you've got to ask yourself the question are you distributing resources as they ought to be distributed? when you've got one manager for every four people you say to yourself is this the right kind of -- >> i fully agree and understand -- >> and how do you fix that? >> what we would like to have is a backup for this because i

understand i think we have a request pending for that and we are told, i don't know whether we were told we can't get it or whatever but we would like -- >> is my understanding is correct you asked for the consoles report, the final consultant report, and you will have it but i have it. i've seen a draft of the structures but also set up a more detailed information. >> thank you. i have exceeded my time. i recognize the gentleman from california. >> i will ask you for the same period thank you, mr. chairman. welcome again to the entire commission. it's obvious, you know, we have different takes on the issues but i sincerely thank you for your public service. the and to commissioner o'reilly, this is a graduate of

this committee. you were here under chairman bliley whom i had the pleasure of working with and getting a lot of things done together. so welcome back. commissioner pai, thank you for your advocacy on the 911 issues. you know that the mother and father a mommy and daddy of this are right at the committee cartoon shimkus and myself doubted that caucus and then helped -- congressman shimkus. we did. what's so funny about that? i think it's terrific. we know that paying attention to those issues but it was a for our country was attacked. commissioner rosenworcel, thank you for your clarity and your passion when you speak, and commissioner clyburn, go get them. just go get them.

and to the distinguished chairman, distinguished chairman, i don't know how many people realized this about the chairman but he is a man of history. and so i want to pick on the vein of history because i think it's very important for us around your life is incremental. it's incremental anyway. god gives us life a day at a time so those are increments. but i think what i would like to do is have you and i want to say a few things about it first, to widen the lens of what is before us today in terms of history. now, the majority has defined or tries to define net neutrality with some very scary things, and they call it railroad

regulation, billions of dollars in taxes, new taxes are going to be levied, no investment is going to be made the market is going to be chilled. in terms of history we have been through the stone age, the bronze age, the iron age, the age of invention, the industrial revolution, the technology age and now the information age. and i think why this is difficult for some to actually see, and when you see something you either get it or you miss it. we are at a moment in our nation's history where we are moving to a new age. and i would say that those that are on the other side of this issue are back in older age

where you have huge corporations corporations, gatekeepers, the wobblies -- the wobblies. that's not what the internet is all about. so i would like you to come as a historic address with this moment is and place it on the stage of history. >> thank you, ms. eshoo. i'm michael get me started on history. >> we don't have very much time. i've got one minute 40 seconds left. >> i think we're living through before the great network revolution in history. and if you look at those what you'll find is that every single time it was the end of western solution as we know it people didn't want to embrace the change will say this is awful. i have hanging in my office a poster for making 39 that was

put out by people who are against the interconnection of roads, and it was all patterned around women and children are going to be hurt by this. it was paid for by all the people whose businesses would be affected because the railroad would interconnect. yet that interconnection drove a 19 and 20th century. we always hear these imaginary horribles about the awful things that are going to result. and would also always end up seeing as a society, you know, we need rules. we need to have a known set of rules. we need to have a referee on the field and throw the flag. and that is the process that we have gone through since time immemorial. every time there's a new network revolution. and we have the privilege of living through that and trying

to deal with those realities debate. >> i think it's magnificent and a short period of time but i wish i could question, i have question for all of you. i'm going to put them to you and with that thank you i would like to ask unanimous consent that congressman cartman's questions be submitted to the questions -- demonstrates his great interest in the issues at hand and another from many many, i don't know, maybe 50 racial justice and civil rights organizations who have addressed the letter to the chairman and myself in support of net neutrality. >> without objection. >> thank you, mr. chairman. >> the lady yield back. the next questioner will be the

gentlelady from tennessee, as blackburn, for five minutes. >> thank you, mr. chairman. i appreciate that. chairman wheeler, i would just say, my viewpoint when you look at our economic revolutions in society weather was agricultural or the industrial, the technology the information, successful revolutions are about freeing up, not mr. king. what we are looking at right now is the vantage point that you were a coming from is taking way and restricting, not freeing up. commissioner o'reilly, let me come to you for a moment. you and i penned an op-ed back in july calling for the need for a cost-benefit analysis and really look at what has been said by ppi, free press professional -- or fester farber and whether that would happen with taxes, "new york times" agreed with the. i want to hear from you a little bit, 30 seconds worth about why

we should that a cost-benefit analysis of what you think the outlook is. >> so i believe we should do better at the fcc and cost-benefit analysis and this is a perfect case. >> none was done speak with this was a woeful job done in this incident. talking hypothetical harm in real world impact on business. in terms of your question on taxes i would switch more taxes and fees to the question is but one universal these and what happens in universal service before. the chairman has made clear the item in its of itself be forced to fund both universal service. that's something we will punt for about a month or two and waiting for the joint -- we are going to see those fees in the months ahead. >> okay. commissioner pai come you give an interview this week and stated that is going to be attacks on broadband and commission is waiting for a joint board to decide april 7. how large that tax is going to be. do you want to expand on that?

>> thank you for the question. the order suggested the joint board is going to the great magician on april 7. the order says a short deadline might be appropriate. at some point very soon the joint board will recommend whether and how to increase these these that will be assessed on broadband. it's not just the u.s. as these as commissioner o'reilly pointed out. if state and local these. state property taxes, localities impose taxes. the district of columbia poses an 11% tax on gross receipts. these will have to be paid by someone. >> chairman wheeler i read something from professor lyons from boston college and she said title ii is fundamentally a regime for regulation. and we are looking at another thing what you said about a person which might include a large -- violently with the sec under section two '08 if they don't seek the charges are just and reasonable.

so you have denied that the fcc is going to get into rate regulation through this net neutrality order but i understand that the orders does not explicitly state that the fcc will be regulating rates on the dates the rules are effective, but what about the first time that a complaint is filed with the fcc under section 28? because the party feels the rates are not just and reasonable what's the remedy going to be? isn't it true that the fcc will be engaged thereby and de facto rate regulation? >> so thank you, congresswoman. i hope somebody finds that kind of complaint. as you know there hasn't been a complaint filed for 22 years into wireless voice space despite the fact is same kind of authority exist. if somebody applies files that

kind of complaint, i don't want to prejudice a decision but i will assure you that there will be a price -- a process that will look at that and that will develop i would hope the record that would make it very clear that the fcc is not in the consumer rate regulation business. >> mr. chairman don't you think which is said about there hasn't been a complaint filed in this space for 20 years proves the point that the internet is not broken? the space is not broken and it does not need your oversight and guidance? >> no, that i was referring to wireless voice, not to broadband. but i think the key thing is you said speed let me cut you off here. i have one question for commissioner clyburn. i want to go to the lifeline program with you. you dedicated restructuring and rebooting that program. and you've had several supply-side reforms aimed at eliminating incentives for

waste, fraud, and abuse. and the fcc's inspector general as you know has performed a review of the verification process on this and recommended that the fcc may improve the effectiveness of the warnings that it gives to subscribers and reduce the level of fraud in the program. we've had hearings on this and i want to work with you on it. >> thank you. >> and is a true under the current system the penalty for subscriber defrauding the program by having multiple phones is to lose the subsidy for those phones, all but one, they get to keep one come and then the carrier is prosecuted and i will tell you why your answer is important to you are talking of getting the end of broadband, and then in addition to the phones, you've got to reform all of this before you talk about expanding. >> i totally agree. one of the reasons why i set up

five points reform because the recognize two things. one we need to eliminate all instances and all existing waste fraud and those abuses. we need to do that and the key way to do that is to get those providers out of the certification business. they will no longer -- >> when you to prosecute the user not -- >> with guidance from my colleagues and while i was acting chair space i yield back. spent the gentlelady yield back. the chair now recognizes the gentleman from new jersey the ranking member, or five minutes. >> thank you, mr. chairman. i just want the commissioners to my district was ravaged by hurricane sent in 2012 and one of the most concerning impacts of the storm is loss of fumigation services. a lot of people couldn't call

their friends or family. 40% of our cell towers were knocked out in the state. a lot of people basically learned the hard way to the hard way that when the power lines go down communication services go down along with electricity. so wanted to ask commissioner rosenworcel, i know you toured new jersey after sandy and asked what lessons to children about how to prevent these kinds of commit chic asian village during future emergencies. >> thank you for the question. i did to her the new jersey shore with public safety officials -- tour. and i won't long forget what i saw a lot of broken homes and businesses and cars and boulders strewn it this way and that, and piles of sand many blocks from where the ocean is. and water had delivered if there. but has a lot of people are committed to rebuilding and i learned a lot about documentation succeeded and failed during that storm.

what struck with me was that many of the wireless towers in the affected areas went out. throughout the 10 states that were impacted by the storm about a quarter of the wireless cell towers without a service. images as you mentioned it was about 40%. but i would bet the number was significant higher on the new jersey shore. and in the aftermath of learning those things were able at the agency to start a rulemaking to ask how can we fix this going forward? because we know that 40% of all households in this country are wireless only and in the middle of the storm that's, the very least they should able to connect and get the help they need. suite issued will make in 2013 at among the issues discussed in that was the question of how much backup power is necessary at cell sites and how much of the reporting duty are wireless carriers should have when the cycle out of service. i hope that we can actually turn around and deliver a decision on that in short order because we

don't know when the next storm is going to hit by british are people going to try to use communications where does spin let me ask chairman wheeler. understand the fcc is considering updates to its rules to ensure that consumers have access to central indications during disasters but can you commit to update and those rules this year? >> absolutely. the issue that commissioner rosenworcel raised is a fair -- paramount issue. there are broader issues that is all issued of copper retirement which got forced by sandy. and how do we make sure the that when the power goes down and you are relying on fiber which doesn't carry its own power but you get the ability to make a 911 call. we have a rulemaking going on that literally just closed last week. all of these issues interrelate but first and foremost in our

responsibility which is why i focus on the 911 location issue in my statement first and foremost in our responsibility as public safety. >> i want to ask about the designated into two girls, mr. chairman. small business are so important in my state and elsewhere. i just don't think small businesses can survive in capital intensive industries like telecommunications without smart public policy. i'm concerned that the current rules for small business still contain bush era loopholes that allowed large corporations to gamed the system to actually introduce today the small business access to spectrum act to update the fcc's rules and give small businesses a fair shot at assessing the nation's airways. i will start, there's not much time left, i will start with chairman wheeler would you commit to working to maintain a robust designated entity program focus on genuine small businesses of? >> you wrote us and asked us that, and i replied yes, we

will. and yes we are. we have had a rulemaking going on and we will issue shortly a public notice making sure that it is broadened out the discussion is broadened out and the discussion is built on the auction in some of the their legitimate concerns that have been raised about that. the thing that is frustrating to me congressman you say yes these were bush era rules, they haven't been reviewed since then and it is time to review them. and what is really upsetting is the way in which slick lawyers come in and take advantage of rules that this committee, i was in the room, this room this committee created designated entities. and as you say the world changes dramatically and how a designated entity can be structured and can play in what

is now a big market was before it was a much smaller market. our rules have not kept up that the slick lawyers should have figured out how to do it and we want to make sure whether it is with this or was it is slick lawyers playing around with licenses that there is no way that we keep our rules current and we're going to do that on this issue ever going to make sure that the commitment ironclad give you, is that we want to make sure that we have a new set of rules in place before the spectrum auction takes place early next year. >> i think you. >> the gentleman's time has expired. and yields back. the chair recognizes himself for five minutes but again, thanks very much to the commission for being here today. commissioner pai, in january the fcc voted to update the broadband benchmark speeds to 25 megabits per second for downloads and three megabits per second for uploads. the speeds that please been set at four megabits per second and one megabit per second while i

understand the need to update the broadband speeds, i'm kind of curious as to the process the commission chose the speed to 25 megabits and the three megabits. it seems to an outside observer an arbitrary number was picked, especially considering that recently the commission voted to spend 10-point in going dollars over the next six years to the connect america fund to deploy 10 megabits per second broadband but according to commissions new benchmark, 10 megabits per second is no longer consider broadband. and you walk us through the agency came to the zoo benchmarks? and also easy to follow up and how does it still planned to spend over $10 billion on those 10 megabits per second in light of the new definition? >> and for the question is determined. the problem is the agency has you'd each issue in effecting. in december when we're talking that roe broadband deployment we agree to spend over the course of a decade billions to establish what we consider to be broadband at the time which was 10 megabits per second.

but for one month we learned that is in broadband. broadband is 25 megabits per second under which standards there so such a thing as mobile broadband because the fastest four gl db connection can get to 25 megabits per second. flash forward one month we learned there is such a thing as mobile broadband and it's good to be classified as a title ii service. the schizophrenia we've seen the last several months as to what is broadband illustrates the basic point. we need an election consistency that is grounded in the facts. the facts in this case basically stem from the question what do people use broadband for? high and large if you look at my statement with respect to the genuine order, i was trying to look at patterns of usage. there are going to be some folks who use the internet for very high bandwidth applications, others use it for less. the goal should be to artificially pick a number so can declare the broadband marketplaces uncompetitive and justify regulation to hud to try

to tailor with some forward thinking what broadband means in the current era. that's what i think the problem with the 25 megabits per second standard which i forecast will be jettisoned soon is that simply based on i think more press release or grasping for press as opposed what was in the record. >> let me follow-up. i'm concerned this new threshold reduce broadband investment in rural areas, if you look at my district and you've seen it a good ultimate deterrent to competitive entry in broadband market. do you foresee these benchmarks to unfairly impact consumers in rural areas of? >> that's a great question. coming from a rural area myself that something i take personally. the fcc heard from a great number of small providers, net service providers in rural areas who told us that title ii ironically would take us in the opposite direction of getting

more competition to a lot of folks in rural areas if they have an option it's going to be from one of these smaller providers. we heard from 43 municipal broadband providers who said title ii will undermine our business model, support a network, raise the cost and hinder our ability. we heard from 24 small broadband providers on victory 172 said title ii would badly green are limited resources. those include very small include one called main street broadband that serves for customers in canyon falls. i think that's part of the reason why the obama administration small business administration was exactly on point when arjun the fcc last year to take a careful look at how these rules would affect small business. that is what the digital divide is going to open up. it's for the rural americans who

have a tough time getting broadband. >> the chairman mentioned in his opening statement about the task force and studying the aging process. i'm just curious commissioner clyburn, where did you find out about the task force of? >> window to find out about the actual task force? to the best of my knowledge last quarter of last year issued a report in february. it was a very interactive process to be asked each office to weigh in and that is win. subject, my memory, sometimes challenge but last quarter of last year. >> thank you. commissioner rosenworcel,? spent i've issued the is a report sometime last year but had to go back and check. >> commissioner pai? >> if you are referring to the task force the chairman

announced this morning, is that the one? >> right. he asked about he spoke about in his opening testimony. >> and i learned about it this morning when he announced it. >> commissioner o'reilly? >> i appreciate the kind words from the chairman. i just heard about it this morning spent my time has expired and the chair now recognizes mr. doyle. >> thank you, mr. chairman. i want to take a moment and recognize along with my colleague ms. eshoo the historic step forward from the order on municipal broadband. taken together these actions by the commission represent incredible wins for consumers entrepreneurs and millions of americans who called on the commission to take action. innovators should need to ask permission or pay gatekeepers to deploy new products and services and the fcc's actions will ensure that this remains true. i want to point out one more thing. my call is on the other side of

the op-ed been talking about title ii like it's the end of the world. up until 2002 the internet was triggered as a title ii service. it was a republican fcc chairman and a republican commission a tactic you reclassified it as an information service. i see this rule with the fcc finally setting things straight. chairman wheeler, last september you testify before the house small business committee come your asked about net neutrality proceedings and you stated title ii is on the table. now my republican colleagues are making the allegation that you only started looking at title ii as a result of white house interference in november of 2014. was the fcc considering using its title ii authority before president obama joined millions of americans in calling on the fcc to take that course of action to? >> yes, sir. and small business committee that you cite, there was one member who was assigned to me don't you dare do title ii.

and there was one member who think we want you to do a title ii, and i said yes, we are considering doing a title ii. >> thank you mr. chairman. let me ask you another question to the open internet order makes great strides to protect consumers and innovators but in particular by including interconnection of protection for consumer privacy groups section 222 in this order, i want to get your commitment the commission will move quickly to complete the rule making on section 222 and ensure that commissions rules in place to protect consumer privacy online. and i would also like your commitment the commission will take seriously this new response to build on interconnection. with all of the recent announcements by over the top providers releasing new streaming video services i think it's more important than ever that gatekeepers are not restrict these new services access to consumers.

and also, mr. chairman, while i've got you come up be remiss if i didn't take the opportunity to mention special access. i understand the data collection component is complete i would encourage you to move forward as quickly as possible to complete analysis of that data and to take action to address any harms taking place your fixing the situation is a great opportunity to improve competition and economic growth across this country. >> let me see if i can build one two three. one on privacy. absolutely. it starts next month where we holding a workshop tickets the parties together and says okay let's talk specifically about how section 222 exists in this new reality. next month and to move after that. secondly with regard to interconnection. i could not agree more with your point about how over the top services are revolutionizing and are going to be the consumers save your. i sit before this committee

before and other committees, and it's a bipartisan belief that something has to be done about cable prices. and that starts with alternatives and those alternatives are delivered over the top, and those alternatives are delivered via the internet your and that is why the internet has to be open so that the our competitive alternatives for people. and i got myself -- >> special access -- >> my hair was not great whatever started asking about special access. [laughter] >> special access. we're in the process and we've just gotten permission and have begun a the data collection on special access. special access is an incredibly important issue that is particularly essential to those who are bringing competition to communications. michael is we're going to have fissile special access issue on the table and dealt with before the end of the. >> one last thing. this question, it's on the

auction that raised $45 billion in revenue meeting all the funding targets including fully funding firstnet and nextgen 9/11. considering this new reality and the massive appetite for spectrum by wireless carriers, hasn't the fcc been liberated from these fully funded objections and its reconsideration of its previous decision on the size of the spectrum reserve in the incentive auction? >> that's what issues that we're going to be addressing again as the together the final rules for the auction. i understand your point that we have now lived up to our committed obligations and this is an issue that we'll be dealing with the next couple of minutes. >> commissioner clyburn commissioner rosenworcel, to you have comments on that for a briefly? >> one of the things i joke about and -- all predictions were wrong that two and a half

three times the amount of money that was predicted was raised. your right to say that we've met our obligations and we will continue through other options including incentive auctions to deliver spectrum to the american people. >> i agree with chairman we'll be looking at this in the next few months. it's important we follow the statute and it is also important that we make sure everybody has some opportunities to bid in the upcoming auction and no community or single player walks away with all the specter. >> mr. chairman, i appreciate indulgence and i like to include in the record this letter from the public spectrum coalition in regards to the incentive auction. >> without objection. >> and key. i yield back. >> adjustments ty mathis by the pitcher not recognize the judgment of illinois mr. shimkus, for five minutes. >> thank you mr. chairman. welcome to the commissioners. it's great to have you. i want to be careful because history does tell us a lot of things. fortunate to be on the committee

during september 11. chairman upton took us to ground zero because we had the verizon switching station right across the street, and what i learned in walking through the process it was really only a big company that could get wall street back online after the catastrophic attack. and it's true. i've still got pictures of it. the basement was flooded. you had wires going up to the third floor. you at individuals and the time the copper lines -- you had individuals and the time the copper line. at the talk about a great country and competition a large entities, sometimes large entities are very important in the security of this country. and i want to also thanks to the kind with a 911. it was a team effort. we had -- it's a process you've

got to stay vigil on as chairman wheeler, you mentioned. first we dealt with 911 over sell. then really want to location. then we went to voice over internet now we're back in the location. because i'm being told by some that there are too many right now and that they may be should centralize those to any comments let's briefly became. >> one of the interesting things in your bill that u.n. ms. eshoo had was -- that you and -- you had states have state level coordination and. and by and large that has been observed in the breach. it hasn't existed. the situation i talk about in georgia, there's no state level coordination in georgia. and this is introducing mobile means that the people on the right side of the people on the left side of the map need to be

able to be talking to get a the decimal standards. let me give you one more you ticked off some of the issues regarding tech don't you. the other is a text the nine the 911 which we have required carriers to do, of which the 6500 psaps in the country 200 implement it. that means america's deaf and hard of hearing community, which thanks to the nevis action of this commission has text to 911 capabilities provided by carriers. they can text their way and nobody hears it. spent i guess the other thing that we also didn't operate was the testing that you did on elevation. i would say -- >> yes, sir spent very excited about that opportunity. of course, i don't have much high rise in my congressional district but i know it's probably important in large

metropolitan areas. gives me some comfort, my concern with the rule being present is one litigation too i had this concerned about how to incentivize build out of the pipes when it looks like you're moving back to regulation and if you are re-regulating then you have to have a few. that's what is the debate comes from. how do you get a fee to build out committee i have a simplistic view, and then the other question i have, it really is about the megabit debate 10, 25. how do you encourage into sniffing and then i will end and you all can -- the individual consumer decide what speed they want versus being forced to by the speed they will never use. like my mother-in-law.

spent it's interesting everybody cites their mother or their mother-in-law in that example. and there is nothing in here that regulates or established tariffs for consumer services for the rates for consumer services. there is nothing in here that says that a company can't can have multiple levels of service. so your mother-in-law gives e-mail only. and the person -- >> and will pay for that service versus -- >> and the person next door walks -- >> just so i can have a contrary debate, can i commissioner pai or commissioner o'reilly address those before i run out of time which i'm about ready to spin a couple different issues. i think the order opens the door to exposed rate regulation that anyone can file a complaint under section 208 either with the commission or with any federal court across the country

and that commission or quote will have to do to get without the rate is just or reasonable. the fact while on the surface you might allow for different devices based on different services, nonetheless it's up to the commission or court to decide after the fact whether there is just and reasonable. that is the essence of rate regulation. you pointed out the incentive or the effectiveness it would have on deployment. we've are from companies that will are responsible for the largest capital expenditures in the country when it comes to broadband and companies they represent a very small market areas and they have told us that the impact of this kind of rate regulation and other title ii regulations is going to impede them from delivering some of those services to anybody with its high band or to your mother-in-law. >> i would yield a now. thank you very much. >> the gentleman yields back to the chair now recognizes for five minutes the gentleman from ohio, mr. loebsack for five minutes. >> thanks mr. chair. thanks for all of you being here today. great discussion about various

issues. i guess i'll start off by saying i don't want to be too presumptuous about this but think a lot of us up here have a lot of concerns about world broadband in particular. i know that it's a big concern for all of you. i 24 counties, and although the committee chairman reminds me that his district is a lot larger than mine i don't mean the current chair, i mean chairman wolf and end with some from north dakota that's a lot bigger than my district, by 24 counties in of a lot of rural broadband carriers, a lot of the isps, small isvs as you mentioned commissioner pai. but a lot of folks who need world broadband for education, educational opportunities for health opportunities. we're going to need that. for farmers up to access gps so they can plant into efficiently and make a living.

and the economic developer. there's a question, at a lot of other reasons as we'll. i've one quick question for you, commissioner pai. you mentioned can you give us some numbers as far as i think municipal or fighters and small provided to and you repeat those numbers? >> forty-three municipal broadband provider unfair pretend that we also received a letter from 24 small broadband providers each of which serves less than 1000 customers on paper 17th. >> how many small providers are there in the country? you receive from 24 do you know what the total number is? >> i'm not sure but this is representative -- >> about a hundred. >> thank you. thank you, commissioner. chairman wheeler, as i'm sure you are aware the fcc reauthorization bill we have before us on this committee that's been offered by majority would make universal service fund subject to the appropriations process. i have been here nine years my

ninth year things are pretty dysfunctional here as we all know when it comes to the appropriations process. in this current environment where congress really seems utterly incapable of passing a bill to record order, we saw this with a last minute with the dhs. tying usf funding which is so important rural areas asia to the appropriations process i think his wrist a lot of instability down the road. i know you may not be willing to wade in on this but my question is to support attaching usf funding to the appropriations process? >> let me see if i can answer that by talking about what we hear from the kind of tears you were talking about the small rural carriers. you are asking us to deploy capital and we need to know that the capital from you is going to come behind that and we need to

know five, seven years of certainty that this money is going to be there. and that's the way the universal service program has been run to provide that kind of certainty. clearly a serious concern is it all of a sudden that certainty is impacted because the appropriations move like this or don't move and we're dealing with cdrs or whatever the case the ability of these world carriers to make the investments that are necessary to provide service in high-cost areas will be significantly impaired. >> not to mention putting a cap on such funds as well which i think is something that is called for as well. this is just a really huge concern for so many of us. the road broadband issue as i mentioned. i've had concerned in the past about how the u.s. have is administered as well. i want to make sure that have a

happy to hear from any of you want to make sure the usf fund goes towards were supposed to go as well and that those folks who can access that and provide that kind of broadband can have access to those phones. we also know a lot of those folks are the ones who are paying into it in the first place. i just heard complaints that sometimes the funding doesn't come back to them. they feel as if they're being disproportionately put upon equal in terms of contributing to the front of it not getting back to any proportionate way with the been put into. would any of you care to respond? >> if i can pick up on that. particularly for the small rate of return carriers, we're going to be putting into effect this year a revision of the universal service program for them. we're going to do with the hated quadrennial, or the qrs, the

hated qrs congressional analysis. we're going to come up with a model that says here is what you can base your business decisions on. and we do need if i could cost for commercial, a self-interested commercial for a second, we do need those carriers to help us come together. the reason i knew there were 800 is because we hear multiple voices talking about what they need. everybody sits in a slightly different position, and we've got to come together with a common. if the industry could come together and say he is a common approach that would be very helpful but i also need to correct the record on something that commissioner pai said what you thought about making broadbrush statement about small carriers. npca, that represents these small carriers has said so the track record of rural carriers makes clear title ii can provide a useful framework and does not

need to be an impediment to investment and ongoing operation of broadband networks. and the small rural wireless carriers in a statement also said a similar thing that they will not object to this. and so we've got to be careful that we don't haul out a handful of people and make great generalizations. >> the gentleman's time has expired. >> thank you mr. chairman for indulging me. >> the chair recognizes the gentleman from new jersey for five minutes. >> thank you very much, commissioner pai, would you like to respond to that? >> thank you for the opportunity. i would. first the significance remember the number one, one of the comments about how to in terms of just the last mile connectivity between the isp and the customer. ed dougherty because the fcc never published the proposal but this is going to the far reaches

of unit including interconnection -- >> that's not correct. >> if i could respond. cycling among the providers these are folks represent the public interest in their communities. one of the broadband providers was visited by the president himself in the weeks leading up to our boat a themselves and please don't fall prey to what they call the argument that title ii will not have an effective thirdly i think it's important to remember with respect to the effect of title ii will have on investment and opportunity, no one has said none of these services has been subjected to title ii previously. at the very most you can make the argument the last mile connectivity was but i think it's critical to remember regulation does have an effective we've heard from members of the american cable association, from small isps broadband providers, we can debate the numbers these providers -- that's part of his why just yesterday we heard from

a major broadband provider quote we have benefited from essentially government staying out of the internet and am worried we are now in a path to start a regular an awful lot of things on the internet. that was google's executive chairman eric schmidt. >> thank you. commissioner pai, in your defending statement, used it i see no legal path for the fcc to prevent paid partisanship at the top of a two-sided market. which it fears to be the sine qua non of chechen to many of the chairman's proposal. 706 of the telecommunications act could not be used for such a ban. while they resist saying it out we -- out right needed to do. that only authorized the fcc to prevent unjust or unreasonable discrimination in both the commission and court sentences interpreted that provision to allow carriers to charge different prices for different services. could you elaborate on that? >> thank you for the question. it has been textbook law since

title ii with doctor. this goes back to the 1880s when regulate railroads that differential services could be affected different prices by common carrier extended towards the telecommute nation-state it's been the case that you cannot ban a prioritization. i completely agree with the chairman statement on the 20th of last year that there's quote nothing in title ii that dance state prioritization. >> given that, how long do you think that this is likely to be litigated in the courts? i ask that because businesses need certainty as to what the rules of the road will be long term. >> i think what do you support or oppose the fcc's enforcement of the everyone can agree on this will be litigated for a long time. >> this goes first to the district court and the district of columbia? >> it will depend on where it will be filed. if there are multiple appeals it will have to be chosen by a

lottery. >> is it your opinion that this will eventually reach the supreme court? >> i think will. it presents a substantial question of which i can imagine the supreme court. >> commissioner o'reilly? >> i agree wholeheartedly with my colleague on this. >> commissioner rosenworcel your views on that please. >> i believe we will see litigation yes. >> and commissioner clyburn and it is certainly an honor to serve with your father in congress. >> thank you. i appreciate that. i am 99.99% sure that there will be legal -- >> so this is even purer than the ivory soap. [laughter] >> wait a minute. i will go better than my colleague, okay? because the big dogs have promised they are going to do. i taken at their word. >> i do think we need certainty going forward and i'm deeply concerned regarding that.

commissioner clyburn, in his speech you gave several years ago you said without forbearance there can be no reclassification. i believe you went on to compare it to peanut butter and jelly, salt and pepper, batman and robin. would you have supported reclassification under title ii without forbearance of? >> without forbearance? one of the things i think we did right was recognize the current dynamics of the day. this is not your father's or your mothers title ii. 27 positions, over 700 rules and regulations, so i'm very comfortable in saying this is looking at a current construct in that you looking at me. >> i think you should have compared it to bogart and bacall. i yield back. >> thank you very much. the gentleman yields back to the chair recognizes gentleman from

california, mr. mcnerney, for five minutes. >> i think the chairman and thank the commissioners for your hard work on this. we guarding the litigation issue, is there any decision you can make whatsoever that wouldn't involve significant litigation? >> i think you just hit the nail on the head. >> just want to make sure about that. i believe most of all most or all stakeholders believe that it's important to meet the big three of net neutrality no throttling no paid prioritization and no blocking but there's other stuff that might be controversial in your recent decision. is there anything going to bring up that might be of interest? >> actually there's only four regulations no throttling, no blocking no prioritization and no transparency. you got to tell the consumers what you were doing. the other thing is to establish general conduct rules that says

you will not harm consumers, you will not harm innovators, he will not harm the function of the internet in the public interest. it's really interesting because people come in and say i don't know what that means. well, that is exactly the way the ftc operates in the way they carriers have been saying us take things away from the fcc and give it to the ftc because we like this case-by-case analysis better than somebody coming in and having a rulemaking. so we are not having a rulemaking that says we know best. this is the way you're supposed to operate. what we are saying is that there needs to be a judgment capability that says is there harm and there needs to be the ability of harm is done to do something about it. but never to prejudge, knows to be in a situation where you are weighing all of the interests. >> okay.

commissioner rosenworcel, does the fcc has the power to regulate broadband providers consumer privacy practices that are unregulated that are unrelated to their phone service? >> no. >> no? >> i mean unrelated to their telecommunications, no. >> is that something that would be of value speak with obviously privacy is an important issue to all americans, and privacy in the digital age is an evolving thing. our statute which dates back to 1996 involved customer proprietary network information under section 222 and that is where the bulk of our privacy authority comes from with respect to telecommunications services. >> are there enough engineers at the fcc to help you do your job? >> i think we have terrific and jeers at the fcc but in revamp

the agency i think we should make it a priority to have a more. it's clear that wireless technologies are exploding. the demand for our equipment authorization process is also multiplying exponentially. and if we had more edginess i believe we would be in a position to help facilitate more innovation getting to the market faster -- >> more engineers. >> to engineers tend to stay out of the politics of the commission for our they like other human beings, want to get into it once it will? >> as a metaphysical question i'm not sure i want to answer that one. >> all right. let's see. you mentioned that they would be, there should be greater use of the upper portion of the five gigabits. could you expand on that a little bit? >> absolutely. we benefit immensely from wi-fi in this country, about 50% use it to go online regulate in public places and 60% use wi-fi at home.

the bulk of our wi-fi activities takes place 2.4 gig -- gigahertz band. many of us are home wi-fi systems are based on a. but only a portion of the five gigahertz band is dedicated unlicensed wi-fi service. we've got other uses in there and i think we should start studying those other uses and find out if we can free up more spectrum in the five gigahertz band so more people have more access to unlicensed and wi-fi service. >> what are by the physical limitations of the five gigahertz band? what are the physical limitations? >> the easy way to describe it is the higher you go you get more capacity but it doesn't travel as far. five gigahertz is really good inside buildings inside households. as more of us use devices that are not tethered to a court, having that cuccinelli is really

important. >> thank you. that you're not recognizes the gentleman from texas for five minutes. >> i think the chair, and welcome to all the commissioners. folks back home noticed that commissioner pai, omission or riley were at the rollout of the new rules on february 26 this past year -- commissioner o'reilly. they have questions they want to know which had been did use at the rollout rollout? they know the claims about open rules that do not violate the fifth amendment by taking broadband providers property. the commission states the rule do not because they could actually enhance the value of broadband networks by protecting innovation. if these rules enhance the value of these networks as the sec's

majority claims, why do broadband providers, large and small, why do they oppose the rules? >> thank you for the question. i think part of the reason why established broadband providers oppose these rules that they've invested literally hundreds of millions if not trillions of dollars since the inception of the internet in reliance on the bipartisan consensus started in the clinton administration that the unit would quote remain an tethered. that same combination of president clinton and congress agreed access to get it would be, information service in section 230 of the act. in reliance on the determination a lot of these providers went to the capital markets, ma took a lot of risks to build out what i consider to be the best internet environment in the world. as commissioner rosenworcel said, are in it is the envy of the world. part of the reason why they have

interest there's a question about whether reliance and expectations have been disturbed by the exertion of these title ii relations. that's something a court is bound is to work out and take very seriously. >> commissioner o'reilly, your thoughts and? >> i would suspect they would be an argument made and challenge made. >> congressman? >> one more question for commissioner pai. commissioner pai let's talk about transparency have the committee works behind the scenes. miraculously making back when the commission introduced those same edits. is that true or false? >> thank you for the question. i put my own proposal on the table two years ago.

when jcct up with its own proposal last year i suggested i wanted to go with my proposal working within the framework here are a number of suggestions that would get my vote. i was told no. a lot of these our red lines, we don't want your vote. one suggestiosuggestio n i had didn't go to the core of the item. it said i wanted to allow schools and libraries to use e-rate funds. doesn't seem to ideologically troublesome to me but that was rejected explicitly as to what was a red line. when the order was adopted and when my colleagues on the others have suggested it was agreed to the same thing on incentive option. i was told no to 11 and made on the 12th. one of the ones that was a red line was extending the comment deadline because with a very complex proposal on the table. we wanted to understanunderstan d what the public thought. i was told no that was a red line, risk giving the incentive option. lo and behold, they've extended the three com and deadlines. these are just some of the

pretty ideological proposals i've made that have been rejected. >> is that standard practice to? >> it has not been historically. based on my first year and at the commission while we have disagreed on some parts of in order that were adopted, nonetheless but there was a spirit of collaboration consensus that gained buy-in from all the commissioners. i think it makes our products stand the test of time. gains its legitimacy gives us more insulation from litigation risk. >> one follow-up question. there's some pars after that it said these actions are substantial because they're essential to the american life. that the current situation is outdated and must be changed. this is a change. i'm going to go home today and take some heat good and bad about what happened. you guys are going to your families and be okay.

how about us being in control as opposed to you all? in the vast? >> that is precisely why when the d.c. circuit rendered its decision last year i said without knowing of this would turn it we should go to congress for guidance. you wrote recommendations act. you are the elected officials who should decide how the internet economy should proceed. ..

>> thank you. let me just ask a few questions of our distinguished commissioners and the first question is to the chairman. i'm concerned about the multi-broadcast alert. in addition to the 911 upgrades what is being done to assure that it reflects the growing co. growing diversity of the nation? i was meeting with what is called to public safety and security body which is an advisory group and talking with them about the input is of

updating and the recommendations they've put out insofar as making sure those updates or communicated with all the parties. we have to increase diversity. >> we will make that a priority because with the challenges we are facing climate change and flooding into terrorist attacks it is becoming more and more depressing than either of the current. the question has to do with the two pai report. they require them to have market in trier barriers every year but the latest report to congress the 257 report was due december 312012 and is

forthcoming. would you give us an idea or share how they would prioritize this as a process reform to assure more diversity and inclusion in the media and telecom industry? >> this has been an item of contention. my colleague commissioner clyburn was moving this process forward and it ran into some difficulties inside the commission among the commissioners. she did an admirable job of that and i am attempting to pick up on because these important issues are not only for the futures of how we build them for

we've opened the future economic opportunities instructor in the country. >> two years ago i sent a letter to julian jackowski asking the issues of activated cell phones examined and i also want to say that you are interested in this issue. what tools are at their disposal >> the chips are a great idea in the increasing number of phones. they bring a number of challenges and they can drain battery power but they are increasingly showing up and consumers have the ability to

purchase them. whether or not they should be forcing wireless carriers to activate the chips or whether they ought to leave that to consumer choice. i know broadcasters in the country are running commercials saying write your congress person and make them do it. this is something that is being resolved in the marketplace and we ought to watch that and watch what happens. a >> think all of you for your hard work and diligence. >> the gentle lady's time has expired and the chairman from illinois is recognized. >> thank you all for being here

and for serving your country and spending all afternoon with us. commissioner pai when you were asked by mr. olson about your suggestions to the commission. it's how to welcome to the minority but i hope the commissioner doesn't become like congress because the intention of the commission we battle issues and look for compromise and i hope the commission doesn't fall on that. commissioner in your statement on the open internet order you spend some time talking about the procedures and how much the order changed from its initial creation and stated that it does with all interested parties should have anticipated the

final rule can you explain the problems you see proposed as compared to what was eventually adopted? >> thank you for the kind words about the efforts i've made to reach the consensus. i think the problem with respect to notice is substantial. i think the fcc team .in may 2014 a different proposal from the one ultimately adopted. it was based on section 706 and never mentioned the public switched network or the extent of forbearance or what sessions would be. never mentioned a host of other things and the problem is one state that this plan and voted on february 6 a lot of the things there is no record to support them.

there is no effort on the basis to support a finding to grant forbearance on a lot of these things and that is part of the reason why they completely recast the analysis that were drawn to that of these previous presidents in order to find forbearance and they are going to substantial legal problems with this. >> you said they would not regulate them on broadband. would you agree that regulating broadband is consistent with your views? >> i said consistently we are not trying to regulate the rates and that if congress wants to do something in that regard that as the congress authority. >> so you are not interested but what about the commissioner, do you believe that under title to the give the authority to

regulate? and i respect that you don't want to but you've created something that will now be passed down through generations of commissioners. >> as i said in my earlier response if this comes before us while i'm there i hope without pre- judging the issue that we can make it difficult to beat the record that would make it difficult for that to happen. >> you can understand our concerns. with respect when you have no intention of doing it that's great but you understand the concern of congress were you've implemented a rule in the knesset say i don't have any intention of regulating the rates but i'm not going to prevent the next commissioner to do it. >> we patterned this after section 332 in the regulation of mobile voice and for 22 years this exact same authority has wrested the commission for mobile voice service and never

been used. they may not regulate the proud internet access service that would be consistent with that view. commissioner pai we heard a commissioner appointed by gore ii at the service with no impact on investment because mobile voice service has been subjected we've seen substantial investment in the mobile voice under that regime. >> i do not for couple of reasons. it's critical to remember the regulation for mobile place didn't occur because the fcc determined that the constitution was sufficient in the voice market place but there wasn't a need for the regulation. here by contrast the fcc fined the broadband market is not competitive so it explicitly opens the door to the kind of regulation that wasn't contemplated for mobile place. with respect to the investment

one of the reasons we have seen such huge investments in 2007 is the inception of the smartphone and the huge increase in the data traffic generated as a result. why your list carriers big and small have to keep up for infrastructure spectrum to deliver the mobile data traffic that's never been classified as a title to service and that is what is driven in the mobile investments not the application to mobile voice. >> thank you all again and i yield back. >> thank you commissioners for being here. one of the keys is spectrum and i believe we need a national spectrum plan to consider both license and unlicensed spectrum. can you share with us briefly some of your ideas to generate

revenue and ways for them to relocate. >> [inaudible] >> the fuel for the wireless revolution is spectrum and if we want to have a modern spectrum economy the are going to need a more consistent spectrum pipeline. today as you probably know, when we need more airwaves for the commercial mobile use we knock on the door of the federal authorities and we begged them and over time they will give us scraps and authorities to clear out of the spectrum to relocate and ask them to auction off the airwaves. the process is slow and cocky and it's not the pipeline to the wireless economy needs. that's why i think it's

important that we develop a system of structured and said it's for federal spectrum authorities so that when we try to secure more airwaves for the commercial use they see that fits in reallocation and not just law and that could include anything from changes in their budget to the benefits through the appropriations process through the ability to actually secure with sequestration might have taken away and this would make the market more evicted and work fast. >> i have a question for you chairman wheeler. i remain concerned about the stingray service and devices that are used by a number of local law enforcement agencies without which there doesn't seem to be any federal oversight and the public should actually have more access to the information

about the stingray device including but it's a use for are there surveillance capabilities and who has access to the sensitive information that collects and despite the assurances to the contrary, it is not clear to me and others how the device doesn't collect data on innocent americans and so you announced the creation of a task force on the device and similar technology. i would like to know the status of the task force and why haven't we seen anything come out of it and what series of questions and what you're doing to address the concern about the lack of oversight over this device. >> the task force did look into the situations and what we found was as follows. our jurisdiction and authority is to certify the electronics of the components of such devices

for interference questions and that if the application was being made in conjunction with law enforcement then we would approve it. this is for the technology that we would approve it and from that point on its usage was a matter of law enforcement and not a matter of a technological question of whether or not that's piece of hardware interfered with other devices. >> so you are saying it is out of your jurisdiction and we have to go to other federal agencies including law enforcement because i'm concerned about it being sold on the market or over the internet.

so this is something we have to follow up with law enforcement? >> on the broad issue you it is follow up with. i think that we would have enforcement jurisdiction on an unauthorized use of the device if in fact they were being sold illegally. >> i just want to bring up another issues. more are opting for the subscriptions about the tv channels and programming content they want and we are seeing the market react. cbs is offering mostly online subscriptions and on and on. no doubt is this the issue. cable video doing ip and the consumer paying for bandwidth and we should look for ways to end power of the consumer to be

able to pay for the programming they want to watch. so i think this is something our subcommittee should explore moving forward and i put that out there and yield back the balance. >> the chair recognizes the gentleman from florida for a question. >> thank you mr. chairman. and i want to thank the commission for their patients today and also for their testimony. mr. chairman there was an action in the tampa bay area that i represent in congress last april involving mr. humphries. it seemed that he had a jammer in his suv powerful enough to jam calls to 911. he'd been doing this for the last two years when a local telephone company reported interference the field agents in office quickly tracked him down

and ended the significant threat to the safety of the folks in the area. it's my understanding your plan to close this office in a area as the emergency preparedness subcommittee i have a few questions. how many offices if we are closing any do you plan to close >> 16. >> the job spots in the tampa bay area moved to the washington, d.c. area yes or no? >> no. >> are you laying off staff to enforce the bureau's work under the next neutrality ordered? >> know we are giving it to increase productivity. what we are finding is that costs two to three times with a centralized operation would cost. we have got too many people

doing it to few things gaming there are issues that we can get greater productivity if we follow the kind of model where you have strike forces and so we would leave in place the necessary equipment and would bring people in out of the miami office to deal with the kind of situations that you're talking about anna that is a cost-efficient way of accomplishing the kind of gold goal that you are talking about. >> florida is a big state. according to the request on page 50, the agency will preserve the integrity of public safety communications infrastructure by taking action on 99% of the complaints of interference to public safety communications within one day. will you commit to and sure that this metric is not and has been met historically according to

the performance reports the commission has issued over the years will you commit that this would be met? >> we can do it without a venue nation in quality. >> will you fight the committee a quality report detailing the bureau success of meeting that metric including a list of actions taken through the remainder of your chairmanship? >> good idea. what do you want me to tell the deputies? if you can elaborate a little bit more with what you like me to tell the deputies and other first responders in the area who may be in danger by the delayed response inevitable which again florida is a big state and i know other members probably have questions for the offices being closed.

>> the reality that we face is that we have a diminishing budget and we have unfunded mandates imposed by the congress and we have to say how can we increase the efficiency. do i want to close these offices? i don't want other folks that are representing areas that are going to lose offices and hear their complaints that i have fixed amount of dollars to work with so the question becomes how do you become efficient and that's what we are trying to do. >> commissioner how do we have any credibility telling other countries like china or iran not to control processes within their borders if we are taking large steps in that direction

with the recent overreaching broadband request? >> we are setting the stage by the passage of the item on the next neutrality it sends the wrong message internationally that matches my conversation internationally when i went to spain. they are interested in engaging issues of broadband and they would like to get as much involvement as they can. they have a greater government control the practice of internet so it is a bifurcated message we were able to send before that we shouldn't do it here and you shouldn't do it there and now we are saying we are willing to do some things regulating broadband but you shouldn't do them over there which i think is a terrible message. >> what are your thoughts on this issue?

>> i agree and i would associate myself when they represented the concerns of the country. there is cultural information being disseminated to the citizens. notwithstanding the order that would continue in the future. >> can we set it for the record the full quote that was accepted by the commissioner? to >> absolutely. >> it is taken out of context. >> the gentleman from ohio for five minutes. >> from the great state of ohio. [laughter]

>> i want to tell you how honored i am to join the chair man in bringing tributes to ohio state today. is this the one i used to meet? [laughter] commissioner come in your testimony i want to associate myself with something you said. i couldn't agree with you more i was on information technology for over 30 years long before there was any such thing as the internet as we know it today and i submit the reason we have these is because we have an unregulated federal government intranet and information services that have allowed the innovators to blossom so i agree with you. chairman wheeler we have

requested the number of documents that have been denied under the claim of deliberative process privilege. for the deliberative process privilege to apply an agency must show that a communication was a direct part of that of the british process and that it makes recommendations are expressed his opinion on legal or policy matters and in proceedings like the open internet proceeding the filings are required to disclose communications between the fcc and executive branch or staff as those discussions are of substantial significance to affect the ultimate decision. i am trying to figure out how these different concepts apply.

and withholding certain communications between the white house and fcc you've asserted the deliberative process privilege. if those communications were relevant to the communications of liberation several questions emerge. one is subject to the rules are the concerns or contents of the meeting was memorialized in any docket at the commission and how could these conversations have been a direct part of that of the british process but not have been of a substantial significance those are questions in my mind and now i will get to a question for you i know that you indicated you have received no secret instructions from the white house but of course that's not the standard for determining when they are available.

in the ten meetings you had with the white house and here's my question and attend meetings he had with the white house ought on advance is it your opinion that only that was the only meeting that addressed the merits of the proceeding that occurred last november? >> yes sir. and they were not necessarily on the open internet. we had cyber issues and -- >> in the meetings that came in advance of the action on the open internet you're saying there was no discussion of the substantial significance to affect the ultimate decision which would require the disclosure of that information is at your opinion?

>> you have identified the test. >> i did not get instructions in those meetings. >> i said do they qualify -- [inaudible] >> how do they qualify under both if they are discussions with the white house that's the highest office in our land. i find the american taxpayer doesn't see that as a second and substantial how can they not be significant and substantial intended to affect the ultimate decision yet you deny them under a deliberative process claim. >> there's optical parts. you asked how. there were not instructions given to me. i've been on the record on that.

>> that's not a determination. >> the determination also is that specifically interactions with congress and the white house are excluded from expletive and have been since 91 but i'm going beyond that and that is a non- export aid conversation if there was a conversation that was taking place in that kind of a construct and number two i got no instructions -- >> under what basis? you can just make that up. at the wall says what is required to be revealed and what is not and a deliberative process privilege applies when you can show a direct part of the process and that it makes recommendations were explicitly good opinions and policy matters rather than substantial significance to affect the

ultimate decision. i am disagreeing and i think it's irresponsible withholding information that should be openly disclosed to the committee and the american people. >> the chair recognizes the gentleman from new york mr. collins. >> before i get to the questions for the commissioner o'reilly and pai. there were ten meetings and we do understand on the side of the disclosure it is my understanding that the other nine meetings there was nothing of sickness against discussed relative to the fcc where under the rules you should have or would be required to otherwise disclosed that is it true there was nothing disclosed on the nine of the ten meetings?