completed application selecting a marketplace plan. nationwide that trend is very similar. by the end of december nearly 2 million had enrolled in several hundred thousand more have enrolled since then. tuesday's washington post cover story stated that dated shows a sevenfold upswing in enrollment in the federal exchanges from the first two months of the web site's performance improved. in so, i want to ask you, can you describe for me the trend and the number of adults 18-34 who have selected these marketplace plans? >> i think we reported an 18- 18-345, 24% of the enrollments and that that was very close to the percentage of that age group in the general population. so we were quite pleased by that the expect to see, you know,

that number increasing. >> talk to me about some of the national campaigns which will help to begin to get you enrollment up higher than even 24 percent, perhaps 40 percent. >> i know that we are going to be doing a lot more paid media, specifically around the olympics which will be starting in a couple of weeks. and around other, you know, sporting events and activities that we would expect young people to be particularly interested in. and now we have been and are doing an increased amount of out reached through social media, facebook, twitter, all of that sort of thing. another we are, all of our advertising is very targeted to try to up reach the population. we obviously want everyone to in robo want to focus on the young people. >> leslie i made reference to my

home state of north carolina and am very proud of the enrollment rate. i have several hundred thousand people in my congressional district, and i tell you that 100,000 of those 700,000 are uninsured, and this is making a difference. what factors do you believe contribute to north carolinian choosing market rate plans? >> i have to believe that in places where the need is the most, you know, that's where we're seeing the biggest response. in places where the rate of uninsured was high, think that is where we're seeing the biggest response. >> t know how much we're spending? >> of sure we don't. >> now recognize the and ready for north carolina. >> they key, mr. chairman.

to my colleague from north carolina, i am going to kind of extends some of the questions to you. >> and adjoining districts, we might add. >> mike colleague pointed out that about 107,000 have enrolled that is the figures we are seeing. however, ford and 703,000 received cancellation notices for their health care policies that they already had. even though that may sound impressive, we are way behind on those who have had their policies canceled. there's a lot of making up to do of want to get back to some of those numbers. correct me if i am wrong. how many people in america did you believe have signed up for coverage? >> well, the most recent figures that we put out word to million, and that is just in the marketplace.

>> 6 million figure the key perry today, where is this coming from? >> that is taking the two and adding four. >> okay. so basically what we're doing is culminating. are you aware that the "washington post" gave three pinocchio's to this number? by you going to keep this figure? >> i did not see the pinocchio's . >> you agree with the 6 million figure? you believe that there have been 6 million? >> i believe that as we reported to my tooth million enrolled in marketplace plants and about 4 million had enrolled in medicaid command at the medicaid number was only through november >> now, of those who signed up for medicaid how many of them could have previously signed up for medicaid that did not before obamacare was instituted? >> i don't have that number. >> you don't have the number. can you give the?

>> i can certainly ask my colleagues in medicated they have it. i don't run medicaid. >> that does not fall under you? >> no. so now we have a situation where we have a number of medicaid that have signed up. wonderful. you want to make sure that people have coverage. is this going to play into the cost factor? you know, when we don't really know where the numbers fallout as far as those who could have signed up before but did not for whatever reason and now have. >> the state's that expand, the newly eligible will be paid, you know, 100 percent. >> the newly eligible, but those who could have received coverage before, the states will be responsible for a percentage of that. >> that's correct. under the usual match. >> usage you don't have the number or the figure.

when we head secretary kathleen sibelius, she said she did not have that number. billy she actually said that they could not get the number. i would appreciate if you could get that to us in the committee because i think -- and i will disclose the washington post fact checker. basically what he said is this number tells you almost nothing about how the health care law is affecting medicare roman. reporters need to stop using it because basically it is very misleading. no, i want to get back. have a little more time. we are all sharing stories about our constituents. i want to hit on the issue of the change for women. i keep hearing about the issue about, you know, bringing down. i have a woman who was formerly in my district, not now from rocky mount north carolina who

basically reached up to my office. through personal situations, lost her health care coverage and now the plan -- she was paying $2,504. national have to pay 610. she simply cannot afford it, will probably have to choose to not take coverage. how when we continue to claim that health care has improved for women when, you know, mammograms, when we call these things freak, how do we go from to order and $54 a month to $610 a month and still climb a she is getting free services. >> again, i cannot address an individual situation with of knowing more of the specifics. i'm happy to have folks talked to her. >> i would appreciate that. i will have my staff kid that information to you in your office so that we can work because of we're really going to take care of women in this

country health care issues for women, let's be straight. let's make sure we're getting the points across because women's health is important, and this is very misleading. with that i yield the remainder of my time fish. >> thank you, mr. chairman. i want to talk a little bit about constituent service where it comes to health care. long before the affordable care act i talked with the issuers,

the pharmacies, the hospital association. lynyrd from them is the nature of the problem we're seeing as we move into january and people using their coverage are no different from what has happened every year as people get it coverage. there are always issues in terms of people being able to verify and roman, see there doctor, all those kinds of issues. we stand ready to help anybody if a possibly can. >> i know that in my state democrats and republicans are working very hard to help their constituents, and so i am hoping that everyone on the other side of the aisle on this committee is taking advantage of the constituent service that is available and then also through the insurance companies and the farmers -- pharmaceutical companies.

i wanted to again the issue of termination. insurance companies that we talk to said they expected almost all of their current customers to stay covered. have you seen evidence of that? >> absolutely. it really is not accurate to think that because the plan was no longer being offered the that means the person is not getting coverage. >> it is not offered because it does not need the criteria -- >> that's right. and so in every instance that i am aware of the carrier offered the person the new plan that in some cases automatically enrolled in a new plan so that there would be no gap in coverage. and then in addition to that, of course, through our traditional policy remain it possible for people to keep their existing plan if that is with the

insurance company wants to offer >> my understanding of this issue of a grandfather option enables about half of those who received cancellation notices to renew there plan. has this been happening? >> that's right. >> and roughly half the remaining group that got cancellation letters, my understanding is they are able to actually get a better deal to the federal and state placement because they're eligible for tax credit or medicaid. they get better coverage for a lower and often much lower cost. >> people or eligible for the subsidy, absolutely we expect that they pay less than in many cases get better benefits than what they had had. >> finally come in december, the president announce that individuals with cancel policies would be eligible for hardship exemption so that they could approach a low cost catastrophic

plan and how this will change the options available to those that got canceled. >> with that basically means is anyone in the attic insulation and feels that the plans that are available to them about affordable can claim the hardship exemption and then roll in the catastrophic plan which is a high deductible plan but will cover them in the case of any serious illness. those plans are generally very affordable. >> thank you. i yield. >> the chair recognizes mr. johnson for five minutes. >> thank you. i too would like to thank you for being here today. you know, we had a long and arduous journey since this all started. ..

over regulating policies of this administration not very million of those folks get a second chance. only in washington, d.c., do we see a constant pattern that somebody else's expense. in this case it's the american people's expense. so i submit to you that what we should have done -- what the administration should have done is roll up the sleeves and do this the right way in the first place. let doctors and patients manage their health care. we have a private sector health care system that has provided

the best health care in the world. it did not have to be done this way. let me get to a few specific questions. since the launch of health care.gov, mr. cohen, has the sit been subject to any security breaches? >> no. >> no security breaches. >> there have been no breaches in the sense of anybody attacking the site and being -- >> there have been no incidents of people attacking -- >> no. >> that's what you said. >> no. well, because you interrupted me, congressman. no, there have been no successful attempts where anyone has been able to attack the system and penetrate it. >> that's contrary to what we've heard in other testimony and what is widely known in the media. >> mr. chairman, i respectfully disagree -- >> claiming my time. claiming my time.

what is the difference in, in your opinion, between a security incident and a security breach? >> you could have a security incident where because of an error or mistake or somebody said -- sent something to the wrong place. which was a isolated specific situation. >> a breach. when i hear breach. >> how do you relay it back to the testimony we've heard before the energy and commerce committee where security was never factored in and tested prioring to setting up the website. can you promise the american people today, right now, that their personal information is secure on witness.gov? >> yes. >> i can't promise there won't ever been an incident. i can promise their information is secure. i can promise -- >> that's like an oxymoron to me. you can't assure there's going a breach, but their information is secure. a followup question.

can you promise to this congress if health care.gov is subject to a breach or hack or any security failure that you'll alert the congress as soon as you find out about it? >> we follow normal procedures and protocols for when those incidents happen. >> but the american people need to know and the congress needs know. can we get your agreement that you'll notify congress? >> we'll certainly work with you to make sure you get that information? >> okay. whose job is to to inform congress and the american people when the security breach occurs? whose job is that? >> cms has an office of security responsible. and is today in the case of the medicare system where we have 50 billion -- 50 million enrollee. >> i got it. cms is responsible. who is responsible for the overall cybersecurity of the health care.gov?

i i couldn't tell you a number of people. i know, we have a dedicated security team. we have people watching the site -- >> do you have any contractors involved? >> do you know how many contractors were involved? >> i don't. do you know how much money is being spent? >> security? i would have to get that number for you. >> does anyone report to you regarding the security of the site? >> my office is not responsible for the security of the site, but i am given reports on -- >> okay. can you give us examples of those reports so we can see what those reports include? >> i can certainly take that request back and see what we have. >> okay. they come to you, so you ought to be able to release them; right? >> i'm concerned to take your request back and see what we have. >> okay. mr. chairman, i yield back. >> go ahead. >> i was going say the number of

report on attempt to hack in the system are classified. and we can -- we can make that available to all members to know there have been multiple attempts. there's not been a breach but i'm sure. much is classified. >> mr. chairman, on that vein, last week democratic staff of the subcommittee and full committee prepared a memo of information that was provided in the classified briefings, which is not classified. the information -- a lot of information -- i was at the classified briefings, a lot of that information not of a classified nature, and so -- what that information said is there are no successful hacks of health care.gov. it further said that there -- that surprisingly there have been no additional attempts and other government websites. and so i would ask naments -- unanimous consent to put the memorandum which is dated january 9, 2014 to the record. >> we will also remain vigilant.

we suspect there will be attempts. there is time left on the floor for votes. as members, we can adjourn to vote and come back and complete this -- >> i think we should -- >> would you like to continue? >> thank you, mr. cohen. i would like to ask a few question. you touched on earlier in response questions about risk -- >> okay. >> it's a program to offset huge costs and being the temporary quarter program, where, within the administration, is this program housed? hhs, cms, or where? >> it is under my program. >> okay. >> and the individual in charge of that program would be who? >> the person who works for me who is responsible for that program. her name is sharon arnold.

>> is that one person that would be in charge? >> well, she -- >> she reports to me. >> okay. >> so. i'm responsible but she works for me. that's her program that he's managing. >> thank you. >> with other people. with her staff. >> threne are -- and there are multiple staff that help her to run the program. >> that's true. >> would you be able to provide us a complete list of the staffers who do perform any service connected to the risk quarter program? >> yes. >> thank you. under this program, if insurers are hit with costs greater than 103% of the premium, the government will give them money, am i correct? >> that's right. and a little more complicated than, but yes. >> i have a couple of followup questions that may allow you to answer that. how will the determination be made of what the costs are? , i mean, is there a form or? >> the insurance companies will have to present data to us.

>> and then it won't be until 2015 we actually make any payments under the program. >> so can you tell us exactly how the insurers will report this? i know it has to be -- they have to report it. how are they going report it? >> there will be a, you know, forms or templates or whatever they will have to provide to us -- the accounting information that will tell us what their health care spending has been. >> i have followup on enrollment questions. if i can shift over to that? >> sure. >> the most important number has been reported by many news outlets is whether individuals have paid. does the administration collect this information? i'm asking do you collect this information? >> right now, we're not, but we will be. >> when? >> as soon as that functionality is built. i think i answered some questions about that earlier. not all of the functionality is built yet. >> will it mean we have to go

back all enrolled to find out whether or not they paid. we'll have to go back to those already in? we're not collecting that hasn't occurred. >> we will ultimately, will reconcile to make sure that the advance premium, tax credits, for example, are not paid -- that's a requirement that you pay the preyum in order to get the tax credit. >> what department -- what department would this data? >> it's going to come to my office. >> who would be the individual be in charge of that? >> that's also sharon arnold. >> we don't know how many at this point how many people have paid for coverage? >> that's right. >> so are you telling me you don't have any data -- you haven't received any information as to who has paid? or you haven't compiled it? >> we have gotten enrollment data from the issuers with with respect to the aptc payments we're going to be making next week. it's not on the individual

basis, umm, so -- they've told us the number of people who are enrolled have paid. we don't have it on the individual basis. ultimately with will. >> i didn't mean to cut you off. are you telling me you're going to be playing insurers without knowing whether or not the insured have been said. >>? 0. we're relying on data from them as to who paid. we don't have an automated system. >> if you are re-- we will reconcile that as soon as -- to make sure that those numbers are reconciled and are correct. once we do have the capability of receiving the addition -- >> go you know the total amount of paid from each at this point? >> since you're relying on that data. >> we have -- yes, we have information on what we're going to be paying in the first group of payments that is going on next week. we have that? >> can we get the data you have? whether it's compiled or not? >> i'm sure you can. >> okay. i believe my time is almost expired. i yield back. >> he yield back.

recognize the gentleman from colorado. >> thank you, mr. chairman. thank you, mr. cohen, for your time today. i, too with received my insurance cancellation. have you ever met anybody who had their insurance canceled? >> you may be the first. >> that's pretty shocking. 335,000 people in colorado alone this their insurance canceled. the letter i got, that told me it would be canceled included this option. it includes purchasing another health plan from us, another cashier, or purchasing a new plan through connect for health colorado. was the president's promise to keep the health care upheld? >> we talked about this a lot. the law provided that insurance companies could keep the existing plans as long as they didn't make significant changes to benefits and cost sharing. insurance companies made different choices. there are a still the of

grandfathered plans out there. those maintain. but then there were other plans that did not continue in to 2014. in symptom cases, the plans were canceled. >> was the president's promise upheld to me? i don't remember the president saying there's qualifications if you like your health care plan. there's no asterisk. >> the law made it possible for everyone who is in an existing plan as of the time it was passed for that plan to be maintained. but it didn't require insurance companies to continue offering them. what we did in november was we offered another opportunity to say to insurance companies you can keep those plans in place even if they didn't meet the requirements of the grandfather. >> so these challenges to -- changes -- these are big changes so you to -- a $5 change require them to discontinue the plan? >> it was a percentage change that was in the regulation as to how much -- it wasn't a change in premium. it was change in benefit or cost sharing. >> so a copay of $5.

that would require you to lose your insurance then? >> i think that was one of the requirement. >> it it a significant change to the insurance policy? >> a cobay was $20 and it goes up $5 that's significant. >> the president's promise -- so in your mind he shouldn't have had to apologize. he didn't do anything wrong? >> i think the president said he recognized that what he had said did not prove to be true for many americans. as a result of that, we offered another policy to make it be more possible for more americans. >> do you have legal opinion that give the president the authority to makes the extension of changes? could you provide me with the legal memo? >> i have to -- i don't recall where -- >> thank you. you testified in september as we talked about before the committee talked about everything, going fine when did you first know it wasn't going fine? was it september 27th? 28th, october 19st? >> october 1st. >> you had no indication friar

october 1st? >> i had no indication friar october 1st we were going to have the, you know, major, major when do you expect ?awz small business to start canceling? >> throughout the course of the year. they don't all tend come up for renewal in january. many were renewed early in 2013 so they will continue. >> how many do you anticipate being canceled? >> i don't have a number of that. we can look to see if we can come up. it. >> if you can provide an estimation of how many additional insured you think will be canceled nap would be create. we have an idea how many signed

up through the federal exchange? i know some we have talked about. how many people signed up? >> through december 28 it was 2.2 million in the federal and the state. of those, it was something over 1.19 million in the federal. >> okay. so about 1.1 million in the federal. 1.19 million in the statements -- states. >> roughly. >> how many signed up were not previously insured? >> i don't have that. >> how many were previously insured but had the insurance canceled? >> i don't have that number. >> how many saw their insurance rates go up? >> i don't have that number. >> but you said you know a significant number of people that saw the rates go down. as we've been hearing. >> you continue know if narrates went down. you are hearing ante-dotely. >> with e are hearing ante-dotely. >> you continue have any concrete numbers whether the rates went up or down? i think we know for people who are eligible for a subsidy that,

you know, for those people it is, you know, almost certain their cost would have gone down. >> you have some numbers but you don't know how many went up. okay. so of this supposed 45 million without insurance, how many people now have insurance? >> i don't think we have that number yet, but certainly we're going try to come up with the data as we can as we go forward, you know, to the end -- >> how do we know the law is working? >> well, know the law is working for many people. we know that -- >> but you don't know how many of the uninsured are insured. you don't know how many people saw the rate goes up, versus go con. insurance company aren't being paid yet. what is -- let's talk about the risk quarter period. what is the probability of risk quarter provision being utilized or activated? >> utilized? >> what is the probability of the risk quarter language being

utilized? >> i think there will be a risk order program. >> no, but, i mean, what is the payment being made from the government to insurance companies? what is the probability of that? >> that will happen. >> you're saying that the government will be paying private insurance companies? >> how likely it will be there will be claims on the program? >> yes. >> i think we anticipate there will be claims on the program, but there also may be some whose costs are lower than what they anticipated. and i think the estimate was it was budget neutral. >> gentleman time expired. a followup question. we're interested in any legal memorandum you have been advised of or briefed on that giant authority under the fracted to delay implementation or the authority to exercise enforcement discretion over enforcement provisions. we all know this law that was signed march of 2010 bears no

resemblance to what is actually going on today because the variety of enforcement discretions and delays. it will be implemented by the administration. we would like no know under what legal authority you are operating or what you have seen that gives you the legal authority to do so. thank you, mr. chairman. >> you'll provide that for the ?rord. >> we'll certainly take that request back and work with you. >> i would like that followup with the other questions that members asked on both sides of the aisle. as far as we would like to know his answers. how many people of the 45 million that originally supposed to have signed up. if it's more or less expensive for them. i ask unanimous consent the written opening statements of other members will be introduced to the record. in conclusion, i would like to thank the witness and members that participated in the hearing today. and remind members they have 10 business days to submit questions for the record. sky mr. cohen if he agree to spond promptly to the questions. with that, this committee hearing is adjourned.

[inaudible conversations]

pace of technology. should be getting under way in just a moment. live coverage here on c-span3.

take your seats. and our friends in the audience could find a seat we'll get going with our hearing.

i'll call to order the subcommittee on communications and technology and thank our witnesses for being here. for this first of what will be many hearings as we look to update the communications act. few sectors of our economy are equal to the communications and technology sector when it comes to innovation, investment in the american economy, and job creation. in these tough economic times, we as policymakers should be committed to fostering this critical sector of the economy. yet the laws that regulate the industry are outdated at best and some are affirmatively damaging. this is why chairman upton and i, along with members of this subcommittee, have decided to undertake the difficult task of updating the communications act of 1934. in the eight decades since its passage, congresses have come and gone. some have even made substantial though targeted changes to the law. but none have undertaken to rethink the act for the

environment of convergence and innovation in which we live today. it's time for our laws to reflect our modern technological landscape, one grounded in the networks and services of our past, and driven by our ip and mobile future. just yesterday the d.c. circuit issued its decision in the net neutrality case. striking down the rules, ordered by the federal communications commission. i, for one, was pleased to see the court remove the government from the business of making management judgments and give providers the freedom to make decisions that are pro-competitive and pro-consumer. while this decision benefits consumers and providers alike by keepings internet free from government interference, the rationale highlights the ongoing confusion regarding regulation of different services. this is yet another example of why it's vital that we take a hard look at the laws in this space and reconcile them with the realities of technology. the answer is not to subject new technology to outdated

regulations, but rather to craft laws appropriate to innovative services and platforms. as we embark on this effort it should come as no surprise that i'm focused on ensuring that we engage in a transparent and collaborative process, our colleagues here in the congress but also with the many stake holders outside in these halls. what we want is a dialogue. last week the committee released the first of what will be a series of white papers seeking input from the public. and i hope that interested parties will take the opportunity to make their voices heard to us. today's witnesses provide a unique and valuable perspective on the communications act. as chairman of the agency tasked with carrying out congress' will, and implementing the act, the four witnesses today have had a front row seat to witness the act in the real world, to see where it works, and where it doesn't. these chairmen of varied experiences and viewpoints, that in many ways represent the evolution of modern communications. when chairman wiley led the

agency, telephone service was a government regulated monopoly. consumers got their news from broadcast television and print newspapers, and the internet was still years away. 16 years later, when reed hundt took the reins the internet was coming into full force and mobility was beginning to take off. chairman powell's tenure saw the convergence of services towards the bundled offerings we see today, as well as the deployment of broadband to americans. and in the four years since michael copps served as academic chairman there have been dramatic changes to the way we communicate and the technology that powers our lives. for example the title of today's hearing contains a hash tag. twit per, then with no vowels in its name, had yet to be discovered by south by southwest. neither we nor the august panel before us can predict the future and what technological changes it will bring. but by learning the lessons of the past, we can do our best to create a legal and regulatory environment that will foster innovation, and competition,

encourage consumer choice, and optimum services. so again i want to thank you for -- to our witnesses for this impressive panel. we look forward to hearing your testimony. and we appreciate your public service. with that i would yield to the vice chair of the subcommittee mr. latta for any opening comments. >> thank you very much, mr. chairman. and thank you very much to our panel of distinguished witnesses for testifying for us today. i appreciate you all being here. since 1966, we have witnessed an unprecedented technological evolution in the communications industry. the rapid emergence of new and innovative technologies has fostered to increase investment throughout the industry in the development of a vibrant, competitive communications marketplace. as we move into the future it is important to examine the communications act to ensure that our public policy continues to encourage this kind of growth and innovation that is essential to fuelling our economy. reforms to current law should reflect the technology we enjoy

today and be able to adopt to the technology of tomorrow, without further government intervention. our efforts should be dedicated to ensure that the laws governing the communications marketplace do not stifle current and future investment, innovation, economic growth, and consumer choice in this dynamic and converging digital age of communications. i look forward to the testimony from our witnesses today, and again mr. chairman i thank you very much for holding this hearing. >> thank the gentleman for his comments. now turn to the gentle lady from california, the ranking member of the subcommittee for her opening comments. >> thank you mr. chairman and good morning to you. to all of the members, and the warmest welcome to each of the witnesses that are at the table. your combined public service is really stands as a hallmark of devoted service to our country. but also, to move the country forward in one of its most important economic sectors. so welcome to you, it's

wonderful to see all of you at the same time, at the table. with news of the court's net neutrality decision today's hearing i think is a timely opportunity to hear from each one of you who have led the expert agency, the fcc, and combined it represents over four decades of service. that is nothing short of extraordinary. and each of you have had a hand in really, i think, changing our nation's communications and technology landscape. so not only kudos to you, thank you to you, but a recognition of what each one of you accomplished. when congress passed the telecommunications act of 1996 it was my second term in congress. my first term on the committee, and there were just 11

references to the internet. the word internet, and only one mention of broadband across 128-page bill. many proponents of updating the act have cited this as evidence that the act is outdated. and unable to keep up with changes in technology. but as chairman wheeler affirmed last week, the communications act continues to provide the fcc with ample authority to exercise its role in this new environment. the court's decision yesterday, i believe, furthers this argument by upholding the fcc's existing authority to yoefsh see broadband services. and i think that's very important for consumers across the country. i make these points not to discourage the subcommittee's review of the act. i join with the chairman to review this. i think that's it's a worthy exercise.

but rather we need to ensure that we know what problems we're trying to fix before undertaking a multi-year examination that include hearings, stakeholder meetings, white papers, and the such. since the '96 act was enacted hundreds of new entrants have emerged, and more than 1.2 trillion dollars has been invested by u.s. telecommunications companies. i want this success story to be an unending one. and i think that is the goal of everyone on this wonderful subcommittee. so to that end, my goal throughout the subcommittee's review will be to see more competition, greater consumer choice, and more innovation. i am so proud, as the chairman was making his opening remarks, that so much of this has been born in my congressional district. and so innovation, innovation,

innovation. and these goals were embedded in the '96 act, and they remain just as important today. at the same time, our process of examining the communications act should not derail, in my view, a more immediate update of our video laws, a view shared by a majority of the witnesses at a september subcommittee hearing. recurring tv blackouts, coupled with the rising cost of broadcast television programming, with limited choice, has left consumers frustrated, and looking to congress, and the fcc, for answers. i believe that working together at a bipartisan basis we can make this happen in 2014. so, chairman walden, thank you for holding today's hearing on the communications act. i welcome the review, and i look forward to hearing the unique insights from the top experts from our country who have given so much in terms of their leadership in leading the expert

agency. and with that 34 seconds to yield to congresswoman matsui. >> thank you ranking member. i want to welcome all the former chairmen. we welcome you here for your ideas and your experience to provide basis for discussions moving forward. as technology evolves i believe it's important that we consider appropriate updates to the communications act that with goals to promote competition and innovation in the marketplace. to that point, i am pleased that yesterday, the d.c. circuit affirmed the fcc's authority to oversee broadband services. in my opinion that was a crux of the debate. and the fcc's argument prevailed on the question of authority over broadband. the fcc will need to exert its authority to ensure now that all americans have access to a free and open internet. a competitive marketplace with checks and balances will fare well for all americans. i look forward to the hearing today, and i yield back the balance of my time. >> gentle lady yields back the balance of her time. chair now recognizes the

distinguished member from michigan, mr. upton, for opening comments. >> thank you, mr. chairman. last month you and i announced our plans for a comprehensive update to the communications act of 1934. the changes in technology since the last update in '96 have been dramatic and existing laws have failed to keep pace with the vibrant and dynamic telecommunication industry. communications and technology sectors have consistently been areas of american leadership, innovation, and job creation certainly, but the communications act is showing its age in our continued international leadership is indeed at stake. yesterday's net neutrality decision, while a victory for consumers in the economy, illustrates the uncertainty flowing from the current statutory scheme and the need for this action. it's time to revamp these laws, to reflect the new competitive landscape and changing consumer expectations. and as we begin the open process leading to acom act update we are looking for input, yes we

are, from all of the stake holders in the communications and technology world. where better to start than with our distinguished panel of former leaders of the fcc? these leaders served during diverse times in the evolution on the communications sector, and they've seen the market operate under the strong hand of the u.s. government, and the challenges with them divorcing the government from its heavy regulation of the communication section of times of oer. they've seen satellite services succeed in bringing competition to the video market. and failed to find success as a competitor to mobile phone service. and they've seen the internet grow from a d.o.d. project to a tool for research universities, and now, as the commercial economic force that we know today. throughout the many nuanced it rations of the communications act, today's witnesses have firsthand seen the act at its

finest, and also in its inability to keep pace with technological innovation as impacted those vital economic issues. so i want to thank the witnesses for taking their time to share their experiences with us, we value, indeed, their expertise and welcome their thoughts on how we can ensure the communications act fosters our communications and technology sectors well into this century. and i yield the balance of my time to vice chair. >> thank you, mr. chairman. and if i had my iphone in my hand, i would hit retweet. for everything that he has just said. we do appreciate that you all are here. we do want to take advantage of the perspective that you have had, think about what has happened in the past 17 years, since '96. and the changes that we have seen, not only in how we communicate, but the rapidity of those communications, and entertainment, and how we access that, how we take it with us,

how we consume it, so we know that the pace of change means that we have to be very judicious and careful, as we look at a rewrite. we know that there are issues that are going to come on the plate that we're going to have to discuss, also. as we look at not only the telecom rewrite but at the use of the virtual space, privacy, data security, the way the virtual marketplace is used, and the way our constituents want to have a tool box to protect, as i call it, their virtual you online. so, we appreciate your time, your willingness to be with us this morning, and i yield back to the chair of the committee. >> yield back. >> gentleman from texas mr. barton want to use some of that time? >> thank you mr. chairman. i've served on this committee

since 1986. i've served with three of the four former chairman, mr. wiley preceded me. we've had some agreements, we've had some disagreements. so it's good to have all four of you gentlemen here today. when i was chairman of the full committee, back in 1996, my commutety introduced a bill we call the coke bill, the communication opportunity promotion enhancement act of 2006. it dealt with national franchising, net neutrality, public educational and governmental access, e-911 and what we now call void. it passed the house 321-101, but it didn't come up for a vote in the senate. i voted for the telecommunications act of '96, and the cable act of '92, and i hope this year to get to vote for another major bill that comes from the leadership of mr. upton, mr. walden, mr. waxman and miss eshoo.

this is a good thing to be doing and we're going to get some good information from your gentlemen and we appreciate you being here. >> gentleman's time's expired. we'll now go to the former chairman of the committee, mr. waxman, for opening comments. >> thank you very much, mr. chairman. i appreciate your convening this morning's hearing, and launching the subcommittee's examination of potential updates to the communications act. and i want to thank our distinguished panel for being here to help us think through these ideas, and i think i've been in congress during the time that all of you have been the heads of the fcc. technology has changed at a blistering pace since the enactment of the 1996 telecommunications act 18 years ago. the communications and technology industries are a thriving sector of our economy. as broadband plays an increasingly central role in the daily life of our nation, having a strong federal communications

commission to oversee its successful growth is more critical than ever. yesterday, the d.c. court affirmed what never should have been in question, the fcc is the expert agency charged by congress to oversee broadband networks. in doing so, the court reaffirmed that the fcc has broad, flexible authority to regulate in the broadband and digital age. however, while the court recognized the fcc's jurisdiction, it also overturned the specific rules the commission had adopted in the open internet order. i believe the fcc now has an opportunity, as well as a duty to exercise the authority the court recognized yesterday and reinstate the no blocking and nondiscrimination rules. an open internet is critical to the continuing growth of this economic sector. the internet is a vibrant platform for commerce, innovation, and free speech.

having enforceable, open, internet rules of the road means that consumers are in control of their experience online. i'm pleased that chairman wheeler has stated his intention to expeditiously adopt a new set of rules following the court's guidance, and i look forward to working with the chairman and my colleagues in congress to make sure these pro-consumer, pro-competition policies will continue to guide the expansion of broadband services. this subcommittee is now embarking on a journey to update the communications act, and regardless of the advancements in network architecture, or transmission protocol, the principles of competition and consumer protection remain as sound today as they were in 1934. i know chairman wheeler recognizes the importance of these values, and the action of the fcc that plans to take later this month to initiate

technology transitions, trials, reflects that. i look forward to hearing from our witnesses about what congress can do to help the fcc meet the challenges of the broadband, and digital age. thank you, mr. chairman. i want to yield the balance of my time to mr. doyle. >> thank you, mr. waxman. mr. chairman, thank you for holding this hearing and thank you to this distinguished panel. it's good to see all of you here in front of the committee. i just want to briefly concur with mr. waxman in light of yesterday's decision by the d.c. circuit, that i want to encourage chairman wheeler to work quickly to ensure that the internet remains an open platform for innovation, competition, and economic growth, which the fcc now clearly has the authority to do. i look forward to working with the commission and the stakeholders to put in place a robust framework that sustains an open internet. mr. waxman, i thank you for your courtesy, and i would yield back to you if someone else needs

more time. >> -- a minute. if not i yield it back mr. chairman. >> gentleman yields back the balance of his time. we'll proceed now to our distinguished panel of witnesses and begin with chairman richard wiley who was nominated by president nixon and served as chairman of the federal communications commission from 1970 to 1977. as chairman for most of the '70s chierm wiley's tenure at the commission predates many of the major changes in the communications sector. chairman we're glad to have you here today. pull that microphone up close. thank you for being here. you'll need to push the button on the microphone there. one time. >> thank you very much chairman walden. ranking member eshoo and other subcommittee members thank you for the invitation to testify today. while i know it's not going to be self-evident, due to my youthful appearance, i've been involved for nearly 45 years in

federal telecommunications policy. and from my own standpoint what has occurred during that period is simply amazing. when i was at the fcc in the 1970s, the average american enjoyed just three broadcast television stations. and one local and long-distance telephone provider, and the department of defense had just begun to explore a revolutionary computer project known as arpinet. but today our citizens have access to hundreds of video channels delivered by countless providers, and transmission technologies, dozens of voice and tech services, numerous wire line and wireless companies, and of course, arpinet has morphed into the internet, which has become a universal medium of communications. interestingly the bulk of this stunning technological metamorphosis has emerged since the 1996 telecommunications act was passed.

that legislation significantly altered the rules governing virtually every aspect of communications. the act's purpose was as simple in theory as it was complex in implementation. that is to provide for a pro-competitive, deregulatory national policy framework designed to accelerate the deployment of the then services and open all telecom markets to competition. to this end the statute sought to eliminate cross platform barriers and to encourage competition among service suppliers previously treated as monopolies or ol ig oplies. to the priet of the drafters the 1996 act helped to bring about the vibrant competition that consumers enjoy today in a variety of communication sectors, via voice, data or video. whether delivered by twisted pair, coaxial cable, optical fine are or the electromagnetic spectrum, myriad providers today

are offering their customers suites of advanced services in a marketplace that really could not have been imagined 18 years ago. in my view, where the statute and, indeed, fcc implementation has succeeded is when a lighter regulatory touch has been applied to markets. such as mobile, and information services. the result has been that these sectors have thrived. for example, in the robustly competitive wireless marketplace, there are now more wireless subscriber connections than the population of the united states, just think of that, and mobile broadband has spawned an entirely new industry, mobile apps, one that is estimated to employ more than 500,000 developers and related jobs and contributes billions to the economy. a similar success story is unfolding in the delivery of the digital content where seemingly

unlimited video streaming websites have developed to compete against traditional mvpds offering eagerly awaiting public new ways to consume video. this marketplace, i would suggest, is emerging because of innovation and competition, and not because of government regulation. conversely where the government has been less effective in maintaining is in maintaining highly restrictive regulations on traditional industries like, for example, wire line telephony and broadcasting. the end result has been to disadvantage these sectors, even though they may be providing services that are often equivalent to those offered by their less regulated competitors. in the developing ip sent rick world, all types of providers should be able to market all types of services, employing the same computer oriented language that defines digital communications. and yet the 1996 act continues

to regulate communications markets differently, based on the conduit used to reach the customer, as well as the geographic location, where traffic originates and terminates. now the underlying problem is not a failure of congressional or fcc vision. instead the reality is that a government has great difficulty in writing laws, or promulgating regulations that can keep pace with advancing technology. and especially so at a dynamic and ever dr. changing industry like communications. thus i would suggest that the objective of statutory rewrite should not be to legislate premised on the current state of the marketplace, or even on predictions of what it may look like in the future, instead, congress may want to consider a flexible, and technologically neutral framework that will be capable of adapting to technical invention and innovation,

whatever that may prove to be. in this regard, let me close by setting forth a few principles that might guide the drafting of a new statute. first the industry silos embedded in the 1996 act should be abolished and instead functionally equivalent services should be treated in the same manner, regardless of who provides them or how they are delivered to consumers. second, the traditional dichotomy between interstate and intrastate services should be eliminated, because regulatory classifications based on geographical end points no longer make sense in an ip environment. third, legislation should be focused on maintaining consumer protection, and public safety regulations. conversely, economic regulations should be considered in the case of noncompetitive markets, or in the event of demonstrated market failure. and fourth, new regulations

should be instituted with a lighter touch, as i said, accompanied by sunset provisions, so that the rationale for continued government intervention can be reviewed on a regular basis. thank you once again for the opportunity to testify. >> chairman wiley, thank you very much for your learned comments. we appreciate your counsel. we'll go now to chairman reed hundt who was nominated by president clinton and served as chairman of the fcc from 1993 to 1997. chairman hundt's tenure at the commission saw the passage of the omnibus budget reconciliation of '93 which granted the commission the authority to auction spectrum licenses, and the telecommunications act of '96. so, chairman hundt, thanks for joining us today. we look forward to your comments, as well. >> thank you, chairman walden. thank you for inviting me. good good morning to ranking member eshoo and all the other members of this distinguished committee. i'm proud that many of you have become lifelong friends and it's a pleasure to be here with you.

i also want to thank the d.c. circuit for giving me a flashback to law school so that i was late last night scrambling to read the key case right before this class. i have a feeling i'm not the only person here who did that, but i also want to note, i didn't have any staff, or classmates, so, i apologize if i haven't read it correctly, but i thought that i would throw away my remarks, and for whatever it's worth, offer you my reading of the case. in my view the d.c. circuit has written first a very, very well reasoned and very important case. there's no question that this reflects that circuit's experience in these topic areas and that they've brought that experience to bear in a bipartisan way to express a view about how the united states ought to grant the authority to

create the legal culture that governs broadband. what have they said? i believe the court has vindicated the wisdom of congress in the 1996 act. specifically, the court has said that when congress, in that act, in section 706, conveyed to its expert agency the quote, authority to enact measures encouraging the deployment of broad band infrastructure, unquote, in doing that, according to the d.c. circuit, congress said to the fcc, you will be our instrument for creating a flexible, and a supple legal culture that will change over time as the market changes and as technology changes. but that can always be used to protect competition, to protect consumers, and fundamentally, to make sure that absolutely

everybody in america is participating in the common medium of the internet. and that absolutely everybody in america is able to use it to publish their views and to review all the views of everyone else. not all those rules are in this decision. but almost all those words are actually in this decision. section 1706, of course, is just one part of the 1996 act, but i know i don't have to remind many of the members here, maybe i don't have to remind any of the members here, that was passed by a very large bipartisan vote in the senate and in the house. we all were, those of you who were in public service then, remember being in the library of congress when president clinton, the democratic president, passed this law that was passed by a senate controlled by the republicans and a house controlled by the republicans. and all came together and said, we have a common vision, and

that is that there will be networks, we did not know, technically speaking, what they would all exactly look like, but that there would be networks that would connect all of us to each other and to all of the resources of information that, in fact, would be utilized for entrepreneurship, for innovation, and for learning. and i have to say, this is what's happened. now no one here thinks the government built these networks. no one thinks the fcc built these networks. but everyone should know that the legal culture that was created by congress and its expert agency, through the terms of republican and democratic chairs, the legal culture is the legal culture that is regarded all around the world as the absolute best legal culture for governing the internet. any one of us knows 12 things that we think should be done differently, or maybe two dozen, but we ought to recognize, just for a little while, that we, as a country, should pat our government on the back, and say

for the last 20 years the legal culture that's been created that has governed the internet has really created the best possible environment for innovation, for entrepreneurship, for consumers. that's what's actually happened, and this court has said, and that law still exists, this court has said, already congress has enacted the law that gives the fcc the authority to protect competition and consomers, and that authority lies in section 1706 and the court also said that congress can -- that the fcc can, if it choose, classify broadband as a common carrier. it could use either of these methods, it could use one of these methods, but it can accomplish the goals that are stated in the act and that have repeatedly been restated by this congress. the only thing the court said is, if you're going to pass rules that look like common carrier rules, and you're going to classify broadband, as an information service, then you're

going to be creating a contradiction that we won't permit. you can't call it an information service and then pass rules that look like common carrier rules, because if it quacks like a duck, it's a duck. so, that's why it was sent back. i read a lot of articles that said that this was a victory for verizon, this is a victory for congress. if it was a victory for verizon, it was a piric victory, it was the most perfect example of a pyrric victory since pyrrus. i want to thank congress for passing a law that works well and this court has said still will allow you to achieve your goals. >> thank you chairman hundt we appreciate your comments and your staying up all night to cram for our hearing. now turn to chairman michael powell, who was nominated by george w. bush, and served as chairman of the fcc from 2001 to 2005. during mr. powell's chairmanship

they saw a significant increase in the deployment of broad band to american homes as well as convergence of services toward the development of broadband -- toward the bundles of services common today. chairman powell thank you for joining us today, and please go ahead. >> thank you, mr. chairman. and as a former chairman, i'm happy to be sitting around with a bunch of these other chairmen, offering as best we can our historic perspectives on how to prudently go about rewriting the act should that be your intention. and i'm pleased to be with ranking member eshoo again and all the distinguished members of the committee. i think it goes without saying and all of us will say it in different ways that the world has changed quite radically from 20 years ago in terms of markets and services but don't ask us, ask your kids. ask them to name three broadcast networks, if you will, ask them to do without the internet for a week, and for god sakes ask them to put their phone down at dinner and see what you reaction you get. i think you'll be convinced.

that transformation has taken place largely because of an enormous revolution in network architecture in the form of the internet, which has unleashed a form of intermodal competition heretofore wasn't really possible and it's really introduced an exciting world and we should remember, gave birth to a host of companies and opportunities that never were envisioned before. the companies that aren't here, google, facebook, amazon, ebay, twitter, instagram, you name it, all able to be born and flourish because of this transformation. i would say that any consideration of the act should start with not only cataloging its ills, but cataloging its successes. much as reed was alluding to. i think it's really important to note that over this period we have seen the most stunning amount of investment in infrastructure and architecture that we've ever seen. we have reached 90% of americans faster than any other technology in world history. innovation and growth have continued at exponential rates with broadband increasing over 19 times just in the last

decade. doubling basically increasing about 50% annually. that's a stunning achievement in something we should make sure we keep going. i, so i think, you know, being guided by the old maxim of do no harm as an important cautionary tale, as i thought about how you might think about architecting a new regime, i'm guided by the idea of the internet itself, which is the fundamental principle of simplicity as a design principle. it has been a very, very powerful one. in the internet, and i think it offers some guidance in the space, as well. so i'd like to, toward that end, offer i'm going to see mr. wiley's four principles and do him three better and offer you seven as briefly as i can. the first is we've heard a lot about innovation. i do think the principle goal of the government should be to nurture that innovation. this is the kind of fomenting change we have never been able to harness as fully as we are

today. innovation has allowed us to bring completely new products and services and network changes to the market. it's created a form of creative destruction that keeps the market energetic and keeps monopoly in check. and i think it's created new kinds of transparency for the american consumer through crowd sourcing and visibility. and we should study the conditions that go in to innovation and make sure we harness them. i think three are critical. innovations really do require freer markets. and a market that moves at moore's law of speed the pace of adaptation transformation and change are incredibly fast. and there needs to be a constant and intense dialogue between producers and consumers. we should be careful to protect that. innovation requires risk taking. as we know, most new ventures fail. there has to be room in government policy for failure, there has to be room in government policy for encouraging taking those risks. and innovation requires investing more than a trillion

as was talking about earlier since 1996, is stunning. but it requires a stable regulatory environment to provide that uncertainty because if investment slows innovation will slow with it. the second rule of simplicity, i think, is once you've created a lighter regulatory environment, by trying to pursue the maxim of less is more, organize it better. we certainly have heard about the challenges of silos and buckets. clearly that had its place in another time when these technologies, applications and tief of companies were deeply intertwined, were not able to provide alternative services and other spaces. that day has moved on and we certainly crave a more unified, integrated kind of legal regime that doesn't make those sorts of legal distinctions. as i heard mentioned today i think yesterday's court decision and the multiyear debate on net neutrality that illustrates the almost tortuous challenges of addressing a modern circumstance in using provisions of last century's rules i think they're certainly widespread agreement on core principles around an

open internet. at the somewhat past we've had to follow in an effort to implement them has made the matter more complex and controversial than necessary and the threat of radically upending a long-standing light regulatory foundation of broadband on which massive investment and growth have been wilt with good effect to implement one set of rules seems distressing any shift of that magnitude i do think would require congress' the people's representatives to weigh in on. a third principle give regulators the ability and obligation to address changing markets. as we've said the markets move drastically and the fcc often has limited ability to make those migrations yes in places they have, there are other instances in which they've not been able to even when they concede that the fundamental circumstances have changed. fourth the law should ensure competitive parity and technical neutrality. there is a hodgepodge of applications of statutes i could point out in which certain rules apply to one sector of a service

and not to other sectors. this has really just been an outgrowth of the passage of years and the changing nature of companies. but there are many rules that apply to cable for example that don't apply to dbs for no discernible reason. one valuable thing the committee can do is prune through the statute to harmonize those as best as possible. the fcc should police markets not create them. i think this is generally well understood but there is a role for a cop on the beat. what i don't think there should be is a master chef who believes it's the commission's objective to make markets or create the conditions and circumstances for them. and finally, the last two, timeliness. if you're working in moore's law you need timely and prompt decisions from the government. lastly and most importantly the law still needs to preserve important societal values, and protect consumers from harm. and the fcc and the government will always have a sacred responsibility in that regard. thank you for your time.