of information particularly under this category of not reasonably described that i don't think shows transparency and clearly does not reflect the president's call, at least public call for transpirnsy. that's, so again because of the relationship i would like to spend some time with you all and look at what's going on. i think there's a serious issue there. i'm sure there's a good explanation, but i don't understand what it would be. another issue that i ran into, you were talking about the budgetary issue thing. about i guess your personnel requests are basically flat, is that correct? >> correct. within of the things that also struck me rather large was, i apologize, i'll complain to my staff about that. particularly after 49.5 my eyesight's not that good.

but it's salaries. the increase on the fec of employees earning $150,000 or above. so even though the number of employees may be flat, those making $150,000 and above have increased rather dramatically. that's what this chart reflects. >> you would like to submit that for the record? >> that would be great, if i could. thank you. it's a huge increase of individuals that are now earning over 150% -- $150,000 in salary so. let me see if i can get you some of those numbers. down from 46 in 2008 individuals to 431 in 2009 to 535 in 2011. that's a pretty say on theishing increase. so what changed between 2008 and 2009 that required such an increase in pay is it different

individuals, is it increased -- i'm not sure what that actually shows us other than that the fact that the numbers are pretty astonishing? >> so i'm not familiar with the reasons for that particular increase in general the work of the fec increasingly requires highly skilled engineers, economists others with advanced degrees to do our work. overtime the employee base at the fcc has become more and more focused on that as we move from paper to digital and there have been consequences for the employee base in that regard. >> so that the part of the reason for the trend. a second is the -- i'm proud of this, the retention at the fec has been reasonably high and that's affected those numbers as well. but i certainly offer with work with you on understanding the numbers. the work that the fec does in terms of generating auction

revenue, unleashing investment innovation in the space. i am convinced based on my time at the agency absolutely requires first rate talent engineering, talent, economists, lawyers, and we certainly lose many, many, many prospective potential employees because we can't come close to competing with other offers that they have. and that's just life in government and i understand that. >> i understand that. again, because i'm not being accusatory. when you look at the numbers in 2006 there were 38 employees. if this is totally accurate. and this is what we found. by the way, this is from a website also a federal government website. all this is public and i do commend you for that. 2006 there were 38 employees in your agency earning $150,000 or above. in 2007, 48. a small increase. 200846. and then from 2008 at 46 to 431

in 2009. 517 in 2010. and 535. i'm not great at math. that's a pretty substantial increase no matter what. we're not dealing with people that it went from $75,000 or $85,000. we're talking about people maybing over $150,000. those are astonishing numbers. again, i want to thank you for being open. you understand that these raise some serious questions to mr. alexander mentioned about make you can look at ways to reduce that 2% increase. when you have these increases in salaries the number of individuals making this much money these large increases that right there may be where that 2% is alone and i'd like to sit down with you and further explore this. >> thank you. >> thank you. mr. yoeder.

>> thank you, madam chair. appreciate you both being here. i appreciate your service to our country. a chance to have a conversation this afternoon as we look at what our budget priority are, how we move forward. certainly this committee and this congress continues to be focused on job creation, economic growth, reducing and bringing our federal expenditures in line with our available revenue. i'm sure you share those goals. i'd appreciate your comments this morning. one of the questions that he was asking was related to light squared. i don't know that's been discussed today. harkens back to last year while we were dealing with this issue many of us were getting a lot of concerns and complaints from various industries across the country from federal agencies even that the progression of light squared would have an effect on gps. i think we're all familiar with how that has progressed. we move forward in the

appropriations committee myself and congressman -- one of my colleagues and i move forward and i move forward with an amendment to sort of instruct the fec to fightin' up its process on light squared to hit some benchmarks to assure congress that light squared was not going to violate existing gps spectrum and part of the challenge is folks like myself have garmin in their district and other companies that rely on certainty in these markets before they invest and grow and build technology. it can scare off potential job growth and potential investment. that's in the president's budget this year. my questions are one, where are we going with light square if what's the latest. how do we avoid getting back in this situation again where there's concern across the spectrum by folks who are concerned about this.

how do we avoid getting back to this position where ashurdly there will be other companies many the future who want to expand and grow jobs which is what we want them to do, but how do we do it in a way that doesn't offend there. >> the goal in that proceeding one was to free up more spectrum for mobile broad band. we do have significant capacity challenge that has the risk of restraining growth and private investment. and the second was deregulatory. the -- that spectrum had an old regulation on it appropriating terrestrial use. and the effort in connection with that was to remove that

barrier to terrestrial mobile broad band build out. to the start we said if doing so would lead to legitimate interference issues we would have to take those into account. as we saw from the abs we are taking those into account. it's an open proceeding still. so we're continuing to be analyze the record. we were very clear from the start of it that we would have to address that. there's a larger issue that i do look forward to working with you, all the members of the committee. there's no reason it shouldn't be a bipartisan issue which is how do we make sure that we can remove barriers to spectrum use and that the incentives are in place to avoid interference being caused by devices being interfered with by spectrum outside their lanes. this particular proceeding revealed that is a real issue.

it could get in the way of unleashing the full opportunities of investment innovation and terrestrial mobile broad band. it's something we all have to work on together to say to your question, learning what we learned from this, how do we make sure that we can move across the board to the flexible use that the commissioner mcdowell and i both agree should be the norm for spectrum policy. get rid of regulations that limit use, but also have incentives to make sure that we don't wake up and say there are interference issues here that prevent us from deregulating. >> well, the number one rule inspector policy is to prevent harmful interference. beyond that i have advocated for six years at the commission flexible uses. sometimes many the past the fec has said certain frequencies shall be used only for specific pharaoh purposes. by the time that's adopted and

investors invest and engineers build out the market has passed that idea by. then you have to go back to the fec with another rule making which can take rules to change what the next micro management might be from the government. so i think it's best to have flexible uses. as far as the light squared issue that did not rise to the commissioners at the fcc. any detailed questions i would defer to them on that. >> i think it's useful to continue to keep that situation relevant as we discuss how we're going forward. i think there were a lot of fears that whether they were going to come true or not those fears have an impact on investment decisions that other companies make. as we go forward there are companies that are making investments currently today in gps technology that may have an impact on future decisions and future lane issues that boy a

long-term guidance, a long-term vision might avoid some of these problems down the road. there was a general concern that we're getting that they were unsure if the fcc would assure the world that light squared or other companies would have zero impact or a nonimpact. that just seems like something that should never be in doubt. it's almost like this seemed like the effort we were talking should already be in the prime directive of what you're utilizing to make this determination already. i don't know how we got to that situation in the premise that maybe the fcc would approve it even though it would impact gps, but that was the belief in a lot of -- in part i know you're still going through it. that was the belief that that would occur. whatever we can do to i guess re-assure those companies that are currently invested in gps that we won't approve technology that would affect their lane i think would be useful and helpful going forward. also want to ask just beefly

about broad band fiber. just as it pertains to partnerships of public, private usage. it's my understanding that there's -- some of the federally funded broad band projects that not all of the fiber the utilized. what is the opinion of the fcc on sharing, selling or leasing of excess fiber in those situations? >> excess fiber of of government supported fine her. >> right. to what extent do we have government supported fiber. is it all private sector or do we have private-public partnerships. >> i'm not sure i completely understand it. overwhelmingly broad band infrastructure in the u.s. is private sector funded and built in the university service fund context there's support for private companies so that rural america can get broad band.

there may be some local municipal, broad band networks. but perhaps i should offer a follow up. >> that would be fine. the final question, i had for this round deals with airplane communication. and i know some of this really has to deal with the faa. we constantly deal with constituents and folks related to just travel and communication that occurred on airplanes and even the most recent i think it was alec baldwin situation playing games when the plane was taking off. this is in the news a lot. to what extent is the fcc engaged in the ability for telecommunication devices to be engaged in airplanes and the restrictions that currently occur on airlines today? >> i saw a report that the faa is taking a fresh look at its rules regarding ipads and other devices and exploring the possibility that it might adjust its rules to accommodate the new

kinds of devices the way people use that. i would encourage that. and some of the traditional concerns about people talking on phones, on planes may not apply to kindles or ipads. i would encourage the faa to look at that and to ensure that it's doing as little as necessary to protect public safety. >> madam chair one more just related to mobile dtv. i have sprint based in my district. i know both of you have been strong advocates for auctions wireless spectrum-launch of this will be another way for consumers to access videos to access local news and information especially in times of emergency. what steps is the fcc taking to make sure it will nourish.

>> we make it clear that the flexibility that broadcasters have to launch mobile dtv on the six megahertz they have shouldn't and won't be affected by the incentive auction process and repacking. they have flexibility to launch it. i encourage i if vacation in the space. the market will decide whether or not it's something that will work. >> you are welcome. >> first let me ask you, chairman, could you submit to us the list of the 200 regulations that you've eliminated. that would be really helpful to have then we can use it to coerce others to follow suit. let me just ask you, both a

little something about universal service fund. i think it was saturday afternoon i was meeting with some constituents who are a little mom and pop cable company. the contribution rate for the universal service fund has doubled over the last ten years or so. which obviously has led in an increase in fee to consumers. have you all done anything to address that particular piece of that our fees and the like? >> the contribution factor reform is something that staff is working on and that we expect to move forward with at the fcc in the near future. on the other side of it in our u.s. reform and online reform the commissioner and i and our colleague mr. clyburn worked together to limit the growth of those funds. on an aggregate basis that sets

the fees that are collected from consumers. the contribution proceeding will look at the allocation of those fees basically who pays it in. the most important thing on the ensuring that the aggregate level of burden on consumers is minimized were issues that we addressed in the proceedings that set the output. we do have to address contributions because the world has changed and the ways that that money is collected needs to be looked at very carefully. i do want to emphasize that putting the programs under budget, setting savings targets et cetera, has already put in place an assurance that the aggregate burden on con sewellers will be within the limits we identified. >> so tell me how the new connect america fund will impact

rural areas? >> it will efficiently disperse funds to local communications providers to build out broad band in their areas. over the years a whole series of i ineefficiencies, waste developed in the program it would be hard to say the money was going to the intended purpose. it was for traditional tv's service not broad band. the purpose was to modernize the program from telephone to broad band. eliminate waste and eofficialsy and ensure accountability so that any money going into the program gets spent on meeting the goals of the connect america fund. getting broad band to rural america. >> some of my rural providers was with a small cable company that i had another meeting earlier in the week with a small

telecom as well -- i should probably call it cable company because there is a difference. and so they are really worried not the new changes to the connect america fund are going to put them out of business. so how am i supposed to respond to those concerns? >> we're listening to those concerns very we've britished a waiver and other processes that as we go forward we can hear the concerns

from companies and take them into account. i mention one other thing a core principal of our reforms was not to have a flash cut. but to look at transition periods. and so the various accountability enhancing efficiency enforcing measures that we adopted generally speaking will roll in over the next few years because we all wanted to make sure that companies would have time to adjust. >> are you available at 3:45 tomorrow? i have another constituent coming to talk about this. and i think i have another -- that would allow me to go to -- you can do a lot more to do her than i can. >> it may be that they're coming to us before you or after you. our doors are open and getting the input directly and the data and information from companies affected is very important to us. >> i appreciate that. commissioner mcdowell, can you explain for the committee your thoughts on universal service

fund reform? what i read of what you said is you agreed with some. you had concerns about the other. some other parts and you disagreed with the other. if you wouldn't mind explaining to all of us here your specific problems. >> sure. one of the concerns is we have not yet addressed the taxing side of universal service reforms that's how you pay for all this. there are four funds where we spend money under the universal service umbrella. we've gotten to most of those reforming and spending side. we haven't gotten to the contribution or taxing side. so the chairman and i talk about this on a regular basis. it's my hope that we can launch another notice of rule making as quickly as possible and conclude it this year. we need to expand and broaden the base of contributors and lower the contribution factor make it sort of a flatter tax sorts. right now we're taking a lot

from a shrinking pool of revenue. and we do need to broaden that base and reduce the overall burden. that's something i've maintained pretty much since i got to the fcc. the sooner we can get on with that the better. there is an automatic tax increase. it's not a hidden tax it does show up on consumer phone bills. it's all that inexplicable language regarding fees and tags and funds and things. it's grown from 5.5% in 1998 to 18% today. and that is a huge spike just in the past couple of years. in part because of increased spending but also because of the shrinking pool. the less tax base you have, the higher the rate is going to be. so it needs to be fixed. it needs to be fixed very urgently. and my concern is it being an election year might be it won't get done as quickly as we would like. that's why i'm keeping the pressure on. on the chairman appreciates me keeping the pressure on. then on the spending side i just

addressed an association this morning, actually, of rural phone companies. and we talked a lot about this area. for a lot of the rural phone companies -- >> you got to have the meeting with them not the chairman. i'm sure my folks are there. excuse me for interrupting. >> yes. 600 of them all at once from all 50 states, most of the 50 states. a very honest open discussion. i don't know what their concerns are. some of these rules start to go into effect july 1st. some rules don't phase in for a period of nine years. they also have a steady income stream of $2 billion which was where it was before for rural carriers. the commission will look at this again in 2017. so five years from now. but that is important. on the other side, some of them did express their concern to me that there are certain loans from the federal government through the department of

agriculture or even some other things where they're concerned about being able to repay those loans. money borrowed for fiber deployment or other such things in rural america. if that is indeed the case, i know there's a lot of anxiety because there's uncertainty about what the actual reality will be. the executive branch has an obligation to look at working out those loans if need be. we also did establish a waiver process it's very frugal being of scottish desent i liked that very much. but if indeed there's a carrier that is experiencing undo hardship because of the reform they can file a waiver with the fcc where they have to open their books in a very detailed fashion so we know exactly what's going on with the money, but they can get a waiver. we will learn a lot should that happen. commission is going to learn a lot about what might be happening as a direct result. i had an opportunity to bend the growth curve of entitlement.

i took that opportunity. >> well, that's great. we all need to do the same on lots of different entitlements. thanks for that explanation. there are some issues with rural utility service and some of those loans and some of them being called in in spite of the fact that companies haven't yet utilized all the funds. so, we'll have to deal with that with rural development in the usda. but thank you very much. >> thank you. mr. chairman, we're very aware that you prepared the fiscal 2013 budget in advance of recent incentive auctions which will greatly affect the future of spectrum availability. these will be the most complex auctions the fcc has conducted to date. please update us on the plans for these auctions. understanding that things will

change as we move forward. we won't press you for a figure today, but i imagine there will be additional mad min straitive costs associated with these auctions. can you comment on that? >> the auctions will present an opportunity to deliver a great return for the american economy and the american people. raise billions of dollars for the treasury, free up spectrum or ipads and other mobile devices. it also will be incredibly complex. the two sided auction the congress authorized this will be the first of its kind. it will require a great deal of hard work, engineering work, economist work, and we're privileged to have that responsibility. the staff is now analyzing the statute, developing an implementation plan determining what effect it will have and most importantly developing a view on what needs to be done to

maximize the benefits to the public, the benefits to the treasury. the benefits to our economy. the fec has a great track record in delivering a major return on investment and we'd like to make sure that the challenges ahead that we don't shortchange the american public because we don't bring the right engineering and economics resources to bear. >> now you tell us that you're at the lowest staffing level in ten years. so in view of these responsibilities what can you tell us about the present level of staff and taking on what you need to do now? >> you know, i'm completely in favor of having a lean highly talented team taking on these issues. and have no interest in looking to hire people we don't need. i am concerned in general about the engineering and economics

resources at the fcc whether it's interference issues like we were talking about before. the complexities of auctions. in order to realize benefits for the american public. so our goal is to do the most we can with the fewest resources and the fewest people. we have a lot of work to do to ensure we bring in great engineers, economists, lawyers to meet the opportunities of mobile and broad band. >> we know an important issue is set aside for spectrum auction.

how will that go and how successful do you think you'll be at being able to deal with that issue? i suspect, i'm sorry i'm interrupting you, i suspect that that's an issue that will have bipartisan support people saying make sure that you're doing the right thing in that department. >> the commission wanted a mobile network for first responders. it's an important thing that congress has now moved forward on that. a great deal of responsibility likes with ntia. there are pieces we'll work on at the fcc. we have a public safety and homeland security bureau that's very focus on it. making sure we harness modern communications for our first responders with the mobile broad band public safety network with next generation 911. with outboundmo