afflicts us regularly, is it possible that the timetable can be achieved that they will get that waiver to be able to go forward, so that they can actually use it this year? >> i hope so. as you know, prior to congress's enactment of first net and the public safety proceedings, there were a small number of waivers granted. we understand that the ntia, which is -- has lead responsibility for first net is preparing comments to us on it. we look forward to getting input to the ntia, from the committee. we want to achieve the goal of the statute of having one interoperable public safety network for first responders. we also have to take into account the kinds of issues that you mention. >> could i just ask if it would be a priority in your opinion to work with all of those issues and assuming that they have met

all of the requirements that you would be able to move exdish shusly? >> a very small number at the stage that you describe for texas. i believe and think it has been proving, the auctions that have the fewest springs attached. or the ones that are burdened with the least number of restrictions will gain the most income, which is of course what we all want. any question is, is that a priority of yours? and maybe you want to go to the chairman and the ranking republican on trying to keep the future spectrum auctions as free

from burdensome restrictions as possible in order to gain the most revenue. mr. chairman? >> i agree that stiimplicity is better than complexity in getting the goals out there. the goal of the office is to max nice the overall economic opportunity from spectrum, it's what the communications act directs us to take into account, we're going to start proceedings in the near future and we'll be hearing from a lot of stake holders and we look forward to working with the economy on the process of enshushing that we have spectrum offices that maintain that leadership. do you think that as much freedom from restriction is a high priority for that goal?

mack mizing the opportunities of spectrum and determining a consultation with all stake holders. the best, simplest model to drive the most economic opportunity, that will be the focus that i hope we'll all have in addressing the complex issues in auction design. >> okay, is there either mr. mcdowell or the others, is there anyone who wants to weigh in on this as well. >> it's very important that we keep the coverage to a minimal amount. when we go back to 2007, when i voted on the july 2007 order for the 700 megahertz auction. there were encumbrances for the b block encumbrances and the c block encumbrances. the intended winner for the c

block didn't make a winning bid and nobody bid on the d block or had a minute mum bid. by the time the auction takes place, and certainly by the time these networks were built out, the market has passed by the thinking of the government at that point in time. that's why which think it's important to adopt what we call flexible use policies and the chairman and i have talked about that a lot recently. >> i know there's a lot of us that want to ask questions, but if we don't get a second round, i do have some questions for the record. does mr. chairman. >> thank you senator hutchinson, senator kerry? >> thank you mr. chairman chairman. you've even countered some of the progress made and some of the advances in technology.

obviously the technology we see competition in the app and a lot that people have a choice on. u but there really are only two dominant wireless service providers and 96% of americans have a choice of either -- of two wired broad band, either your cable or your telephone. so my question to you is how would you say the law has in fact encouraged or discouraged competition in the best sense of the word in terms of numbers of providers and so forth. >> first of all i have heard from a broad array of speakers this week that broad band is --

consu consu consumer benefits. competition has always been an issue in the communication space. since 1996, we have more competition than we did before and that's good. we hear from many stake holders in the space, smaller companies that are trying to compete, that they have real concerns about obstacles to competition. the more that we can in a smart, sensible pragmatic way, promote healthy probust composition, the better off our economy will be, the better off consumers will be and the less of a need there will be to adopt other kinds of regulations that a commission would need to consider if competition is insufficient. >> but is it, and anybody can chime in on this, is it the commission's fundamental view that two and two is adequate, that we're willing to settle or should the law be geared to

somehow figure out if there should be a greater number of competitors within those spaces. >> a duopoly is not the ideal outcome at all. >> about 90% of the ---of american consumers have a choice of five wireless providers and i want to comment the chairman for his work and this goes back to charmz michael powell, unlicensed use of the tv white spaces, think there are a lot of opportunities that can create -- and wireless is a terrific hope in that regard. >> let me just throw an additional question out as we do that. >> for google, amazon and a

bunch of folks, they have been able to initiate very significantly obviously. but net new centrality -- can you just share with us. three our four of our witnesses made the same argument. but how would you say investors, and startups on the internet, how have they responded to this capacity, with respect to the new centrality? >> the issue isn't the google and face book and amazon today,

but the burden of those companies three, five, seven, nine years ago when nobody effort heard of them, and their wonderful new entrepreneuristic community that were open because of the internet. investors in early stage technology. and we have seen since then an increase in investment and innovation across the broad band economy. our apps economy continues to boost, and we have seen double digit investment in broad band and infrastructure and much more stability in the space that we have adopted our frame work. >> and as we think about bringing this law up to date, should we codify the rule?

should we put it in? >> i would encourage it. >> is there any dissent on that? >> yes, i brought a very long dissent in our order to 2010. and i think actually codifying it would complicate efforts internationally as we are now combatting the itu from -- actually come up many, many times to say, well, it's the law of the united states to do this, why can't we do this internationally? i would be very wary of congress trying to codify that, it's before the courts and courts will decide whether the fcc had the authority to do what it did and i think the fcc did not have the authority to do what it did. >> part of the reason why i'm seeing a lot of innovation in this space and more encouragement toward that, because these high level rules of the road which incidentally fit on one page provides certainty, it provides transparency, it provides a means for those who want to

innovate in those spaces. our service provider will not be able to favor their businesses at the detriment of innovation. wanting us to encourage and move forward with these high level rules of the road encourage us to recognize i have to say in closing, ms. chairman, with respect to europe, what the united states does is going to have a profound impact on what they do and we want them to be open. so i think this powerful argument for why, in fact my concern is the codify indication.

. >> i encourage all members so that 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.

i'm -- how many formal complaints did you receive? >> i'm not sure we received any formal complaints. >> how many did you receive before that? >> i believe it -- it was handled on a particular basis. this is what i mean by pre-emptive rule making. a private network built with private capital, and 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. but as commissioner mcdowell has talked about, whether it's 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 i think despite what has been said here today. from what i hear from the players and the stake holders in

the market. is that this threat of the government coming in and controlling what they're going to charge for broad band networks. this is a big concern for me and commissioner mcdowell, we hear monopoly talked about a lot, durks uopathy. from the sec session's own statisti statistics. >> i think we have got a pretty remarkable and dynamic marketplace and i think there is a good and growing case for lighter and ligd er hand of

regulation, not to go in where there are no problems and i think 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 band widths and there are big very differences and for us to try to regulate it, makes very little sense right now. a lot of our regulating that we talked about mr. chairman when you came by the office, is based on the assumption there's not enough competition and one of the responsibilities of the fcc is to develop a competition study. you and i talked about the need to get that out so that we could have a good information as decision makers here, but do we have a competitive market or don't we? i think all the evidence is that we do, and the fcc is long overdue in giving us the information we need to make good decisions and for you to make good decisions, because most of

the regulations and what i consider arbitrary and unpredictable rule making 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 government function and we need to get that from now. thank you very much for your service and i yield back. >> thank you all very much for being here and i -- as you always know, i always like to invite you, especially the new members as now members, to come up to alaska to give you a sense of rural and where even though 90% of to the country has wireless and the competition, we're not in that equation totally yet. but thank you for the work you've done. let me -- mr. chairman, you know i would be parochial for a moment, but that's who i represent is alaska. let me give you an example. we're dealing with an issue now,

adak, let me give you a comparison, adak is like if you were in -- a 12-00 mile distance. one of the rules or at least the efforts of the national broad band plan was no flash cuts. we'll here's what adak is dealing with, it's a small community, 130 folks, they went from december 2011, resource of usf funds, to january 12. 84% reduction, just like that, this country will be out of business by the end of this year. and the process, many of you heard my complaints and concerns about the waiver process. now this group represents 130 customers. this is waiver one that they have to fill out and this is waiver 2. it's very expensive and very hard to do.

and somehow, you know, i recognize the one size can't fit all and you have been very good at the commission, trying to figure out alaska and hawaii, and i appreciate that, this is the worry that we just -- i'm giving you my flash point. we need some ability, because at the end of the year, they will not be able to pay their rus loans and they will be out, out of business. they're the only land line and wireless provider in the whole area. that's it. in the sense of what's going to happen. so, is there a way, and i euuse this as an example, small carriers under 50,000 lines, and i imagine it's very under. to help get some relief on the fee structure and the cost. this is less than $100,000. as you know, these are all lawyers, and as you know, as

you're all lawyers, it's not cheap to go to an -- a very timely response, because their clock is ticking. >> mr. chairman, i begin with you, 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 here and seen what i am talking about. so help us walk through this and ensure that a place like adak can survive where most of their work is now in wireless. this is what they want to provide, as they meet the goal of broad band. >> this is my example. because it's a crisis for them. >> the general challenge we face is we inherited a program with very little accountability, where recipients in general have control of the funding spigot and fiscal responsibility is a

challenge and converting the program from one with insufficient accountability to one where the money that 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 implementation and we understand that for some of the companies it's a particular challenge. we take the waiver process seriously, we'll continue to look for ways to streamline it and improve it, so we can move from the program we have, which everyone agreed didn't work, to one that efficiently achieves our collective goals of assuring universal broadband. >> is there a way, especially for very small carriers is there a way to help give relief so it's a streamlined process? i'm not a lawyer, i can't tell you what streamlined looks like. this seems excessive for a simple obvious issue that's about to happen.

>> we will continue to look for a streamlined way to run the process. there are many companies receiving taxpayer dollars. we have to get the money going into the fund protected. also not completing a possible situation for companies coming in. some of what the companyies are doing now to help us assure we have an accountable program we won't have to do it more than once. >> i have several other questions, broader and i'll submit them for the record. i appreciate keeping you to your requirement of five minutes total. >> mr. boezman. >> thank you and a special election for our two new

members. senator jankowski. we recently sent you a letter, businesses large and small need to be able to plan for the future. there are many concerns, especially for the rural providers that they lack the necessary data to move forward. i welcome your comments regarding that. we also invited you to send a staffer to ago arc, and i i think that the many in rural america feel like they're being left out of the process. arkansas is much like west virginia. so again i would also ask you to do that. can you comment a little bit about that. as we move forward? >> sure. first of all it would be my second trip to arkansas, 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 who have no broadband infrastructure. 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. there were forms that we put in place are designed to cut those back and then finally move forward with funding broadband for unserved americans in places like arkansas. the focus is on achieving these goals for rural america, the purpose of universal service, doing it in a way that's consistent with fiscal responsibility and we're in some ways the hardest part of implementation, will continue to work together as a group to get the balance right so we get

broadband to people who don't have it, who with deserve it, that we don't waste money, we are cognizant of business realities for companies that are receiving funds for the program, and deal with those companies in a fair reasonable phased in way. >> very good, thank you. any any of you can jump if on this one, one the things we're hearing a lot about are the misuse of the lifeline program. and the marketing is very, very aggressive now. many americans are concerned about the misuse, possible fraud and abuse of the lifeline program. it's like seeing the wheelchair ad on television, you know, where you contact us and you'll get this free. what that does also is, it really -- it's one of those things that destroys trust in our institutions. so can you comment on reforms? i know you're actively working to do that. what do we need to do to fix the

program? >> we share those concerns, the commission adopted some strong reforms to address waste, fraud and abuse in the program, tackling, for example duplicative recipients when there's only supposed to be one per home. tackling the situation when people who aren't entitled to get the benefit get the benefit. there is a problem with sleazy, unscrupulous people who try to take advantage of the program and people. we're increasing our enforcement efforts, i can't speak about specific investigations that we have ongoing, but companies out there that are taking advantage of this program, we will come after. >> that'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 such as incentive auctions and things like that are implemented. what's on the short term?

>> license is a real opportunity we're seeing wi-fi taking more and more of the load, not knowing where it would lead a couple decades ago. we're seeing advances in technology, in 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, the 1755 spectrum, we need to accelerate those efforts, move quickly, there are several pieces of spectrum that are identified in the legislation with deadlines for auctioning them. when we aurks them, we make sure we're auctioning them in ways that are best for the public. >> thank you senator boezman. senator blunt.

>> on the reform of the universal service fee what are you doing to deal with the issue of an unsubsidized competitor? 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. some thought on that would be helpful? >> well, getting broadband to unserved americans is goal, along with fiscal responsibility. and tackling those areas where the fund is supporting one company where there's an unsubsidized competitor, we agree that needs to be phased out. what if there's partial overlap,

those are issues that we will work through as we implement it, broadband to unserved americans, fiscal responsibility pep and c cogny sans -- we have near term reliances that we have to take into account. >> and is the additional use 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% are depend independent on the help from the u usf? spend more of this on broadband. does that mean you have less available to spend on traditional phone service? or how is that impacted? >> no, because the networks are the same. many of the companies in this particular category. most of the issues come from a

subset of rural providers, and that's the ones that are under a rate of return regime. guaranteed 11.25% return. most companies don't operate that way, and in fact most unserved rural americans live in areas served by companies that are called police cap carriers, we do want to make sure that as we put in place these reforms that we're sensitive to the unique needs of some of the smallest companies that are under rate of return. but we also have an obligation to the consumers putting money into the fund getting that balance right is what we're focused on doing together. it's not easies but that's our goal and our focus. >> on spectrum sale, are you having any luck with companies -- do you need some companies to relinquish areas of the spectrum they have? and are you having any luck getting them to do that? >> well, with respect i agree with my colleague. we neee