make when we are creating a record and i felt the responsibility to make that clear. let me thank all of the witnesses for their -- thank all the witnesses for their testimony. i appreciate all the members for the thoughtfulness for which they approach the issue. i appreciate and i want to thank those who have paired with us and watch the hearing from overflow rooms since we did not hold this outside of the traditional hearing room. we appreciate your forbearance and you're watching the democratic process in the overflow rooms. the record will be open until the close of business on thursday and thanks to the committee and all of you. this committee is adjourned. ..

for her visit to sandusky show show was shown this red suit as a showing of support for the

maple leaf. i admire the thought she put into her wardrobe and shoe knew the advantage of picking out a color. >> brought to you as a public service. >> for the first time in many months, we have now new members. joining us to discuss the fcc's

agenda is sam gustin. what do you think is the main priority for the fcc? >> i would say the biggest immediate priority is the spectrum auction that is scheduled next summer. and that is to sell the existing spectrum for broadcasters to address the growing spectrum crush that is being driven by the smart phones and tablets. >> tom wheeler talked about the upcoming spectrum auctions. here is what we had to say: >> it is something that has never been tried before. and i liken it to a rubeic k pi

cube and you have to provide an incentive for broadcasters to want to auction their spectrum. on this side of the cube, you have got to provide a product that is structured in such a way that it incentives the wireless carriers to want to bid for that spectrum. and on an almost realtime bases you need a band that is changing to reflect the variables going on. that is why this hasn't been charged. this is as a monumental und undertaking. and all of the pieces to create value for the broadcasters and value for the wireless industry and paying for first net and providing something for the american taxpayers all have to go into the complex rubic's

cube. >> this is the most complicated spectrum market we have attempted. and there are a number of cha h challenges. you need to create an incentive for the television broadcasters to be willing to give up this very, very valuable spectrum. on the other side of the coin, you need a structure that has enough bidders to be able to drive up the price. there has been discussion about whether some of the wireless companies might be excluded, verizon and at&t known massive amounts of spectrum so there is

discussion about excluding them. but that might have a negative impact on the auction itself. so these are issues the fcc is going to have to work out. and i might add the auction is currently scheduled for next summer. but due to the monumental complexity of the auction it might be pushed back. >> gg stone has been appointed by tom wheeler. does that say anything about how the auctions will be conducted? >> well, the appointment of gigi to the senior staff was a surprising development because of course for many year gigi has been a respected proponent of

the fcc. i think in a number of ways, chairman wheeler's appointment might be sending a signal to the public interest community that he is, if not sympathetic, certainly willing to be engaged with the public community to an extent that, if not occurring during previous fcc administrations. as far as the spectrum auction is concerned, having gigi means there is a strong public voice in the chairman's office and that is a good thing. >> why? >> because i think one of the tough things about the pharmaceutical -- fcc -- is it

to be a politicized agency. you have the nation's largest wireless companies, the big internet and cable companies and all of their interest groups. and you have the american people on the other hand; the public. what the fcc does affects anyone who uses a cellphone, smart phone, tablet, anyone who watches television and that is all of us. so the interest of these different constituencies are not aligned. and one of the challenges at the fcc is balancing the competing constituencies. chairman wheeler, for example, served as a lobbiest for two

groups for years. and a lot of people in the public interest community were concerned by that. so i think it is good there is a very, very strong advocate for the public. cephal >> what do the lobbiest from the bigger companies think about the appointment? >> they have not issued statements yet. the big companies are hopefully about chairman wheeler and gg has found herself on the other side of the issues from the big wireless and cable companies.

i would not want to say what they think about her poin appointment, but i think it is important. >> tom wheeler was cleared by the commerce committee, but held up because of the disclose act. here is an exchange he had with ted cruz. >> does the fcc have the authority to employ the act? >> that is an issue i would like to learn more about. that is a pending proceeding on that exact question. i need to look at it and become informed. but i don't miss the expression as to the strong feelings on

both sides. >> mr. wheeler, every republican on this committee, along with mitch mcconnell september -- sent -- a letter to your predecessor, i would ask you to submit in writing an answer to this question. and i would note as you and i visited privately, this issue has the potential to derail your nomination. should the commission leave the role and get into the business of regulating political speech -- we have seen with the irs what happens when members of congress urge the executive branch to begin playing politics. and so i look forward to reading your written response in terms of whether you believe the commission has the authority to implement the disclose act or

regulate political speech. >> thank you, senator. >> sam gustin, what is the disclose act? does the fcc have authority over its regulations? >> the disclose act is a bill that is currently stalled. it is designed to increase transparency in political ad funding. it would require super-pacs and third party groups and unions to notify the federal election committee when they spend more than $10,000 on political adds. this is an outgrowth of the supreme court's sit citizen's

united. after that, a lot of public interest groups, pushed the disclose act which would increase transparency in political funding. many republicans are opposed to it. they wrote a letter saying it raises serious first amendment concerned and because the bill is stalled some democrats, and some advocates for the bill, have suggested the fcc could use their authority over the broadcast broadcasters to implement some parts of the disclose act. senator cruz doesn't believe the fcc has that authority and

wanted tom wheeler's world the would not implement them by fiat. some people do believe the fcc has the authority to implement the requirements of the act. the fcc passed a rule last year requiring many of the top broad carjacking -- broadcaster s to put information about ads online. so it is dispute on whether the fcc has the authority to implement the act or not. and senator cruz met with tom wheeler and privately and he

told him it wasn't a priority for the fcc and that has swayed the concern and wheeler was confirmed by the senate. >> what about the issue of media ownership? is that coming up? >> that will definitely come up. media concentration has been a big deal. there was talk about the comcast purchase of the largest company with the one of the crown jewels of the american media business, nbc universal. there was a lot of talk about that. and there are rules regarding

media-ownership in cities around the country. so places like new york and los angeles there are rules that prohibit big media companies from owning too many media outlets across media. so newspapers, television stations, etc. and the fcc is currently working to reform the media ownership rules. and of course a lot of the big media companies advocate rela s relakes -- relaxing the restrictions -- but members of the public interest community have argued for what is referred to as diversity or more local-independent stations. so there is a tension. so yes, that is going to be a

big issue for chairman wheeler for sure. >> another issue he discussed at the conformation hearing was on fcc processes. here is a bit of the new chairman. >> there are so many components of the effect of the auction that you have to say the auction is a top priority. but on a more mega scale, i have spent a lot of time dealing with the fcc in my life. it is important that the agency make decisions and make decisions in a timely fashion. there is nothing worse for investment, job creation and all of the things that flow from investment than businesses not knowing what the rules are.

so i would hope that in an overarching scope of things we would be able to, with my colleag colleagues, because i am aware this is a commission not a sole job, that we will be able to identify issues and move on. >> sam gustin, what does that mean? >> well, i think chairman wheeler is right. the fcc is one of the most broke, slow-moving agencies in the federal government. if you look at the some of the rulemaking processes and some of the other activities that the fcc does it is incredbley complicated and if you like at the statements that chairman wheeler made in the last week he

has etalked about this motion o speed. i think i am hopefully and people a lot of people are he can get things moving a little faster and increase the transparency at the agency. but experts cannot fully understand what the fcc is doing even because a lot is technical and baroque. it is really creating uncertainty and as we know uncertainty is the enemy of business. business needs certainty to be able to invest. if there is one thing we need in the united states in terms of

broadband and communication infrastructure is investment with dispatch as chairman wheeler might say. i think it is important,and i am hopefully that chairman wheeler makes an effort top pick up the pace and increase the transparency. >> mr. wheeler refer today the fcc as the optimism agency. what does that mean? >> that is a nice term of phrase. i think part of that has to do with chairman's wheeler enthus a enthusiaenthus enthusiasm. he is a bit of an intellectual and a civil war

historian as well. he has a historical perspective that i think will be beneficial and serve him well in the agency that is populated the opposite. and interestingly one of the phrases he uses is he talked about internet being a hinge moment. he has a sense the internet is a unique hinged moment filled with promise for the united states for its economy and all types of applications -- from health to

education. so i want he wants to instill optm optimism. and that is for increasing growth and opportunity around the country and for the next generation of broadband services in health care and education. so when we talks about optimism he is trying to set a tone of hope and acting with dispatch for the best interest of the country, economy, businesses and the american people. >> mr. guess, cellphone unlocking is one issue being talked about.

>> who knew the library in congress had this far of a reach? i am a strong supporter of property rights. at the same point in time, i believe when i as a consumer or you as a consumer, or anybody else, have fulfilled our commitment and paid off our contract, we ought to have the right to use that device and to move it across carriers or whatever as we see fit. and yes i look forward to working on this issue and to resolving this issue to give the c consumers the flexibility. >> sam gustin, is that an issue he can implement immediately? >> i am not sure about immediately. but there is a growing grassroots effort to dress this

issue. it has picked up the issue and it is baffling why the library is involved in the issue of cellphone unlocking. he needs to balance to competing interest of copy right and the contractual-terms users agree to with common sense ideas about once you have dpu met your contract you should be able to move to a different providers. while this is an important issue, it isn't as important as the spectrum options or net issues or the other big issues. >> network management and we are

in a holding pattern but has chairman wheeler forecasted his views on that? >> chairman wheeler has been keeping it close to the vest on net nutrality and the fcc's open internet rules. these rules exist and they are policy. the open internet rules exist. he is chairman of the fcc and the open internet rules exist so it is his responsibility to enforce them. this is one of the highly talked about shooudz issues. verizon is suing the fcc saying

they lack the enforcement. it is an idea that broadband service providers like comcast, and at&t shouldn't be able to d discriminate against rival services. comcast cannot slow down or degrade netflix for example. ve verizon is suing the fcc claiming they lack the authority to enforce those rules. and verizon is saying the company rules violate their freedom of speech because it transmits its own speech and the

speech of others across networks, restrictions or rules that prohibit how it can structure or manage its network violate the company's first amendment right to free speech. this has attracted quite a bit of criticism because verizon is free to speak out any time. it is giant corporation with free speech rights. it will be interesting to see what the federal court does and we will not see the decision for several months. if the fcc loses the case, chairman wheeler will face a difficult choice.

we might try to bridge the rules. or try to reclassify broadband service that would give the fcc the authority to enforce the rules. this reclassification over the years has been called the nuclear option because if he did that there is no doubt the fcc would have the authority to enforce the rules but the big broadband companies would go ballistic and it would set up a politicized battle between the broadband companies and the fcc. this issue has been going on for years as well. there were discussions during the shutdown and debt ceiling

debate. some wanted to attach provisions to cut the net program. and this is a highly publicized issue. once the decision is ish shsuis it goes against the fcc, there is going to be difficult choices. >> what can you tell us about michael o'reilly? >> he is a former senate staffer who is well-respected. it is traditionally when fcc appointments get made there is a pairing so that a democrat and a republican are nominated to the agency. he is not as well-known in the

industry as chairman wheeler. he was a long-time senate staffer republican who is respected. so far all of the comments from chairman wheeler and public interest groups and industry groups and big companies have been supportive. i think it is, from my point of view and the others, it is great the fcc finally has their five member compliment because it is time to get to work. >> the communicators will continue to cover this. sam gustin from time magazine. thanks for being with us.