted to have you here again, and thanks for your testimony. please go ahead. >> thank you, mr. chairman, and ranking member eshoo, and members of the subcommittee. thank you for allowing me to testify on the topic of ip transition. in recent months under acting chairwoman clyburn, the fcc has greatly increased its interaction with the states. we are particularly please with the outrage from the interim fcc task force federalism task force. chairman clyburn is to be applauded for her leadership and for her outreach. in my home state of vermont we face many challenges. very little fiber is being deployed to the homes and our many areas without broadband access. there's limited competition even in urban areas. wireless coverage leaves much to be desired even where it exists, and yet even in vermont,

transition to the ip-based voice networks is occurring. in this latest evolution in which is been underway for quite a few years now, networks are migrating away from circuit switched voice and data services the ip-based services. during the transition, like the previous ones, it is crucial for policymakers to focus on the right issues. no regulator or legislators should intervene in the market to put a thumb on the scale in favor of one technology over another. the market should make those choices. the reason public service commissions and agencies like the fcc were created and regulate remains the same. first, we regulate where competition is not vigorous enough to adequately protect consumers. secondly, we intervene to impose public interest obligations. regardless of the level of competition some oversight will always be necessary to provide what the market will not. including consumer protection, local number of ford building,

interconnection, arabization of service restoration, 9/11 service, disabled access and universal service. the at&t request for the wire center trials raises some questions of why trials are needed now. the at&t -- at&t and other providers have no significant problems ruling out ip-based service today. the transition is well underway and a major reason with issues remain is because the fcc has focused on the wrong issues. the transition is not about regulation or deregulation. the fcc has ample tools in the 96 act to eliminate unneeded regulation. nor should the debate be technology focused. congress establish a technology neutral framework in the 96 act and incorporated the core values of consumer protection, universal service and competition. the fcc should just follow this framework. but for over 10 years the agency has followed what congress has set out but not in exact terms.

instead the agency has been unable under both democratic and republican chairmen, to provide needed certainty by classifying voice services either as a telecommunication service or as an information service which has underlined the communications market. leading this question -- leaving discretion of islam has treated the arbitrage that undermine intercarrier commendations system and is the reason -- the call completion problems mr. feld mention. it is also left some consumers who chose ip-based services with fewer protections than they might have had with the circuit switched service despite voice services being exactly the same from a consumers point of view. the states and industry stakeholders continue to wage significant resources ultimate expense of taxpayers and ratepayers, on perceiving that would be unnecessary if the fcc acted to the fcc has real-world voice interconnection trials

will not necessarily help the commission clarify the statutory basis for the incumbent lacks duties to provide a voice interconnection. the clarification begins and ends with interpretation of the statute. there is no question that the interconnection is technically feasible. feasible. at&t and the rise and manage that on daily basis on their own network. rather than inventing new legal theories with no statutory support, specifically to avoid classifying voip telepathy as the fcc did in november 2011 transformation of art, the agency should just classify the service. oversight of voip services is absently nothing to do with either the internet or peering arrangements. verizon and at&t assure their customers that their voip services are not internet services on the website state. if the fcc continues along to

consider technology trials, congress should encourage the agency to first speak the benefits of a fact-based recommendation from an adequately funded federal-state usf joined the board. any proposed trials can only benefit from the significant state involvement. in conclusion, while technology has changed the expectations of our consumers do not. consumers expect the same level of service and protections they have been accustomed to come and it's up to us all to ensure that those expectations continue to be met. thank you for your attention. i look forward to your questions. >> thank you very much. we appreciate your counsel today. we'll go now to our final witness on this panel, mr. randolph may, mr. make him it's good to have you back. we look forward to having her comments as well. >> chairman walden, ranking member eshoo, and distinguish them as of the committee, thank you for inviting me to testify. i am president of the free state

foundation, a nonpartisan free market oriented think tank that focuses its work primarily in the communications policy area. i've been involved for 35 years in communications policy and various capacities. including having served as associate general counsel at the fcc. i appreciated the opportunity to testify in july before this committee regarding fcc process reform. that hearing was very important. but, frankly, the topic at this hearing maybe even more important. as the transition away from narrowband communication services to digital broadband services continues, the fundamental question confronting policymakers is this. will be existing public utilities style framework, still largely governed communication service providers be replaced by a free market oriented paradigm

that accelerates the ongoing broadband digital transition? or instead, with the regulatory framework be an impediment to progress? the answer has important implications for the nation's economic and social well being because there is widespread agreement that the transition to ip services which indisputably is leading to dramatic marketplace changes will be completed at some point and there's also widespread agreement that completion of the transition is a positive good. because ip-based services provide consumers with more functionalities and less costly ways than do copper-based edm services. there's no doubt that the digital revolution has enabled increasing competition among broadband providers or the provision of voice, high speed data and video services, whether

these providers offer their services over wireline, cable, wireless, satellite, fiber or whatever technology. the relevant point is not that all of the services offered by all of the competitors are perfectly substitutable, or that they meet every consumers desire at all times. the relevant point for policymakers is that for an increasingly large number of consumers, these various competitors provide a choice of service providers, offering a choice of attractive service options. note that i said above the ip transition almost certainly will be completed at some point in time. but the fcc's actions can possibly congresses, to come will affect the timing of the transitions completions, and

whether the regulatory regime that emerges is a proper one going forward. my testimony explains why in order to benefit consumers, and in order to promote investment and new networks and innovation, the legacy regulatory framework which is based on assumptions of a monopolistic market place that no longer exists should be replaced in a timely fashion by free market oriented model, requiring telecom companies to continue to maintain their tdm networks as when they're economically viable, trains investment dollars from deployment for new ip networks. and economists agree that burdening any service provider regardless of the platform used was unnecessary cost of regulation does deter investment and innovation. so in the ip world, at the fcc's regulatory intervention should be tied closely to findings of

market failure and consumer harm. the fcc may well possess the authority under the communications act to implement most of the regulatory changes necessary to facilitate completion of the digital transition. while at the same time safeguarding certain basic public safety and universal service interests, which i recognize are a born interest to be safeguarded, but to the extent such authority either is lacking or the fcc fails to properly exercise such authority in a timely fashion, then congress should be ready to step in. for example, congressman gladys recently introduced bill h.r. 2649 which requires the fcc to present forbearance relief should be granted absent clearing and convincing evidence to the contrary would be a useful tool in enabling the agency to act more quickly. especially if forbearance relief

is made available for all entities subject to the commission's jurisdiction. as i think should be. in any event a slice of any near-term legislation that may be discernible to ensure that benefits resulting from the digital revolution are fully realized ultimately congress should adopt a comprehensive overhaul of the current communications act along the lines of the digital age communications act model that i've long advocated an in whichi described in my testimony. finally, mr. chairman, i mention i served as associate general counsel at the fcc. that was in the late 1970s and early 80s under the carter administration. at that time traditional economic regulation of the various transportation markets was largely eliminated. this deregulation initiated by president carter's administration was accomplish on a mostly bipartisan basis.

and the congress and agencies cooperated reductively. the agencies generally initiated deregulatory changes to the administrative process, while congress engaged in oversight. and congress eventually legislated to put in place the regulatory regimes that were allowed for the most part on marketplace competition rather than regulation to protect consumers. i believe that a similar opportunity for positive change now exists. again, thank you for inviting me to testify today. i will be pleased to answer your questions. >> mr. may, thank you and thank you for your in depth testimony which we all have. i'm going to start off with questions. mr. iannuzzi, in your testimony you said and i quote, the repair doesn't come is incumbents replace their tdm technology with ip technology, competitors will lose access to the last

mile connections that have enabled them to push deployment, innovative business broadband services to american business. that's kind of the crux of the argument you represent today, correct? that if they abandoned, if at&t or other companies abandoned their copper networks, then you can have the ability to get to that last mile, correct? >> correct. >> now mr. cicconi, from your perspective what does that mean in terms of -- is that accurate? will you, at&t and other countries to make last mile connection unavailable? and i want to go to mr. may on this as well. and again, hit the button if you would. >> short answer is of course we would make them available. and there's nothing we propose that we take that away. >> under the same reasonable rates, terms and conditions of? >> i think we're talking about copper loops, there's nothing in our proposal that would change the treatment of that as a unit.

>> in terms of an advanced network of? >> when you are talking about ethernet, for example, the fcc has got to the ethernet is a competitive service i think if we are rolling out ethernet services and replace it for tdm facilities, and to give you a sense of that, a tdm facility is not classed at the broadband level. so for placing tdm with a broadband facility, for example, back to a cell tower, i think the fcc is cleared even it is, in fact, very competitive. and i think, in fact i think sprint ceo just data recently that for the same price he pays for t-1 to a cell tower and he can get 20 times the capacity by running ethernet to the same cell tower. and so, so obviously it's a competitive market. we wouldn't feel bad regulation per se is needed in that area

and in order to provide an alternative capacity. >> mr. burke, what is your reaction to all of that? >> well, i think one of the things you look at when you look at the potential for interconnection is that there's supposed to be agreements. the idea is that they are supposed to agree. that doesn't necessarily mean that all the players have an equal bargaining power. doesn't always work that way. if that's the case it may well be necessary for somebody to take a look at those agreements and the '96 act clear he said, and wisely so in my estimation, the states can look back and arbitrate that. and it also defined the service to include advanced services. so 96 had it right and gave a methodology so that you'd be able to handle arbitration of these issues if, in fact, mr. cicconi and more to couldn't agree. and i think that's another point

that exists in the states position you and what they would have to do in this brave new world moving forward. >> all right. mr. may, from your perspective. >> thank you, mr. chairman. i think part of the premise of your question was based on the continuation of offering of copper-based loops for mr. iannuzzi -- >> just the ability regardless of the underlying infrastructure to have a competitive marketplace for the alternative competitors. >> right. there's a transition going on which is why i call the hearing, commended. from my perspective, over time as i said in my oral testimony it's important that we not required the maintenance by regulatory of older technologies that are less efficient and more costly. so eventually i'm not in favor

of requiring at&t or anyone else to maintain an existence technology. in a competitive environment that we are moving to come is not efficient. but i want to say one other thing. in mr. iannuzzi's testimony, talking both about the ability to access facilities of others and to use the last facility, and is also talk about interconnection of facilities. and as we talk about this today, those are really common they are actually two different things, in 251 into the queue without getting too technical they involve both of those things. and from my perspective in terms of -- 252. where public policy wants to go, i am more receptive to arguments that have some great authority backstop for interconnection saying i have to interconnect my network with mr. brooks network

or mr. cicconi, then i am about regulation which continues to require that if i build a facility that i have to provide access under regulated terms and prices, you know, for someone else use those facilities, and the simple reason, and this is important i think to understand is, when you require that type of sharing of facilities and access that he talks about, and he does say he has some facilities of his own. when you do that, it discourages either him from building his own facilities or it discourages me if i'm the one that has to provide access from actually investing more to build more facilities. >> my time has expired on an upturned to the the gentleman from california, ms. eshoo, for five minutes. >> thank you, mr. chairman. and thank you to all of the witnesses. we'll start over here with the

italian part of the table. [laughter] who don't agree with each other. despite their shared background. ethnically. mr. cicconi, you stated in your testimony that modern ip networks are both more dynamic and cost efficient than the tdm-based voice telephone networks that we depended on over the last century. how does a new network of technology change the state of competition? because i think that that really goes to the heart of a lot of what we're talking about here and some of the testimony that we've heard from others. in your view shouldn't the rules that preserve and promote competition the technology neutral?

i've always there'v the technolg neutral in whatever legislation we do it's always been something that i thought was like a hot stove. don't go and touch it. it should be neutral. >> first of all, i don't think the telecom act itself makes the rule technology neutral. it puts most of those rules in title ii, which is common carriage and doesn't like to our wireless service but, in fact, you have an express provision that it can be applied to wireless service, doesn't apply to cable. it applies uniquely to the wireline tdm services are abided by a legacy wireline carrier. so they're not technology neutral in that sense. they are uniquely imposed on this part of the business. and as you saw from the chart earlier, it's a defining part of the business that the current time. at&t has fewer than 14 million customers using traditional wireline services.

by contrast, the number four wireless carrier has doubled that. so i would argue that today these services are competitive, congresswoman, and that you all and you wrote the act, or if we wrote the act in 1996, i think it's something fairly unique. i think he recognized in their that there were major transmissions that were underway, and that i think augurs well for competition to educate the fcc some fairly unique powers there. >> so are you agreeing that the rules going forward promote competition but you don't agree that the art technology neutral? >> i certainly would argue that it's appropriate mission for the fcc to continue doing, but i would disagree that, that all the rules that were needed in 1996 days we are not in my office. thank you. mr. iannuzzi, without passion and you get great testament.

i loved what you said. and it's uncommon for people to come here and speak about what their father said, how that remained with you, what you do, what you're for, not what you against that where you want to go and why. i just think he gave terrific testimony. without a baggage we backstop, what incentive do you think the largest income of providers have to reach a commercial interconnection agreement with you? >> thank you very much, congressman, for your kind remarks. >> turn the microphone on so everyone can hea can you say thu for your kind words, congresswoman. [laughter] >> you don't hear that, right. >> when i got my license they asked me three question. one was to the technical acumen, do you have the financial

wherewithal, and do you have the business know-how. i would have flunked that test if it's going to go into a business to compete against the 800-pound gorilla without some type of firewall, some type of framework that allowed a competitor in market place to exist. our build to go and negotiate a commercial agreement, the incentives, economics 101 '01 concepts are, the economic incentives of the incumbent provider, they control the connectivity to the customer. it is in their interest not to provide connectivity to other people because they would like to keep that customer. so without a firewall there to make sure that we did have fair access to access to the custom customer, the business case would fall. they would just not be there. >> thank you very much. i think i am at a time. thank you. i'll submit the rest of my questions for the record.

i do have some for mr. feld and other witnesses. thank you. >> we will now go to mr. barton for five minutes. >> thank you, mr. chairman. last weekend i finally got to go home to texas after the government shutdown. and i hadn't in their -- the first time in 2010 years i've been in congress that i had not, i spend two consecutive weekends in washington, d.c. so obviously i was glad to get home. when i got home i walked in to my house, and decided to make a phone call. and i didn't have a dial tone. the phone was provided by at&t, legacy carrier. [laughter] so i got the phone book out and i went through the protocol on page nine, you know, while 1-800, and we'll be happy to help you. and if the problem is on your

phone in the house, it's 99 bucks. if it's not, we will come out and fix it for free. so anyway, i went through that and i finally, you are, self-reported the problem and i did all the things you're supposed to do. and they called back, and you know, said we will be out tomorrow i 8 p.m. well, the next day by 8 p.m. they worked out. so i picked up my cell phone, which is provided by verizon -- [laughter] and called and hit zero and got a sweet lady in houston, texas, pic and i said, my phone is not working in my home and i still haven't got the servicemen. and she agreed with me. she said, we will be here tomorrow. and by golly, they were. they fixed it. boom. and the guy could not have been

nicer. could not have been nicer. but the moral of the story is, i had to use a wireless provider to get my hardline phone fixed. in 1996, they were supposed, they were competitive. we wanted to see lex to compete with the ilec, the incumbent. since 1996 them my congressional district has changed four times. but we are still operating under rules that were put in place for an old system. and it is time, just like our congressional district every 10 years in the case of texas, we changed to times in addition to those tenure changes. we really need to take a look at this. i love at&t and i love verizon and i love all the independents out there. but what i really love is consumer choice. and market efficiency and

competition that works. so my question to mr. cicconi, who i've known since way back when, even before i was a congressman, i knew jim, would the group that you represent guarantee access if we did away with some of the writers were protections under title ii? >> first, congressman, i'm sorry for your service problems. >> you know, we have had rain problems -- >> but i think you made an important point in that there are alternatives out there and wireless has become an alternative for wireline phone service. there are many competitive carriers offering wireless services, cable offers phone service today. i'm not sure in your area or not, but there are an array of choices at the. so i think that consumers have

those choices today. now, is it a legitimate function of government to ensure that everybody is connected and has the ability to communicate? absolutely. our companies always stood behind the principle of universal service and i think that's an important function of the government to ensure that the choices are there and that they aren't able to all americans. >> to the average consumer, a consumer doesn't care whether their service by ilec or others get what they want is something that works that is sufficient and that is cost competitive. our job on the committee is not to protect existing market segment. our job is to do the very best we can to give our consumers choices. and i want them to stay in business. i'm not anti-clec but i want -- is what we passed in 1996, it might have worked for 1996.

but that world doesn't exist today so let's forget what exists today and in the future and go that way. with that, trying to think of for the hearing and i yield back. >> we turn now to the gentleman from california, mr. waxman. >> thank you, mr. chairman. date on some of the testimony we heard today, one might think that we are evaluating a new network being built across the country. and ip network that runs on fiber lines and wireless airwaves. others suggest that this is no new network. but that new electronic that have been added to the copper and fiber infrastructure that has been transporting voice and data throughout the country for years. why are these distinctions important? is what we really care about our basic values like protecting consumers and competition, universal service and public safety. why does it matter what kind of

infrastructure communications runs over? mr. feld, it's my understanding that google is currently planning to offer extremely fast internet access over new fiber networks being deployed in three communities. although consumers can sign up for video service, to complement their internet access service, google is not offering a voice product. google has not been shy about stating that it is not offering voice, at least in part due to the complex rules associated with providing telephone service. what do you think of google's argument? when a company like google can be saddled with regulations if they decide to add voice to its video and broadband offering. >> i think a couple of points that need to be very clear. first is that when google talks about the regulations that they found too burdensome, they are not talking about 251, 252 kind

of regulations that have been the focus of the debate here to get ugly things we all the great artist in a system like 911, like consumer protection and privacy protections, all of these things that we said yes, that's very important spend what are they talking about? give me examples. >> it's expensive to maintain the 911 system. it is expensive to contribute to the universal service fund to ensure that all americans are connected. we believe that it's very important to maintain these things but we believe it's very important, you know, google likes to collect the information of the people to use its service. they have one level of privacy protection for the. their business model is based on a couple different things. infoworld we treat this very differently and you cannot treat a phone call information at the same way that you treat a facebook status update, that tht

people hold that very closely. i understand for google to say we don't want to get into that system. but if we're to say okay, we want to encourage google to get into this business so we want to eliminate these kind of final consumer protections, i think that would be a very grave mistake. >> so even if they choose not to offer a telephone service, that doesn't lead you to conclusion that we had to limit the rules for all telephone service is? >> not at all. any business looking into a market figures out what the trade-offs is and what their business model is. we have a thing that is viable in the network that goes everywhere using telephone numbers and i will point out when we have companies that are voice providers that want to use those telephone numbers, we impose certain obligations on them already. and businesses make the violation of whether the benefits of getting that, into that business are worth the expense. >> that's their decision for themselves. for the rest of the public policy and everybody else, given the importance and complexity of

transitioning voice services to all-ip networks, wouldn't it make sense to have a trial overseen by the fcc to help collect data based on real-world experience and challenges? this past may the fcc issued a public notice seeking comment and trials related to the ip transition. then chairman joseph genachowski stated at the time quote, trials are a smart approach that the fcc has deployed before. in the public notice the fcc invited carriers interest in pursuing a geographic trial like at&t and they propose to submit a more detailed comprehensive plan including the design of the trial that data that would be collected. the rules that would need to be weighed in the role of the space of the trials but it seems to me they're approaching this issue methodically and thoughtfully. so let me ask with a short time i have left to anybody on the

bill that wants to jump in on this, do you believe the fcc is moving ahead in a diligent and responsible manner and export potential trials on the ap transition? if you don't, what would you do differently? >> i just would say that yes, i think the fcc is behaving exactly appropriate. they have invited further comments. i think that we cannot treat conversion of -- >> is there anybody else with a contrary position to this? >> i don't think i would be, country, but i think a couple fundamentalist the first of all when fcc put out its additional questions and i think we all recognize that the fcc was going through the leadership change from the former chairman to a chairman not yet confirmed by the senate. and i don't think honestly chairman waxman, they were prepared yet to answer the question.

by don't think they should be leaving the question open of whether we should have trials. when the father patrician almost a year ago we asked, we asked them to actually set up a trial. this isn't an at&t project at some recent heard that it involves government, involves the entire industry and evolves consumers and stakeholders. it shouldn't have to at&t to come up with a plan. we acted propose industrywide trials to the fcc that the fcc would actually help put together in a collaborative way working with everybody. and so i think they come at least to this point, punted on that decision. i don't think and not having trials is an acceptable answer because i think it would in essence be the government saying we're not going to plan for this. and when you -- >> these are not methodical and not fully -- >> the fcc actually planned the transition, conducted the trust and learn from them and it went fairly smoothly. and i think that's what needs to

happen and that's what i still am very hopeful will still happen. >> my time has expired. it's up to the gym is going to let anybody else respond. >> comment, please? >> with all due respect, the concept of a trial, in my opinion, is a boondoggle. the reason behind is that we do i.t. all over the place today in network and how we connect with other cooperative parties. we have smart people. when i do this stuff right now. we are losing ground in terms of -- trying to make the -- then let's get going with it. are the things we have to tweak stuff? sure. but in terms of the mechanics of it, it makes it sound like water is hard if you want to make it, come look at it. you can take anything and makes it more difficult. it's done today all over the place. >> will have to move on.

>> thank you, mr. chairman. again, thanks very much for holding this hearing today and thanks to everyone who is just fine today. really appreciated and hearing your testimony. if i could start with mr. cicconi, if i may. as a jump in from vermont mention can he and i worked on different issues, especially concerning rural call completion, big for both of us. i have a world history. i go from urban to suburban to very rural. and one of the things i've met with all my rural telecoms out is that if the problems with dropped calls. and this is a serious issue for folks at the because if you family members that are elderly and you're trying to call them and all of a sudden they're not picking up that phone, then your next recourse is to call the local on enforcement or the fire department to go out and check on family member. the same way it hits small businesses or any businesses out

in these areas because i've a lot of businesses that are located way out. and all of a sudden the calls are getting top and you can't make that call, they lose business. pretty soon they're out of business. so as we're looking at what's happening out there as the network, especially the role providers transition to ip, how do you think this will affect the call completion in the future? >> notwithstanding mr. barton's earlier service problems -- [laughter] i'm not aware that at&t itself as a rural completion problem. but i'm aware there is a problem, the fcc has proceeding underway right now to try to deal with it. and to deal with in a way that applies across all technologies and across all providers, and that's the way it should be. and i think it's an example of what an appropriate role of government should be. >> by giving us to go forward with the ip, especially in role providers you think it will help them make sure they don't have the dropped calls? >> i would be hopeful but again

i think the is one of the reason joe trials to test these things, make sure they work properly, make sure the replacement technologies are just as reliable with the others. just in response to what mr. iannuzzi said a minute ago, we can go out and convert a wire center today from tdm to ip without permission from the fcc. so while a lot of investment is going on, we can do the fundamental investment. that's 20,000 wire centers in the country that have to be converted to ip, not a single one of them can be converted without permission from the fcc today. why we need the trials to take two of those wire centers, all we propose after of 20,000 ice, conduct the trials and see if we can accomplish this without the kind of problems that you've explained i in the rural areas d ensure, frankly, that the replacement services and technology are actually better and don't have those issues. >> thank you.

mr. may come in between your testimony, in your section number three it says, ultimately congress needs replace the first communications act with a new digital age communications act and to stay because of the extent of the dramatic market place changes brought by the ip transition as always been described i seems to me congress needs to comprehensively overhaul recommendations act by adopting a new free market oriented model that breaks through with the past but could you elaborate on that, please? >> yes. thank you, congressman. one of the reasons why ultimate congress should act -- should pass an act, it really goes to a lot of the discussion we've had today i can fourth, talking about, whether policies or technology neutral or not, and how that relates to competition. the reality is the current act

is not technology neutral really at its core. we talk so much, those who are in this area, talk about this, stovepipe regime because in essence the act establishes different types of regulation based on different types of technical or functional constructs. and that's not the most efficient or most sound way for regulation to go forward. so what should happen really in the future is, is, competition is obviously important as ms. eshoo has talked about. we all want competition, but what we want to have really is an environment, and, in fact, the digital revolution is enabling more competition. that's why we have these, we have cable and wireless and

fiber and all of these things are part of the digital revolution. but ultimate in a new act what we would like to have come in my view, would be a standard that ties the regulatory activity of the agency closely to an analysis of the competitive marketplace. and then only if there's a market failure or consumer harm, and i recognize that if there's consumer harm there's a place for regulation. i'm not, like mr. cicconi, i'm not advocating no regulation. but we need in a new act to tiebreaker toward activity much more closely to an analysis of the marketplace. that really gets away from all this discussion about this technology and that technology and that type of thing. but the fact that technology is changing, and it enables competition, that is a reason for policy changes.

it's not a reason to do nothing. >> thank you. thank you my time has expired and i go back. >> we turn now to the gentleman from pennsylvania, mr. doyle, for five minutes. >> thank you, mr. chairman. mr. chairman, this morning i read in the newspaper that at&t recently notified many of its special access customers that it will eliminate certain a long-term discount price plans effectively increasing rates by as much as 24%. competitive carriers argue that have no alternative to gain last mile access to business customers and must simply accept the higher prices. mr. chairman, i would like to ask unanimous consent to place a copy of that article that appeared in "the wall street journal" this morning, and a copy of the ex parte filing that several companies made with the fcc in regard to those rate hikes. >> [inaudible] >> thank you. let me ask mr. feld and mr. iannuzzi, how can at&t institute up to 24% price increases if these markets are competitive?

and do you find fault in claims by some that competition today eliminates the need for a regulatory backstop, particularly and light that at&t's actions to effectively raise special access prices? >> sure. only a dominant market let him go and raise prices ad hoc at that magnitude to it was quite shocking to see that take place. those are very vital to run the connectivity with other networks. so if there was true ability to shop and pick, then they would be for closing those sales and those revenue streams. at&t is in the business to make profit, and to then just raise prices, if the market was working and it's an equal service, you would go pick the next lowest provider, provided they had equal the capabilities.

>> i would add that we often have a confusion between the underlying infrastructure and the things that are riding on top of -- we look at the number of wireless carriers, the number of carriers that office is to offer service to the ongoing infrastructure, and looking at just the surface of that we say wow, there's a lot of competition. when you get below the surface to the infrastructure on which all of that competition rides, used have still the same data network problem, still the same kind of infrastructure monopolies that you have to worry about. so i think that what we have seen in the special access, and this is not new problem, it's been going on for many years, is that there was a lot of open anticipation when we set up criteria about how we're going to tell whether there was competition. some of that did not happen but also the criteria were frankly too optimistic and did not take into account the difference

between people offering retail service, or people offering different kind of commercial service, and the critical infrastructure that you have to get to in order to reach the customers to offer that. >> mr. cicconi, would you like to respond to? >> yes, sir. first of all let's be clear when we're talking of the special access this is mentioned and we're not talking about services that are broadband. it is easy has not class these services as broadband. one of the reasons mr. doyle, that you read "the wall street journal" article that we are not offering service contracts out five in seven years is because we plan as part of the ip transition, the reason we're here today, to be replacing these all facilities with modern broadband fiber-based facilities, including ethernet. so naturally we don't want to be offering long-term contracts on a facility we're going to be replacing it with an alternative facility. there's a proceeding underway on special access currently at the

fcc that's designed to gather facts on what alternative facilities are available for other providers like telnet to use. we think that the data the fcc collects from all providers, including cable, is going to show that there were ample alternative facilities there. one of the alternatives by the way is for -- we are right now have a project underway, and hopefully within two years we will have run fiber to a million businesses in our 22 state footprint. and i think any other carrier out there is free to do the same. >> mr. cicconi, listen, i understand your transitioning and that it probably makes sense you're not going to do a seven-year contract. the concern is not so much your discontinuing the long-term contracts affect your raising the rates -- you're not passing down the discounts. and if this were truly a competitive market i don't know how you ca could get away with doing that. >> mr. dorgan i'm going -- i

don't think we have raised prices but i think we've eliminated some great plans but i don't think prices have gone up. >> i would like to see that. let me just -- mr. chairman, i see my time has expired. i'll just wait for another time. thank you. >> the gentleman yields back. ..