obstacles to competition. the more we can, in a smart and pragmatic way, promote competition, the better off the economy will be, the better off the consumer will be. >> but, anybody can chime in on this, the commission's fundamental view that two and two is adequate, that that's what we're willing to settle, or should the law be geared towards trying to somehow figure out whether there should be a greater number of competitors within the spaces. >> senator, that's an excellent issue to raise. about 90% of american consumers have a choice of five wireless providers. i want to commend the chairmen for his work on unlicensed use of the tv wide spaces. i think there are a lot of

opportunities to create new delivery platforms that can inject more competition. so we're very optimistic about more competition in the broad band space. and that's certainly a corner stone of the commission. >> i see you want to say something. let me throw an additional question out as we do that. for google, facebook, microsoft, amazon, a bunch of folks, they've been able to innovate very significantly, obviously. but net neutrality has been critical, we would argue, a lot of us would argue, to their ability to do so. can you just share with us, i think it was, what, three, yeah, three of the four witnesses at a recent hearing, when we have a video hearing a few weeks ago made the same argument.

but how would you say investors have, in startups on the internet, how have they responded to this capacity, with respect to the neutrality. how essential is it in your judgment with ipos and creation of new entities? >> i think it's been essential. the issue isn't google and facebook and amazon of today. but the versions of those companies, three, five, seven, nine years ago, whenever no one ever heard of them, and they were wonderful, new entrepreneurial opportunities that existed because of an open internet. the framework that we adopted last year, which was supported both by early stage investors, technology companies, the cable industry, most isp providers, provided predictability across the board to investors in early stage technology companies as

well as investors in infrastructure, and in fact, we've seen since then an increase in investment and innovation across the broad band economy. and much more stability in the stas span before we adopted the frame work. >> as we think about bring bringing this law up to date, should we put the rule in? >> i would encourage it. >> is there any dissent in that? >> yes, i think it would complicate efforts internationally, as we are combatting them from trying to regulate internet. this issue has come up many, many times.

the courts will determine whether or not the fcc has the authority to do what it did. >> part of the reason, i believe, senator, that we're seeing a lot of innovation in this space and more encouragement towards that is because these high level rules of the road which fit on one page provides certainty. it provides transparency. it provides a means for those who want to innovate in this space. that they know that the isp, their service provider, will not be able to favor, their businesses at the detriment of innovation. so with all of these players, again, wanting and encouraging us to move forward, begun, with with these high level rules of the road, i encourage us to

recognize what has been happening over the past several years in terms of the engagement and what will continue to happen. >> with respect to europe, what the united nations does will have a profound impact on what they do. we want them to be open. so we will argue why we may consider the complication. >> thank you, senator kerry. i encourage all members so everybody can be called upon in a relatively short period of time to keep their questions and answers to five minutes. senator demint. >> thank you, mr. chairman. i have to smile when i hear us, you, talk about encouraging innovation and investment in the industry. this is one industry we don't need to encourage it.

the greatest obstacle if you talk to people in the industry, whether content providers or networks are just orb trar and unpredictable rule making. i'll be careful. i appreciate you coming by my office. i enjoy meeting with you. i appreciate your service. how many complaints has the sec received in the last six months six the regulations were published? how many did you receive before that? >> in terms of formal complaints, i believe the commission received at least one. >> it was handled on a particular basis. this is what i mean by preemptive rule making. a private network built with private capital. we're deciding how they're going to manage it.

if there was only one network, we would have to sit down and talk about it. as commissioner mcdowell has talked about wireless or land line, dozens and dozens of choices. it's remarkable to me that we're talking about given our limited ability to manage anything. that we think we can manage the internet and pick winners and losers. the market has worked well. and from what i hear with the players and stake holders in the market is that this threat of the government coming in and deciding how much they're going to charge based on bandwidth, not only affects the networks but eventually the contact providers will be told how to favor one versus another. so this is a big concern for me. and commissioner mcdowell, we hear monopoly talked about a lot in the wireless business, but

how many how many purr chus them from providers other than verizon and at&t. >> perhaps half the marketplace is picking up providers other than the top two. >> i think we have a pretty remarkable and dynamic marketplace. and there's a good and growing case for lighter and lighter hand of regulation. not to go in and have no complaints and no problems, and violate the private property rights of the people who build out a network and begin to tell them how they charge for their product, and as you know, users use different bandwidth. there are very big differences. for us to try to regulate it makes very little sense right now. a lot of our decision making, as we talk about, mr. chairman, when you came by the office is

based on the assumption there's not enough competition. one of the responsibilities is to prevent the study. we talk about the need to get that out so we can have good information as decision makers here do we have a competitive market or don't we? we need the information to make good decisions and for you to make good decisions. most of the regulations is coming from the assumption that there's not enough competition, not enough choices, and it's the job of government to come in and protect the consumers. i think it's a false assumption. we need to get that report from you. thank you all for your service. and mr. chairman, i yeel back. yield back. >> thank you sir. minnesota bench. >> thank you all very much for being here. as you always know i like to

invite you, especially new members, as now members to come up to alaska to give you a sense of rural and even though 90% of the country has access. we're not in there. and that's who i represent, alaska. we're dealing with an issue now which to give you a comparison it's like if you were in east texas. here's what we're dealing with.

they went from a december 2011 resource of funds to january of 2012, 84% production. just like that. this company will out of business by the end of the year. many of you heard my complaints or concerns about the waiver process. this group represents 130 customers. this is waiver one they have to fill out. and this is waiver two. it's very expensive and very hard to do i recognize that one size can't fit all. we need stability. at the end of the year they will not be table to pay their loans, and they'll be out. out of business.

they're the only providers in the whole area. that's it in the sense of what can happen. i use this as an example. is there a way for small carriers, under 50,000 lines to help give some relief in the application process and the fee structure and the cost. this is $100,000. many of you are lawyers and past lawyers. these are not cheap. is there some way to get some relief? their clock is ticking. they're going to this be out of business very quickly. so mr. chairman, you guys have done an excellent job in working with us in alaska because it's so different. i mean, when we say rural, it is rural. extreme rural. and all of you have been there and seen it. you know what i'm talking about.

help us walk through this and ensure that a place like this can survive where most of the work is now in wireless. this is what they want to provide. this is my example. >> the general challenge we face is we inherited a program with very little accountability where the recipients in general have control of the fundings we get. and just the responsibility is a challenge. and converting the program with one with insufficient accountability to one where money that the consumers are paying in, every dollar is going out in a way that makes sense is a challenge. we're in the first round of implementation. and we understand that for some of the companies it's a particular challenge. but we take the waiver process seriously. we'll continue to look for ways to streamline and improve it. so that we can move from the program that we have, whichever

one didn't work, to one that achieves the collective goal of universal broadband. >> is there a way for special carriers? the waiver cost is the same. you have to fill it out. is there a wait? help give relief so it's a streamline process. i'm not a lawyer. i can't tell you what streamline looks like. this seems excessive for a simple obvious issue that's about to happen. >> we have to get the balance right between ensuring accountability and not creating situation for companies coming in. some of what the companies are doing now.

we're committed to a streamlined process. i appreciate keeping to your requirement of five minutes total. we appreciate all of y'all being here. and a special welcome to the two new members. chairman, as you know, we recently september you a letter regarding the universal service reform and the need for regulatory certain city. and there are many kerns from the rural providers that they lack the information to move forward. so second, i would welcome your comments regarding that.

many in rural america feel like they're left out of the process. arkansas like west virginia. so i would also ask you to do that. but can you comment a little bit about that? as we move forward? >> sure. it would be my second trip to arkansas. and i learned a lot on my first trip, and i recognize the challenges in rural arkansas when it comes to broadband. those challenges are all over the country. and we have 18 million americans that live in areas with no broadband infrastructure, including arkansas. the program we inherited was sending more money than it should to certain areas. funding four or five providers in a single area. or funding one company when there was an unsubsidized competitor. the reforms that we put in place are designed to.

the transition is challenging. but our focus is on achieving the goals for rural america. it's the purpose of universal service. doing it in a way that involves accountability. and you're completely right, predictability. we're in the hardest part of implementation. we'll continue to work together as a group to get the balance right so that we get broadband to people who don't have it, who don't deserve it, that we don't waste money. we're also cognizant of the business realities and deal with the companies in a fair and reasonable phased in way. the market is very aggressive right now.

many americans are concerned about the misuse, possible fraud and abuse of the lifeline program. it's like saying the wheelchair ad on television, you know, where you contact us and you'll get this free. it destroys trust in the institutions. so can you comment on reforms. what do we need to do to fix the programs? >> we shared the concerns. tackli tackling tuplicative recipients. people who weren't entitled to get the benefit, got the benefit. there's a problem with sleazy, unscrupulous people who try to take advantage of the program

and take advantage of people. i can't speak about specific investigations that we have on going. customers taking advantage of the program, we will come after them. >> it's good to know. we talked about spectrum a little bit. what short term solutions are out there for spectrum needs that can be utilized while we do the longer term solutions. what is on the short term? >> several things. and my colleagues may want to comment. i agree that it's a real opportunity. and we're seeing wi-fi taking more and more of the load. not knowing where it would lead a couple of decades ago. we're seeing advances in technology and infrastructure, smaller cells being rolled out, more efficient networks. there is near term spectrum that we can auction off if we all

work together. we're working closely with ntia on the 1755 stpectrum. we need to accelerate those efforts, move quickly. there are several pieces of spectrum identified in the legislation with deadlines for auctioning them. we will auction them in the way that's most valuable to the public. for example, finding ways to pair them. >> thank you, mr. chairman. >> thank you, senator. senator bunn. on the reform of the universal fee, what are you doing to deal with the issue of unsubsidized competitor in that environment. what we talked about with wrk. how are you defining unserved and underserved and trying to be fair as you look at the unserved

community, and then look at the partially served community. little thought on that would be helpfu helpful. >> getting broadband to unserved americans is number one. tackling the areas where the fund is supporting one company with an unsubsidized competitor. there are issues in the margins that become challenging. what if there's partial overlap? those are issues to work through as we implement it and the cognizant of business realities so we don't treat them unfairly but have near term alliances that we have to take into account. >> and is the additional use of this fund have any impact on those small telephone companies that are 60 or so percent.

we have one or two that may be as high as 90% that are dependent on the health from the u usf, as you then say spent more of this on broad band. does that mean you have less available to spend on traditional phone service? how does that impact you? >> no, because the networks are the same. and many of the companies in the particular category, really, most issues come from a subset of rural providers. that's under the rate of return regime. these companies have received for many years a guaranteed 11.25% return. most companies don't operate that way. most unserved rural americans live in areas served by companies called price cap carriers. we want to make sure that as we put in place the reform, that we're sensitive to the unique

needs of the companies under return. but we have an obligation into the fund. getting the balance right is what we're focused on doing together. that's our goal and focus. >> >> are you having any luck with companies? are you having any luck getting them to do that? >> well, with respect, i agree with my colleague. we need the federal government in some cases to relen kwish spectrum that they have to move more quickly to spare spectrum. that's the single most promising area to free up substantial amount of spectrum for broadband. do you know what the government community could give up total control to parts of spuk trum to

be beneficial to the use of spectrum. >> the federal government alone occupies 60% of the usable spectrum. this is just if federal government. spectrum sharing is an ill defined term. it can mean a lot of things. if a private sector user of the spectrum is going to not have priority should the government want to break into the channel, so to speak what is the value of that to the marketplace. that's along the rights of an unlicensed user where you don't have priority if you think of your walkie-talkie or baby monitor. it could get cut off by your neighbor. so that's not an ideal situation, the the use of wide

space is sharing. using the scraps there but i don't think it's a cure all. i think they need to look a lot harder at the respect to relinquish for auction. and they need to do it yesterday. >> thank you, senator. >> thanks, mr. chairman. chairman genachowski, if we look at today's "new york times," it talks about the hacking case. and the head of the rupert murdoch british newspaper empire.

and reverting the course of justi justice, and i'm looking to that because it bolsters the case that i want to make with you reaching the highest levels of the new york based company and involving access to the uk and the u.s. now we look at the list here and see these are senior people for the company. and they applied for renewal of the license in 2007. five years ago. and despite this long list, the fec did not announce any plans for proactive investigation into whether or not newscorp -- in

the u.s. and i address this to each one of you. what does it take for the fec to begin an investigation? >> well, only we have important responsibilities under the law. we're aware of the issues that we see in the uk. these matters may come before the fcc as a judicatory matters. i think it would be inappropriate for us to prejudge them. and also inappropriate to speak about any investigations we may -- >> we're not talking about an outcome. we're talking about a natural disaster. >> we don't comment, as other agencies of government don't comment on the status of investigations. we have important responsibilities to take seriously. it's important not to judge it. >> that would be good. take seriously. the fed of the company found unfit we're looking to see that

as they do have an obligation for good character to have a license renewal. it's been long standing that the fec is looking into newscorp and its application to renew the license in new jersey. mr. mcdowell, do you have a point of view here about when we ought to get started on looking into this? >> i think the senator stated it eloquently. >> i heard. >> i agree. >> senator, we do have a process in place, they have a the right to file before us, and when and if they do, we take all of those matters seriously and will review in a timely manner. >> senator rosenworcel.

>> it speaks in terms of technical qualifications to the commission should monitor the situation. >> and senator, i have nothing original to say. i will associate myself with a colleagues on the question and commit to you in the context of the license renewal proceeding, i will sate the record carefully and support appropriate action. >> well, i think that some action here is absolutely require required in terms of where it economists, it would be the fourth largest media market in the country. charges are flying in all over. while there's not enough