>> this weekend on booktv and american history tv, a look at the history of literary light of chattanooga, tennessee. saturday at noon and sunday at 5 p.m. on c-span3. moment >> a panel of former fcc chairman testified about the impact of tuesday's d.c. circuit court ruling on broadband or high speed internet regulation. the ruling says the fcc has a the 30 directly the industry but had done so and probably, thereby notifying the agency's so-called net neutrality will. the former chairman appeared the former chairman and. i house energy and commerce subcommittee looking at the 1934 communications act which was last revised in 1996. [inaudible conversations]

>> [inaudible conversations] >> [inaudible conversations]

>> take your seats, and our friends in the audience would like to take a seat, we will get going with our hearing. i'll call to order subcommittee on communications director technology and thank our witnesses for being here. subcom for this worst of what will be many hearings as we look to update the king occasions act. k few sectors of our economy ors . equal to the communications and technology sec atorre when it ci to innovation, investment in the american economy, and jobinveste creation. in these tough economic times we

as policymakers should begh ecoc committed to fostering this economy.tering of the yet the loss the regular the industry are outdated at besthat and some are affirmatively regul damaging.indu this is whystry chairman upton b i, along with members of the subcommittee, have decided to undertake the difficult task of updating the key medications act of 1934. cmunica in the eight decades since itsht passage congress have come and gone. some of the been made substantial the property changes of the law. but none of undertaken to la rethink the act for thew. environment of convergence and innovation in which we live today. and it's time for our lost reflect our modern technological landscape, one grounded in the network of our past and driven byic our ip and mobile future.vy just yesterday the d.c. circuit issued its decision in the net neutrality case striking down di the rules ordered by the federal communications commission. orded 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 apting t 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 are how they are delivered to consumers.

second, the traditional dichotomy between interstate and intrastate services should be eliminated, because regulatory classifications based on geographical endpoints no longer makes 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 forth, 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 lord comment. we appreciate your counsel. we will go now to chairman reed hunt who was nominated by president clinton and served as chairman of the fcc from

1993-1997. chairman hundt's tenure at the commission sought passage of the omnibus budget reconciliation of 93 which granted the commission the authority to auction spectrum licenses, and the telecommunications act of 96. 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 very 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 wiomof specifically the corydon has said that when congress and that act in section 706 conveyed to its export agency the authority expe to enact measures encouraging

the deployment of broadband me infrastructureas. in doing that, according to the d.c. circuit, the congress set toin the fcc, you will be awareg instrument for creating a flexible legal culture that wild change over time as the market oanges and as technology changes but it could always becn pred to protect competition and consumers and mature everybody is participating in the common media of the internet and that suddenly everybody in america is able to use it to publish their views and to review all of the views of everyone else. not all of those words are in this decision but almost all of those words are actually in this decision. section 1706 of course is just one part of the 1996 act, but i

know why don't have to remind many of the members here. as passed by a very large bipartisan vote in the senate and in the house. all of us that were in public service and remember being in the library of commerce when president clinton, the democratic president passed this law that was passed by the senate controlled by the republicans and house controlled by the republicans. we didn't move technically speaking with what looked like and to all of the resources of information that would be used for the entrepreneur should and innovation and learning. now no one here thinks that the government built these networks. no one thinks the fcc built these networks that everyone

should know that the legal culture that was created by congress and its expert agency for the republican and democratic chairs the legal culture is the legal culture that is regarded all of the world as the absolute best legal culture for governing the internet. we know 12 things the we think should be done differently or who doesn't but we ought to recognize for a little while that as a country we should have our government on the back. the government has retreated to the best possible environment for innovation and for entrepreneur ship and for consumers and that's what has happened and the court said. already the congress has enacted law that gives the fcc the authority to protect competition and consumers it lies in 1706

and the court also says the congress kim if it chooses classified broadband as a common carrier. it could use either of these methods or it could use one of the methods that it can accomplish the goals that were stated and that have repeatedly. if you are going to pass rules that look like the common carrier rules and you are going to classify blonden as an information service and the contradiction that we will permit and not look like the common carrier rules because if it quacks like a duck them it is. this is a victory for verizon and congress it was the most

perfect example of the victory since paris. [laughter] so i just want to complement the congress on complementing the law that has worked well and the court has just said still it will permit you to achieve the goals. we appreciate your comments and staying out all night for the hearing and now we turn to the chairman michael powell who was nominated by george w. bush and as the chairman of the fcc from 2001 to 2005 and from abroad and to american homes as loves the convergent services towards the development of broadband, towards the bundles of services thank you for joining as the former chairman i'm happy to sit around with a bunch of these other chairman how to prevent

illegal about rewriting the action that was intentioned and i am pleased to be with a ranking member again and all of the distinguished members of the committee and the world has changed quite dramatically from 20 years ago don't ask your kids that ask them to name the three broadcast networks if you will asking them to put the phone down at dinner and what reaction degette i think you will be convinced it's largely because enormous revolution in the network architecture and in the form of the internet which was unleashed a form of competition heretofore that wasn't really possible and we should remember it gave birth to a host of companies and opportunities that never were envisioned before, the companies that are not here, google, facebook, amazon, all able to be born to flourish

because it is transformation. i would say any consideration that should start with not only cataloguing it is as much as it 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 that we have ever seen. we have reached 90% of americans faster than any technology and world history. innovation and growth have continued at exponential rates with broad and increasing 19 times just in the last decade doubling basically increasing about 50% annually that is a stunning achievement that we should make sure we keep going. i think being guided by the old maximum do no harm is an important cautionary tale. as i thought about how you might think about are detecting a new regime i am guided by the idea of the internet itself which is the fundamental principle of

simplicity as a design principal and it's been a very powerful one in the internet and i think it offers some guidance in this case as well. so i would like to offer i'm going to see the principles and offer you seven as briefly as i can put first is we have heard a lot about innovation. i think the principal goal should be to nurture that innovation. this is the kind of change that we have never been able to harness as fully as we are today. innovation has allowed us to bring new products and services and network changes to the market. it's created a form of destruction that keeps the market energetic and keeps the monopoly in check and i think it's going to create new kinds of transparency for the american consumers through crowd sourcing and disability and we should study the conditions that going to the innovation and make sure

in the market that moves the speed up the piece of adaptation and transformation and change and needs to be an intense dialogue between the producers and consumers and careful to protect that. and it requires risk-taking and as we know, most failed. there has to be room in the policy for failure and there has to be room for encouraging taking those risks. and innovation requires investing more than a trillion dollars as the contras man was talking about earlier since 1996 is stunning that it requires the state regulatory environment to provide that uncertainty because the innovation will slow with it. the second rule i think is once you've created a lighter regulatory environment by trying to pursue the maximum of less is more, organize it better. you have heard about the challenges of the silos. a clear lead that had a place in

another time when these new technology applications and types of companies were deeply intertwined and were not able to provide alternative services. that has moved on and we certainly create a more unified and innovative kind of legal regime that doesn't make those sorts of distinctions. in fact as i heard mentioned today i think that the court decision and the debate on the net neutrality illustrates the almost torturous challenge of addressing a modern circumstance and using provisions of last century's rules. there is a widespread agreement on the principles are not the open internet. in the past we had to follow the effort to implement them and made the matter more complex and controversial than necessary and the threat of upending the longstanding light regulatory foundation of broadband on which massive investment and growth has been built was a good effect implement one set of rules seems distressing and any shift of that magnitude i do think would require the congress people's

representatives to weigh in on the. the third principle is give the regulators and ability to regulate the changing market putative as we have said the market's move drastically. the sec often has limited ability to make those migrations there are other instances they have not been able to even when we can see the fundamental circumstances are changed. it should ensure competitive parity and technical neutrality. there is a hodgepodge supplications and statutes i could point out in which a certain rules apply to one sector of the service had not the other sectors. this has been an outgrowth in the past years and the changing nature of the company but there are many rules that apply to cable for example but do not apply for no discernible reason. one very valuable thing the committee did was prone to through the statute to try to harmonize the differentiated treatment as best as possible. if the fcc should police the markets and not create them i think there is a generally well

understood that there is the role for the cop on the beat. what i don't think there should be is the master chef with the objective to make the markets or create the conditions as the circumstances for them and finally, the last two timeliness. if you are working in law you need tough decisions from the government. but lastly and most importantly it still needs to preserve important societal values and protect consumers from harm and the government will always have a responsibility in that regard. thank you for your time. >> thank you. speaking of cops on the beat we will now go to michael that served as the acting communications from gingrey to 2009 and served as the commissioner to 2011. prior to joining the cashen, the commissioner worked right here on capitol hill in the u.s. department of commerce. thank you for being with us and

we look forward to your comment on the panel. >> thank you, chairman fais chairman, former chairman, all of the members of the committee i am delighted to be here. we are here today to review with the communications act needs to be updated or otherwise reform. i have heard some say simply because the pnac is old no matter from 18 years ago cannot have relevance in today's world. as some only a little younger than the original act of 1934 the declaration of independence and the constitution were long ago relevant in our lives. it it remains strong and second the current act provisions can still do much to improve the

communications landscape to the opportunity for all of us and to nourish the kind of civic dialogue upon which the successful self-government inevitably rests in an ideal world most of us were welcomed into believed it could be improved. the last revision in 1996 in the political moment the line was sufficient and does the cultures across the sectors and constituencies who were able to negotiate compromise statute that while far from perfect at least envisioned delivering to every american a matter who they are or the circumstances of their individual lives, the most advanced communications technologies and services feasible and reasonable and comparable prices but played with consumer protections, rights of privacy and public safety and utilizing competition to help achieve these goals. but in the statute to work to deliver these benefits was my mission at the fcc, working with some of the most amazing public

servants anywhere. as i carried out by public interest mission in the common cause. in the immediate wake on the new pass, the commission made important strides to carry out these congressional mandates. but things changed. some of the very interests that helped negotiate the communications act spend more time undermining the statute that implementing it. such efforts continue to this day as we saw in yesterday's court decision left unaddressed was seriously jeopardized in the future. i've been in front of the panel many times over the years to voice my dissent on the concessions and the classification of the communications services and industry consolidation across the telecom and the media sectors. the elimination of the policies that have safeguard the public interest and the exact consumer choices and consumer prices and the deployment of the competitive low-cost high-speed broadband the century's most

important infrastructure. a record number of hearings needs to show many people do not share the easy optimism that is expressed about the state of america's communications readiness. as you consider legislation in the coming months america is a variable wonderland. the triumph of the free-market entrepreneurship that puts us at the front of high-tech nation's but there are those we must avoid. they originated so much of the technology behind the internet has fallen in the broadband penetration according to the oecd the country is in the connections for 100 residents. or compared to the research shows that americans are paying more and are getting less than the wired broadband consumers in the competitive countries. but part of justice has noted that marketplace offers little in the way of choice. even as the mobile data plans are saddled with caps and higher consumption and innovation alike and once again for the third

time, they found itself unable to certify that we enjoy a competitive wireless marketplace. surely the time has measures to make the quality broadband universally affordable once and for all. why we are not gathered here this morning to rehash those decisions, i do think it is important to understand that many of the false contributors to the current statute or more the result of the industry efforts to undermine and have commissioned decisions that too often eight and a bed of the effort. so while we open discussions and the revised communications, let us recognize that our present staff has been interpreted and always not originally intended and that many of the constituents are still relevant, workable and consumer friendly. there is a statute to enforce in putting the job on hold while we can start changing it is not a good option. i think most of us here this morning understand they are finding in a correlation of interest that can come together to the communications act of 2015 or 2016 that is more

challenging than the current law. we have the duty to achieve the ongoing goal of the congress laid out and these remain powerful interests. a statute that invokes the public interest over 100 times to highlight the universe of reality of the protection and that undermines and informs communities and engages citizens that cannot be all bad. i have some preferences for the statute, of course also a good part of it would be making sure that the commission and the industry followed through on what is already on the books to foster competition and consumer protection to deliver on the public safety, preserve privacy and the massive intrusion and the industry consolidation to put the brakes on the gate keating in the media both traditional and new and to provide the fcc would have the resources it needs to decide its response of devotees.

my greatest disappointment at the commission is that we didn't do enough on the truly reflexive diversity of people. can you believe that today there is no african-american owned television station anywhere in the land? america is diversity and of our media fails to represent the diversity of the diversity of providers and content and viewpoint and ownership it feels us. they are across the need of land that need to be addressed with additional resources. imagine that there are still areas where the majority of the first americans cannot access even plain old telephone service, let alone the kind of high speed broadband that is the most powerful tool they could have to create opportunity where there is so little opportunity now. i would hope we could find ways to stimulate the basic communications research without the public-private partnerships and i'm not talking about the nec staff, but the basic fundamental research that will determine who wins and loses on

the global food stakes. for making the commission more efficient, like doing away with the closed meeting rule and the more commissioners from even talking to one another and that reform needs to go forward. whether or not i believe that when three commissioners have something they want to do with the fcc that should go on the agenda. i always come back to the democracy because that is what concerns me the most. our country is in trouble reminiscent in many ways on the severity of the economic, global and social crisis that phase in the 1930's and that are. the citizens can be expected to navigate through all of these issues and come out with smart decisions for the nation's future. until the condition fuels that

we are not available to all and that the media environment and the committee of what has been short circuit, the investigative journalism holds by a thread and we expect to produce those things that the market itself no longer produces and which in fact the market alone has never produced. it's vital to our economy but they are the lifeblood of our democracy and they must be available and open to all in the exclusive problems of the affluent few always alive to the common good. we shouldn't see our communications as part telecom, part media or part traditional media or new media. we have one communication in the ecosystem, and our job is to make it work for everyone. and i know of no greater challenge that confronts the congress, the commission, or the country. thank you for holding this hearing today and for inviting me to be part of it and i look forward to our discussion. >> chairman come thank you for your thoughtful presentation. we appreciate it. as you know, the subcommittee's

move forward on some of these initiatives coming and we welcome the encouragement of on the other side of building the sunshine act and a few other things. so, i would like to open up the questioning process now the question of chairman powell to the edison to presided over the federal communications proceedings and a classified cable and telco deliver a product and services as information services committee you think that we would have seen the same level of broadband fast these could during the past decade had in the fcc classified these services as common carrier communications services? >> i think in short, my judgment is no. i think the internet if the classification decision was made was more unknown than it was known it was a period of rim that experimentation. i think the capitol required to drive and to produce the broadband networks that were not in place needed conditions that allowed the flexibility to make those choices without the risk they would be put back into the

kind of monopoly that the regulatory model. so, i think it was an important component to spur the investment. >> chairman, does the federal communications commission need to continue to have broad discretion over the mergers and acquisitions, or should the department of justice antitrust review be enough? >> i think there has been duplication from time to time although i would point out that the justice department is looking at potential suspects and the fcc has a broad public interest standpoint. i think that the two agencies that need to work together and that have worked together through the years, so i think the process is appropriately developing, but i do worry sometimes that we see the handling of these consolidations and mergers which i think is contrary to the best interest of the company is also contrary i think to the public interest and

consumers. >> kim the fcc ever future approve the regulations given how rapidly the technology is changing there are elements in the communications act holding the commission back from addressing the new technologies. >> i don't think any agency can more than congress could reach the statute that wouldn't over time for a and its relevancy in the market that is driven by technological change to really do believe that there are tools to give a greater flexibility and not more prescriptive constraints that we have seen in some regulatory vehicles. so they cannot come and i think that the other is asking the commission anything that requires the predictive judgment about the future outcomes should be avoided where possible. >> that's why i suggested in my

prepared testimony that we ought to have an opportunity to have a light touch here and have a very flexible technology neutral type of approach in this because it's very hard to predict. in 1996 they did not really foresee the need to develop the internet to become a universal medium coming and i don't think that they predicted broadband to be but it is today. so i think that you have to step back a little bit. and i think that allows the technology to develop and to allow innovation to ocher without stifling. >> i'm going to start with the chairman and then each of you can take it in a minute and a half i have left. should the internet be regulated under title to? >> one of the things i would like to say about that is that people should fully understand what that means, even if it were able to give you a better basis

for recovering the components of would be the applications of the thousands of pages decades-old regulations instantly the internet where they here to have not been on a bipartisan basis. we have had a much more regulatory environment. the shatter to the investment expectations that would result i think would be exceedingly damaging more than most people realize. >> chairman? >> do you have a comment on that? >> just two points. the 1996 act was shorter than the rules for little league baseball, meaning that congress did not as easily have to write the pages and in its wisdom it didn't do so in 1996 and that act now has given the ability to achieve the fundamental goals. as i mentioned earlier, it can choose to use the specific

methods that are dictated by the common carrier treatment, but it absolutely does not have to use the very many of these methods to accomplish its goals and the court on page 61 outlines its view and says you can treat it as common carrier and have about 30 words that established the principles. i'm not saying they can do that but they should do that. >> i think what they should do and i would hesitate to say to the current chairman but since you asked i think they ought to take a fresh look at all of the facts of bill rall that exist right now and they also ought to be down here listening to dewaal and have a robust discussion but the key point is they have the authority. >> i have gone over my time. >> i think would be a big mistake to turn away from the

information service pathway that we started and go back to the common carrier regulations however that might be defined. we want to provide an environment where there's opportunities for investment and encouraging the innovation allowing the business to try to experiment and find ways to serve the customer and i think that to go back to a 1934 style commentary regulation that was really based on regulating their railroads i think doesn't make any sense. >> my answer is yes i do. we have the authority to review that and whatever we do we need to do it quickly, promptly and provide some certainty in the marketplace. i've always stressed the importance of that reclassification. people talk about section 706 and i have always said that there is an authority there to give a lot of the things that -- we don't need now to get into the months of third and fourth

and fifth ways to thread the needle. now to get into months of third ways and fourth ways and fifth ways to thread this needle. we need clarity.busiss needs consumers need clarity and the commission needs clarity, too. and we have to make sure whatever we do that things like interconnection and those things, consumer protections are provided. >> appreciate that. i thank the indulgence of the committee and turn now to the ranking member miss eshoo for five minutes. >> thank you, mr. chairman. to each of our distinguished witnesses, what a rich, rich hearing with your testimony. thank you very, very much. to chairman without any staff or other council to assist you late last night, in your testimony you disgusted the importance of the decision that this country made to allow internet service providers full use of the

existing telephone network without paying the owners anything. because it is very, very -- i mean, one of the essentials in the success of the internet. so essentially we said, the incumbents could not be gatekeepers to charge a toll for getting on line. in your view does yesterday's decision reversed that longstanding policy? >> no, it does not. congresswoman, i think you put your finger on the central issue if i may say, yes, internet service providers are gatekeepers, and they also are 2-sided networks or to cited gatekeepers, like any gatekeepers. someone on the west side and some want the east side. the situation then is very similar to the credit-card industry. we all have credit cards.

then there is a credit card company. on the other side of that there is the restaurant. it is very useful for restaurants that we all have credit cards, and it is useful for us that all the restaurants will take them, but it is not so useful if the gatekeeper says, now, some of these restaurants are not going to allow the participate in the system. translating that to the presence , if the internet service provider were say, you know, not all the people that are putting the content on their computers, we know what all of them to be able to have access to all of the user's were to say not all the people that are putting the content on their computers, we don't want all of them to be able to have access to all of the users, that's a problem if the gatekeeper behaves that way. >> thank you. >> that's the central issue. >> thank you very much. to chairman powell, it's wonderful to see you again. as you know, under current law, cable subscribers are able to

buy the so-called broadcast cable tier in addition to getting access to any other cable programming. as we transmission consent fees continue to rise and are inevitably being passed on to consumers in the form of below-the-line fees, i don't think it's a sustainable business model, most frankly. i just don't think that it can continue to work this way. do you think the so cold must buy -- lower their bills by electing to receive broadcast channels over the air? >> i don't. i think it should be an extraordinary circumstance in which the government tells the consumer, you have to buy a television package as a prerequisite of buying more of what you want, which is essentially what the rule does. the other grounds on which i think it's fatally flawed is

only cable subscribers have that obligation. dish and direct satellite subscribers do not have that obligation. and they're the second and third largest mvpds in the united states. yet a consumer who subscribes to directv does not have to, under the rule, buy programming but if they switch to comcast or cable, they do. that was the parody i was making. >> chairman copps, thank you for being here today. the man with real wisdom. the man that we always count on to put -- place democracy front and center of everything. you know so well that since citizens united, the last two election cycles that have set records for money spent, including hundreds of millions of dollars from undisclosed

sources, the bulk of this so-called dark money spend iingy outside groups that hide their donors go toward negative tv ads. we all know that. would you recommend changes to the communications act to ensure that voters are informed about who exactly is behind these anonymous tv ads? and is there anything in your view that the fcc can do on its own without congressional intervention? >> i would recommend them enforcing the statute that we already have. if you take a close look at section 317, which has to do with sponsorship identification and which goes back even before the telecommunications act of 1934 was written, goes back to 1927, ensuring that listeners and viewers more recently know by whom they are trying to be persuaded whether it's a commercial product or political

product. those rules were last revisited in a meaningful way by the fcc in the 1960s, which repeated that people have a right to know by whom they are being persuaded. since then we have all these new avenues of dark money and super pacs and all of the rest. we also have the authority recently reemphasized by the government accountability office, the recommendation that the commission update those rules and get on with the job. so, we can have this kind of information available to consumers so that when you see that negative ad and it says brought to you by citizens for purple majesties and amber waves of grain and it's really a chemical company dumping sludge into the chesapeake bay, potential voters, citizens have a right to know that and will know that. that's basic information that you need to have, if you're going to have a viable civic dialogue. this is something that the fcc can do.

it doesn't await a president making a proposal to do this. it doesn't involve congress having to pass a law. it involves the federal communications commission doing its job. it could do this in 90 to 120 days and update the rules to take mind of the new dark money avenues i was talking about earlier. so, this would be a real way to shine a little bit of sunlight on the dark world of tv political advertising. >> thank you very much. and mr. wiley, thank you for your wonderful, distinguished public service. i'll submit my questions to you in writing. >> all right. thank you. >> thank you, mr. chairman. >> thank you. we'll now turn to the vice chair of the full committee, the gentle lady of tennessee, miss blackburn for five minutes. >> thank you, mr. chairman. and thank you all for the time this morning. i want to pick up where the subcommittee chairman left off, talking about the responsibility of the fcc and what it would

look like going forward. i think that it's fair to say -- and mr. powell, i will address this to you. i have heard you say aol was on top at one point when you were -- on top of the game and where are they now, i think, was the comment. anyway, looking at where the fcc would be and as we look at the telecom act, should we look in terms of the fcc being more enforcement rather than regulatory in its scope or in its -- really in its scope? mr. powell and then mr. wiley, i would like to hear from you. >> i think some aspects of that deserves a fresh examination. i was a huge supporter of, served there with great people. it does an enormously great public service. int introspective management. it is one of the last of the new deal agencies that has

regulatory power. that is, the ability to set the prices, terms and conditions of market activity as opposed to having a more significant enforcement, policing or consumer protection role. not to say that some of that may or may not still be warranted. i do think that that is a kind of hold over from judgments of different administrative eras. if you're going to look at -- you should look at the -- >> look at the balance? >> the diochotomy and balance of that role. i do think that many have migrated more toward that role. i think they're worthy of second consideration. >> mr. wiley? >> i would agree largely with what chairman powell has suggested. i think the commission does have strong enforcement efforts today and some would say almost two strong in some instances. but i think, frankly, a lighter

touch is the way to go in this area. >> let me ask you this. privacy data security, front page news right now. it's going to be. do you think that now is the time for the fcc to focus on its core competencies or should it move over and look at privacy data security or leave that to the ftc? mr. wiley? mr. wiley? >> i didn't hear that. i didn't hear it. i'm sorry. >> privacy data security, leave it to the ftc and the fcc focus on its core mission or what is your thought on that? >> i think so. >> you think so? >> i would agree with that. >> okay. mr. powell, coming back to you, 706. we're hearing a lot about that today. and you may have others who think that, you know, the fcc -- that this is an invitation, 706 is an invitation to come in and

regulate internet services. as you look at 706, do you agree that the provision was intended to give the fcc the ability to forebear from regulations that would stifle broadband investment and innovation? >> i agree that the decision certainly gives them the power to forebear and for many years many people interpreted 706 as principally deregulatory. it speaks of removing barriers and obstacles, less so about introducing them. i certainly was serving at a time where the commissions have held that was not a separate basis of authority. and in fairness to the fact, every commission had so held until recently. so, that was the position of the law when i was there, at least. i will say, though, that i think if the commission is going to have a role in broadband, i highly would prefer that be under the construct of the light

regulatory information services definitions that reside around 706 than to make a radical transformation to title 2 as a regulatory framework for those questions. >> okay. thank you very much. mr. chairman, i will yield back the balance of my time. >> the gentle lady yields back. the chair now recognizes the gentleman from california, the ranking member of the committee, mr. waxman. >> thank you very much, mr. chairman. my colleague, miss blackburn, suggested that the fcc needs to act more like the federal trade commission, ftc. consumer protection work. i believe we need an agency like the fcc that can write forward-looking rules of the road for industry and consumers. chairman hundt and copps, do you agree with that? >> absolutely, mr. waxman.

forward-looking is -- here is the best example of a useful forward-looking law. it's in the incentive auction legislation that you passed where this congress said we want the fcc to establish before the auction a generally applicable rule about how much spectrum anybody can buy. that has to be forward looking. you don't want to go into the auction with your money and not know whether or not you're going to be permitted to win -- keep the license that you thought you were the high bidder on. that has to be forward looking. that's a great example of you all asking for a forward-looking rule and really deserving a forward-looking rule. >> we all talk about how rapidly the telecommunications technology and services are changing. the commission has to be aware of that, have the flexibility to react to that and certainly to fulfill its responsibilities to look into the future and try to

determine how best to fulfill its mission, which includes consumer protection, includes privacy and includes ubiquity of services. >> mr. powell, in light of yesterday's decision, the d.c. court circuit recognized the authority of congress in the act. do you believe that the agency can properly oversee the growth of broadband infrastructure services? >> i do. for a matter of record as the chairman of the fcc and the commission that classified broadband the way it is today, we quite pointedly recognize that the -- the importance of that role to a continuing degree. and we believe that existed within that title 1 framework to take care of those circumstances. whether you agree or disagree the court certainly validated yesterday from a judicial

standpoint that title 1 and 706 do provide that flexible authority. >> mr. wiley, if you agree the fcc has the authority, do you think it ought to use it? >> the court said that the commission could have authority in this area. i would strongly advise in my own view the commission to let the marketplace develop and if problems do exist, then to step in. there are avenues, if we find blocking, if we find discrimination, there are avenues that can be taken. i think the problem is sometimes we're in search of a problem here that may not exist. i think if you look at all the suggestions of the carriers that have come out of the decision from yesterday, they all want to keep the marketplace open, all want to give consumers access to various kinds of content. and i take them at their word.

i think that's going to develop. >> if we want to keep the marketplace open, isn't it reasonable to anticipate that some of the players will not want it to be so open if it's to their financial advantage? shouldn't the fcc play a role to make sure prospectively that we haven't opened competitive market with the consumers being in charge? >> i completely agree. if i might, i think it's important -- let me say this. i have the view that the case in the statute have the following meeting. section 1706 gives the fcc the authority to accomplish the goals you just stated without also requiring the fcc to make a classification decision. that is to say, it can make a classification decision and act with the authority that would come from that, but it doesn't need to do that in order to pass rules that are authorized under section 1706. meaning 1706 and the common

carrier provision are two independent bases for fcc action. that's why the fcc can choose both or either in order to have a decision making that would accomplish the rules you describe. >> didn't the courts say the fcc made the wrong choice and they have two titles they can rely on? you are saying they don't need either title? >> i think what the court said is if you do choose the information services classification, then you're bound by the restrictions in that. but you don't need to make that choice in order to accomplish the goals that you are desiring, which the court has said that it approves of the goals. >> and you don't need to be -- regulators common carrier either? >> beg your pardon? >> you don't have to regulate it as a common carrier. >> you could choose that, or 706 or both. what you can't do is choose

classification and pass common carrier rules. >> thank you. that's very helpful. thank you, mr. chairman. i yield back my time. >> the gentleman yields back and the chair now recognizes for five minutes the former chairman of the full committee, mr. barton. >> thank you, mr. chairman. i'm going to make a brief statement before i ask a question. i was here in 1996 and that act was a philosophical change from where the committee had been and, to some extent, where the country had been in terms of telecommunications policy. you had a republican congress, house and senate for the first time in over 50 years, maybe 60 years. you had a democratic president, mr. clinton, who came from a

kind of conservative pro-business background down in arkansas. and the former chairman of the committee, mr. dingle and mr. waxman and mr. markey and some of those folks had a very regulatory approach. although not totally so. and the teleco act of '96, mr. bliley and mr. fields, we decided to go with a market approach. and mr. copps, as he has pointed out, markets don't always work. but generically if they're open and transparent, unless there is a natural monopoly, they do give a lot more choice to people. and that's what the teleco act of '96 did. it rejected the philosophy that

the government knows best, that the regulatory knows best, that if they have access to appropriate information, people can make choices that are good choices. and we see reflected today in some of the questions that mr. waxman especially just asked, you know, that some of my friends on the democrat side just don't like a market approach. how dare it be possible that under title i informational services you can have an open, transparent internet and you don't need the fcc to tell you what to do. my god! that's scary. we better get that fcc back on the job. they just maybe -- you know, if they can't do it under title ii

as a common carrier, well they're just going to have to figure out how to regulate under title i. well, you know, if you look at the explosion and what's happened -- i mean, i have -- i had somebody, a young person, a very young person, about 9 years old, come into my office down in texas and apparently did not know there was such a thing as a hardline telephone. did not know what that was on my desk. this young lady thought a phone was just something you carried around with you. her parents were young, didn't have hard line phones in their home. her dad worked out of his truck, doing stuff, contracting and stuff. she didn't know what it was.

so, this thing mr. upton and mr. walden are starting, working with mr. waxman and miss eshoo, it's a good thing. where i have to depend on the intelligence of mr. copps, mr. hundt, mr. wiley or three or four other wise people at the fcc to know what's best for me in the telecommunications policy. i think if we set the ground rules -- i agree you have to have a traffic cop. but i don't agree that you've got to be so prescriptive that the market just flat gets strangled before it even has a chance to get under way. so my question -- and i'll throw it open to the panel -- is there still a need for a title i?

i mean for title ii, for common carrier? in the telecommunication marketplace today, could we deregulate the telephone companies in totality because, you know, there really is no such thing as a natural monopoly anymore? >> if we can find a way to assure that some of the qualities that people fought for long and hard in terms of privacy and public safety and consumer protection do not accompany the new tools of broadband and the internet as they accompanied telephone, then i think we're in trouble. i like the market approach, too. and it was decided long ago that the telecommunications industry, the media industries would appropriate under the capitalistic system. you don't blame business for trying to seize market control or capture the market or even to have gatekeeping. but we've always, since the very early in the last century, had

protections against untrammelled building toward monopoly and duopoly. i wasn't as intimately involved with the '96 act as you were, but i followed it with some degree of interest as being somewhat more proactive. i read that act as instructing the federal communications commission to do what it needs to do to encourage bringing the most advanced telecommunications feasible to all of our citizens no matter where they live and reasonably comparable prices, reasonably comparable services, allowing them to access media that serves communities and provides information that are necessary to exercise a citizen's responsibilities in a democratic society. so, i think, yes, a light touch where possible. but, you know, we sit here and talk about what we have to do

away with these stove pipes and all. i agree with that to some extent. in trying that, if we're going to say we're going to treat a telephone call entirely different than you make a telephone call somewhere else, that's not functionally equivalent or treating technologies alike. >> i know my time is way over, but it's something -- it's something to think about, because we've got a real chance and the rest of this congress and the next congress to build on what we started in '96. >> i would just like to say that i agree with much of what you're saying. i think in a competitive marketplace that we see today with the kind of ip centric world, i think economic regulation has to be considered with some skepticism, because if the markets are competitive, if you don't have market failure, then the question is why should

the government be stepping in? consumer protection, e-911, those kind of things, that's a different story. we're talking about economic regulation here. and i think it's more questionable. and i certainly wouldn't be thinking about going back to common carrier world in an information services environment. i don't think that makes sense. >> thank you. the gentleman's time has expired and the chair recognizes for five minutes the gentleman from pennsylvania, mr. doyle. >> thank you, mr. chairman. once again, thank you to our witnesses for your testimony today. we've talked a lot about neutrality and the court decisions. i would like to maybe go to a couple of different topics and ask chairman hundt and chairman copps about special access. how can the fcc enhance competition in the special access marketplace? and is new statutory authority necessary or do you think the

commission has the sufficient authority to ensure that the markets are competitive? >> on special access, yes, i think the commission has the authority to make up its mind. i was before this committee. i think you were here, too. perhaps it was mr. markey or somebody who asked us all back in 2007 to sign letters saying we would have this thing resolved since september and we all said whoopee, let's do that. and it hasn't been done. enormous amounts of money are at stake here. the availability of competitors to is at stake here. i am pleased at some signs now that the fcc is beginning to move and i especially want to commend you. i know you were a big proponent of getting this data collection process going and that's the prerequisite of doing some --

something final on this. the commission also has to look at allegations of anti-competitive practices and special access, such things as loyalty mandates and excessive early termination and shortfall penalties. but getting this right is important. and each year that goes on is billions of dollars going to maybe where they should go or maybe where they shouldn't be going. >> thank you. commissioner hundt? >> i echo commissioner copps' thoughts. this is a forward-looking rule. or to put it another way, we could always use a forward-looking rule on this topic. >> commissioner copps, we have been waiting years and years and years and i hope before my tenure in congress is over that well-see the fcc do something on special access. and i intend to be here a little bit longer.

commissioner copps, the fcc recently closed a very successful low-power fm application process and currently is considering thousands of lpfm applications. i personally want to thank you for your efforts in that regards and ask you what other opportunities you see for the fcc to further empower communities in innovative ways. >> first of all, i want to thank you. without you and your colleagues, this wouldn't have happened. we wouldn't have had that window, first one open since 2000. it's a window of enormous potential. so, number one, we want that to move forward with all dispatch and maybe go from 800 low power stations to maybe thousands of them. going beyond that, though, we just have to look at whatever kind of options we can think of to encourage community radio to

revive the channels and not just cast aside. noncommercial media, nonprofit media. that applies not just to media companies, but to telecom companies, newspapers and so many other things. there's a lot of potential here in a market that doesn't seem to be able to provide all the tools that we need for media and for news, for nonprofit media to step in. dragging its feet on making a lot of these determinations that it should be -- so, low power, yes. looking at channels 5 and 6, all sorts of options out there. put some special emphasis on using community radio, diversifying communities and native lands. it's just a field that's rife with potential, if we could just step up to the plate and realize our responsibility to do it. >> thank you. gentlemen, thank you for your insight today. we appreciate it here on the committee. and i'll yield back, mr.

chairman. >> thank you very much. the gentleman yield backs the balance of his time. and, mr. powell, thanks again for you being here today. if i could just start with some questions to you -- >> yes, sir. >> it's kind of interesting. reviewing your testimony and also mr. wileys, you both used very similar language in spots. and in your opening statement you said that this market requires a greater degree of business flexibility, fewer p prescriptive rules. technology-neutral basis and creates a better investment climate. i also saw that mr. wiley also had said in his testimony about the government can't keep up and there's a need for flexibility and technology-neutral framework in his testimony. so, very similar language. in your testimony when you go through it, i find it interesting because you're going through your seven points and

for simplist simplicity. since 1996 we've seen $1 trillion invested in internet infrastructure. and then you also laid out the simplicity that has to be there. but also in that simplicity, you said practicing simplicity can be scary. it takes courage to discard old ideas and rules that aren't needed. can you give a couple of examples of those? >> yeah. it's a great, challenging question. i think i might actually go back to some of what mr. barton was talking about. if you think about one of the wisest things that was done in the 1996 act, it has nothing to do with the individual rules but the fundamental judgment that the government rejected the monopoly thesis and decided instead that competition was the more fruitful approach. common carriage law inherently

is about a government-sanctioned monopoly. it's essentially the queen of the realm who grants an exclusive license to a ferryboat captain in exchange for all the privileges of that monopoly, they agree to be bound to serve all the citizens in a nonzrimtry way and other things that the zorch wishes to have as part that have benefit. mutual in regards they get the exclusive profits and the realm gets the benefits of serving all the citizens. in some ways in 1996, the government sued for divorce from companies through exclusive monopoly and instead said go compete. raise your own capital. no guaranteed return on investment. no guaranteed success. but yet the lingering notions of common carriage, which are still in the statute and, by the way, are still being raised in the context of the net neutrality debate still hover around our regulatory questions.

to me, whether the country comes to some committed conclusion that even with its challenges and the need for oversight that were really about competition and were ready to truly let go of common carriage is a fundamental example of how to make that decision. >> thank you. and another question. when you're looking at assessing the competition and the communications industry, do you think an updated communications action modify how the fcc currently conducts its competitive analysis? >> i think there is some ambiguity there when managed in responsible hands works fine. at times, it doesn't. i am worried about the fcc marginer review process in part because it professes to do a competitive analysis following anti-trust guidelines administered by other

departments. but under the public -- which i do think is valuable, it turns into a competition of conditions. anti-trust lawyer, i used to believe the fcc, if they're doing something bad, shoot them. if they're not, don't let them cure harm by how many good jelly beans you can put on the scale and make the thing go away. and then by doing it in a way that it extracts these concessions as a voluntary proffer, you make sure that the case can't be appealed by the courts. i think insulating the review process from judicial review through the conditioning mechanism and allowing the commissioning mechanism to be a vehicle by which the commission with legislate beyond its authority can get companies to do things in the context of that proceeding. borders on kind of administrative improbableabil y improbableability. does that happen every time? no. does it happen sometimes?

yes. you should examine the review process and see whether better controls can be in place. >> thank you very much. i see my time has expired and the chair now recognizes five minutes the gentle lady from california, miss matsui. >> thank you, mr. chairman. i want to thank all of the former chairmen for being here. this has been a really interesting and informative discussion. under section 254, carriers have certain obligations to provide universal access. in the d.c. circuit's decision yesterday, the court made clear the fcc has a similar charge under 706 to ensure that all americans have access to broad band and that the fcc has authority over broad band providers to meet that mandate from congress. i have two questions for all the chairmen relating to the court's decision yesterday. the first, do you agree the fcc should and must promote universal access to broad band for all americans? mr. wiley? >> yes, i would agree with that.

>> yes. >> mr. powell? >> absolutely. there's no way you can be a functioning member of society without access to this technology. >> okay. then does the court's decision yesterday affirm the fcc's authority to transition the universal service fund to broadband? chairman wiley? >> i think the fcc has done a good job in looking at that. i am concerned somewhat with the size and the growth of the universal service fund. and i think the commission has to look at the compensate -- the pay covering that. some issue has to be looked at. >> but generally yes? >> yes. >> generally? >> yes. i would commend them for migrating the fund to general broadband. and the ruling yesterday only strengthens the commission moving in that direction. >> good. chairman copps? >> yes. >> great. i appreciate your views. biggest unintended consequences

avoided by the court's decision because transition usf to broadband is really a critical step toward achieving universal access and adoption in this country. chairman hundt, you said that yesterday's circuit decision is a victory for congress and the smart, flexible approach of the 1996 telecom act. how can we continue that success? are there any unintended consequences we should watch out for as this committee starts the process of updating the communications act? >> which i believe chairman wheeler has already said that he intends to do. and naturally that should be and will be an open proceeding. i'm sure this committee will have an ample opportunity to express its views.

i don't, myself, have the ability to forecast where that will come out or should come out, because i think it's really, really important to examine all the new facts about emerging network architectures and about competition problems on both sides of the two-sided network. i would just say that's why it's so useful that the court has said that the fcc's authority is broad and powerful, because the technologies in the network architectures and the competition problems are constantly changing. and the fcc and rule making has the ability to adapt to those changes, sometimes eliminating rules, sometimes writing new rules. this is a very, very workable process that we have here. and, as i said before, congratulations to this committee for the 1996 act, which did create this legal culture. >> chairman powell, would you like to comment?

>> i'm sorry. can you refresh the question? sorry. >> well, i'm really -- >> sorry. >> you know, we -- as chairman hundt commenting that the court decision, he felt, was a victory for congress and for this smart, fixable approach of the '96 act, are there any unintended consequences that we should watch out for as we re-examine and update the communications act moving forward? >> i more or less would agree with chairman hundt. i think to the degree that, you know, in some ways i saw a quote the other day that i thought summed it up great. it's not a victory for any side but it might have been a victory for the debate. and that is that the commission continues to have a meaningful role in the oversight protection of broadband without crossing the line into the more dangerous concerns around common carriage. if that's ultimately the

outcome, maybe that's workable. unintended consequences, i do think even the court struggled with them itself, 706 is an extraordinarily broad, unconstrained provision. how it's interpreted and how responsibly it's interpreted, i think, is important. i think congress hasn't spoken with much specificity about broadband regulation. to take a position as open-ended and vague as 706 and see that as the foundation for everything broadband going forward has potential risks and dangers, but i think that will be worked out over time through its application, through dialogue with congress. >> thank you very much. chairman copps? >> while i'm pleased that the court recognized the authority of the commission, i don't know that i'm ready to declare victory yet. if it is a victory for the debate, that's not necessarily a good thing, because we've had so many years of debate while the evolution of the internet continues and gatekeeping shows

the rise of its ugly head. it's a victory if the commission reacts and acts promptly and provides some certainty and some guarantees. but we've lost a couple of years, looking for third ways and other ways and i don't want to lose a couple of more years going down that road. >> well, i think there's an opportunity here. yes? >> i think it's a victory. i think it's a victory for technical innovation, a victory for investment and ultimately a victory for the consumer. and i think thus we ought to see how the marketplace develops in this area and see whether problems, as i said earlier, really come about, as some people predict. >> i think this is an interesting moment in time. and we have to provide a thoughtful way as we move forward. and i appreciate all your comments. thank you very much. i yield back. >> gentle lady yields back. the chairman now recognizes the gentleman from illinois. >> thank you, chairman.

welcome, all. it's good to have you. i think it would be safe to say that no one envisioned this technological world we live in, no one envisioned it in '96. in a rewrite for public policy elected officials or even folks of the commission to envision what would world would be like ten years after a rewrite, that's got to be almost -- that's impossible to do. is that -- most people view that as correct? no one knew in '96 what would come. so that talks about what these basic premises that i enjoy, democracy, freedom, marketplace, capitalism. one thing that hasn't really been addressed is consumer choice. and how that really does drive innovation and drive -- and understand marketplace. i remember going to the consumer

electronics show and the mp3 was being unveiled and i just was amazed at how much capital flowed for just music in this space, in the technology space. that's the same thing now with internet, broadband, downloads, you name it. it's all migrated to that. we don't ever want to lose the aspect of the power of the individual consumer in this debate versus what some people would say would be the power of government regulatory arena or agency. and i think that's true for these segments of society that feel they don't have access. i think that you can pull together based upon technology the ability to get the word out through broad band, information,

newsletters and the like. technology has allowed us to really -- there's really no excuse for people not to have access to information flow today even if they go through universal service fund or go to the library to get on broadband through what we've been able to do through the e-rates and all that which we talked about a lot through your day, mr. hundt. in your opening statements, a couple of you talk about silos. you are all members of the commission and you all were chairmen, which is a different position than being a standard commissioner. you have the responsibility for the whole body of workers within the fcc. so, we've got the bureaus and the other things other than the bureaus. you go on the website and see all these other little offices and stuff. consumer and government affairs, enforcement, international media, public safety, wireless.

so in a rewrite of the '96 act, should there not be some discussion in how we reform the commission itself based upon what current technology is today? and i think, mr. wiley, you kind of talked about this a little bit? and just a guess of where am i heading in the future? there is a future, right, mr. copps? there is a future. but how do we reform the fcc itself and start tearing down some of these silos, which some of you have addressed are a problem? and if we can go from left to right, mr. wiley, if you want to go first and that will be the end of my questions. >> i think what's changed in the internet world is that you find different parties doing the same kinds of services, providing the same kind of activities that you wouldn't have thought of before. you wouldn't have thought of broadcasters being in the

technology end or cable being in the wire line field. but this is happening now. and i think, therefore, the commission probably does have to change its internal structure. if you have -- in a digital world if you have functionally equivalent services being provided by different parties, i think they should be regulated in a functionally equivalent way. and that's not the way the xigs has do commission has done it through the years. it's not the way they're organized. it's going to take some change. >> thank you. mr. hundt? >> the french say that works in practice, but maybe doesn't really work in theory. and i think it's really, really important to focus on practice. the current structure allows the fcc chair in what i will definitely describe as an open process to reorganize the fcc to meet the objectives that are set by any particular congress in any particular situation. and that's a good thing.

so, when this congress had the wisdom to ask the fcc to auction the spectrum in 1993, i was allowed, thanks to you -- but not because of a statutory mandate, but because of flexibility, i was allowed to create a wireless bureau, which previously did not exist. at any given moment it's hard to say exactly what the administrative structure ought to be. and i think the current system, which tells the chair, figure it out. tell us what it is. you're held accountable. that's a good system. >> i do think form follows function. and i think -- certainly when i was chairman, we merged a few bureaus. cable was a separate bureau from broadcasting. today it's the media bureau. changes we made to try to reflect. a common principle is organize around the way it's seen through the eyes and ears of consumers. to me at the time, television was television to most americans

and making sure you had cross pollenization of the bureaucrats, professions -- the bureaucracy and professionals who managed that i thought was important so they saw their functions through the same eyesu can follow. the chairman is also ceo. the statute assigns them responsibility. i don't think we talk enough about the ceo role and the management of that operation, but i think there's plenty of flexibility to respond to that if it's clear what it is what we're trying to execute. >> i don't think there's any magic formula. certainly there have been times when the stove pipe approach has been too much in presentation. michael tried to work against that and go toward a wholistic view and so did the chairman. that being said though, you need experts in these specific bureaus. there is a specific telecom

expertise and wire line and wireless and details of that and special access and everything else we're talking about. so i think you still have to have those bureaus but the chairman establisheded a consumer task force whose job it was to go across those agencies and look at -- look at those bureaus to assess the impact on consumer well-being. that's a good approach. it's a management thing and something that i think is a product of good leadership at the commission and good oversight by the committee. >> we need to move onto mr. dingell for the next five minutes. mr. chairman. >> i want to commend you for this hearing. i think this has been an important hearing and events of this week tell us that it's time the committee is going to have

to starred looking at what we're going to do about bringing the '96 act up to date. i have enjoyed the comments by my dear friend, mr. barton, announcing my position as being strongly regulatory, sometimes i have a hard time recognizing my position when it's set forth by other members. in any event, that's not important. i would like to remind everybody that this business of the '96 act started when we began to try to get judge greene out of the business of regulating the telecommunications industry. it also started when we started trying to get the amount of spectrum that was held out of use by industry and business and

government and get that available to people. and to see to it that we had a fair program for dealing with our legislation and a fair program for dealing with these matters. i would like to welcome our friends, the chairman here, for their appearance and their assistance to us and what it is that they have done with us over the years. if there's an attempt made to update the communications action, i will offer my support. yesterday's court decisions vacating the anti-discrimination and anti-blocking rules of the federal communications commission open internet order is proof that congress needs to bring our communication laws into the 21st century. only clear direction from congress will strengthen consumer protections, promote

competition and give industry the regulatory certainty it needs to innovate in the future. as we go about this important work, i caution that we do so with great care. on the benefit of a carefully collected and substantial body of evidence. this is going to require rigorous oversight by the committee and considerable work to get the information that we have need of so that we can legislate properly. i hope that the undertaking will be bipartisan in order so that any final product that we complete here moves through the senate and to the president's desk for signature. we have to resolve a number of very important hard questions to form our work as we move forward. i respectfully suggest that

these questions include but are not limited to the following. first, how do we improve and protect americans access to content while also preserving the ability of private companies to monetize their investments for future growth? likewise, how do we best foster the ongoing development of future technologies that will ensure american leadership in the field of technology and communications. and then we have to decide how we are to promote the more efficient and fair use of value and increasingly scarce commodities like spectrum, which we've not administered too well of late and have administered on

the amounts we could get for in money rather than how it would serve the nation to allocate this spectrum. lastly, we're going to have to decide how we will ensure that the federal communications commission, the national telecommunications and information administration, and other related bodies function smoothly. protect consumers and promote growth rather than hindering it. regardless of these answers and answers to these questions and others, i submit that our work should proceed from the conviction that public interest is still and will always remain the central concern that we have with regard to the communications act. i have had the good fortune to be one of the authors of almost every major piece of telecommunications legislation passed by the congress in the

past three decades. the public interest is in the heart of each going back to the 33 and 34 act. i see no reason why that should be any different this time around. the only issue worth exploring is what that standard hats meant in year's past and whether there's any reason to give the commission different gliuidance for the future in interpreting it as we address the other questions that i've just outlined. mr. chairman, i wish you god's speed in this endeavor. i offer you my support and i'm delighted that the chairman of the commission has been here this morning to assist us in beginning this process which i hope will go forward with reasonable speed, with great care, and again with great attention to the public interest. i thank you all for listening to

me. >> chairman dingell, thank you for your kind comments and generous and willingness to improve our communication and other laws. we look forward to working with you. my only disappointment is you did not have a list of yes or no questions for this panel. with that, we'll turn to mr. terry from neb >> yes, you do. >> thank you. >> and i would just, for our esteemed guests here today a one to follow below my friend from california began. that is what the high cost area is. a lot to take it from a little bit different angle at your input. as kind of mentioned here, we have seen a convergence of technologies and services that are of kind of being wrapped into one anymore. and the same as -- we talked about it in my early days on this committee invoice. borden brought that up.

now it is in video. and so when we talk about overall telecom and the internet as a basis of delivering video today, it is kind of making -- well, it is altering the way that world telecoms used to work and so we have a current legal structure with this jure and a mind-set of treating world telecoms like old copper wires which a lot of them still are using. so i just want to ask your opinions about in reform for or within the fcc, shares rural and high-cost areas, far mr. michael copps, even comes back to inner-city where you have low

take the high cost, how do we think about this differently in making sure that if you live in rural america or you are setting a bow wind farm where you want to continuously oversee but remotely, thereby requiring broad broadband for all of that data, do we need to think about things differently than high-cost zero high-cost inner-city. mr. reilly, what we start with you. .. cost inner city. >> i'm not an expert in the rural telephone area, but i still think there's a concern that's different than in the big cities. i think therefore high-cost funds are something that have to be part of the whole equation in my opinion and you know that

better than anybody in nebraska. so i don't have any huge input to you today as far as how to change the system. >> i guess to clarify since video and internet are becoming the same and your telecom is maybe your sole provider of that, it's all meshed together. does that change anything? mr. hunt? >> i think that many people have said we really want broadband to be the network for everyone in the country. in rural areas as i'm sure you know, congressman, there are many places where the cable broadband penetration is as low as 15% and 20%. not anything nearly as high as it is in washington, d.c. or in the