>> the annual conservative political action conference kicked off today in national harbor, maryland. tomorrow we will take you there live as the national rifle association ceo will address the group. that is live, 1:00 p.m. eastern on c-span three and c-span.org. >> federal communication commissions tom wheeler and all of the commissioners were on capitol hill today for senate commerce committee hearing. they answer questions on the spectrum auction and broadband access to rural areas. this is this is two hours and 40 minutes. [inaudible] [inaudible] >> we come to order. welcome to to today's hearing on oversight of the federal communications commission.

during our oversight last march i expressed my mates men on an agency like this has not been reauthorized by congress in 25 years, making it the oldest expired authorization in the commerce committee's expansive jurisdiction. rivers and a quarter century legislation takes time but together we are beginning to make progress. for example, today's hearing marks the first time in a century the full fcc has appeared before the committees twice or anything of congress. another another example is our unanimous approval last year senators fcc consolidated reporting act should make market place examinations less burdensome on the agency and more informative to congress. reauthorizing the fcc is our responsibility as legislators of diverse constituencies who are affected by regulatory agency with a half billion dollar budget. time for this committee to get back to regularly authorizing the commission as part of its normal course of business.

in the next few days i will introduce the fcc reauthorization act of 2016. it's my intent my intent to market the bill in the coming weeks. today we have a familiar face, commissioner jessica who is appearing before the committee for the fourth time this congress, her renomination is currently pending before the full senate. i support your confirmation, is pleased to process your nomination to the committee last year. i appreciate your public service and your private service to this committee. last years oversight hearing came shortly after a successful successful auction of aws spectrum which net 4.3 billion in winning bids. that was the product of the 2012 spectrum mag a broadcast tv airwaves that is scheduled to begin next month. an incentive auctioned the fcc is charged with a balance mission. one reallocate the spectrum and relinquished by tv stations, and to protect both a tv station

that continue to operate following the auction and their viewers. congress provided nearly $2 billion to reimburse stations to relocate during the post- auction and the fcc has established a timeline to complete the repacking process. concern has been raised about to the time allotted may be inadequate. i hope that will not be the case. these concerns deserve the close attention of this committee. my colleagues and i want to see a successful auction and a successful repacking process. local broadcast tv remains important, the broader market continues to change and grow. the video services market is a dynamic segments of the comedic occasion space. it it tries tremendous innovation, dynamic experimentation of video distribution models. it is not a coincidence the

parts of the video market seem the most innovation are also the least regulated. among this reality the fcc proposed a partisan role to have the government better produce results in the consumer power disruption is already happening. a letter was sent shortly after the adoption of this proposal, i agree with senator nelson sentiment and i quote, advances abound and competitive video navigation device market and a section 629 should always be implemented with an eye toward what is actually happening in the marketplace. i want to further echo his warning, section 629 does not contemplate imposing regulations by which third parties game for their own commercial advantage the advantage to alter, add to or interfere with program provided by content providers. that is from senator nelson's letter. the bottom line is today's video

market is increasingly competitive, pay-tv subscribers are finding more user-friendly and less of expensive ways to find the tv that they want to watch. finally, i'd like to address the issue of standalone broadband support for small, rural carriers. because of flood universal service fund rules these providers lose all support for serving households that choose to subscribe to broadband while not simultaneously purchasing landline telephone services. last march all five commissioners make commitments to me in this committee to fix the counterproductive loophole by the end of 2015. it's my understanding that an item is currently in circulation at the commission that would fix the standalone broadband problem. it reflects the negotiated compromise and some other complex reforms that have been linked to this objective.

the 2015 deadline for standalone broadband has recently passed, glad the extra time gives a fair chance for role providers to assess the impact of the reform proposals on their businesses in the rural customers that they serve. i look forward to seeing the full plan, assessing its impact and continuing to provide oversight of the fcc's implementation of this reform. i'd like to thank all of you for fulfilling your commitment to fix the standalone broadband issue for role consumers across the nation. i would like to say a word regarding report issued this week by chairman johnson. among other things the report finds the fcc and i quote, failed, failed to live up to his standards of transparency. i want to quote chairman johnson for his and his staff are the work on this report, the commission rather than resorting to a defensive posture will look for ways to demonstrate the kind of transparency expected of our independent agencies. today's hearings provide one opportunity to do just that.

i look forward to hearing your testimony and i appreciate having our commissioners before us today. i look for to having an opportunity to ask questions. i turn out to our distinguished ranking member for his opening statement. >> thank you mr. chairman. i return the compliments to you in the way that the two of us have worked together in a bipartisan way on a number of issues trying to blow them down to a common approach. i am encouraged that we will continue in the committee thanks to yours and your staffs approach to leadership. on behalf of senator mccaskill, which we all know is going through a difficult time, i want to ask that her letter to the

commissioners and then their responses when they summit them be submitted into the record and entered into the record as a part of today's hearing. >> without objection and i would also say to my colleague from florida that i think all of us on this committee express our thoughts and prayers * colleague who is a very active and respected member of this committee, we hope and pray for a quick recovery. >> thank you mr. chairman. this is significant because it has been over a year since all five commissioners have appeared before this committee. a lot has happened in the interim. i really appreciate mr. chairman about what he said about commissioners renomination in the confirmation that we attempt

to get, as soon as possible, and i want to recall for the record that at the end of the 113 congress we had, this is december 2014, we had one republican fcc commissioner, michael riley who is here, awaiting confirmation. the democrats agreed to confirm commissioner o'reilly's nomination without pairing him with any other nomination with exchange for a promise that republicans would confirm democrat jessica quickly in the new congress. senator mcconnell promised senator reid, and i'm i'm

getting the straight from senator harry reid, and promise then chairman jay rockefeller that they would move the rosen were so nomination without delay in the new congress if the democrats in the last congress, 2014, agreed to move commissioners o'reilly's nomination. commissioner jessica's nomination is on the calendar. i know chairman that you are working with leader mcconnell to make this happen. we do not want to lose her leadership and thoughtful approach to the crucial issues, but mr. chairman this has been now over one year. as promised it did not happen in

the first year of the new congress, last year, 2015. here we 15. here we are in the second year of the new congress, finally she is on the calendar, i hope we will move to fulfill the promise that was made in order to confirm commissioner jessica. i want to thank all of the commissioners for appearing today. as our nation grows ever more internet enabled, more connected and more mobile, this fcc role becomes very critical. you are the expert agency that congress created over all the things communications. you have a statutory mandate to protect consumers, promote competition, ensure universal service, preserve public safety, and as technology transitions

these core directives do not necessarily follow. so that is where you come inches in terms of the protecting consumers i want you to call your attention to the ongoing problem of spoofing. last week senator fisher and i introduced the spoofing prevention act of 2016 designed designed to update the law and provide the fcc with more enforcement tools to combat these abusive phone scams. americans lose millions of dollars each year to the scams. that is especially true of vulnerable senior citizens. we must protect the public from the scammers and i hope the committee can act swiftly on

senator fisher's and my legislation. in the meantime, i expect the fcc to do everything that it can under current law to stop the scammers. now with regard to promoting competition there has been intense interest in the past few weeks on your recent set-top box proposal. i support the existing statutory obligation to promote competition and choice in how consumers access their pay television programming. it is essential that any new fcc rules in this area must not harm the production and distribution of video content in my letter to the chairman said just that. the fcc has worked hard to keep u.s. competitive in our national

spectrum policy. in a matter of weeks the commission will launch the first voluntary spectrum incentive auction. the agency deserves much praise for getting us to this point. at the same time, many of us have heard concerns about what may happen after the auction during any repacking of tv stations. obviously we will will continue to watch the fcc's work closely in order to make sure that tv viewers are not disenfranchised at the end of this important process. i want to recognize the work that is being done by the commission related to 5g. the next generation wireless service. the nation is once again on the verge of wireless revolution in the work on a new spectrum front tier for such services is vital

to american leadership in this area. tomorrow this committee will take up the bipartisan mobile now act that chairman boone and i have reference. that bill is designed to help move the ball forward on 5g. with regard to universal service, as important as it is to promote cutting-edge communication technologies, it it is equally important that all americans have access to these networks. i know the fcc has been spending significant time considering reforms to the lifeline program. i want to make it fairly obvious that we must have a lifeline program that helps low-income americans obtain access to broadband. in order to them to participate

in today's digital economy. failing to do so risks exacerbating the digital divide. with regard to public safety, call to 911 remains the most ever call anyone of us will ever make. i hope you all will keep that in my look forward to your testimony. >> thank you senator nelson. we will proceed now and will start on my right and you're left with chairman of the commission. chairman wheeler if you will go first and we will work down from there. by the way, i would add to for -- i know it's hard to enforce the timeline but some of you on the panel who have been on the side and you know how nice and how much the staff would appreciate it if you would confine your comments to as

close as five minutes as possible. i know you have written statements that we will include in the record. >> thank you very much mr. chairman. members of the committee, we look for to discussing the matters of importance that you have identified as well some others. so i will heat your ammunition and be brief. for quick topics. first, has been reference, we are only 26 days away from the world's first incentive auction. next week we will have a workshop in a web ask for broadcasters who are desiring to participate so they can work through their processes and begin to understand even more. the following week we release the forward auction participants. the the third week we will have practice sessions after we have distributed to the participating broadcasters their own security so they can actually practice and the system. the flight falls in three weeks

and five days, but who is counting. secondly, i have just returned with my colleagues from the mobile world congress, the big gathering of the mobile industry in barcelona was the buzz was all about 5g. commissioner jessica made some remarks that were spot on in the importance of spectrum in 5g. your mobile now legislation is an important part is you both have reference. i want to make sure that everyone understands there is a difference between the way we approach 5g spectrum and the way the rest of the world. because we just met with the rest of the world. we will allocate 5g spectrum faster than any nation on the planet. we all ready have a proceeding under way. we'll bring that proceeding to closure this summer.

we will then get out of the way and let innovation and competition rain. i have been approached by various other governments saying you need to wait until there are standards, it is not our philosophy to engage in such industrial policy. we are world leaders in 4g because of the fact that we made special available and we let competition and innovation rain. i believe that is the same strategy that will bring us to world leadership in 5g. thirdly, the last time we were together we pledged a greater return carrier reform and broadband support to unserved areas before the end of the year. as he said we met the goal but not the calendar.

thank you for your understanding. it was a complex issue. thanks to the work of commissioners we have a bipartisan plan that was not only negotiated with our offices which is no easy undertaking in and of itself, also negotiated with the major association of parties involved which increase the complexity. commissioner o'reilly delve into the specifics of the issue and exhibited the kind of bringing people together attitude and finding solutions that made him an effective member of the staff of this body. commissioner clyburn who had over a decade of experience dealing for stand with this issue at the state level, brought that kind of expertise and experience and helped us

through that process. none none of us got everything we wanted. nor did any of the associations get everything they wanted. but we have a solid, bipartisan reform and broadband funding for unserved areas in particular that will serve the test of time. lastly, and this and this is not last in priority, just last on the list, public safety is embodied by 911 is dangerously close to a crisis. as the digital world passes it by. twenty-first century life-saving is being blocked by 20th century technology. we at the fcc has done all within our power to move the

next generation 911 capabilities of digital ahead. we have improve 911 location accuracy, wave push wave push for text deployment, we've improved network resiliency, and we have just completed a year-long process where we brought all of the experts from around the country to spend a year developing a plan for just what does it take to get to the next generation 911. we have submitted that task force plan to this committee, congress holds the key to whether there will be a next generation 911 and we look forward to working with you in achieving that goal. thank you mr. chairman. >> thank you chairman wheeler. >> thank you, good morning, thank you for the opportunity to appear before you today. this is my my fourth time in the congress but who is county. as my colleague mentioned, last week i had the privilege of speaking at the mobile world congress in barcelona.

it is a global gathering to discuss wireless technology. the good good news is the united states leads the world and the current generation of wireless technology notice 4g. while. while we have only 5% of the globe's population, we have over one third of its 4g deployment. what i learned in barcelona is that we have work to do to maintain our leadership role. the good news is that wireless policies front and center, this month at the fcc we will begin the world's first spectrum incentive auction. this week, in front of this committee, you will consider mobile now legislation to advance our nation's leadership in wireless policy. in light of all of this i will focus my remarks today on three aspects of the future of spectrum policy. first, the future of spectrum policy requires looking at

millimeterwave spectrum. today, the bulk of our wireless networks are built at three gigahertz or below. in the future we are going to have to bust through that gigahertz ceiling and start looking at airwaves north of 24 gigahertz. we are going are going to have to look at airwaves that go to infinity and beyond. the signals at these high stratospheric frequencies do not go far. if we combine them with dense networks and small fields we are going to be a will to have wireless networks that are ten - 10000 times faster than what we have today. these networks are the memorable part of wireless technology known as 5g. the race to 5g is on. what i learned learned last week as our counterparts in europe and asia are already making headway. it is imperative the fcc

complete its outstanding millimeterwave rulemaking and get it done this year. second, the future of spectrum policy requires not just more license spectrum but also more unlicensed spectrum. in short, we need more wi-fi. unlicensed spectrum like wi-fi democratizes internet access, encourages permission to list innovation and contributes $140 billion to the u.s. economy every year. it is good stuff. in any effort to increase the license spectrum pipeline we need to explore the cut for unlicensed, call it though wi-fi dividend. right now the fcc we have a golden opportunity for a wi-fi dividend in the upper portion of the five gigahertz band. thanks to the encouragement of this committee we have a smart framework for testing the span for unless things use while also protecting automobile safety.

we need to work with our colleagues in the department of transportation, the department of transportation, the department of congress and get this testing underway. third, the future of spectrum policy requires we focus on the ground as much is on the skies. spectrum gets all the glory. the unsung hero of the wireless revolution is infrastructure. no amount of spectrum will lead to better wireless service without good infrastructure on the ground. that means we need policies, we need smarter practices for deployment on our federal land, we need to update policies for the deployment of small cells which are going to be critical for next-generation 5g network. if we do these three things we will create dramatic opportunities for new wireless services for across the country. let me finish by highlighting the last point. not in technical terms but in human terms.

we have problems to solve, resources that are constrained and communities that need help navigating what is possible and the digital age. we are on the cusp of cars that drive themselves, streets that can be safer, commute times that can be cuts, emergency services that are more effective and healthcare that is more personalized, and communities with more capability across the board because there are more connected. it is already happening. the city of chicago is deploying wireless sensors to help solve problems before they occur. with childhood asthma, flash flooding, street congestion. a host telling california has made wi-fi available on school buses to help bridge the homework and help students lack the connectivity they need to do basic school work. wireless smart sewer systems have saved the city of south bend, indiana millions millions by providing real-time analysis of wastewater.

these efforts are exciting. they can be bigger and bolder if we have forward thinking steps with spectrum policy and if we take them right now. thank you. >> thank you. >> mr. chairman, ranking members and members of this committee, thank you for holding this hearing. i'd like to focus on for issues which this committee has led. direct dialing 91 one, contraband cell cell phones, five gigahertz spectrum, and millimeterwave spectrum. first, ensuring ensuring direct access to 911 is important both to me and members of this committee. last month senators, introduce the carries act of 2016. i commend the senators for their leadership. many knew the tragedy that inspired this legislation. in december 2014, carrie was attacked and killed by her estranged husband at a hotel room in marshall, texas.

her nine-year-old daughter try calling 9114 times as she had been trained to do. those calls never went through. the hotel phone system required her first to dial a nine before 911. when i first learned about the second is two years ago i started an inquiry into the status of 911 dialing. today we have made substantial progress across the country and fixing the problem. when we started for example, no major hotel company requires franchisees to permit.9 1111 dialing. today, nearly every major chain does. the job is not done, that is why the carries law act of 2016 as needed. it would require all multiline telephone systems sold, leased, are installed in the united states allowed directed 911 tiling as the default setting. i hope this bill becomes law soon. second, i want to turn for the threat posed by inmates use of contraband cell phone.

they create a major threat to public safety. that has grown worse up late. contraband cell phones are now flooding into our nation's jails and prisons, inmates are using them to order hits, run to order hits, run drug operations, arrange gang activity, and victimize innocent members of the public. i heard about these disturbing develop and first and last october when i visited a maximum security prison in jackson, georgia. we cannot let inmates treat prison is just another base of operation for criminal enterprise. we need to act. in. in 2009 this committee passed bipartisan legislation to help law-enforcement combat the serious threat. in 2013 the fcc picked up the baton with the notice proposed rulemaking. and at the agency keyed up technological solutions and regulatory reforms. we now need to follow through. to help do that i announced earlier this week that i would

hold a field hearing on contraband cell phones in south carolina on april 6. i hope this event will reboot the conversation and build the foundation for a robust fcc response. third, i want to thank the committee for its leadership leadership in identifying and drawing attention to the 5g band, band ideally suited for unlicensed use. four years ago we called on the fcc to begin the process of opening up this band and the fcc did that in 2013. since then, since then, senators marco rubio and corey took her have introduced wi-fi innovation at, a substantial measure which would help move the process forward. right now there are up to 195 of five gigahertz spectrum that could be opened up for use. putting a spectrum to work could herald a new world of wi-fi. the fcc needs to get this done. progress progress has not been fast enough. through regionalization approach

have identified paths forward. i hope we get this proceeding across the finish line and soon for the benefit of american consumers. fourth and finally, i want to commend chairman and ranking member nelson for the introduction of the mobile now acting for the bipartisanship they showed in that measure. in particular i want to commend them for calling on the fcc to move forward on opening the millimeterwave band for mobile use. companies are now investing heavily in mobile technologies that reliance spectrum above 24 gigahertz as part of their work on 5g technologies. we should aid those efforts with rules that will allow 5g to develop in the united states as quickly as technology and consumer demand will allow.

there's plenty of work to do. the fcc recently adopted a proposed rulemaking addressing some bands above 24 gigahertz but we left 12,500 megahertz of the spectrum on the cutting room floor. i called the agency to focus on those bands as well and i'm glad this committee is looking to move more massive wave spectrums into the marketplace. members of this committee, thank you once again for holding this committee. i look for to answering your questions and continuing to labor alongside you on these critical matters. >> thank you commissioner. >> thank you chairman and members of the committee for the opportunity to participate in the committees fcc oversight process. the commission has collectively recognized the need to act on wireless issues especially next-generation network, commonly referred to as 5g. to as 5g. to realize private-sector deportment is paramount additional license and on license be made available in six gigahertz frequencies and higher bands including those about 24 gigahertz. the u.s. is currently the world leader in 4g wireless communication wireless communication because our nation wireless provider endeavored to

meet the consumer demand for new data services and recognize the economic value in doing so. any unnecessary delay risk another nation, something we should make sure does not happen. along the same line i find it necessary to express my concern for the outcome of last november's world radio communications conference. we are unable to agree to study certain bands of future mobile use. in particular the failure to study 28k get hurts for 5g in the u.s. and other countries into the u.s., bypassing itu and undermining its future. besides spectrum, companies need to deploy facilities and the effective manner. unnecessary siding expenditures will slowdown 5g a broadband. let me suggest me suggest a few ways in which burdens can be

reduced. first, the commission must follow through on its commitment to expand the relief provided to small cell and installations. in addition despite the best effort of the congress, localities are still blocking too many facility siding attempts. some options to deal with this include any repetitive permit requirements when multiple small cells are cited in close to the city. preventing permits denied based on locale. for larger towers : location must be permitted and by resolving the decades-old problem of twilight towers will also permit co- location a wireless.

these decision often impact entities that are not familiar with the commission's activities and potentially subject them to another ventilatory body or conflicting set of rules. separately they commissions creative license in regard to statutory interpretation is beyond measure, and some instance the fcc has set aside the intent of congress and deal struck at the time of its own president and sometime the english language for reinterpret a statue and enforce old statutory paradigm onto new innovation. all in pursuit of a particular outcome, the result innovation is being put through the unnecessary bringer which threatens output, employment and innovation. i also want to bring your attention to three issues where a change in law can be beneficial. first, payments made in response to u.s. effort forfeiture orders or consent decrees should go back to the fun. that would reduce the amount of money needed from consumers. second, from

consumers. second, legislation in the area pirate radio could be helpful in giving the commission more forstmann tools a better focus its efforts. finally, i want to again acknowledge the continuing reform efforts, sadly there are no updates on our ad. thank you for your time. i look for to answering questions. >> thank you. >> chairman, raking ricky member, members of the committee, good morning. what a privilege it is for me to appear before you. today i would like to send to my a testimony unto congressional directives relating to universal service and diversity. i took seriously my commitment to you, to modernize universal service support program and stop carriers. this collaborative process has been resulted in reforms that are a win win for role customers and for those who contribute to the universal service. commissioner o'reilly in the chairman, i joined them, i'm

thankful to say we presented a framework for consideration that should modernize the program in a manner that is simple, rewards efficiency, and sets forth the path to ensure that we connect unserved households a disaggregate support in areas served by an unsubsidized competitor. as audible as this proposal is, the fcc still must address the lack of broadband access on tribal lands in the gaps that real main in coverage across this nation. millions of americans are stuck in the digital darkness. they lack the technological infrastructure needed to improve their lives, particularly particularly when it comes to healthcare. life-saving and life changing technology like the one eyewitness in roseville, mississippi that manages the care of patients with chronic diabetes are only possible if broadband is both available and

affordable. when it comes to universal service reform, we have no choice to modernize or allow me to bully say this morning completely overhaul the federal lifeline program. we can can never forget that section 254 of communications act places equal weight on the needs of low income consumers as it does for those living in rural areas when it comes to access to advanced services. the fcc should never turn its back on this directive. let us roll up our sleeves, refrain from dwelling on what may be wrong and start working on fixing and finding solutions to address whatever is deficient in lifeline so low income americans, once and for all my have access to life-changing opportunities that broadband has unleashed for the rest of us. section 257 of communications

act test the commission with identifying and eliminating market entry barriers and promoting the purposes of favoring diversity of media voices, vigorous economic competition, technological advancement, and promotion of public interest, convenience and necessity. however, i've spoken to dozens of independent programmers who said they face insurmountable challenges when it comes to acquiring carriage, that it is difficult to receive fair or reasonable contract terms and growth in their online distribution model is prohibited or inhibited because distribution access is often restricted be a contract. for every independent programmer that reaches an agreement within am vpd, there are countless others who cannot even get a simple telephone call return. i'm pleased to say my fellow commissioners join me avoiding

for an independent programming notice of inquiry during our february meeting which will launch discussions about what role, if any the commission should play in addressing obstacles that may be preventing greater access by consumers to independent and diverse programming. members members of the committee, i am truly grateful for the opportunity to speak with you today. i look for to answering any questions you may have. thank you. >> thank you commissioner. i think all of you for being here again and for sharing your thoughts with us about the priorities of the commission and the things that we should be focused on here in congress as well. chairman wheeler, january there will be a new a new president of the united states. your term doesn't expire until january 1 of 2018.

that enables the newly elected president to nominated chairman to lead the fcc quits from the same party as president, so my question is do you intend to respect that traditionally resigned from the fcc when the new president takes office unless explicitly asked to stay on? >> thank you mr. chairman. that is a ways off. i understand understand precedent, i understand expectations, i also understand that ten or 11 months is a long time. it is probably not the wisest thing in the world to do to make some kind of ironclad commitment but i understand the point you're making. >> and you understand the tradition. >> i understand that.

>> chairman wheeler is my understanding that commission rules prohibit the disclosure of nonpublic information to any person outside the commission except as authorized in writing by the chairman. these rules limit the ability of commissioners and fcc employees to discuss certain nonpublic matters with outside stakeholders making the chambers waiver authority. yes or no, we provide the committee any written exceptions you sign while serving as chairman of the commission. >> yes, sir. thank you. commissioner o'reilly you've talked about the current commission serves as a roadblock to public participation and ultimately damages the fcc's credibility as an agency. would you like to expand. >> yes. when i think it inhibits my ability to talk to outside parties or come in and they will suggest certain ideas and ways

to change things but i can't correct them on anything they may be sticking about. they may have some information and might be missing some. it's hard to have a full dialogue. at the same time i can't test out ideas i have with these parties. number two, the, the rules being applied is discriminatory because the rest of my colleagues don't have the vantage the chairman has and they have used at the time of the commission, there's a number of things that have happened that disclosure of nonpublic information that we are not able to take advantage of. i think think their application of the rule would make more sense. >> i will direct this to all of the commissioners, it deals with section 629 which i referenced in my opening remarks. the committee case and it provides the fcc with authority regarding pay-tv set-top boxes. it clearly relates to actual physical equipment, the plain language of the statute and the can sumer experience as a was 20 years ago when it was from added

to the law. the question is if the pay-tv service is offered in a manner that requires no set-top box, and, and no other words no physical equipment needed to access programming to section 6219 remain necessary or applicable to that pay-tv service? >> everything in the world is going software. the networks themselves used to be run by hardware and art now run by software. that doesn't mean that we do not have jurisdiction over those activities. i think the statue talks about equipment device and devices and in a software world you cannot consider the kind of functionality the statue talks about and not consider software.

>> the chairman's point is fundamentally correct that so many functions that took place over hardware are now taking place over software. i think what is also fundamental is that congress wanted to make sure this market was competitive and whether we're dealing with hardware or software, i think we want to find a way to make that happen. >> mr. chairman i think this question raises the basic approach that commissioner o'reilly raised concerns about which is the agency's taken statutes that were written a quarter-century ago and expanding it dramatically to a certain jurisdiction over a new marketplace. in my view view as a policy matter instead of doubling down on old technology, we should encourage efforts to migrate to an apps-based economy where where instead of spending a few hundred dollars on box, you spend zero to $5 on on an app which will allow any

navigation device to have the same function. >> the short answer is no and i would be happy to ask band upon that. >> i agree that the current construct may on the surface seem limiting, but what we have the capacity to do in a trust will continue to have the flexibility to do is look there and recognize that though the words may be different, the application of functionality i believe we should look through current lenses and apply and interpret the fame mark which has either worked or needs room for improvement in order to really interpret through today's lens how we approach the directives that you have given us to ensure a competitive marketplace when it comes to a now refer to as a set-top box.

>> i have one quick yes or no question from five commissioners do you agree that a consistent legislative reauthorization process would produce a more responsible and productive relationship between the fcc and congress? >> you are right to write to the rule. >> i assume that's a yes? >> yes. >> yes. >> yes. >> i defer to congress on that. >> i also defer to congress. >> if there is a specific suggesting to include in the authorization bill i hope you feel free to follow up with any suggestions you have about that. is something i think would be very useful in terms of making the relationship between congress and fcc more productive, probably more trusted and more understood. senator nelson.

>> set-top box. we do not want to threaten the vibrant market for quality video programming, so mr. chairman, how do you respond to the concerned that i raced i raised about the impact of your proposal could have on existing copyright and contract provisions for video content? does the fcc, to your proposals impact third parties whether they will be able to alter or add to video programming or advertising contained in such programming? >> thank you senator nelson. i i think there are probably several responses to that. one, that which the cable operator puts out should remain and untouched. nothing in our proposal creates an opportunity for that to

happen. because copyright law remains in place, because the language that we used actually was listed from the cable card language now being used by cable companies and their cable card and has proved sufficient to protect against that. thirdly, we actually asked to paragraph 80 of the notice, but if you think that is not good enough, tell us what would make it good enough because it is not our goal to cause harm. >> okay, let's go to spoofing. chairman, i have laid out what is happening, citizens are really getting taken.

they are losing thousands of dollars in the said cases are someone's life savings because particularly a vulnerable senior citizen has been fooled by the number that is calling. many of the provisions in our bill that we recommended to congress in the fcc in 2011, i know you were going to agree it is important for congress to give you the tools necessary to combat the sophisticated spoofing scams. commissioner jessica i appreciate your attention to phone scams, what has the fcc learned from its inquiries into the phone scams, do you agree

that more needs to be done to inform consumers about their options for avoiding or stopping the scams? >> yes. thank you for the question. we have we have bad actors, scammers, and fraud who spoof telephone numbers to wrongfully obtain something of value to them. we have to put a stop to it. i know you were responsible for the truth in caller id act about five years ago. that has been a helpful source of authority for the fcc. what we have found in the intervening years is the fraud happened offshore. it is now coming from international locations. it has also migrated to texting. what i appreciate about your new legislation is you are giving us the jurisdiction to resolve the problems and try to get these bad actors out of the business once and for all. >> other senators have joined me

on this legislation. >> i may be the only membranous panel who is actually been victimized by this. i came home a few weeks ago and my wife says to me, the the irs is calling and say we all the money. i said this was news to me. you didn't. >> you to fall for did you? >> i said why they called the wrong number because i'm the chairman of the fcc. so i got the information and took it to the enforcement bureau and they started drilling down. guess what, this was a u.s. number but it was coming from abroad and we could not get to it. so believe me we understand and are with you with this. >> by the way the do not call list, it doesn't work.

[laughter] i mean it has gotten so bad that i do not want to landline. now i'm getting the calls on the cell phone. i hope you all look at that. i have run out of time of the second round. >> are you tired of hearing from the presidential campaigns in florida? >> as a matter fact, that's right. i was wondering when you are asking the chairman the other minute about what he intends to do in the future, you mean you don't think that president trump would renominate him? [laughter] [inaudible] >> commissioner o'reilly, you gave the shortest answer concerning section six to nine, i'm going to ask you to expand. we have the benefit here of someone who's been on both sides

of this, you are a staffer here during the consideration during the 96 telecommunications act. can can you tell us what believe congress intended when it drafted the language 20 years ago and do believe the fcc proposal lines with congressional intent? >> thank you there are few of us in a different role some still evolve from the 96 act. having worked for chairman tom bliley who is the author of this provision i can tell you i hadn't opportunity and was in every meeting and this is one of his priorities. his intention of that provision was to make the availability of set-top boxes and retail establishments. >> ..

>> >> i don't believe when you look at the text of the language talk about interactive communications equipment and other equipment it gets to the applications side where the application only world.

it is over broad and penalizing going forward. >> the commissioner seems to suggest that that five or $10 app would suffice to make the rule change irrelevant. >> i would even think it is that much. i have 20 video app today i get them directly from the programmer or my cable provider they are free and watch programming on my phone and tablet and on my television through those applications without having the set top box stick it seems there is a question who is being helped by the rule. senator nelson makes a pretty good point about his concerns.

chairman reeler has nothing to worry about. what do you say? >> while everybody agrees it should remain sacrosanct unfortunately nothing actually protects it so repeatedly with interested parties would that street remain in tact to extract adds or insert their own ads later on top? and with market forces just the intellectual property issues led his party recently heard from minority programmers that we'd win this disruption because ultimately without

compensation and protection for intellectual property. >> think for your interest in rural america. of this panel we have senators from states with significant rural populations. and on and on. thank you for coming to some flour county. you will be back in mississippi soon? and i hope we can visit at that time. you will all notice the benefit to public health of the mobility fund and to

connect wireless only households they used to be that that fcc would do no harm to existing coverage in the rural states to was support what you say to that? >> i have been speaking a number of years of the sec for establishing a permanent mobility find. there are spots three have absolutely no coverage and we feel extremely vulnerable. solid floor to continue to work with you with those

resources to target universal service funding. and to insure those who did not have connectivity there are 5 million without any phone service we need to address those needs to look for to continuing to work with you misspending more time in mississippi and south carolina can looking forward to looking at those of healthy donors holes with no connectivity whatsoever. >> and to think the commissioners for their dedication and expertise but don't always agree of every action but i think we agree on the objective of the fcc

was so pretty good bipartisan agreements we have been working together with the chairman and ranking member on the bill to make sure unlicensed is available in the future. we need a clear plan because it is an affordable way for people from all walks of life to get of mine in carriers to offload traffic. wi-fi is the best opportunity ahead to empower consumers and entrepreneurs we have to focus on wi-fi. thank you for your leadership just flesh out why you think this is so important with the issue a policy changes and also the

fcc authorities. >> thank you for your work because good spectrum policy requires the unlicensed spectrum. there is no better evidence been taking a look at wi-fi. democratize internet at -- access, it is vital for the internet of things and how many offload the traffic onto that. $140 billion and that spectrum is an afterthought. every needed unlaces plan. it shouldn't be an afterthought but front and center in policies. >> of the mechanics why it is so difficult to have a

plan? the financial incentives are just not there. >> you're absolutely right the cbo comes through legislation and on spectrum policy delivers high marks when we sell spectrum at auction but it is the shame because of their broader economic benefit so that accounting is dated and mrs. the market short changes our future. >> chairman and want to talk to about the zero rating programs and you have held those in the open internet but i am personally struggling with my view on this and some members of the committee are great

opportunities for consumers to provide additional access but it is in des trochlear that some of the programs are not all that different with the open internet order so flush out your over arching thinking and how the commission evaluates the plan provided by individual companies. >> senator i am not sure we held harmless, but what we did was to specifically say this is something that should not be decided in the internet open order because if you make the case it is helpful to increase choice said lowers cost, yes. and in some instances it is

harmful because it uses the tool against competition and a tool to operate against other folks? yes. so how do you make those judgments? that is the power of the regulatory agility of the open internet order. what we have been doing is collecting information in which we are developing the data points necessary to reach the conclusions that you are specifically talking about. the staff is far down the path. but some think we are undertaking.

with the expert agency policymakers have to think through the balancing act. zero raging programs are coming "fast & furious" to at least violate the spirit of the open internet order but there will be some policy questions in front of the committee. >> thank you very much mr. chairman. coming back to the set top box i of familiar with this provision. the chairman and i are co-authors in 1996 propelled by the way i am also the author of the to not call list. [laughter]

just as relevant today as it was a quarter of a century ago. [laughter] , we want that to be updated as diligently as possible. i obviously had many, many conversations over our legislative intent we just want to break down the monopoly that existed for consumers not purchase but rent a set top box from the company the reason we were concerned was we had just finished the process of those to purchase loans for 75 years americans were forced to rent a phone the black rotary dial phone from the company.

it is a good business model. told clumsier over 50 years. if you can make somebody rent something to pay you $1,800, at that time it was a joke. so we had to break it down so we didn't half to rent any more then comes the cable industry with the same model. you cannot go out to get a different box from an innovative company. the dash percent are still renting the set top box. that is an innovation. 99%. with the average per family?

to madrid $32 per year. to the cable and satellite companies. we haven't seen any innovation or breakthroughs. en to download the app that allow she you to have a new way of accessing this information but net neutrality is what the set top box for the consumer to decide. that is what this debate is about. so mr. chairman how closely can we make an analogy to

the revolution to our needs to open up so the consumer has more choices? >> i think the analogy is bought on. the cable industry is for it they filed with us in 2010 to say they want it the kind of thing we're talking about. and today everybody is inventing. all these imagining things. i pointed out to senator nelson. we still the language from

the cable car license agreement because we put in the item that the language is now a total failure. one considers the bigger agenda. >> comcast is just one company but it is installing thousands of boxes a day. per day. and to pretend otherwise is to ignore that real life experience. they would like another choice.

but they start to innovate real fast because there is nothing like darwinian paranoia to induce competition to make consumers feel good and lowers the price they have to pay to read the box. so thank you. >> i want to thank the commissioners for being here. a lawyer to ask the commissioner if he comes before the senate committee the universal service fund issue in there is some additional issues with the chairman introduced on the side but the main concern is

heaps i urge you all to take a trip through new hampshire with that same experience whether isn't coverage but in support of the universal service fund my constituents are paying $37 million in a year in and it is a bad deal for my constituents given that we have real needs in my state important parts of my state and sell a want to ask you. so you have said immolate olin contribution reform

from the opening and internet order and i try to understand why we have to wait? recently that congress with the internet tax freedom act in to ensure a clean dash insure there not taxed we want to make sure everyone has access. new york to we have to wait for the open internet order? and with that permit extension my constituents are tired of waiting for contribution reform and

putting a lot of money into this. >> you are right we have talked about this extensively. so i know what you speak of. with that inability to get service in parts of northern new hampshire in particular. that is familiar to me. to the extent we're not acting but we are working extensively behind the scenes. just a few weeks ago i met with my colleagues on the board from all across the country and though state staff from other locations in those existing systems to support communication is dependent john the assessment of old-fashioned

long distance service that we know does not represent the future so including places in new hampshire will have to update and working behind the scenes to understand the impact on consumers and business is it changes are made. >> why does the open internet order jeopardize the potential for reform in what risk from the open internet order could end up with a universal service tax that presumably would be contradictory to the policy that a strongly bipartisan? can you both comment? >> i want to be clear. we're not looking to change

but modernize the system. to the extent why this court case matters it is statutory. the collection obligation is on telecommunications so we need to make sure that definition is stable to assess ways to move forward. expanding the contribution base and a connection space system and looking at models from all over the country with the goal to make sure role communications stays strong. >> i will try to be brief but in terms of timing and substance when the sec adopted the open internet order we were slated to give a recommendation of contributions in april 2015 if you look of the 317 page

order we anticipate a short extension of the joint board now we're almost one year over from the opening and internet order to think it is clear that would be pretty unpopular with the bipartisan part and they should not be able to tax the same in light of the fact of the fcc has declined from these regulations of other areas of this one is put off for a later time. and it is also a tip -- telling there already spending money in anticipation from the universal service fund. reading the budget by 1.$5 billion a year last year that would expand a lifeline program without any budget so that is already spent and has to come from

somewhere. ultimately that would be the broadband tax. with those timing and substance. >> my constituents will not pay that tax. >> so i take that off the table. >> will you just respond to that? it is important to hear your thoughts.

there is a diminishing amount of services of a fixed amount of overhead and that has to go continue the up as our colleagues complain the universal service fund has gone up with the percent that it is today. the mass says that it has to the you cannot build out in the rural areas or fund the schools to make sure they are connected to make sure that everybody has access. this is a pressing and complex problem. what is interesting to say boy is the right person on point. she talked about multiple solutions.

>> want to talk about innovation i am very grateful for the senators for working and leading that innovation work we are really very excited about the fact we're now looking at making sure in fact, i definitely want to follow-up with the progress of testing those findings but while we are there i went to a jump into what i think is extraordinarily important and for the record without objection with a letter signed by broadband providers in interest groups talking about the urgency it

is amazing to see everybody signed by comcast is pretty extraordinary. when it comes to the lifeline program are we getting a good return on investment? in the urgency of broadbent. so commissioner can you comment? >> today is absolutely necessary to have access to broadband to have a fair shot of prosperity in the digital age. to many households do not have access. as reported and -- as important for emergency services or keeping a job or what is critical for homework we have 5 million households with kids who cannot do their homework because they don't have

broadband that is say homework gap in we should do that without delay. >> mr. cliburn? >> a 30 year-old program in the beginning that worked hard for those last few million people to have access to a voice only product. . .

those -- >> real quick, i was going to talk about innovation. we made a lot of progress. the next frontier is videoconference calls. can use my last 2nd to talk about that? >> we put forth further notice. video visitation model that

many facilities of gone too. there are people who cannot visit in person their loved one. we have heard reports that this is financially taxing, so we will look to see if the regime is is broken is the one we have already positive. >> without objection. >> thank you, mr. chairman. as you know, this past december a group of seven senators and myself wrote expressing concerns about the fcc recent actions in the area of municipal broadband, and i believe broadband services should be available to all americans the matter where they live, and i am concerned the fcc seems to be picking winners and losers and municipal broadband networks run the

risk of overbuilding private sector networks and taking those limited universal service funds away from companies that rely on them to provide that broadband to rural america. recognizing this in nebraska we passed a law prohibiting municipalities from providing broadband telecommunications services. mr. chairman, and your response to our letter you said the commission has not authorized municipal broadband providers to receive broadband experiment support at this time. it is interesting that you say that given that last month the fcc wireline competition bureau released in order to remove the electric power board of chattanooga from further participation in the broadband experiment program , the very municipal broadband provider for whom

the fcc recently preempted tennessee state law. the bureau said that the electric power board have been provisionally selected to receive 710,000 and rural broadband experiment funding. public notices suggest they are not the only ones. mr. chairman, has the fcc authorized municipal broadband providers to receive funding through that rural broadband experiment program whether prohibition only or not, and if so, how much money? >> thank you.you. i recall letter and specifically doing research behind it. i will be happy to submit for the record the details, if there have been development since then. >> you don't know if the fcc has authorized funding for municipal broadband providers?

you don't know if the fcc is authorized municipal broadband providers to receive funding? >> i just heard you say that that was done in chattanooga. it was a bureau level decision. i was either not aware or have forgotten. >> if you could get back to us on that come i would appreciate it. there obviously questions out there. commissioner. >> earlier in your career you spent time working as an attorney with the department of justice, and the states of north carolina and tennessee have filed legal challenges to the fcc troubling order preempting laws in those statesthe states that do restrict abilities of municipalities to provide broadband services. and you probably know that the department of justice has declined to defend the

fcc order in court. can you tell me how rare in action this is end does it not suggest the fcc overstepped legal authority by preempting state laws? >> thank you for the question and indeed it is exceptionally rare for the department of justice not to take the position of one of the agencies are discharged typically with defending a court and speaks to the fact that this particular order had legal vulnerabilities which i focused on. supreme court precedents, it is clear the agency cannot find the requisite statement from congress to support the preemption of state laws. >> i would hope this committee would take note and possibly look at legislation that will help the fcc and recognizing state law and the future when we have issues come up. also, i am concerned about

what will happen to low-power television stations in nebraska after this year's broadcast incentive auction. we have a population of less than 2 million people. many of those folks live in rural areas where it is not possible to receive a signal from those full power stations in the state. we have a number of low-power television stations, and they are valuable for ensuring that nebraskans, especially those who would normally receive broadcast content from iowa or south dakota, that they can receive local content, not that we have anything against south dakota, mr. chairman. you have consistently declined to say whether they will be able to keep there spectrum after this incentive auction. can you ensure me every reasonable effort will be

made to find a channel so that they are providing a worthwhile for valuable service. >> yes, ma'am. the statute does not establish any priority for low-power stations. there are two things to bear in mind. we will start knowing in 26 days but don't know right now with the spectrum layout will look like afterward. what we have done is to say we will help you after the auction if there is a situation, help you find a new channel, help you share because the beauty of digital is your now in channel sharing and can get an upgrade by sharing with a class a which gives you more in your market.

we are laying out a plan to do that. >> i appreciated it. if i can help in any way with that i would like to run anywhere with that. as people live around any border of the state it is difficult to get that local news which is important, and as we address that need, i think thesei think these low-power stations could be an answer for that. i thank you. >> mr. chairman, thank you. i grew up in nebraska on the border of television and radio, and it was not that detrimental. >> i had to watch the royals. >> we saw the broncos. [laughter]

mr. chairman, commissioners, thank you for your presence and let me start with the spectrum conversation. i will forego comments to see if i can get to this question and more. when do you anticipate that it will be complete? and do you anticipate that completion of spectrum frontier proceeding will lead to an option 17? >> one of the things that has yet to be worked out as out to deal with existing incumbents. >> the consequences of this auction will determine the nature or necessary steps, learn something. >> no, sir. we get the 600 megahertz option which will begin later this month and then

insofar as the 5 g spectrum, the millimeterwave band spectrum, we are in the process of working through how you deal with sharing and other issues for folks that are currently incumbents. that will lead to the kind of resolution that we need to authorize use which we will do this summer. >> not an offer should take -- not an auction issue. >> which will lead to the question of how we dispose. >> given the nature of high band spectrum it seems to me we will not only need more spectrum but the support of infrastructure and its deployment of higher frequencies. are you on track to complete the small proceedings for the end of the year? >> yes, sir. >> let me turn to the issue of the impending auction,

one of the concerns i have is, my assumption is the spectrum crunch is the greatest in urban areas in my concern is what that means to rural. we have the $175 billion, the 39 month timeframe. what is the plan for clearing spectrum compared to rural versus urban? is there a distinction? i want to make certain rural is not at the end of the line when it comes to reimbursement or at the end of the line when it comes to trying to find a contractor. >> that is a great question. the reality of when you go is that auction is a daisy chain. spectrum is a daisychain. how you set up spectrum in chicago affects what happens in kansas.

and so they are all interconnected which means that there is not one higher ranking spectrum than others. if you have not gotten it right in one area the daisy chains up and screws of chicago. so the answer to your question is, we have to solve it on a broad base. >> i should not have concerns that rural will take a backseat while spectrum is utilized someplace else and then we have problems with accessing the fund or enough time to get towers built. >> because of this daisychain issue, if you cannot. in kansas, you may not be able to clear it in chicago. >> if there was a bias it is technically incapable. >> yes. >> good. >> and then maybe this is to commissioner o'reilly or you on the issue of rural

broadband. you and i have this conversation when you came seeking conversation regarding your nomination of confirmation and have been attempting to reform the order in regard to an issue that is important to me and to kansans, the universal service fund is important to us, as you would guess, and my question, as you make usf reforms to that reimbursement model, can you provide me an update 1st with when the carriers will see an actual order and assure me that there will be enough support not only to recover the cost of providing the service that many carriers have made command utility service.

i've expressed a concern for a long time that the our us and fcc seems to be incompatible and your orders suggest there may be a federal agency that will be owed significant amounts of money payments and that serviceability was determined at a time in which the universal service fund is different than it's going to be under your order. >> there are three votes today.

>> something we talked about a lot. we will not cross the threshold. however, and i don't mean to throw this but i want to emphasize how this was a bipartisan effort. >> goes into the item. the changes, legacy carriers in terms of build out and things will improve the experiences.

we also make clear. >> it is such that a carrier will be dramatically impacted and we want to be sensitive. >> thank you. >> thank you, mr. chairman. seeing as others brought up sports casting, every american ought to have access. probably not going to agree with me.

they grand the position. >> following through each of those. >> a simple yes. >> concerned about packer games. chairman of an independent agency. >> yes, sir. >> the report regularly.

>> no. >> a number of troubling findings. i would like to ask a couple of questions. we'll where you had legal advisers that are troubled about the record to support the fcc rulemaking. >> i hope that the lawyers are constantly second-guessing each other. >> but you are aware. >> that is what was going on. >> that is what was going on. also debate and discussion. >> holding for public notice and written up, but you do not go forward with the public notice to beef up the public record. >> no. >> why that wasn't issued. >> thank you. i think what we did was hit

pause, and i publicly announced that we were hitting pause for the purpose of enriching the record and i think at that point in time we know the big dogs are going to sue on this and wish to make sure we have eyes dotted mts crossed. >> the concern and a 1992 office of legal counsel opinion, the concern about the independence of the agency. and the interesting way to do so is to discuss matters pending. there were a number of medians we uncovered in our investigation where clearly

this open internet ruling was being discussed and yet there was never a record made of those ex parte communications. >> i did get checked the rules. >> substantial significance. >> communications. >> the path your going down. going down with this statement. pretty significant. >> file.

>> i was shocked. his opening statement that the fcc would get out of the way to let innovation and competition rain. regulating the internet, getting out of the way and letting innovation competition. >> i do not think it is getting out of the way of innovation and investment and the agency did not until november 10 of 2014. but we have seen is the fact that among made to five-- major and small providers that investment and innovation is slowing and we heard from a number of small

that she is shelving plans to upgrade the network in rural arkansas precisely because of the uncertainty and burden. we have seen the first-ever decline in broadband wireline investment in the internet age outside of the tech bubble bursting in 2001 and the great recession in 2008. it is telling that these are spending billions of dollars in companies like aol bring investments abroad because presumably to return on investment is now greater in areas outside of the broadband infrastructure which is an unfortunate thing for the american consumers. >> they prove that. e-mail after e-mail. we do not believe there is adequate notice. nine separate aspects were thought to be lacking.

>> what he has just portrayed as facts are not. investment is up command i can quote you from the statements the companies themselves make. cyber is up 13 percent over last year. usage of the internet is up, and that has driven what you want to be up, which is increased revenue per subscriber for the internet companies. in the last year since the open internet order to place. >> your own staff said that. we worked with the staff in

the job is to constantly say hey there issues you need to address. broadband is not being reasonably and timely deployed. which is it. >> they don't have enough. >> part of the reason why the broadband is not being reasonably deployed is because the policies of failed. that is part of the reason why we see this decline. there is a reason why google has a greater market capitalization than every cable company in the united

states combined. it is no accident that this is depressing broadband investment. >> you can say that satan say it. >> i be happy to submit the sworn declarations. >> the companies provide under penalty of sec to their investors. >> what they will say. >> at&t and comcast in companies like that. >> peak players. >> this is good stuff. >> we have next up.

>> i would love for the four corners. >> thank you. >> a high number of valuables. no idea what the exact commercial value is. extremely useful to the commercial market. we don't know the cost until its value by somebody. we you be supportive? supporting the actual daughter -- dollar value? >> some of that would require congressional changes in law.

in terms of the theory and concepts plywood. actually ought to put it. the agencies themselves. i want to be on the stick side as well. >> thank you. there are many complex issues. ensuring we don't create a safe harbor for terrorists and bad actors. how we move forward with encryption and technology. >> it's my way forward.

>> as you know, failed retransmission consent negotiations have resulted in blackouts. the fcc has undertaken a review of the totality of circumstances test the stellar legislation with the hope that we can reduce the amount of such blackouts. can you provide the committee today with any indication on when, when the fcc plans to complete the current totality of circumstances? >> we are on course and speed to maintain the date you established in the legislation. >> very good. when it comes to additional spectrum and spectrum pipeline issues, last auction scheduled is this year and we know that it will not produce enough spectrum availability to satisfy consumer needs. mobile data traffic will be over 600 times greater next

year than just ten years ago and a further moving toward a 5 g world where we can do things we never thought and will the enhancing the way it gets learned taking telehealth to the next level but need more spectrum to achieve it and are hoping the fcc moves forward in a positive direction. what else can we be doing diff free of commercial spectrum. if you would like to outline more come out of kuwait -- how we create incentives? >> i talked about the opportunity cost for putting the burden on the budget. there are number of things we have to do. get a better response. difficult to deal with. i spent 20 years working with them. we need to have better direction. representing agencies and we

ought to work on changing that mission as well. on terms of things that will help to my number of committees on fighting. >> thank you. working on a sponsor. they want to call it the keep digging bill, i don't know. >> one digg, one climb comeau one citing, that is what we need. that way it is not just you dig up streets a lot but crime the -- climb the poll and have citing on the antenna once, and all that comeau we are all in violent agreement on but could use

legislative help. >> i dig it, so that is good. and i wish to thank the broadcasters for working hard to find a solution some of the problems we have had. they have been working hard to find a solution. the two counties got the broncos which is incredibly important, but they did not have access to colorado whether were news. we have to fix that. they have adopted rules to petition, but what more could we be doing, can you be doing to ensure they get colorado broadcast? >> addressing that to me? >> yes. >> moving with dispatch. we were frequently here. saying wait a minute there is a whole. you pass the ball the us.

it is up to us. >> i might be the only person who has been to la plata montezuma. i spoke with people who said they never saw the governor of theirgovernor of the state on television once. >> they may regret that if it changes. >> the point stands, they stands, they deserve to have access to local news, colorado football games and generally feel like they are part of the state. should work with the market modification process to make that happen. >> and thank you. thank you for being there as well. >> all right. thank you. >> thank you, mr. chairman. thank you for being here today. it is exciting to hear you talk about new technologies. i know we chat about

overbuilding, efficiencies. thank you for the support on the amendment, a step forward. something we ought to look to expand. he often talked about the need to make sure programs are managed and well then i see the commissioner adding redundancies. for many of us who are looking at rural areas, we are underserved. can you really say that is an efficient use of universal service funds and should the commission be focusing on areas with no connectivity like those in montana? >> no and yes. no, it is not a proficient use of funds to subsidize competition, and that is not something that should be going on.

can we do something about it? yes. i believe that we are. one of the issues that i know you and i have talked about another members is the mobility fund. and we will come out with a new proposal for how we fell comeau what did you call those? the high-fat doughnut holes. >> unhealthy doughnut holes. but we have to do it in a way that does not subsidize the doughnut where there is competition because we have got at least for licensees who are not covering the doughnut whole. we want to make sure that we support one of them, one to fill the whole, but not to take the money and compete with others around which will be an art form.

>> and that plays important for rural states where we are dependent upon small businesses. i have the experience myself, a lot of the commission's recent proposals from the neutrality to the set-top box proposal seem to disproportionately impact small businesses who do not have always full of compliance staff. in fact, i hear more than anything else from small business owners about the compliance burdens that they routinely face and want to thank for of the commissioners who have been to montana in the last six months. i think we can put you on the payroll for the montana chamber of commerce. you get the quality of life draw. commissioner riley, you visited montana and have the opportunity to see how small business owners contribute to the state. manymany only have a handful of employees, no armies of work -- armies of lawyers.

do you agree that it is reasonable to exempt small businesses from some regulatory burdens such as enhanced transparency? >> absolutely. there is legislation considered in the house, but my colleague and i have articulated a view point that this should have been addressed by the commission and was not. legislation would adequately and properly address it. is that commonsense? it is an overused term. >> suggest that this was undo. >> i agree with my colleagues to the right.

this is something we can do to the agency. exempting for the next year, but it would be useful if they contemplated the longer permanent exemption. >> regulations and uncertainty, that is the 12 punch. thank you for that added peace providing certainty. i want to pivot to broadcasting. you prioritized unlicensed spectrum. under the current proposal it is not clear that some low-power stations and translators will stay on their. this is a big deal back home. what assurances can you give to small businesses who may be forced off their into the montana communities rely on translators including the denver broncos. >> thank you, senator. as i indicated before, we don't really know what the auction will produce.

i think that the impact in areas like montana will be different than the impact in other parts of the country which is a saving grace. but what we have done is to say that for low-power television we will make special efforts even though was never addressed and statute and specifically was no priority for dealing with it. we said we will help them find new channels, help them chair and end up with classic status. we have heard you loud and clear. i know that it is a matter of angst because people do not know until they know, but when we all know we are ready to spring into action. thank you. thank you for your concern. >> thank you.

>> thank you. thank you to each of the commissioners for being here today and your tremendous leadership each and every day. i enjoyed our recent discussion in my office regarding the testing plan. leading with the department of transportation to determine whether it can be opened for shared wi-fi use. they have heard me say how important this is. tens of thousands of lives, on the cusp of having cutting edge so we want to make sure that we do it right and move forward with the speed. the testing plan is executed completely and on schedule.

but i want to talk about some of the challenges great skills to contribute. they are working in tech industries, automotive, advanced manufacturing, they love to go up to god's country, the upper peninsula the because of the incredible quality of life, but they cannot. i was pleased at&t, frontier command century link has accepted over 60 million annually to extend service to some of the most rural parts of my state, but we are all aware the work is far from over. critical that the fcc support mobile broadband as

part of the connect america fund phase ii and should strive to be technology neutral so that we have a better shot at innovating our way out of the problem. perhaps we need to ensure the fcc is the best available data to base its multimillion dollar funding decisions. i was pleased to join colleagues yesterday in a letter led by senator mansion and senator gartner. if we continue to rely on a map we will not close the role and waste an awful lot of money trying to do so. a nonprofit in my state initially received broadband opportunity program. to develop an accurate and up-to-date statewide broadband map that served as an invaluable resource for residents but also to a

service provider industry. connect michigan than supply the information to the federal government for inclusion in the national broadband gap, they are piecing together funding and forging new partnerships to keep their critical operations going. my question to you is, i realize the support of broadband may have been more successful than others, but i am concerned about the sufficiency of solely using data supplied by carriers to fill in the national broadband map rather than the more granule state collected data used in the past. and i know the fcc is doing work to collect data to prepare it for inclusion. do you think this will prove to be more accurate than previous data collection efforts?

>> thank you very much. >> the 1st cut was the coverage maps that the carrier use. that did not work. because that is our franchise car license area. secondly we went out and had folks to drive tests. and that worked in areas where there were roads or at least main roads that did not work in rural areas. but we are tryingbut we are trying to gather is information out of form 477 that is much more granular reports i'm getting is that we are. we have been denied funds for the last two fiscal years.

we have requested it. >> federal agencies to work together to create accessible open inventory of assets as well to bring in more data and they want toa want to commend the chairman for including in his mobile now legislation language that would create a federal infrastructure asset database, but it is important the committee consider the value of further incentivizing states and local governments to participate in the database and i have sponsored an amendment to the mobile now bill that would ask agencies to complete a report on the issue and report back to the

committee within a year. would you agree or do you agree that we would achieve more comprehensive and accurate understanding of our broadband infrastructure assets are not only including federal assets but those owned by state and local governments? >> you cannot manage it if you cannot measure it. i am for all the more data we can possibly get. >> and a strong supporter of that amendment.amendment. thank you so much. >> thank you, senator peters. up next senator cloture. >> thank you. two minutes, and i appreciate the senator letting me go ahead. i understand the commission is close to finalizing action on an order. i want to thank you for that and quickly how do you inspect -- expects vista

driver all broadband development. >> i would like to say through the roof. it is significant. we have to make sure that the money is not just going into the market but it is going to the broadband holes in the market and filling those areas. >> very good. as you know, i have been a strong proponent. do you think the policies are a sensible way to facilitate broadband deployment? >> yes.

can't comment, and i appreciate the commissioner bringing up the bill that we have. with other senators as well and always appreciate commissioners work on the drop call issue, and the rest of you as well. your indulgence. >> thank you. youyou. he did that in under two minutes. very impressive. >> a good example of bipartisanship. >> thank you. i appreciate the commissioners coming to testify today. a lot of discussion on the challenges of rural states, senator danes., the combination of rural states and small businesses is a big one that you are aware of.

as you know, you kind of have those issues magnified. because many communities do not have roads, let alone telecommunications. so i appreciate the focus of all the commissioners. chairman, commissioner, has everyone been to alaska? great. good. love to have you back. i appreciate it. you can talk about distance. going through the list of rural states. we have boroughs that are bigger than mississippi. no offense. let me follow up. your visit spurred our

wireline and wireless server carriers to work together to address the unique challenges we have in alaska. these are making progress on expanded wire and wired and wireless broadband capabilities. they will continue this. there was some concern that you are not considering and the proposal with regard to the natural rate of return, reference to what we are now referring to is the alaska plan. the commission has been working on. can you assure me today that the commission will act on the alaska plan for rural

wireline and wireless services within 60 days so that we have some certainty. >> i have it on the schedule for the 2nd quarter. i hope we adopt the rate of return order yet this month. trying to do quick math moving in the early 2nd quarter, but i intend to have this before my colleagues in the 2nd quarter. >> no later than 2nd quarter. >> it is an important constituents. >> in the current rate of return decision i asked for the alaska issue to be addressed right now recognizing there is rural and then rural alaska. >> that would be ideal. that would be the

second-order effect. drop dead date in terms of certainty. >> no kidding, yes sir. >> just a yes or no. >> absolutely. >> going back to certainty. senator peters talked about the connect america front phase ii and again although that deployment started for phase ii last september the fcc has yet to publish in order for the alaska price kept carrier who submitted a detailed plan over a year ago to support broadband to the thousands of unserved alaska households.

phase ii for the alaska press carrier? >> the two roll together. >> again, i think that is important. >> let me ask, broadening out, i know you have been focused on the couple issues. any commissioners can mention it. commissioner rosen more so, you mentioned this in your testimony. the issue of streamlining the infrastructure permitting process clearly impacts alaska particularly on federal lands which we have over 60 percent of, but it is important to help to encourage and apply new technologies cannot pardon them, can you give us a

sense, is there consensus on the commission that this is something we need to do? the challenges of this broader infrastructure deployment issue comeau we would be interested in your suggestions on how to streamline the permitting process i would welcome any thoughts that you might have on this broader issue which is not just one for alaska but for the whole country and particularly for states that have a lot of federal land as well.

>> yes,yes, senator. i put forward a number of ideas that would be helpful. i will just highlight with you, pushing the envelope, but i would suggest the flipside is it may require more legislation. folks in the senate, but it is something that will probably be necessary. it is work that will be necessary and we have had localities. i referenced one in a speech in florida where they put up and that month later they pulled it down.down. we have to figure out how to get the infrastructure out there. >> commissioner, on the issue on federal lands. >> yes, federal lands are one 3rd of the national

real estate, and some of the slowest places to deploy broadband. middle-class tax for the job creation act, this committee has section the required federal authorities to have a master contract for deploying infrastructure of federal facilities. i think the next step would be to actually require federal authorities to use that contract. it is the missing piece. were we able to do that we would harmonize the contracts one 3rd of our national real estate. >> and you don't have the preemption issue obviously. >> exactly. >> thank you. >> thank you, mr. chairman. everybody on this panel has provided a very distinguished service to our country. thank you for your service and for being here today. all of you are familiar with the abuse of cramming, which

is the unscrupulous practice of wireless carriers allowing 3rd parties to add charges a monthlyon monthly bills without authorization or even consent or knowledge sometimes. commissioner rosen morsel, i want to thank you for your visits to connecticut familiar native state in hartford to join me several times to discuss this abuse and to announce refunds that are going back to consumers as a result. at the fcc hearing about a year ago i raise the mobile cramming issue and asked several of you if you would commit to initiating and fcc rulemaking to apply the conditions of the consent decrees to the home market which i think is important to protecting consumers long after the consents decree

expired. good, but all carriers should be required to protect consumers from deceitful practices, and stop anyone from profiting from them. i would like to ask each of you again to open a rulemaking on wireless cramming and asked whether you will commit individually to that rulemaking. >> yes, i would be open to any framework that will allow customers to gain control and for us to have more tools at our disposal to protect them from this very serious issue. >> i am in favor of more specific rules. i believe it is important. >> to be clear, 1st and foremost it lies with the

chairman. i will give it the careful scrutiny that it deserves. >> yes. thank you for giving me the opportunity to appear with you to discuss this. cramming is fraud, digital age pickpocketing and is good that we have had consent decrees that allowed it to occur but it would have been better to prevent it in the 1st place. >> and is there, if i may ask you, a factor that is holding back the beginning of rulemaking? >> not really, sir. this is, frankly, resources and timing issue. i would point out that we took an enforcement action on this against for major carriers for about a quarter of a billion, most of which went into consumers pockets, not any treasury.

and so we are vigilant on the issue and the interesting thing is that you can do that absent a rule because the statute is clear, but if there is a need for rules as well, then we ought to have them. >> well aware of enforcement actions and commend you for them. there was the reason for the various meetings, simply to make consumers aware that they need to claim the refund. i want to in the short time i have left talk about the enforcement bureau which i think is a critical part of the fcc. as a former prosecutor i know. breaking the law are not always happy about it and

make various claims like lack of due process. so not surprised to see that happening in objections to the enforcement bureau catching people who break the law. in many instances it is just that simple, and i hear from constituents all the time about unexpected increases in their monthly cable bills to never-ending robo calls that harassed them even though there on the do not call list to all kinds of other abuses and violations of law of the enforcement bureau pursues. ..

everybody thinks about enforcement in terms of penalties and the fact of the matter is that if you have done something wrong, there should be a logical consequences, but we are also protecting those who do things right. the most anti-competitive activity that exists in the

market today is when your competition cheats and so this is -- you need to have a logical consequence for your bad action. this is how we make sure the good guys are being penalized by the actions of the bad guys and so enforcement is a very important competitive tool. i think you have just made one of the central points because the good guys are the vast majority and with these rules do , laws regulations rules, is essentially protect good guys in business from the unfair competition, the people who break the law and try to cut corners and thereby cut costs and undercut their competition so in a certain sense and i think this point about antitrust

enforcement and consumer protection enforcement is in a long-term sense pro-business, pro-job because it enables people who play by the rules do have a level playing field and i think that of course enforcement depends on the enforcers and the enforcement bureau having enough resources to make a decision about how to enforce the law but i think your central point is very well taken. thank you. >> thank you senator blumenthal. senator nelson has just a quick question. >> given the fact that the most important call that a person may make his 911, tell me what you plan on the next generation for 911 and what you do think we should do?

>> thank you senator. i think we have taken the 911 issue as bout -- about as far as our authority takes us and it now comes to this congress. we have just sent to this committee the recommendations of the year-long task force on next-generation 911. it is my understanding that the 911 providers themselves are in the process of specifically turning that into here is what is needed in terms of specific legislation but i fear that this is something -- i was involved in the 1999, 911 act that made it a national number and i think it's going to take once again congress stepping up with a national policy on 911. >> thank you. senator nelson the only thing

between you while now and a restroom restroom break is senator mark and myself so senator markey has a follow-up question. >> i like the sequencing. so thank you mr. chairman. on february 26 of last year we opened the next chapter in the history of american innovation and that is because on february 26 will always be known as the internet freedom day. the fcc stood up for net neutrality and declassified brought van service and a title to the communications act. it was a major victory for consumers, for our economy and for democracy because that day was a day where the fcc stood up to the best ideas not merely the best funded ideas and we thank you for being on the right side of history. so what happened in the united

states as the fcc promulgated those net neutrality rules? well nearly 68% of all venture capital funds invested in the united states went towards internet's civic software companies in 2015 so congratulations. you have created this engine of innovation and capital flow into these smart companies, the innovative companies and it's clear the fcc got this right and there are a lot of other places you can put things and the decision goes towards that sector and young people in colleges graduate schools who want to continue to innovate. you have made a lot easier for them to do so. what i would like to do

mr. chairman if i could is to ask you a couple of questions. the first is, is it unusual for an independent agency to communicate with the white house? >> now serve. >> is a difficult for an agency to communicate with the white house? >> congress, everybody. >> have other congressmen weighed in on rulemaking since the fcc's founding in 1934? >> yes sir. >> do you have any list of those that come to mind that you think may have acted during that time? >> i happen to remember one time when president reagan called chairman fowler to the oval office and i remember that story because i happen to be around at that point in time. >> i remember that story very well and i don't regret president reagan for wanting to do that but i do remember that's extremely well. i didn't agree with chairman fowler on much but i did appreciate the fact that the

president talked to someone during his administration. could the fcc follow the process used by both democrat and republican commissions when crafting the open internet order? >> the process has remained unchanged senator. >> i want to make clear the fcc has done precisely what congress intended the commission to do classify broadband internet access service going to its best understanding of the technology of their day and how consumers use that technology and i am confident that is how you are proceeding and i thank you for that and i think the commission for that. i'm also pleased with the recent steps that the fcc has taken to increase consumer privacy protections and is part of the commission's correct decision last year to reclassify broadband title to the commission wisely chose to apply

section 222 to broadband extending the duty to protect the privacy of internet service providers information. i believe an isp has a duty to protect the privacy of consumers and use the companies wireless infrastructure to connect to the world. centers ocher and blumenthal and i have written to the commission urging the commission to initiate a rulemaking to protect the privacy of consumers who use broadband and i do believe you should have a comprehensive definition of customer proprietary network information to ensure transparency and consumer consent if the information is going to be reused that their privacy is protected and protect consumers information by requiring isps to implement strong data security measures.

can you give us some idea mr. chairman of when you plan on moving forward on rulemaking on broadband privacy? >> i hope it's very soon and that includes this month. >> that includes this month. excellent. and also i sent you another senators a letter on the proposed acquisition of time warner cable and bright house networks by charter communications and my hope would be that the commission would look at it ensuring that the guiding principles competition, competition is you have said repeatedly mr. chairman and ensure that it gets the kind of review that insurers the proper protections are in place for the competitive marketplace. >> thank you mr. chairman.

>> thank you. senator markey. >> just a couple of final points that like to make. one is i want to say as i mentioned earlier this committee will be marking up the bipartisan act tomorrow which will help advance wireless innovation and deployment are the key of ranking member nelson said my belt locus is on the high-frequency wave bands that are going to be critical for wireless services. our legislation intentionally builds upon the good work that the commission is doing in spectrum frontiers proceeding so i was glad to hear earlier today that chairman wheeler expects this order by summer. chairman wheeler you have been quoted as saying that in the year that you have left in this job every time that you appear before congress the number one item that you will talk about is the absolute necessity of

congress to deal with the issues of next-generation 911. that was your prepared testimony that follows up on that. we have also recently seen an increase in organized stakeholder advocacy on this issue which echoes your concerns will you be receiving, and i'm going to rephrase that. you will be receiving questions from the commerce committee in the coming days as we look forward to this issue and so the question is do i have your commitment that he will cooperate with this committee by responding fully in a timely manner? >> you bet, yes sir. >> very good, thank you. senator cantwell was on her way racing back over here but i don't think she's going to make it so thank you all very much for your time today and i know it's been a lengthy hearing but a lot of our members as you can see have a great interest in the issue before the commission. because the committee may take up reauthorizing -- the hearing

record may remain open or close of business this friday. during the same senators are asked to submit any questions for the record. upon receipt by friday march fourth. this concludes the hearing. thank you all. [inaudible conversations] [inaudible conversations] [inaudible conversations]

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senate leaders met with president obama on tuesday to talk about the supreme court vacancy. senators mitch mcconnell and harry reid discussed the meeting on the senate floor earlier today. here is a look.