have the chairman and commissioner mcdowell speak. and then we would come in with questions, as you can see, there's a lot of people here and a lot more coming. so we might want to use our time efficiently. >> jim rockefeller? >> thank you, members of the committee, thank you for the opportunity to be here today. congressional oversight is a vital function. this committee has also taken -- the provisions on incentive auctions and public safety, faithfully implementing the new law is a key priority of the fcc today. i'm pleased to be joined by a full complement of -- experience and accomplish the excellent additions, they join a commission that's been productive, colleague jal and focused on issues that are important to our country. engagement that has significantly improveded our decisions and our processes.

at the fcc, the problem is to maximize the communications technology to further the public interest, to help grow our economy, create jobs, enhance u.s. competitiveness, and we have made tremendous progress in the past three years and indead private sector ---job creation are up across the broad band economy. these numbers are up by double big -- the u.s. has now regained global leadership in mobile. and we're the first country rolling out the next generation 4g mobile to scale. first the spectrum gap, we're focussed on freeing up more spectrum for unlicensed use.

removing regulatory and other barriers to flexible spectrum use and mobile broad band buildup. and moving forward on innovative approaches like small cells and on spectrum sharing as a new and additional tool to free up government spectrum for new use. i am proud that the idea was proposed in our national broad ban plan. and the national challenge of impmenting -- continuing a proud tradition of u.s. leadership on mobile policy, and i look forward to working with my colleagues and the committee as we move forward. we're also tackling the broad band deployment gap, as you have mentioned today, about 18 million rural americans live in areas where there's no comprehensive infrastructure. to spur wired and wireless broad band to hundreds of thousands of rural -- and sets us on the path

to employment by the decad deca while put the -- through our broad band acceleration issues, accelerated broad band buildout. we have adopted orders to ease orders and established a shot clock to establish cell tower and -- we are tacking the broad banged adoption gap, nearly 1/3 of americans, nearly 100 million people haven't adopted broad band. we need to tackle the barriers to broad band adoption and digital poliliteracy. has already helped connect virtually every library and classroom in america, last year we adopted several -- limited

school's ability to strike the best deals for broad band and remain comitted to this important program. public safety communications is a core mission of the fcc and we're on schedule implementing the fcc helping first net deliver on the promise of nationwide broad band communication for our first responders, we have also worked on improving 911 and we're working on next generation 911, that americans will be able to send texts or photos to 911. and the process culminating in isp concerning 19% of u.s. subscribers to commit to significant steps to commit to our country's cyber security. in the international yuan sit, we're proposing policies to countries the -- that has enabled the internet to flourish, consumer protection and empowerment is at the

core -- smart phone etheft and cramming and the latter, i appreciate the excellent committee staff report on the subject. i want to highlight how we conduct our work. the fcc is committed to smart and workable government. we have taken many steps to modernize our programs, our major reforms are saving hundreds of millions of dollars, and in addition to our program mattic changes, we have -- unnecessary data collections, we have done everything i have listed in the statement and more with the lowest number of full-time employees in ten years. when i had the honor of being confirmed by the senate for this position in 2009, i promised that ould -- fostering competition and protecting consumers, those remain my goals and i look forward to working with this committee on unleashing communications technology for our congress and the american people.

>> thank you mr. chairman, commissioner mcdell. >> thank you mr. chairman, this is my first opportunity to welcome our new colleagues, i want to thank the senate for confirming them and whenity senate did confirm them, i put out a statement saying how qualified they were. 48 hours after being sworn in, they can handle it i'm sure. so we have plenty of work to do together, in the coming months and years. i believe that america's future is bright when it comes to putting the power of new communications technologies into the hands of consumers. specifically, i firmly believe that we are in the early days of the golden age of mobile broad band. due to america's light touch regulatory approach to the wireless sector, we have always led the world in that arena. we can encourage this and further strengthen america's global leadership in wireless if which implement the new spectrum

law with humility and with regulatory restraint, second work hard to ensure that local and -- and third commence a comprehensive -- enhance speck torl eefficiency. when it comes to s ts to innov new spectrum law. counter productive consequences as well. new auction rules should be appropriately minimal by adopting deregulatory flexible use policies that will make any rules future proof, for innovations we cannot even imagine today. rules also offer fair opportunities for small, medium and large players to bid for and secure licenses without excluding any player from the auctions as congress intended with the law. the fcc's inbox is full with many other matters as well. we must conclude our proceeding

on universal service controversial reform as soon as possible. this silent and automatic tax increase is eating into consumers' wallets. it has been as high as 18% and it must be abated as soon as possible. further more we are overdue for modernizing our media ownership rules. based on the record before us, and recent court decisions, at a minimum, the 1975 vintage cross ownership ban seems as out of place in today's digital marketplace than the long side burns and disco music of its birth year. not only must we stay energized to keep the international telecommunication union from swallowingen the high lehr -- multistake holder model for internet governance, but we must quickly find allies tlouy ies t the world, especially liz in the

developing world for this effort. thank you for having me here today and i look forward to your questions. >> thank you very much commissioner, i'll start with the questions to be followed by senator hutchins and then senator kerry and senator demint. i appreciate the fcc's commitment to expandings broad band across the country, i also share your passion for making sure that broad band is both wide liz widely deployed on a unified basis. the ga -- sustainable broad band adoption through the btop program. it's my hope that this study will allow us to identify the most successful elements of the program to focus resources on those only endeavors that have proved to be effective. so while i appreciate the fcc's recent efforts on promoting

digital lit traszity, should not under any circumstances affect the newt of e rate funds is outmatching the money available by a 2-1 factor. during your confirmation hearings for the three of you, i asked each of you if you could commit to me that you will support and commit the e rate program. i just love to remind you that i asked for a yes or no answer and i got all yeses. so we're asking for a repeat performance, because the world changes. and please give me a yes or no answer do you promise not to take -- digital literacy emissions. mr. chairman? >> yes, i think. the answer is yes, we're committed to strengthening, supporting and growing the e

rate program, digital police rasity is important, we don'to won't do anything in the -- >> so that would allow you to answer yes? >> i believe so. >> yes. >> say yes, please. >> commissioner mcdowell? >> yes. >> -- commission never rose worth? >> yes. >> and commissioner pike? >> yes. >> excellent. and not much time either on that. this is for the chairman and it has to do with theabili mobilit fund. in the context of service reform, you and i have spoken about the importance that requireless services -- in rural areas, the fcc -- areas that are under served today. prior to our fcc actions to reform the universal service fund, our offices together

discussed the importance of making sure that the fcc's efforts help bring wireless service to rural areas that do not have it now. but it's my understanding that the largest holders in my state of west virginia may not participate in this fund. my question is can the mobile fund serve places like west virginia even if local carriers refuse to take part, number one, and number two, if not what other steps could be taken to bring wireless services to these areas. >> we hope and expect that there will be broad participation in the upcoming auction for the mobility funneled. in our order, for the first time, we identified mobility as an independent service goal. so we're committed both to universal service to everyone in their homes, but also recognizing that people want and need mobile service when they're

on the road, to and from work, elts. -that is the purpose of the mobile fund, we'll take the first step of these reverse auctions, as i said, we hope and expect broad participation on the goal of getting mobile broad band in parts of the country that don't have it, where the economics don't support it but where it's important to make sure that citizens have mobile access. >> i now call upon the ranking member from texas. >> first i want to ask a parochial question and it's about the state of texas wireless broad band network for emergency responders. as you know, we have you -- it

is further long in its efforts to comply with the parameters of the gran than any of the other jurisdictions in the country, i'm told, and they are prepared to start using the network u as early as this month, just for the start of hurricane season. and my question is, because texas has moved to try to meet this very important season that 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