auto hop simply improve on technology that's already available from the dvr to what's possible in the dvr? >> yes. i think it was in the datamax case and the autohop does what everybody in the paytv business does with dvrs which is allows the customer to record a channel or series of channels and it allows customers with a push of a button to skip ahead on the commercial. what auto hop does is make it more convenient for customers to do it. may alarm went off at 6:00 in the morning and i don't have to reset it every morning for 6:00 even if i'm in a different time zone. so auto hop allows you to choose to watch a prime time show, you can make the choice to auto hop through the commercial with the push of a button. just as we've regulated, i've

sat through the regulation of we have to have a ratings system so the customers can block it out. we now have regulations to turn the volume down for commercials. it's amazing we had to do that and it's amazing that commercials could be that loud, and i think we certainly don't need regulation that prevents the customers and i understand the broadcasters' point and consumers do not have the right to skip a commercial and do not have the right to record a show and we'll fight the good fight for the consumer. >> i've got to say from the standpoint of the broadcasters, i understand their business plan and their revenue concerns, but we have to balance the consumer decision of what they want to see versus that business when we need to work something out. mr. barrett is eager to make a point. >> i think if this committee is interested in protecting localism and if you're

interested in having your local station cover the wildfires in fort collins, the auto hopper and that technology would be damaging to local business model and you will lose local station's ability to provide the coverage that's important to you and your district. >> that's why i'm saying i think for the local broadcasters, i'm sympathetic to the business model, but we need to balance that, plus the consumers wanting the choice. it's not dish that wants to have that choice. it's the consumer. so i think we'll have to work that out. thank you very much, mr. chairman. gentle lady's time has expired and miss black burn is recognized for five minutes. >> thank you very much, i have a couple of questions that i want to get to today, but i do thank all of you for your patience and for your diligence in continuing to work on this issue. since you're the only female on

the panel today i see seven guys and you. let me go to something you said previously and having usage-based billing at one point by saying the isps should charge a flat rate for a certain amount of bandwidth and then charge a per-bit meter grade for usage that goes beyond that limit. so what i wanted to see is if you still agreed with that and should -- let's say if somebody is a netflix subscriber and they're using a large portion of capacity as opposed to -- someone with data caps. what we say is data caps are not

inherently bad and they can be abused and they can be used competitively to encourage people from using online video to disadvantaged competitors and we are very concerned about that. one of the problems here is what is the rationale for usage billing or data caps. former chairman powell said in his testimony and he said yesterday in response to questions about the doj investigation, well, we have to deal with congestion on our networks. data caps is a blunt instrument to deal with congestion because it only happens at one point in time. if i'm backing up my data at 3:00 in the morning i'm not causing congestion and that goes against the data cap. i want to emphasize that it's really important for congress and the fcc to know how data caps are set and how they're evaluated and comcast just raised the cap for the first time in four years from 250 gigabytes to 300. why did it take so long with the

explosion of video. so we don't think usage-based billing is inherently bad and it can be abused and it's very, very important to know how they're used. >> okay. mr. powell, let me come to you, you might want to respond to that and i want to ask you also to talk a little bit about mfn and the most favored nation status and looking that the plus the alternate distribution method clauses that are there. in nashville with a lot of the entertainers, they understand an mfn approach when they're doing shows and so with a lot of the content producers and with people pushing content forward, we have the adn approach and if you want to answer the question and the second question, that would be great. >> first, i'd like to highlight

something she did say and echoed by the country's leading regulator, both the chairman of the federal trade commission that there's nothing inherently wrong with usage-based pricing. if you run your air-conditioning all day long at the lowest temperature and the neighbor chooses to open the windows and have the breeze blow in you will ha pay more money, and it's about priced fairness that you're being allocated a portion of the cost consistent with your use and that is a very well-established economic principle and we don't think just because you can condemn it in words makes it so. the other thing i would say about cap, first of all, let me be clear. caps are not the industry standard. in fact, as far as i know after comcast's recent change there is not a cable company that employs a cap that penalizes a consumer after they exceed that cap. they're able to move to other

pricing bundles or increased capacity. so this idea that we are all uniformly applying caps as a way of creating artificial scarcity i think is not factually accurate, and i do think there is an economically defensible reason for usage-based pricing and threshold models and it's not about congestion management as gigi suggested. it's about how you monetize a high fixed cost network. you have to dig up the ground and put this thing in and charge the users. we're not allowed to charge other corporations and we have to charge end users alone and how to do that fairly is what the cable companies are experimenting with. on mfn i'm not that utsch in of an expert on the specifics of the contracts. they've been around a long time. i would note that in the doj-supposed investigation that's under way. doj looked at these mfns in the

comcast and nbc merger and other merger-specific deals and didn't find any violations in those cases and passing on them. to be honest, they're contract-specific. i'm not privy to the contours of them. i think they can serve a beneficial purpose and i also think they can be harmful, but that's what we rely on the examination for. >> thanks. i appreciate that. my time has expired. mr. chairman, i yield back. >> the gentle lady yields back and now the gentleman from pennsylvania, mr. doyle. recognized for five minutes. >> thank you, mr. chairman. >> want to thank you for joining us today. i know my constituents in pittsburgh appreciate the hertz station that you have there. i want to elaborate more on mr. ergen's comments about the hopper service. my understanding is that there's a fair use exemption for dvr recordings. can you explain to me how you believe that the hopper service is so different than regular dvr

service? >> i believe it goes beyond the contemplated fair use parameters. i think it's a copyright issue and it's a matter that's in the court right now and i will be anxious to see how the court adjudicates that. it remains a threat to the local broadcasting system and one of the best qualities of the american societiy is we have the broadcasting system that's in place in 210 markets and the determinations that you'll make is, there's a prioritization and the tradeoff 6 things and i'm here on behalf of the people committed to local communities and i think there's got to be a high prioritization for preserving the localism that the stations provide. >> thank you, miss song? >> it's to me this is a way of how copyright is misstated and misused to stop innovation. the sony versus universal cases

is absolutely clear. the public has a right to record what they want to record off of tv whether it be a vcr or dvr. that was 1984. that was a long time ago. look, people have been skipping commercials for 50 years since the guy who just died invented the remote control. all right? this is about consumer choice. i remember what was it, ten years ago when jamie kelner from fox said it was okay to skip commercials. it's just turning three steps with a remote control into one and consumers should have the right to do that. >> thank you. >> mr. o'leary, in your testimony, you spoke about your ultraviolet service. my understanding is that it's basically a new way for consumers to be able to watch movies through the internet rather than having to purchase a dvd that they can watch on a dvd player, and i find the service very interesting. i have questions.

on the ultraviolet website, you indicate that customers can stream content to almost internet-connected device and that they can also download digital copies when they don't have good internet access. can ultraviolet customers download a digital copy on to any device or certain compatible devices? >> my understanding, congressman is that it has to be a device that's registered with ultraviolet service and that downloading is a component of it. i think in the first phase, the emphasis as your question highlight side in streaming, but they will have the ability to download it on to different devices. that they're registered with. >> i just thought it was unclear on the website, based on the advertising it seemed to me they could download the content on any device of my choosing and i noticed some similar confusion from ultraviolet users who with thought they would get a digital copy of a movie to watch

anywhere. can you explain what some of the approved devices are? >> you could download it, for example, on to your laptop or on to a tab sxlt on to different things like that. i would have to get back to you the specific list of the types of devices and the complete list of the types of devices that -- >> i'm just curious when these ultraviolet compatible devices are, and i think it just might be easier for the consumers when you look at that website to understand what actually they can use and what they can't use. >> absolutely. >> and just a follow up to that, does your service give customers guarantee that they'll always have access to the purchase they made? i have my old dvds. some of them might be krached up, but i can still go out to the closet and pull out the dvd any time i want because i know they're always there. is there a guarantee that people will always have access to a purchase they make? >> yes, congressman. it's my understanding that this

is a perpetual agreement between the consumer and the producer and that they will have access to those, yes. >> thank you. mr. chairman, with that, i'll yield back. >> thank you, the chair will recognize itself for five minutes. and it was drastically different than 1992 when congress, and the regulations still apply today as if a monopoly power exists. i think it's important for us to go back because we take for granted the technology and i can look on my video device and watch "swamp people" episodes on this video device and yet the laws that we have on the books today were written when we had these devices for telephones and so while i can do things today, we all take for granted, just remember the law was written when this device was your communications device. and so i think when we start

this conversation it's very important to remember that technology has changed dramatically, yet the law hasn't changed at all. so we have a process today where if we have a disagreement with the law you have to go to the fcc and maybe they'll rule against you one day when with we have this open discussion. >> traditional consumers -- when they operate virtually free and are constantly threatened by the possible extension of these same, obsolete rules. since congress created the problem decades ago, it has a responsibility to review and fix them today. the current, unfair system forces people to turn to the fcc for relief to cherry pick regulations that benefit their platforms. i also question the wisdom of regulating new start-ups and innovative services as traditional video providers. they're not recipes for encouraging the utmost innovation for investment and ultimately competition with

consumers. they should instead focus providing relief to all stakeholders by repealing the '76 and '88 copyright licenses as well as the '92 cable act. sweeping away, it will level the playing field for video distributors alike. it will look much like it does for cable programming where it's paid for traditional copyright licenses. it's time that we recognize the dramatic transformation in the video marketplace by getting the government out of negotiations that could be left up to the private sector. >> i think i know somebody in this subcommittee who has legislation to do just that, and we'll -- we'll now on eye want to ask some of our panelists some questions about this. first, if we can just go across the board in a yes or no question. do you believe the current video marketplace can allow consumers on why, when, where and how they'll allow video programming.

i'll start with mr. johnson. >> with regarding the service, i would say no because of the lack of programming --? thank you. just yes or no across. >> no. >> mr. hyman. >> getting there, yes. >> mr. font? >> i agree with mr. hyman. >> mr. powell? >> make that three. yes. >> mr. bearet? >> yes. >> mr. ergen? >> no, not yet. >> mr. o'leary? >> yes. >> we have, clearly, a split amongst the panelists here. mr. barrett, and i appreciate the wdsu affiliate, in new orleans does, it's one of the affiliates. do you currently have the legal rights to sub license all broadcast programming transmitted over your signals to companies like netflix and sky angel and who does not qualify for compulsory copyright licenses. is it something that you have

the legal rights? >> with respect to how we transmit their signal to other distributors. >> so limited rights? >> yes. >> mr. ergen, your company is opposed to paying for access to content. >> no, we're not opposed -- no, we're not opposed to paying for content. >> mr. johnson? [ inaudible ] >> when you say content you mean local programming or cable channels? >> any content that you -- >> no, we expect and have been paying for the content, yes. >> mr. hyman? >> all we do is pay for content. >> this is something that already occurs. i want to ask mr. barrett, you all own other channels, is that correct? >> correct. when you're negotiating with different video distributors, is that a free market? do you all sit at a table or are

there copyright laws or retransmission consent agreements that have to happen? >> we negotiate on behalf of hearst television for consent rights and are not involved with negotiations with the cable asset. >> i want to ask you about commentious made on the opening statement. on page 9 and 10 you had specific reference to hr-3675 in which you say cable and satellite providers, first, they would turn back the clock to a time when cable and satellite providers would lose without obtaining broadcasters' consent. i would suggest to you that my legislation does not do that. i would hope you've read the secs that not only repeal compulsory copyright, but also retransmission consent which means we would revert to cope right laws and under the legislation that i filed that you referred to a company would have to pay for the content that

you would provide before you could distribute and you referred to my bill and said that providers can confiscate the content under my bill which is a mischaracterization, and i wonder can you read my bill and have you relooked at this statement? if you say this is a mischaracterization, and i will revisit that. just on the final question, miss sown, you've read the bill, too. does this legislation that has filed allow for people to confiscate content and give it away, would they actually have to pay for it? >> think, not. the thing that keeps getting lost in the conversation is that mr. barrett's colleagues gets their transmission spectrum for free from the public, okay? in exchange, they're supposed to make that signal available for free from the public. so this notion that they're somehow entitled to money for their signal, number one, that's only been the case for the last 20 years. so from the advent of television

broadcasting the '50s until 1992, other people were quote, unquote, confiscating their signals, but again, that signal was supposed to be free. i don't know how you confiscate something. >> if under the bill, they would have to pay and get an agreement with one of mr. barrett's companies. >> that makes more sense. it eliminates the middleman. >> i ask that you will look at the statement. >> will go back and look, but let me comment, i think the characterization that we get for free is a mischaracterization that the public trustee model has been in place since the 1920s and the 1930s communications act and it acknowledges that the spectrum is a limited resource that belongs to the public and most capable of serving the public interest should be entrusted with that license and the body of record would show the local broadcasters in this country have served the public interest very well in the notion of free is baloney.

>> i was specifically asking about the bill that was filed and the copyright laws that would still be in effect if the bill was filed. nobody should retransmit your signal without getting an agreement and compensation to you know. all right. appreciate it. the gentleman from michigan is recognized for five minutes. >> i thank you. i commend you for holding this hearing and welcome to our witnesses. i have a lot of questions to ask and too little time. so i hope you'll help me by answering yes or no. this question to all witnesses, and i'm going to make a statement and then i'll ask if there is anyone that disagrees. we can all agree that consumers want innovative and entertaining new content, new delivery methods won't matter much to consumers. now, is there anyone that disagrees with the statement that content creators should be compensated fairly for the

content which itself should be protected? is there anyone that disagrees with that statement? very well. now, speaking of content, there's some consternation, i understand this question, mr. ergen, that your latest invention affect content and distribution, so i would like to explore this issue perhaps more carefully. mr. ergen, is dish network currently being sued for copyright infringement and breach of conduct in federal court over the new service? yes or no? >> yes. i would characterize it differently. we filed a declare tore ruling in the state of new york based on -- let me finish please, because i want to make sure the record is clear. we filed a declare tore ruling -- >> mr. chairman, may i have order, please? >> the next question -- >> one last question from the gentleman from michigan. is it true that hopper

automatically records and provides commercial skipping for programs on the local ford network affiliation statements in the market? yes or no? >> no, it does not automatically record. >> thank you. >> now, mr. ergen, is this so because the channels are the most popular channels on your system? yes or no? >> it has to do with a variety of factors. >> is that yes or no? >> it's not a yes or no answer on that one because it relates to how the satellite works and how we can record. >> i have an election coming up like all of my colleagues here on the committee, like every politician everywhere, and we all use political ads on local stations to reach our constituents and those who vote in the districts. mr. hopper, it limits the ability of every member of this

sub committee and every one of the challengers to reach constituents with ads to help them make up their minds on election day. do you understand and appreciate the concern that the politicians up here on the deis and other politicians would feel on this matter? yes or no. >> i understand the consumers very well. i'm not a politician, so i can't say i understand your concerns. >> very well, thank you. >> certainly understand consumers. >> given all of this, mr. ergen, i hope you understand my skepticism when it comes to dish's latest offering and its effect on the future of video. i would like to use the rest of my time to learn more about how the cable industry is adapting to new, federal communications regulations to provide its subscribers with new types of

content and ways to visit. now, mr. powell, is it true that the cable industry supported the commission's open internet order? yes or no? >> ultimately yes. >> thank you. mr. powell again, if you please, help me remember, was use-based billing considered and allowed by the open internet order? yes or no. >> yes. >> mr. powell, were managed services also considered and allowed as part of the order? yes or no? >> yes. >> mr. powell, i want to thank you for the way you're proceeding here. so are cable companies delivering products and services as well as practicing business models that comply with the open internet order, yes or no? >> yes. >> mr. powell, in other words, cable is complying with the order? >> yes, we believe we are.

mr. powell, one last question and i do want to commend you again, the fcc just set its viewability order. i think it's very important that cable subscribers be able to access local content by smaller broadcasters. this is the question. what steps will ncta's member companies take to ensure that their subscribers can still access local broadcast signals affected by the viewability orders' sun set. >> yes, we agree that it is important that we can continue to receive their signals. 80% of the consumers have gone digital and they will not be affected. as to the remaining 20%. we committed to low-cost boxes that would make that an affordable transition, similar to the broadcasters used for the hd transition and we provide

adequate notice and the transition period to allow that to happen smoothly. >> thank you, mr. powell. and my thanks to the panel and thank you for your assistance and your candor. i yield back the balance of my time. >> the gentleman yields back. the gentleman from illinois, mr. rush, is recognized for five minutes. >> thank you, mr. chairman, and i want to thank the witnesses for their appearance in the subcommittee. >> i have a question regarding the legal construction on the definition they will submit for the record or ask if we have another round of questions. and if there is time remaining, mr. chairman, i would like to hear some of the panelists' reviews regarding the consumer privacy matters, privacy needs to be addressed as so many have business models that depend heavily on advertising and there are other emerging models not

represented here today that are rolling out video offerings tied to social media platforms, but first, i would like to ask questions that pertain to the more diverse ownership with wireless, cable and information services licenses. while i agree with you, we should have the diverse ownership and control of wireless services. i would like to rdz something into your testimony, it says that, and i quote, the model permits a diversity of ownership and control that does not exist in wireless services, end quote.

and you know, mr. barrett, for example, the minorities make up one-third of the u.s. population and owned and estimated 3% of foreign commercial television stations and 7.5% of commercial radio stations. and i strongly suspect that minority cable system ownership, numbers are not much better and much more. the numbers suggest to you that there's sufficient diversity of ownership and has the video content and should we be concerned that those levels could be decreased even further following voluntary location and they're going to lead up to incentive options. >> make those numbers suggest that there is a sad limitation on the number of