but it's not worth being here during the jobs we do if you don't try to succeed in doing some of the hard things. >> you mentioned dynamic scoring the business of putting a price tag on bills and he suggested some of the problems with it. it requires a lot of assumptions and there are a lot of uncertainties. but is there a silver lining here? if congress were forced him think more about economic growth not only in spending bills, not only only tax bills the senate spending bill slick infrastructure like it -- will be moved closer to the gores at all smoke and mirrors? >> i've never said we should look at alternate analyses when thinking about what we do but there's a difference between what you use for the purpose of scoring and purposes of analysis. it's very dangerous to use scoring methods that may in the end exaggerate what your savings are an understate what your costs are and end up with a

fiscal problem that is much more severe. so i think the discussions of the dynamic scoring cannot let it us slip into a place where we look the other way and there's a high-risk that some of the decisions we make will leave behind a big fiscal mess. i've had the misfortune of inheriting fiscal messes and taken great pride in cleaning them up and i think we have to be careful and not create those problems. >> you spoke approvingly of the ryan murray spending bill that helps us avoid the shutdown but that build left in place some caps on domestic and defense appropriations in 2011. are you comfortable with a the level of those taxes? >> i never thought the caps were in the right place. i think we have a tremendously important need in this country that are both on the defense and non-defense side that will lead

to a stronger economy and a stronger nation if we have the room to invest sensibly. in the context of the conversation about these kinds of issues there will have to be further discussion about how you pay for providing additional room under the caps. i think there is growing interest on the republican side in particular because of the impact the caps are having on defense spending. we have proposed for a number of years now a way we can go forward in a fiscally responsible way and provide --. >> pay for many we would spend more money than the caps allow but no affect on the deficit? >> i'm not going to get ahead of this year's budget that we have made it clear there are trade-offs that can make that possible. >> when i listen to republicans talk after the present speech and since the election the strongest point they have made i think is that the public has

voted for smaller government and the president continues to act as if the public didn't say anything and that he continues to push for bigger government. how do you respond to that? >> if you look at what the american people want the president's policies lineup closely with what the american people want. i don't know anyone who thinks it's a better life to sit for two hours in traffic for half an hour right. infrastructure is not something that has republican and democratic lines to it. it's always hard to pay for it. the question is not how should we do but how shall we pay pay for. one advantage is too tiny to business tax reform is you are taking a priority that the american people care about infrastructure and you are using one-time savings which really should be used either to reduce the deficit or to pay for one-time expenses in order to

profit. that's a recipe for getting things done. >> let me turn to the economy. you mention the international monetary fund revised their forecast for the united states and expect 3.6% growth while revising down their forecast for pretty much all the rest of the world. is that realistic? can we have a great economy in 2015 and 2016 given all that's going on in china japan europe ukraine in the middle east? >> dave the united states is recovering in a much more strong way than much of the rest of the world and we have a much better better -- than much of the rest of the world. i think because of the factors that i describe. we made sensible polities -- policy decisions. we are for sony people and businesses that get back on their feet after a tough time. think we are neck different position than we were even in 2012 when there was a lot of concern that if europe was a little weaker issue is a little week it might throw the united

states back into recession. nobody believes that today. i worked hard to make sure we never came to a point -- but the discussion now is do you lose a few 10 of a point not to see united states slip in a dramatic why? with that said i don't believe for the united states to be so much stronger while everyone else is so much weaker. the answer is for others to adopt policies that will help drive the economy forward and if you just think about a car with one tire that is fully inflated and four that are flat or losing air that's not good. we have a global economy that needs to have fully inflated tires everywhere in the world. the good news is they think they are policies can be pursued to get their. it's political decision-making not economic necessity that's holding back global growth.

>> you on your way to europe. ukraine and auschwitz. i don't know who does your travel planning but would he tell the europeans that they should do to get their economy stronger for their sake and ours and how much leverage do you have with them? >> i think i have made my a few very clear that we believe germany needs to pursue all of the different policy leverage that it has at its disposal. he needs to use monetary and fiscal policy and do structural reform. we made that clear in a global setting with regard to other countries as well. i believe the united states has a lot of influence in the world largely because of the example we have set. it's very interesting that two years that i have been treasury secretary we were just getting to the point where the world stop blaming the united states for the financial crisis and now we are at a point where everyone

marvels at the durability and the resilience of the u.s. economy how we bounce back. it didn't happen by accident. i think that countries can learn from matt and make these decisions. obviously politics around these issues are hard domestically and in regions around the world today think we have a responsibility to make clear what we believe has helped drive u.s. growth and lead by example and participate in global conversations to drive issues forward. >> are you a little frustrated? germany is sticking to its goal of a balanced budget even though it's a country that is major roads to maneuver. the debt overhang in europe remains the same. don't you feel like you're beating your head against the wall sometimes? >> i think these are important issues that require a state effort. >> i'll take that as a yes.

>> let me ask one final question then we will turn to the audience. the president talked forcefully about climate change. but in this era of bold initiatives and things we care about that we can do with the republicans things that we can do the republicans that were not to put down markers you decided not to increase the gasoline tax or propose a carbon tax even the lower oil prices might make that politically palatable. why not? >> policy cannot mistake or view view. we have an enormous commitment to making progress on climate change issues. we have pursued an agenda with the tools we have available to work through existing law to make as much progress as we can. it worked internationally on an agreement that president obama and president. shay: reached that is quite

stark and will set financial progress here. there's no mistaking our commitment in moving forward. we believe it's the right thing to do for economic reasons as well as the future of our environmental and we are determined. >> do you think someday we will get a carbon tax? >> i'm going to leave the discussion of how to deal with it in engaging with congress. we have made clear we are prepared to engage. because we are saying congress's willingness to deal with this issue not keeping up with the urgency we took the steps we took administratively and we were made ready to work together on a bipartisan basis. this is truly one of the issues of our generation where we are going to be measured by whether or not we have taken it seriously. >> we have time for a few questions. can i have a mic for the first question?

>> thank you mr. secretary for being here. a quick follow-up question on something you mentioned several times in his speech. i couldn't tell poor talking about a carrot or stick approach which would decrease incentive to differ and you can also mention eliminated deferrals altogether which i believe would be a stick approach a regulatory approach which would tighten us on the counter standards. is this on all-of-the-above strategy and on the last one is this something you can proceed on the regulation side if legislation doesn't move forward forward? >> taghavi i think took quite a decisive step in september to clamp down on the economic value of an version and the mechanisms by which companies can move

forward. we made clear at the time we would continue to look at other administrative steps that i have been very clear from the beginning we cannot through administrative steps totally shut down diversion. we have the problem of the tax code that makes them economically attractive in the tax code that makes it legal. the only way to really fix this is to go back and fix the tax code. we'll continue to work as hard as he we can with the tools that we have because they think the outrage the american public felt last year over this issue is fair. i hope this debate over inversions lester will underscore the importance of proceeding with business tax reform because if in the end where we end up is with the system that is simpler and more fair and gives businesses incentives to invest the united states it will create jobs here. i'm not going to say we are done looking at administrative

things. we certainly will continue and i hope he would make progress on legislation so we don't need to look at caps. >> there's a woman right here next to the gentleman in the white shirt. >> thank you for taking my question. cecile with tig advisers in new york. just to follow on the question of inversion. is there a sense of when we might see the regulation supporting september 22 statement coming or when we will see anything else? >> the notice that is out there is well understood and clear and we are continuing to work on regulations but i don't think there's any ambiguity about the policy. >> and the date on the regulation's? >> they are working through the process but as i think you know it's a pretty well-established practice in the way we have proceeded and for people who are doing tax planning they

understand what the new interpretation is. >> doug elliott here in the front. >> doug elliott with brookings. what area business taxation didn't address today was taxes on the business sector. was clear in the run-up to the state of the union the president himself didn't mention it that there would be substantial additional taxes on at least the larger financial institutions. i was wondering if you could tell us more about what that would be and why it's being done. i know some of the press has misinterpreted this as being about too big to fail if they think many more institutions will be covered than just that so if there are other reasons you would be doing this. >> first it's not a new idea to have a financial services fee. we have had one for most of this administration are budget but the structure of it has changed. it started out as a way to pay

for t.a.r.p.. we are now getting on in time. we are getting out and the new structure is really designed at looking forward not backwards. one of the risks in the financials up -- sector going forward. we have a limit of 15 million above. other kinds of institutions asset managers and insurance companies and it's hard to see not just on size but whether they rely heavily on funding. i think there has been an enormous discussion amongst the financial world both the u.s. and internationally about the risks of the mismatch between short-term funding and long-term commitment. we believe this will actually help to make the system safer and it will take the risk

associated with short-term wholesale funding and have it be more internalized. it will also ultimately be seen as part of an overall business tax reform plan in which obviously we will have other implications in terms of financial and other issues. >> hi andy with cornerstone. both you and david mentioned congressman ryan and senator hatch. have you sat down with them in their offices and how would you characterize the prospect that -- the progress you made if any so far? >> i have remained in close touch with the ranking members. on congressman ryan was sure the budget committee before that so i have had ongoing contact with him. i'm encouraged that there is a broad interest in pursuing a bipartisan discussion on tax reform. i think the principles that i laid out a reflective ideas that

they see republicans in the ways & means committee show interest in and i wouldn't be saying we couldn't get this done if i didn't think there is interest in the project. >> and then by the camera there. >> hi i wondered if he could talk about the transpacific partnership and specifically the economic impact. >> i am actually student. >> the president said last night in a state of the union we stand to gain a great deal by writing the rules for the future in a way that has high standards and investments from the u.s. and export from the u.s. attractive. there's no secret that the growing population in the world is outside of the united states. we want to participate in this growing markets and the only way

to participate fully in the growing markets is to have fair rules of the road if that we help to support. i think the idea of the transpacific partnership was to start with high standards and to say we want to work with countries that are willing to accept high standards. five years ago no one knew whether major countries would want to engage. we now have one of the most significant groups of countries in the world saying we all are prepared. i think it's important to set high labor sandals -- standards and is to make it so markets i think we are making real progress. what the president said last night is very much the case that in order to pass trade agreements he made trade promotion authority in our first challenge is to get congress to approve. >> what he thinks so many liberal democrats in the house in particular are so resistant? >> i think this is not new today are this ear and those of us who

worked on trade agreements for the last 30 years notifies a challenge to get a bipartisan consensus. i don't think it's any different now than any of those other periods. we can work for the concerns to get there. i don't think it should surprise anyone that these issues are tough. >> someone right there. then we will come to the front. >> with the strategic research partners and i was wondering when we might expect the president to release more details on his tax reform proposals and how detailed they might expect those to be and then also regarding the individual -- family tax breaks

required to be part of any business tax reform or would he be open to pursuing business tax reform without ensuring family tax breaks? >> the president laid out a framework for business tax reform that i think it's been quite clear for several years and actually more detail than many people realize because they were so quick to dismiss there could be a serious conversation. i would encourage everyone to look back at the white paper we put out. as we do every year we will put a green book out with the budget in more detail under budget and we will be discussing these issues. i tried this morning to add texture to the conversation crediting people in washington get overly caught up with who can put a plan out is their plan out? the way to benefit us by sitting

down and working out the details. i think we know the shape of the business tax reform plan that might be the basis for a bipartisan agreement. the challenge now is to go forward with democrats and republicans to have a conversation and i'm looking forward to that process. >> the gentleman here in front. >> thanks for answering my question mr. secretary. i am from the treasury economic office. >> you won't be judged on how tough the question is. >> i am an intern so. [laughter] >> you mentioned the tax breaks for returning lowering the corporate income tax rate and increasing tax credits for americans with children so i wanted to ask realistically

speaking what are the issues you mentioned today do you think republicans will meet halfway moving on to minimum wage in student loan interest rates etc.? >> and now i think if we could sit down and work through these issues one by one they're actually more issues where republicans and democrats could reach agreement than most people think. our system has been so locked in partisanship and gridlock that we don't even have the conversations on where the areas of commonality are. i think it would be a good thing for the country if we could make progress on trade and business tax reform. it would break the logjam on that and i think there's a lot more issues where if you just look at what the american people want and what we need to do to move the country forward we could reach agreement. i'm not going to give you a list of the items but i do believe

there's a lot the president said last night that ought to be in a good bipartisan conversation. >> why should the next two years be any more harmonious than the last two years? >> if you look at the last two years we actually got more done than people remember. there clearly were some bad moments in brinksmanship which i hope we don't go back to but there also was the murray ryan agreement that provided for an orderly process for two years to continue doing the important work of the federal government without brinksmanship. there was agreement on a farm bill. there was an agreement on a water resources bill. i think there are areas where we can continue to make progress. there's no question that there's a need to rebuild trust between people who disagree. it didn't used to be the case that if you had different points of view there was nothing you

could find in an area where he could work together. i don't think that's a case now either. certainly not with the american people want. with the american people want is for us to hold to our beliefs to find areas where we can make progress and that's what last night's speech was all about. >> thank you very much. please are mero to stay in your seats until the secretary leaves. if their coffee cups in your seats take them with you and please join me in thanking the secretary. [applause]

naaqs the house panel looks at rules that would ban internet providers from blocking or slowing content or from charging sites for faster access to their customers. the bill would also apply to wired and wireless internet service providers. former fcc chair michael powell is among those testifying at this house subcommittee hearing on 10 occasions and technology. [inaudible conversations] >> calling to order the subcommittee of vacation's and technology. good morning and welcome to first hearing of the 114

congress. i can think of no issue within our jurisdiction that's more important to consider at this time in the future of the internet and our responsibility as legislators to set internet policy for the country. that's why we have put forward draft legislation to provide consumers the protections they deserve while not choking off investment and innovation. we have shared this draft out with both sides of allen made it available probably invited our witnesses today to give us their views on this draft proposal and i thank all of our witnesses for their participation. with a very important choice to make between letting three very smart and capable but on elected people at the fcc the majority commission uses statute written for another era to cobble together regulatory scheme and undoubtedly will end up in court for years in litigation providing no protections and much uncertainty or we can do our job and craft a new law for

this entry through the open and transparent legislative process that we are beginning today. we have come together before in the subcommittee and full committee to grasp communications legislation frankly now it's a pretty good law and we must do it again. it's the only way to bring clarity and certainty to internet governance. a little less than four years ago the fcc wasn't court defending its first attempt to regulate billing network management practices. since then the commissions gone to court twice on net neutrality and twice the courts have rejected the fcc's rules. while the court seems to have given fcc lawyers a third time is a charm roadmap for having drafted rules on the current at the commission is preparing to invoke net neutrality's nuclear option reclassification under aging and inept rules developed from 19th century railroads and adapted in the age of monopoly telephone. we don't have to settle for

that. we have a duty to those who use the internet those who manage the internet and those who built the internet to provide legal certainty, consumer protection and clarity for investment. what we are offering today is a solution that will bring to an end the loop of litigation and legal gymnastics that have flowed from attempts to shoehorn the policy to fit the authority that it has. our discussion draft is largely based on the 2010 open internet order adopted by former fcc chairman julius genachowski and it draws from the legislative proposals put forward by former energy and commerce committee chairman henry waxman. some pundits have raised concern that the draft in section 706 of the telecommunications act. 706 was added in 1996 and it instructed the fcc to promote deployment of broadband networks. until recently was understood

that section 706 meant the fcc should use its existing authority to promote broadband deployment and it worked. however last year the courts for the first time interpreted section 706 to permit the fcc to take nearly any and i underscore any action to promote broadband so long as it is not inconsistent with the rest of the act. did you catch that? ..

and are too often ignored. it together and we take an uncomplicated challenge and produce good legislative solutions. we stood up with the american people coming and we must do so again. the legislative proposal represents a good-faith effort and the net neutrality debate before it goes to court again. our committee will not ignore the responsibility. some of my colleagues know we've been working on the draft legislation from a. we listened to supporters and the parties. we will take the advice and

counsel from the witnesses today into the full consideration. and then we won't let the old washington gridlock stand in the way of us doing our job for the voters demand and deserve it. with that i recognized the gently be from california. >> thank you mr. chairman. at today's hearing renews a critical discussion of the congress about the internet. should it be truly open and equal. should consumers, competition and choice drive the deliberation. should privacy and the disabled be protected? should every region, city, town and reservation, the rural or urban be capable of leveraging innovative online content services? i reviewed the majority proposal very carefully and i commend you for finally acknowledging that we do in fact have problems with

online blogging and paid preregistration. we agree that the rule should apply to both broadband services. what is abundantly clear in the proposal is to purposely tied the hands by prohibiting them from reclassifying their broadband under title ii. the proposal creates a huge loophole called specialized services. the the proposal says it will prohibit the fast lane but under the specialized services the loosely defined term broadband providers can give themselves pay her taste service and the fcc will have no power to define this. if if our goal was to have a system that is guaranteed equal access to an open internet to everyone and it should come in who is going to carry out and oversee this? this proposal carries an enormous fight against enforcement which in turn doesn't give consumers a leg to

stand on. the proposal is to the efforts made to bring broadband to the rural areas. it could unintentionally harmed the 911 system. then it's the authority to permit access by the disabled to the communication services into the utility poles. the proposal also attempts to address the forms of discrimination but who today knows with any certainty what tomorrow's form of discrimination will be. the proposal takes away the authority of the fcc to address them. i don't think your constituents or her mine are clamoring for the bill of rights to various companies. with within open, accessible internet. 4 million people spoke out to the fcc and i think that our goal should match pairs. we should protect ordinary

consumers promote innovation, create competition and advanced the startups. when we do come our constituents should be 100% confident. an open internet is not only critical to america's future. it is essential for every american to learn, to educate to build businesses and create jobs. it will bring more into it. the path we take determines the future. in an attempt to eliminate the bad practice we shouldn't be tempted to establish the rules roles that would create the new best practices.

played in the balance of my time i healed. >> you are recognized. >> that being said the bill .-full-stop. it's permanently revoked in severely weakens the commission's ability to address serious issues and promoting broadband competition encouraging broadband deployment and protecting consumers in the privacy's. mr. chairman, technology policy needs to be flexible, not prescriptive. he needs to it needs to be adapted and able to change to meet future needs. the principles included in the bill are very similar to the fcc proposed in its 2010 rules. we see battles between netflix over internet connection, renewed efforts by the cities to build your their own broadband infrastructure and create jobs in a continuing need for strong consumer protection.

the last five years have been a lifetime in the technology world coming and we needed the rules that can adapt to the pace of innovation into the new challenges that it brings. i yield back. >> the gently and yields back the balance of the time and will now go to the chairman of the full committee, the gentleman from michigan mr. upton. expect the committee is known for working together to tackle the issues. getting the job done for each site does a little to make things better for the american public about one issue that is divided for too long is how best to ensure an open internet rooted in the bedrock principles of freedom and access for consumers in the innovators alike. the free markets address these issues, the fcc seems to believe that we get a reaction is necessary and one of the only tools at its disposal is from the roosevelt era to shape the internet of the 21st century.

tools unfit we choose to take action. last week the chairman and i put forth draft legislation that would codify the authority to enforce the bright line rules of the entrance road. the consumers and innovators ensuring that they remain the preeminent goal the leader of the internet era. changing the quality of traffic based on where it came from or what it is for prioritizing the payment. it requires providers to be open and transparent with consumers allowing them to make the most informed choice about their service. we've also included safeguards to choose potential loopholes and prevent mischief. this should all sound very

familiar to my democratic colleagues because they are the rules many in the program have been calling for for some time. they spent years to craft rules that achieve the same goals. much has been taken from the past fcc attempts. but it limits the authority resulted in the years. the consumers deserve certainty to know that they are protected by the rules. so they can move forward in the business models because without that certainty they suffer and consumers lose. the baggage of the law is created for the monopoly telephone service.

in the internet era and beyond this draft legislation provides a sustainable, responsible path to appropriately and effectively address the concerns from the left and the right. it puts to bed one of the most contentious issues and allows us to move forward in double of modernizing the nation's communication law. the act can bring bipartisan change for the communication law that but we first have to come together and resolve this decade-long debate over the future of the internet. i won't yield the balance of my time to mr. barton. last night after the president's state of the union i came back to my office and did a little video that we put on my facebook page.

also i believe we put it on foot or -- twitter. we have a xbox playstation four, cell phone, knows how to use the internet better than i do. anyway, my point is to paraphrase he asked the american people are you better off today than you were four years ago? when you look at the internet you can ask the consumers are you better off today than you were four years ago. i see the advertisements every day. there is a texas plan right now give me your bill cut in half.

i'm not going to name who is offering that you all would know if i said it. the internet is not a monopoly like the telephone companies were worth the utilities were in 1930s. it's one of the most vibrant markets in the world. some of the people that are at this table helped develop policies to make that possible. i don't have any time that i'm supposed to yield. if the chairman would give him at least a minute i would ask unanimous consent that he has done -- a minute. thanks to the witnesses for being here today. the fcc indicates that it is

moving forward with the broadband internet services under the title to communications act to be at this course of action will bring legal uncertainties, innovation investment and negatively impact american consumers. even though this is a classification recognizing the challenge, but would attempt to circumvent by for bearing the sections of the law, the plan that would only seem to magnify and further processed on innovation. avenues of ending the long-standing precedent of the light touch regulatory framework that governs the internet would add unnecessary regulations on broadband providers and restrict the ability to continue investing the networks that the consumers demand. that's why it is performed by the chairman and senate and with that, mr. chairman, i appreciate the consent. >> is a gentle man returns at this time. before i proceeded to mr. load

who i believe this is your first hearing is the ranking member of the full committee. so we welcome you for that. we will add with unanimous consent and extra minutes to your side of the aisle. and i've been told that apparently during the opening statement, the microphones literally on the side where they could hear them screaming on the internet apparently not on your side. so i think we've got that corrected now. it was an attempt to throttle. [laughter] >> it wasn't supposed to catch anna along the way but anyway, i think we've got that. >> i think this has something to do with the deflated football. [laughter] >> i'm not going there. it's been painful enough. with that, we get serious and i recognize the gentleman from new jersey for six minutes. >> thank you mr. chairman. but we start by stressing the

importance of the network neutrality. it is a surprisingly simple concept that consumers cannot big corporate interests should control the access when they go online and it represents the idea that small businesses should be able to compete on a level playing field. access has become a criminal part of all of our lives and it's how we apply for jobs and how we help our kids with homework and grow our businesses and that is why 4 million americans reached out to the fcc, demanding strong net neutrality protections. and those 4 million people expect that we here in washington will pay attention. i'm heartened that my republican colleagues. that we benefit from the rules of the road and forced by the fcc, and i welcome their interest in the bipartisan legislation so long as it is truly bipartisan from the start. mr. chairman, i don't want to undermine the fcc authority as i think you suggested. and i certainly don't think that that will serve to protect

consumers. the fcc must continue to serve an important role in the broadband age and gain the cop on the beat standing ready to act whether it is to protect the consumer privacy to encourage the accessibility for americans with disability or promote broadband deployment in the area and just as important as must maintain the flexibility to keep up with new technology. so why are we in congress continue our work i do expect the fcc to continue its work. these are complicated issues with answers that have taken the fcc nearly 13 months to craft the rules that responded to the needs of the american public and congress couldn't be expected to get out in 13 days days, so why are the fcc to continue to move forward as we begin this legislative effort. it has been over a year simply since they wiped off the net neutrality rules so it's been over a year since consumers and innovators last have a strong network neutrality and if it is too long. the time for the fcc to act is certainly now. i look forward to working with

my colleagues and the commission to ensure that the internet remains an open platform for the commerce innovations and self-expression for generations to come. i would like to yield. i know i have an extra minutes so i would like to yield two minutes and then the rest of the time which is almost two minutes to mr. rush. >> i think the ranking member who yielded the time and of the witnesses for being here today. the american people have spoken clearly on how important the internet is too dalia lives. and i've heard from hundreds of my constituents but right call or come up to me to share their thoughts and i heard the message loud and clear when i hosted the hearing in sacramento last september on the net neutrality. i must say it is remarkable how it has shifted on the net neutrality. i am glad that my republican cliques now agree that there are threats to the internet

openness. i am concerned about the unintended consequences of the current draft bill. in particular it could undermine the effort to transition to broadband, putting at risk broadband deployment and adoption advances in the urban and rural areas. that said i do believe that there is a role for congress and that is why i introduced a bill with senator to instruct the fcc to write rules that ban the so-called internet fast lane. the bill has two components. it bans the agreement and it doesn't take away from the commission's authority. by contrast of the republican bill attempts to ban the agreement. i am very concerned that the overly broad definition of the specialized services in the bill could serve as a loophole for the partisan schemes. the internet is dynamic.

we don't know what tomorrow will bring. the fcc a flexibility to adapt to changes in the marketplace. as the congress considers legislation, it is important that the fcc does not slow down or delay the vote. i look forward to continuing to work with my colleagues and to ensure the bipartisan fashion to raise the debt neutrality rules and i yield to the congressman. >> i want to thank the gentleman 80 and ranking member. for two decades now the battle on how to best ensure the free and open internet has been persisted as a clear victor of the voting. all of this uncertainty harms america's broadband consumers. chronically and it disproportionately disconnected segments of our society and our

local and state and federal governments and even our nations economy. certainly also broadband network and edge providers as well but make no mistake about it it is the consumers that stand to be the biggest losers of all. many consumers weigh in with congress for the strongest rules possible. these broadband consumers and users have said they love and depend greatly on the broadband service. and that they want for the services to be provided on a level of competitive terms.

they also said to us with passion and fervor they do not trust the broadband providers would honor those terms for the selfish and anti-competitive motives. this should serve as a powerful reminder to us and the issues and it's propelled by the bipartisan concern and minimal to the bipartisan resolution and compromise. he is concerned all broadband consumers and citizens in our society regardless of the political affiliation. we have all seen and heard however that this manner is too

important for the congress to stand by what you consider or markup only the majority republican draft. it is my intention to introduce open internet legislation in the not-too-distant future. i would hope to work with my colleagues on both sides of the aisle with aspiration that whatever legislation is hammered out that it will be nothing but bipartisan. mr. chairman and ranking member, i yield back. >> that takes care of our colleagues for opening statements. people go through the witnesses and we are going to start out with what the federal communications commission we are

delighted to have you back before the subcommittee and we look forward. please go ahead. >> it's a fundamental constitutional principle that the congress establishes the law and the federal agencies implemented. the net neutrality debate raises critical institutional policy and practical problems that only congress can fully address. the open internet struggle has been long and torturous precisely because the congress is not established a clear foundation for the fcc to act. the commission has turned itself in knots for over ten years trying to adopt a super set of internet regulations. to review the commission for its tether even where it found merit in the rules themselves. if the congressional authority is the problem then surely the

congressional action is the solution. in the absence of such action, the commission is poised to try again with another approach, prompting a third round of litigation with an uncertain outcome. congress has the power and the responsibility to end this roller coaster which is damaging to everyone other than leaders and advocates. the title to ii approach being pursued is establishing an fcc ruling and regulatory framework over the internet but congress has yet to fully consider and consciously adopt itself. congress adopted the title ii 80 years ago to address the parameters of the telephone regulation. the technologies were radically different. the prevailing philosophy favorite monopoly rather than competition. consumers were passive recipients of service rather than active publishers and creators created the telephone telephone era didn't have giant internet companies are saying

and influencing the services and network demand and consumer application. networks were specialized for a single purpose unlike the convergence of today. has congress worker that matter anyone .-full-stop through for the digital future? we have no doubt congress will seek to advance legislation to rewrite the telecom law. but now the decision is made for congress rather than by congress in the name of the net neutrality with potentially far-reaching unintended consequences. the regulators shouldn't have the final word on the serious questions. the institution that represents 320 million americans should decide them. by changing the status quo to the governing affairs committee commission would affect a major and a dramatic shift in the broadband policy. with sweeping domestic and international consequences that

countries like russia china and iran have consistently sought the subject of internet access to telephone regulation and give the state greater authority over infrastructure. they will cheer on the news of the leadership and the moral authority of the a bulwark against the government control of the internet. the legal and practical problems of the title counsel for the congressional interaction for one. it is is an unjust and unreasonable practices. under the decades they've been able to charge for providing the service without violating this requirement and while they will attempt to declare all that prayer each urges unreasonable, it will face a serious headwind for the well-established precedent. only statutorily banned the prayer decision rules would avoid the risk. other are sure to follow. when agencies one agency sections will narrow the jurisdiction of another. for example if the fcc declares

broadband is is to look on service, the federal trade commission and the authority over such actions will be diminished. another unintended problem is the classification to result in the fees on internet service raising broadband bills for consumers and hurting the national efforts at adoption. america has an ambitious national broadband goal. there is a strong national desire to reach more americans in more places. it will take nearly 300 million by their own estimate to reach out to 100 megabits per second. and now we dream of the gigabit speed. no one can claim that title ii went against the flow of the private capital necessary to meet these ambitions. for some time at the the edges can be smoothed by forbearance cutting away the data to the relations and leaving the group needed to protect consumers. about one person's needs are another person's fruit and the continuous battle over this should be included and excluded

is itself a massive undertaking fraught with uncertainty and litigation risks. they they have to cover to eliminate all of this uncertainty and working together in good faith and consensus we believe the cooperative effort will yield positive great results. we support legislation if the bipartisan legislation and we are open to working with all members of the committee to be too satisfactory resolution. thank you mr. chairman. >> thank the gentleman for his testimony and we are now going to go to the ceo of etsy. please make sure your microphone is on and we look forward to testimony. >> thank you chairman and ring a member and members of the subcommittee for the opportunity to testify on this issue. at the rapidly growing internet company, the technology company i'm here today because the internet along with the millions of businesses who depend on it under the threat.

etsy is an online marketplace you can buy handmade goods from artists, designers and collectors around the world. we democratize over 1.2 million 88% of whom are women to collectively we sold $1.35 billion worth of goods in 2013. most are the proprietors of work from home and they lived in all 50 states and they depend on the income to pay their bills and support their families. 18% support themselves full-time. to build and run the global platform that supports these businesses to etsy raised more than $91 million in capital and we employ over 600 people worldwide. without the incredible power of the free and open internet, we would not be where we are today. like many we had humble beginnings and we started started out of a brooklyn apartment, went from an idea to launching in just a few months. no one had to ask permission to

work pay for the privilege of reaching consumers at the same speed as other companies. this is the entrepreneurial environment we hope to preserve. with those rules to preserve a level playing field online millions of startups will suffer. it is a low margin business and we charge just 20 cents to listen to the item and take only three and a half% of every transaction. we couldn't afford to pay for the access to the consumers yet we know that the delay is of even the most -- millisecond have a direct impact. this is this isn't just about the video but everyone that depends on the internet to reach consumers. without the rules to prohibit discrimination on line we would be forced to raise the fees to have the same quality of service or accept the revenue that comes in. this would hurt the microbe businesses that depend on the platform the most. to understand what is at stake

that is why 30,000 of them joined the internet users to urge congress and the fcc to protect the open internet. in her comments, tina from spring valley illinois captured the sentiments of many of the businesses when she wrote we rely on all of my fails to make ends meet. any change in those and it is the difference between the balance and peeled for my children into cereal for dinner. we applaud the congress for recognizing the strong message of the rules are essential for innovation online. the discussion draft for the position addresses many concerns and we are encouraged to see bipartisan agreement on many points. in particular we support the outright ban on the paid preregistration blocking and throttling. we agree transparency must underpin the strong rules and we encourage to see that they apply to mobile. getting to the majority, given that the majority of the traffic now comes from the mobile sources it's essential that they they play rather uses your phone or laptop.

i think that we're concerned the proposal doesn't ban all types of discrimination online leaving loopholes that could be easily exploited. for example under this bill broadband companies to trigger twice but services. in the authority to address the new types of discrimination. i worked in this industry my whole adult life and i know how quickly technology changed so how can we be sure that this bill anticipate every possible form of discrimination? we also have serious concerns that by revoking the authority under section 706 the bill would undermine the agency's ability to promote rapid broadband deployment across the country in the rural areas where the internet allows them to reach a global marketplace. for example linda from michigan said of the internet is so important to me because if someone agreed to the area from the urban center i rely on the fair and open access to grow my small but taste business.

finally while we understand the legislation is narrowly focused on the last connection the doors of the last mile is just as important. this bill doesn't prevent them from creating chokepoints at the last mile nor does it grant the authority to regulate the issue referred to as interconnection using a loophole that would allow the companies to circumvent the legislation despite its good intentions. our position today is the same as it has been all along and we encourage the government to establish a bright line rules that ban the paid preregistration application specific discrimination can access fees and blocking online and to apply the rules equally to fix them in the mobile broadband and at the point of interconnection with the last providers. we believe they have all of the authority they need to implement the rules and that the congress has an important role to play as well particularly hoping to address the litigation risk that will follow the action. we welcome the opportunity to protect the open internet once

and for all. we will not go to the vice president of public policy for amazon. a slightly larger platform. please go ahead. >> thank you very much. it's good to be back. thank you for your attention to this issue and for holding the hearing at fort inviting me back. amazon long supported maintaining the openness of the internet which has been beneficial to consumers and innovation. now there is widespread acceptance of the need for government action to ensure that the internet openness now policymakers need to only decide how to ensure that the internet openness of that atrocity is maintained and effective. our consistent business practices start with customers and work backwards. we begin projects by determining what customers want and how we can innovate for them. here in the context of net neutrality public-policy we've

done the same. we take our position from our customers that his consumers point of view and they want to keep the fundamental openness to the choice it provides. consumers will recognize that the net neutrality is taken from them. if it is taken they won't care how or for example where it is taken. we belief that they have ample existing statutory authorities. but of course congress has the power to set new policies for net neutrality either entirely true in in the statute were true in or true in a mix of the existing statutory authority. amazon remains very grateful for congress to continue the attention to the topic certainly worth the general oversight. but thank you especially for creating and ensuring your discussion draft bill and for providing the opportunity to begin discussing it today. the principles of net neutrality campaign in the discussion draft are excellent. for example the draft clearly acknowledges the throttling and the prayer decision must be

banned and the protections must apply to wireless as well as the wider line into the providers must disclose practices. of course for these excellent principles of the internet openness to be meaningful to consumers they need to be effective and in the three instances the discussion draft could be interpreted to undermine that this was a bill should be modified accordingly. first while requiring the consumer choice, developed exclusively except specialist services from the requirement and this could create a loophole if the specialist services involved the preregistration of some content services just like the prioritization. consumer choices make nothing would protect the consumer choice more than protecting them from interference by broadband internet access providers. second in the subsection to discussion draft bill would promote them to engage in reasonable network management that any claim of reasonable management should be used suspiciously than practices undermines prohibition of blocking the prayer decision etc..

third the discussion draft bill is unclear on which parts of the broadband internet access service providers network are covered by the net neutrality protections. as indicated earlier the consumer will not care where the next atrocity occurs but only whether it does occur. in some of these areas the draft should be modified and in order to ensure that the internet openness of next atrocity is maintained and effective. the addition to the draft should be modified to provide adequate detail and certainty to consumers and businesses in the internet ecosystem. michael businesses companies need confidence in the state of law and regulation in order to innovate and invest in products and services on behalf of their customers. details including factors considered during the come and procedures are essential for businesses and consumers to have the confidence to make choices about investments and purchases. we believe they should be empowered to create certainty in detail to the enforcement tools

and notice in the comment rulemaking. the discussion draft bill in the subsection says they may not expand internet openness obligations beyond the obligation establishing that those. the intention here is to establish the ceiling for the obligations and that is the prerogative of the reasonable expectation that we would support if the boldly went so far. however with such a ceiling in place, it isn't necessary to rescind the authority under title two of the act which has in the subsection could lead them hopeless to address the improper behavior as well in its authority under the ceiling. and it would leave consumers and businesses in the system without adequate certainty about the enforcement powers. also, in part because the subsection b. could be direct to establish the formal procedures for this decision could be interpreted to bar them from noticing the rulemaking in this area and if that is the intent we oppose it.

expecting them not to expand statutorily to establish obligations is one thing but we believe that it would be a mistake to prohibit them from providing the comment rulemaking out of the detail and the certainty to customers and consumers and businesses below the ceiling. in conclusion mr. chairman i look forward to working with you and your committee to ensure that the internet openness of the net neutrality is maintained in defective and of course i welcome your questions. >> thank you and we look forward to working with you as well. i think we have ways to address a lot of what you pointed out and may actually already have but we look forward to working with you. next we go to the executive vice president general counsel of the hispanic media coalition. we are delighted to have you here at the subcommittee as well and we look forward to your testimony. >> thank you for having me back and all of the members of the subcommittee. the open internet as we heard already today is a crucial tool for all people to engage in our democracy, participate in the

economy, become better educated and shared their stories. i am pleased the members on both sides of the aisle recognize the pervasive threats that blocking, throttling and paid prayer decision pose to the american people and our economy. because the open interest truly is a bipartisan issue. i am not on the panel to represent the industries. i'm here to speak for the millions of americans who follow this issue with a level of awareness that actually is very uncommon for inside the beltway telecom policies. over the past year i have been surprised on this issue with everyone from my conservative in-laws in the deep south to my liberal friends on the west coast none of whom are particularly well steeped in the federal policy particularly not the telecom policy but they get it because it personally affects their lives. and also they support the congressional attention to this matter, to best protect consumers by respectfully urge

the congress to allow the fcc to exercise its authority completed the rulemaking process and an act light touch open internet rules. this is the most certain path to ensure that individuals and businesses are protected without delay. it would allow the expert agency flexibility to respond to innovation and changes in the marketplace. the fcc has wide support from nearly 7 million americans this negative comments were signed petitions as well as hundreds of civil rights and consumer advocacy organizations and leaders. the discussion draft of the legislation on the table today would represent a seismic policy shift with repercussions far beyond the open internet debate. it has drawn robust criticism for four main reasons. first it would strip the country's expert communications agency of the authority to protect consumers on the

communications platform of the 21st century of ending the consumer protections that americans have come to expect and this subcommittee has supported for decades. pray privacy, network reliability, access to 911 services committee disability access just to name a few. it effectively freezes them in time only allowing it to ever come across a handful of harmful practices that we have contemplated based on the market conditions and the technology that exists today. second it would submit to the efforts to the efforts to close the digital divide such as the broadband subsidies and the modernization of lifeline which could bring greater broadband affordability to the working poor. today nearly one in three american people still lack some broadband access. the vast majority of these people are rural poor brown, black or a combination thereof.

at the same time standardized testing in american public schools is moving to digital format. it is critically important that we do no harm with legislation that would undermine serious efforts to achieve the now indivisible goals of digital and educational a quality. third, as compared to the rules crafted under title to it would offer consumers admitted and inferior protection. the draft legislation doesn't ban unreasonable discrimination and create an exception for specialized services that can do is follow the rule. forthcoming is what fourth, it would create market uncertainty by relying on the adjudication process. consumers would have the burden to identify, report and litigate violations but most of us are likely to lack the techno- core expertise to identify the violations of the source or would have the legal expertise to pursue the enforcement or both.

of those that oppose the reclassification point for concerned. my written report goes into the details but let me summarize there is no evidence that it would harm investment innovation, home to the coanchor broadband or welcomed a protracted litigation. in fact the hard evidence including statements from the isp themselves suggest the opposite. it has allowed americans to engage in our democracy at a whole new level. tea party activists, dreamers, organizers are all excellent examples of regular people who have harnessed the power of the open internet to disseminate messages and engage in the political process. this is democracy and free speech at work and it is a virtue that is deserving of the strongest protection. thank you for having me here today. >> delighted to have you back. and as for your comments on the

legislation at issue at hand. we will now turn to the vice president and chief research policy officer from the minority media telecommunications council. we are delighted to have you here as well. please go forward with your testimony. >> thank you very much chairman ranking member of the committee. i do have to say as the vice president officer that we just changed our name today at 9 a.m. to the multicultural media telecom internet council. >> we reserve the right to extend remarks. [laughter] the acronym is still the same and the support and work to represent those of you that are other organizations that consist of the naacp, the rainbow/push coalition among others. so as my colleague recognized the also stand on the side of people who are on the other side of divide and i think that is

important on the topic of open internet because they have been accessing this as historically disadvantaged communities embarked on the journey to first class digital digital citizenship and all of the opportunities so we welcomed the draft legislation in addressing the values. i want to use my time to bring three issues to the attention today. my statement is on record and much more detail but my time is best spent on these points. i would like to highlight the benefits and open internet brings to people of color in the affordable populations we represent and encourage the committee consideration of legislation that promotes an open internet and finally, i would like to offer to friendly recommendations to strengthen and ensure that the legislation realizes the value of the consumers who want to acknowledge that a quality. i want to confirm the words of the ranking member that broadband access has the civil rights prima -- prerequisite.

they have the skills to gain jobs a call education and receive greater access to health care. today, however, to many americans still do not benefit from all that broadband enables. the rate is disproportionately low and is contributing to the digital divide. despite the growth in the minority homes the rate among african-americans and hispanics are still lower than whites, african americans over 65 for example, still exhibit especially low rates. 45% are internet users can get 30% only have broadband at home compared to 63% or 61% for white seniors. long users overall site that a relevance, affordability and the lack of the divide in that order for their reason not not being online for closing the digital divide should be an important goal for policymakers during the right course of action to promote and protect and open internet is one of the ways to get their. i want to acknowledge congress

has a proud history recognizing structural injustice in our society and acting to correct them. in the 1860s the congress passed the 13th, 14 amendments which enabled the protection and enfranchised millions of americans for the first time. in the 1960s congress acted the civil rights act of 64 the voting rights act of 65 and fair housing act of 1968 all integrate measure to the reverend martin luther king. today, congress has the opportunity to show the leadership again. by acting as a solution that preserves the opening track we all enjoy the congress can extend the promise of justice, he poverty and democracy to all and avoid a legal quagmire that will lead to the unending absurdity for the economies. i agreed with jessica gonzales's demand for broadband which in turn stimulates the investment infrastructure innovation. and we know firsthand about this

and it's our belief that increased investment in broadband also improves access to the type of innovation we like to drive in the community. but of course, the way that we get there is going to have an impact. for the past 20 years, the administration and the fcc chairs from both political parties tried the successful bigotry platform for the benefit. look at the state of wireless of people of color. under the current regulatory framework nearly 75% of african-americans in into 70% of hispanic cell phone owners use the device to access the internet more than the overall population. and people of color have two entries as equal of empowerment. under the current rule we've actually seen the type of collective mobilization in ferguson ferguson missouri new york city and columbus ohio. these drive policymakers to continue the progress that is already has already been made. but unfortunately meaningful rules failed in the past year the circuit court struck down

the forces of the commissions open internet order and that was in the current framework that allow to broadband to allows broadband to flourish and option to take hold the fcc now considers the position of the title ii regulation that we be the is ill-suited to the current reality. posing such heavy-handed frameworks on the internet would only serve to stifle broadband deployment discourage investment and harm innovation and also please uncertainty to the regressive taxation on the universal service and potential ambiguity of the enforcement. some have argued that the adverse affects of the regulation to the forbearance authority is the right way we think that misses the point. if the commission could exercise the forbearance authority and product the banner it still would take years to sort out and appropriately calibrate the set of rules and this uncertainty will continue to drive the attention of those issues that the community needs the most

the modernization of the schools come universal service to perform in other areas. so, in closing it is for those reasons our troops have actually acted that we stay away from the tight regulatory framework to something that has more flexibility to allow the ecosystem to continue to row and we think that the regulation is close and actually getting there. i would like to close again with the additional recommendations from the congressmen in the debate as we look at this issue. first congress should address the harmful practice of the digital redlining. it's the refusal to building server low-income communities in on the same terms as wealthier communities and imposes the digital segregation. the experience of the country shows segregation harms and degrades all of us and this is no less true of the digital age. congress should empower them to prohibit the digital redlining and we urge in the legislation that congress also needs to look at how to prevent that because currently this is a problem. second, congress should ensure

that the rules will be enforced. we have recommended it to that commissioned the creation of an accessible, affordable and expedited procedure for the reporting of the resolution. one approach would be to use the process under the titles and framework of the civil rights act of 1964 grade under title vii, and if they receive an expedited ruling and do not need to hire a lawyer or write a provocative filing, whether the precise details of implementing a similar mechanism in the communication context the core principle here remains the same. consumers, particularly individuals individuals and vulnerable populations to serve as has been mentioned, an accessible affordable expedited procedure to ensure the government protects them and this must apply at whatever solution we seek. my friends, but time is now to get past the debate that's been lingering more than a decade and when the congress's discussion and guidance on this issue we

think we can make it happen. and we look forward to working with congress to do such so that we can get to the issues that mean the most for the community's universal service public safety and ensuring that we allow the internet to grow to the next level of innovation to solve our social problems. thank thank you. >> thank you for your testimony and your suggestions. we will turn to the final witness this morning. meredith avril baker, president and ceo of the wireless association. ms. baker glad to have you back before the subcommittee as well. >> chairman, ranking member and members of the committee thank you for inviting me to share the wireless industry perspectives on the importance of an open internet. at the outset i want to be clear america's wireless industry fully supports an open internet. wireless users demand it in a marketplace where competition has never been more vigorous. in the past 20 years the wireless industry has grown from

a luxury product to the key driver of economic growth. we all benefit from faster speeds, more services and lower prices. think u.s. the u.s. is the global leader in wireless by any metric and it's at the forefront of mobile innovation in health automotive and payment fields. central to that growth was the foresight and establishing section 332 a mobile specific regulatory framework outside of title ii. congress has the opportunity to grow the same stability for broadband. we greatly appreciate the committee's work to develop a regulatory foundation for future innovation with common sense net neutrality provisions. the draft is an excellent start and offers a viable path to preserve an open internet with enforceable requirements. a properly crafted legislation will guarantee the protections the president has called for by allowing broadband providers to continue to invest billions create jobs and innovative products.

we do not ask that wireless be exempt from any new law only that any new requirements reflect our industry, our technology and our inherent differences. i want to highlight three key differences. first, mobile services are technically different and depend upon limited spectrum resources. this requires substantial network management millisecond by millisecond to deliver service to consumers. there is more bandwidth in a single strand of fiber than in all of the spectrum allocated to the commercial mobile services. second we are competitively different. more than eight out of ten americans can choose from four or more mobile broadband providers. this is fierce competition it is driving new services offerings and differentiations that benefits consumers. third, we are evolutionarily different. the four g. networks are less than 5-years-old.

and the future is bright with advancements like lte broadcasts 5g and connected life application. it's vital any legislation is flexible to preserve the competition, differentiation and innovation mobile consumers enjoy today. while we are optimistic as a process on the hill will enhance the wireless experience for all americans, have significant reservations with the fcc proposed path of title ii. the application of title ii in any form to wireless broadband would harm consumers and our economy. the title ii is designed for another technology and in another era in which competition is largely nonexistent if at all and innovation came slowly if at all. given our industry is great success with mobile broadband outside of title ii, we have significant concerns with how

the 682 pages of regulation would apply to the dynamic mobile broadband space. if the commission proceeds as opposed to the path of the court contemplated a year ago, the wireless industry will have no choice but to look to the courts. given the language of the section, we have every confidence that we would prevail but it is not our preferred course. under section 332 mobile broadband is legally different. in 1993, congress exempted a future bond voice mobile services like mobile broadband from the common regulation. it did so unambiguously. given our industry's greatest success with mobile broadband outside of title ii we have significant concerns of how the 682 pages of regulation would apply. the commission and the courts have repeatedly found that

wireless broadband is not a common carriage service. they lack the statutory authority to change the course and litigation would harm consumers with a year or more of uncertainty and delay. as leaders across the globe try to replicate the mobile success and embrace 5g this is the wrong time to inject uncertainty into the nation's efforts. we risk falling behind when the stakes have never been higher and the connected life and global competitiveness are more within reach. a better approach would be for congress to act and end the debate. doing so would free us up to turn to the bipartisan issues that the spectrum reform and modernization. by acting congress can help ensure the united states remains the most dynamic and innovative mobile system. thank you for the opportunity to appear and i look forward to your questions. >> thank you for being here and thanks to all the witnesses. you have given us some really

good starters. some of you like what we are doing and some of you don't. we can all agree on the principles at stake. as a matter of how we get there. i have a couple questions i want to ask. to follow-up on your testimony, ms. baker, regarding section 332 coming and i'm not trying to mimic the former chairman and mr. dingell did in the essence of time i have a couple yes and no questions but really would be helpful. do you agree with ms. baker got mobile wouldn't be covered under the existing authority when it comes to a playing of these new net neutrality standards? >> turn on the microphone there. >> bbb they could reach wireless by classifying the broadband. >> you think they could get there even though it has a

different view? >> i'm not an attorney. >> that makes two of us. >> the most important thing there is no difference between mobile and broadband. >> so you want them both covered. >> i agree with the chairman's assessment. i also agree that consumers view these interchangeably and it should be the same policy for both. >> so you think it is sustainable. >> i'm not an attorney but we think that the title number two with stifled the expansion of mobile so we think that is a bad idea. >> ..

>> >> we found the fcc process

so far to be quite open switch is quite possible. >> no. >> i am not sure if we would see it. probably not. >> no. >> to a former commissioners and they said very unlikely. that is why we need a better process you get to see it through the legislative environment new gift great input as we move forward. eric is a disagreement regarding the application that the ftc order would allow it. some think our bill would preclude a but our question is with those service fees

with the sec order with the internet now be subject to the levy? to make guests. the way it works in short that congress requires an assessment of universal service for many telecommunications provider. if the sec reclassifies broad bid will be in the classification and subject to the assessment. an argument of the commission could forebear but an absence it would absolutely result in increased charges on federal universal service. >> if the sec goes down that it yearly total the eliminates the authority on regulated common carriers.

>> that's correct under the clayton act is prohibited from exercising its authority against telecommunications services providers. they are a champion with broad reshaping authority to the franchise by this decision. >> you are not the only one with that exemption of draft legislation. both the ftc and the president has set an exemption in to be necessary to track the proposals have there been an that neutrality proposal does not acknowledge for specialized services. >> with paid prior to a station that is the concern

but then i don't know. in light of the prior comments from the chairman he is doing a by very thing. the commission ended forebear but it did not need to have but it could be partially done a very judiciously but we did have a much more precise about what this means not to view it as all or nothing. >>. >> we have another commission that changes that. i have gone over time i now recognize the gentlelady. >> thank you. i want to thank all the witnesses. in the fall done a marvelous job from the testimony today to highlight what you like

and what you don't yet done that very well and we're grateful for that. died just want to make a comment. it is a throw around and it is a hefty charge because everyone cares about this. if we live in a certain direction the private sector will stop investing. free an to everyone else. but there is nothing to substantiate that. when you looked at the wireless option billions of dollars that come in and when we began that effort the chairman and the subcommittee they laughed and said he will not make as a dime. $45 billion so far.

but i think that is a lot of money. that is a lot of investment. that is worth something. and the cfo of verizon says we will keep investing. whether title to or not the ceo of sprint. these are not insignificant comments. so i take it is important for the record that someone makes that charged that it should be backed up because we beat fax and the evidence that comes with the facts. that would be most helpful to less. i just want to go to mr. dickerson and i should say today is the first time i have met you but i've met

him on c-span he was part of a conference with the washington ideas conference how he presented himself and what he knew they'd you for being here and all the jobs you have created. with of broadband provider so if the of broadband provider looks at the content what affect would that have on north carolina -- etsy if they'll created a new company? >> yes. i was actually chief technology officer before i was ceo because one of the

things that we know and i did find this broadly from amazon to rue google mitt is an obsolete directly correlated with revenue. things are slower revenue drops if it is faster revenue goes up. so smaller companies like etsy disadvantaged you can see those into -- vantage is based on speed this would hurt those etsy sellers have a lower speeds than competitors. >> and put them on of business and we have sellers to make money using the internet and they use the money to feed their families or pay for school where do

the things they need to do in their lives. >> under the proposed legislation the problem of the interconnection abuse is not only ignored the fcc is presented from doing anything in the future. day you believe it is not explicitly addressed but what would happen? >> i am not so clear in in the bill of it is precluded or not. some people believe it is and to with than network operators' network only that it is occurring.

with a gap in the legislation. >> i of overtime. but mr. chairman -- chairman i fail to basket and this consent to urged the fcc to adopt a strong ( internet rules and now also asked from the national association id of realtors that those are being included in the record of the legislative process should not hold up the sec for moving forward with strong legally enforceable objection. >>. >> the chair recognizes is himself for five minutes.

thanks for being here today and i find your testimony very interesting about putting a round pay again a square hole. but for many of us we have diverse districts was averted, herb did a cover rule, with the concerns the process may require them to overhaul building practices is. with the terms and conditions to be subject to the new enforcement rules. with a new regulatory burden should they be exempt from

that neutrality rules? >> first of all, i would say is the support of the concept of the internet and was strong and sustainable growth. but what we are concerned about with a complex received two-stage relieve raise the cost is a critical concern on the margins that have difficulty of rural america. to deploy that an infrastructure in those places will dampen the ability and enthusiasm to reach those hardest hit.

>> under the sec began risk of title to to have more delays and also the harm of regional providers with the regime that it would do would this service to rural america could you elaborate on that? >> of course, the association and is chaired from bluegrass cellular and

it all have armies of regulatory lawyers to comply with transparency and other burdens. the uncertainty had stifled their deployment, they are worried and do not know what title ii brings. and the wireless industry is extremely competitive they need to differentiate to serve their communities. they need to make sure they can compete with different concepts and they're not sure what article ii will operate without respect. it is called differentiation and that is part of it. >> especially if you are a

small business in an area with not a good coverage talking about two weeks ago they had a problem being able to connect with their customers. so are you saying there would be hampered because of that? >> for those services. >> you go into detail how that regulatory structure is rapidly evolving that ecosystem but title to regulations will do anything to can troll growth with the reclassification with providers to upgrade third ones to enter the market? >> of course, they will they have businesses to run that

will lead be a division level compared to the velocity for what the country has? we have a president others talk about wanting every nation to achieve world-class top broadband speed and statice you want every american to access and we are impatient about that. networks are rebuilt between 80 and 24 months with $50 billion annually. to get the gigabit speeds hundreds of billions of dollars acquired over some amount of time. it is simply common sense to understand increasing predatory cost or uncertainty will slow the magnitude or the velocity or the timing or the pace of that evolution. even like amazon or etsy they have just as much of the imperative of the high growth and evolution and network capacity that is

primary to employ it to the businesses they provide. said the increased costs associated with the regulatory environment a cost of borrowing with the rates of return and the years of uncertainty to finalize and stabilize will have a negative effect just look at the recession with companies having plenty of capital with there of willie to lou deploy or invest because of the uncertainty that surrounded the recession to have an example of how this works. >> my time is expired. the chair recognizes for five minutes. >> i will yield. >> digest want to state for the record something that is very important given what is baker said. wireless voice as you know,

as a former commissioner of the sec since 1983 i think everyone needs to have appreciation of that ilk think the testimony reflected that. thank you spinnaker i feel we both agree pretty neutrality protections isn't good for consumers but howell might they lose if it would enact the bill we are discussing today? >> 84 the question. i think what is done the table today there are serious threats to divide the fcc efforts to bridge the digital divide particularly concerned with real subsidies said the effort to reform the lifeline program that could have the potential to create affordable broadband to the working poor and undermines

privacy and truth of building that we have come to expect and rely on and calls into question to protect us of the communications platform. >> my colleagues is consistent with the neutrality rules. will that provide the same level of protection? >> there are some rules there are a number of distinction is that i've laid out but it strips the fcc of any flexibility to oversee consumer protection to ensure there is not harmful or discriminatory practices on the internet. that he essentially freezes the fcc in time so it cannot address any harms that fall

outside of the principles laid out from the draft legislation nor can it address any new harms that present themselves of technology in the marketplace. >> we have heard the argument article ii will stifle innovation and it is called the nuclear option. how do we evaluate this argument that cable companies' stock prices are up since the president announced his support? mcfadyen is the complex question and i am not a market expert but a careful examination historically over period some of regulatory intervention verses of light to regulation will demonstrate a clear pattern. when cable rates were regulated investment was suppressed until the prospect of the 1986 act that deregulating and they soared and in 2001 with to

regulate friday and was put in place it the least radical increase of the investment $1 trillion over the course of the year. sincerely believe the market believes in the assertions and promises that article ii will run into a rage regulation for those that exist but unless that is clearly identified adult think it is priced into the market and very likely would be if anything would change. >> maybe the economy is just getting so good. we're just sort based on what the president said last night. most broadband providers say they're already in compliance with network neutrality they are rarely afraid both the president and the sec they support for parents.

if we all agree it should be off the table shouldn't congress address that issue and could be an intended consequences letter in the draft bill? >> first of all, rate regulation is the most dangerous but i went not conceive of the thousands that alone is a focus of our concern and we do appreciate the president saying rate regulation should be from the assertions period simultaneously heard about the adoption of section two o one, two '02, two '08. two o one is a statutory provision for that says to insurer it is just and reasonable for cows so we don't at have any confidence that the words matched the direction of the order of

the government will make sure rate regulation is off the table where they have that power but for now are choosing not to. >> thank you. we will now recognize the gentleman from illinois. >> my congresswoman had a shot across the dow to former commissioner baker so i thought i would give her a better chance to respond to the statement made. >> i appreciate that. the ranking member is correct first of all, we know the care and free markets is working $112 billion of investment of the wireless industry the last four years but in 1993 when congress enacted section 3922 di regulate

wireless data and mobile voice with limited title to requirements also the second bucket for all of the service is like global broadband and they specifically exempt the sec to apply article ii requirements on news service is that mobil broad band was a new service. it has always upheld will pull broadband is not regulated by title to. >> i know my colleagues have giving credit to the chairman of the subcommittee i have always been to the point did you make a $30 billion of investment to upgrade the pipes then you have dash of the of revenue

to do that or business model to do that. my whole position is not limited with government control of existing but the encouragement of more. but that was then and this is now we are now in a new world order where we have now looked at the debates and said businesses have done that to weedy to get the monkey off our back in business is talk about certainty. socratic to the chairman to say let's go back to the previous debate what was put out in front by our colleague. where can we find middle ground? that is what the chairman set forth.

now with great consternation from my friends on the other side. so i with the chairman that we can move forward with certainty but ina legislator. there is a process to legislate then allow the executive branch and the sec to implement though lot. because of another sec comes to be established by another president it could be topsy-turvy again. just to give credit even breathing as kicking and screaming along with him on this policy because.

>> can you yield? >> i am catholic and for catholics we understood and confession. thank-you. [laughter] >> but i still believe in the paid prioritization. i am not sure we get there this way this is my concern. >> will you healed? >> remember part of the legislation first of all, we would want the fcc before they go off to regulate that everybody has testified pretty well and has been light touch regulation how would has been ruled out with no overwhelming evidence of clear market failure of deep regulatory control so why do we have to go down the path? but the president is now turning fcc as his old

puppeteer that this is what you have to do but the chairman said he is being pushed and we will act by february 26 and by the way in and of us will necessarily see that order that is our reform efforts that we passed out of the house with more transparency. they are proving we don't know precisely what that will look like we want to give certainty because of the issue from this baker with mobile devices because we all go to a double blow world but the statue that authority does not exist at the sec. there may try to go there and there is a dispute but you will be in court. the marketplace will not have certainty for the third fourth time the lawyers will get rich and we are not lawyers so we'll just have to pay the bill so i prefer to get a committee together

to find a common ground that is why we started with a 2010 order with the work the democrats had done then to give pause to the of market. >> where do we go now? >>. >> let's me say the way it strips the sec of its authority to prevent them from giving in to enter its access key infrastructure under title to it needs access to every tool in the arsenal with the broad band infrastructure fed the entrance in the marketplace

like a google fiber is driving u.s. innovation and ideas peace to offer faster or cheaper service by bringing much competition to the broadband market may also create jobs across the country and often in areas where the isp cannot make the investments themselves. both companies have high bandwidth applications are either of you concerned the draft bill does not have any mention of intered connection is recently used to leverage pavements? >> we are absolutely concerned that interconnection in is not included i agree with what he said earlier