places and instead had to give away to the ash trang we arbitrage in the auction. so that's why currently the fcc is undergoing the review of the auction. and petitions filed by competitors concerned. and i welcome the chairman when he said we want to make sure the integrity of the program remains in tact. it is important to have that further notice of proposed rule making where we make sure once and for all these loopholes are closed and corporate wmp ends. >> could i pick up on this. because we called make news. >> i would like to. >> commissioner pai and i are going to agree. there are people back here who are falling off their chairs at this moment. >> i'm glad we can agree on this. >> you know, i am against slick lawyers coming in and taking advantage of a program that was designed for a specific audience and a specific purpose. i'm as opposed to that as i was

when commissioner pai and i disagreed last year on the way the slick lawyers were trying to take advantage of our rules on broadcasting. we are going to fix this. these are rules that have been in place since the bush administration. as the commissioner said we've got a rule making under way on this. we are going to issue a new public notice on this to make sure that this specific issue is teed up. and we are going to make sure that this -- that designated entities have the opportunity to participate and not to have designated as period beards for people who shouldn't. >> and senator i want you to know that i've been pushing for change in this since 2010. it's been a constant refrain from me to ensure more opportunities in the space. as you know, as was said, we are reviewing those applications. no final -- nothing final has been said. people have an opportunity to weigh in. >> great. thank you. important issue.

but i can't leave without addressing the commissions recent order. you know, i think it's only in washington actually that something has innovative has driven so much growth and new ideas as the internet, where we would end one an order that essentially applies 1930s style utility regulation and think that may be the best way going forward to ensure there is future innovation. and so i want to just share the concerns of so many of my colleagues that have been raised about the commission's order. and commissioner o'reilly. i want to ask you briefly about europe. because europe isn't exactly known for laissez faire hands off regulatory approach. as i understand proposals europeans are offering are much less stifling than the fcc's rules. normally we are not looking to

them t as the mald of where we want to to be in terms of regulations. can you help me understand what i see in fact we could be disadvantaged to some of our foreign competitors. >> i just came back from a barcelona. and had opportunity to talk to a number of people there as my colleagues did. and europeans particularly noticed the decisions, unlike the chairman's conversations, my conversations suggest they are very aware what we did and are willing to exploit it and take advantage of that and say if you are going to regulate the net we're going to opposite direction and lg willing to be less regulatory and drive traffic their way and companies and let the united states suffer in the process which i think is the completely backwards. >> i met with the european regulators and told them what we had done. and what we hadn't done. and i came away with exactly 180 degrees different. and then i talked to the ceos of the major international wireless

carriers. one of whom then was quoted in the press as saying yeah, you know, i think that this approach that america is taking and is possible and applicable. and you know what the key thing for all of them was? was what we did in terms of so called specialized services. managed services. non public internet services. and how we specifically said that isn't going to be covered. because the growth in the internet business. verizon, their cfo just had a statement about this at an investors conference. the growth in the internet business is going to be in specific services. internet of things, over the top services that are not public internet services and are specifically precluded from regulation in this. that was the big thing that the europeans wanted to talk to me about. because they had heard over

you're going to cover it. i said no we're not. and then everybody said oh okay. well then we're pretty copesetic. >> my time is up. i'll do the follow up because there is that specific example where i think of that already europeans are proposing things that are not as onerous has things proposed by the commission. thank you. >> thank you. >> we had a joint economic committee hearing with jason furman. i was there and on the floor so it's good to come back. this week i'm introducing the improving world call quality and reliability act with senator tester. i know problems with world call completion are of interest to many members of the commission and i welcome. i thank you for that and also members of the committee. i hope you will consider co-sponsoring our bill which is going to directly assess -- address one of the root causes of the problem, least call

reuters. recently you took enforcement action against verizon for failure to investigate problems with calls not being completed to rural areas. we thank you for that. part of the settlement included a commitment to addressing the number of least call reuters verizon uses. i would like to again think you and particularly commissioner erer erer clyburn if attention to this issue. this problem is now five years old and we still clearly have problems. least cost routers seem to be a major source of these call completion problems. do we need to know at least who they are and require them to follow minimum quality standards? and do you agree that we need to get to the source of the problem? and for my colleagues who aren't familiar with this this is what it sounds. actually calls being dropped at businesses and homes for no reason. and they are not getting the kind of service they need. they are getting substandard

service. so mr. chairman. >> so the -- first of all i think you pinpointed something very important. the data on that we will finally start getting first of next month when the information, when carriers are required to file with us. so we'll be able to say to you with statistical specificity what, senator, i believe is the situation that you are attempting to solve. and that you are moving this legislation is terrific. and that in that this is something we're also considering in our further notice on this topic. but i think you have identified it. >> thank you so much. commissioner thank you for your leadership on this issue. >> thank you. one of the things that was positive about the consent decree you mentioned with

verizon is now we're going to have workshops and there is going to be research. in terms of the overall issue of course the chairman mentioned that april 1st the requirements kick in. in august we'll have a clear picture with reports being released. so i know right now one of the things you mentioned the least cost routers today. the rules don't apply to them today. but thank you very much for reinforcing an issue that we will continue to review. >> okay. very good. thank you all of you. last congress i introduced the smart phone theft prevention act, as all know this is an unbelievable problem across the country with smart phones being stolen and people getting beat up, sometimes killed over cell phones and the bill required smart phone manufacturers and wireless carriers to install kill switches on all smart

phones so consumers could lock the device and wipe the information if it was stolen. additionally minnesota and california passed laws to require consumer protections on all phones sold in their states. we've come a long way on the issue instead of pretending it is not happening or that we can't do anything about it. but i think we need to keep on the pressure and that is why i'm actually reintroducing the bill. chairman wheeler are you committed to keep working with me to address smart phone theft? and do you think there can be more done the national level and any other commissioner that wants to chime in? >> yes, ma'am. and thank you for your leadership and coming down and help us kick off on the workshop we had on this. and let me tell you about the results of that. yes you are right the kill switch t volunteer agreement, the kill switch. i've seen reports uncorroborated in major cities where theft has gone down as a result of this.

i'm not going to break our arms patting ourselves on the back but there are three things here under way. one is that there needs to be a non wipable b -- as you can't wipe it out and substitute something else -- unit identifier for each device. like a vehicle identification number on a car that can't go away. the -- at our request the 3 gpp which is a standards body have said they will come out with a standard for that by the end of the year. but only moving towards it. doesn't solve it. second issue is there needs to be an on device, remote lock, ability to wife -- this sort of thing. after july of this year the devices that come into the market will have that capability. the third component that we have to have is we have to have a

good stolen phone database. there is currently one run by the gsm association. but it is, well, if you will participate in this and it is not quite user friendly and it is not -- and we need to work with them, or with law enforcement, to improve that. and we've been working with law enforcement to bring pressure on either one of those. but i think those are the three steps that we have to take. but you have been a leader and thank you. >> did you want to add anything? >> wurn in three robberies today involves theft of a mobile device. and in some mange metropolitan areas it is one in two. and by any measure that is an epidemic. so i think it is vitally important every consumer have access to the ability to remotely wipe their device and that should be on every device free of cost and we should make sure that's available as soon as possible. >> thank you.

>> senator wicker has returned. so senatorer, wicker. senator sullivan. >> thank you very much. [inaudible] [ laughter ] eight hearings in five days? is that what i've heard. >> >> five hearings in eight days. >> well. i've had four hearings in one day. so there you go. [ laughter ] breathlessly rushed back in. and thank you all for filibustering until i could get here. mr. pai. let me ask you. you know, we -- sometimes we vigorously disagree with our colleagues. it is clear you have vigorously disagreed with a majority of this panel on the so called open internet rule. and i appreciate you doing it

cheerfully. but also forcefully. and i -- i want you to help us understand the reasons that you have given procedurally and substantively under the statute as to why this decision is violative of requirements and violative of the communications act. >> thank you for the question. i could go through all 67 pages but i will abbreviate it for the sake of the panel and for everyone watching. in short there are problems with process and problems with substance. in terms of process my view is the agency failed to comply the administrative procedure act. in terms of giving public fair notice and an opportunity to comment on the proposal that it ultimately adopted. here is the indisputable truth. the fcc never proposed title 2.

it adopted a proposal in may 2014 that was based on section 706. through the course of the summer it was widely reported that section 706 was the lead proposal. later it was reported that some sort of hybrid proposal, based on themizzoula initiative was the lead proposal. only after did the fcc suddenly change course. >> what would need to have been done for the proposal to actually have been made. >> i will say and said this before the president made his announcement when i healed the only fcc hearing that allowed people to comment on net neutrality. by view was that whatever the ploem was the american people should be allowed to see it and comment on it. we should have a new round. that would avoid the pickle they are now in. where they have to litigate for

a couple years. there wasn't notice in this case. and the best evidence is you saw a lot of speculation in the press wens wurns oonce we got the document on february 5th. what does it mean broadband subscriber access was removed? they didn't know what was in the plan. >> now with regard to the substance. >> with respect to substance i think the text of the communications act and the fcc's own precedence make it difficult for title 2 to be applied to the broadband why industry. one example, with respect to the mobile broadband, section 332 explicitly lyly prohibits prooifl mobile service. and you will see legal gymnastics in which the fcc cleverly tries to redefine the public switch network in order to have it apply to the internet the mobile broadband services but i don't think a review in court is certainly going to see

that passes muster. and with wire line. i would argue there are substantial hurleds the agency is going to have to broach to make it stick. both reasons of the process and substance there is serious litigation risk in this order. >> is there any question in your mind that is going to result in years of litigation. >> the best is what's come to pass. the first case which was the comcast bit torrent case took two years. the 2010 open internet order was resolved in 2014. so the communications bar will be busy some time trying to figure which courts to challenge this and the courts will have a long time to saver its many details. >> and in terms of protecting the flexibility and the ability going forward of this huge engine of the economy, what does this order do? >> i think it is going to have a

significant negative impact. and the best example of that is mobile data. the argument has been made repeatedly here today that while title 2 as applied to mobile has been successful because it's somewhat diluted. two points. one mobile as commissioner o'reilly pointed out mobile data has never been a title two service. secondarily, arguing the tremendous increase in mobile investment has been attributable to the title two application to mobile voice. anyone's looking at this the introduction of the smart phone in 2007 generated explosion in mobile data usage which carriers then had to struggle to keep up with and did it by billions of dollars in spectrum and billions more in wireless infrastructure. and it was because mobile data was like lightly rated that we saw benefit to consumers. also argue that in january the fcc made a big show about 25 mega bits per second being the

standard for broadband but then in february decided it would be account tble to title 2. you can't have it both ways. >> thank you very much. >> thank you senator wicker. senator sullivan. >> thank you mr. chairman. and thank you commissioners. i know you have had a long day. and i have a bunch of basic questions. you are the experts. i'm a freshman senator here trying to figure out what's going on. obviously there is a lot of press. let me just ask a couple base questions. and to the extent you can keep them short but i want a number of different responses. fcc reauthorization. when was the last time that happened? by congress. >> i think the chairman said 25 years ago. >> so do you think that is a good idea? why why? chairman wheeler why do you think that is a good idea. >> i think congress makes the rules.

congress decided not to for 25 years. if congress wanted to decide to do it again congress makes the rules. >> commissioner pai. >> it allows congress to modernize our operations and make sure rules keep pace with the times and i think that is important for congress to be involved with. >> so big policy decision -- you aren independent agency. so big policy decisions who makes those calls? congress? the president? you? who is responsible for making big policy decisions that impact telecommunications. >> sorry i -- >> i have so many questions. >> congress has historically set down the parameters and said this is what we want the agency to do -- >> you think -- do you think

regulating the internet is a big policy decision that wasn't contemplated 70 years ago that should be for o more of a congressional action than an independent agency action? >> i think that the congress instructed us to protect the public interest, convenience and necessity and gave specific authorities to do that -- >> on a -- >> and that's what we were following. >> on a portion of the economy that wasn't contemplated 70 years ago. >> well this was '96. but the early days of the internet. >> so commissioner pai? >> i agree. and that is why i said in the wake of the verizon versus fcc decision in 2014 that now the fcc now twice having failed in court to have its open internet rule sustained we should turn to congress for guidance. >> is there anything in the law quickly that gives the president kind of -- so let's say chairman thune or ranking member nelson give a big speech on the

internet and it's regulated and well thought out. and then the president gives a speech too. is there at all that says this agency should give more deference to the president? >> absolutely not. >> absolutely not. >> in terms of consensus, do you try to work consensus as commissioners? there is obviously some pretty differing opinions of this rule. is that the typical approach to try to work on consensus? do you think that is important to try to achieve consensus? plmp a lot of times if you are the chair you want to work on consensus. do you think that's mop. >> i totally agree. 09 90% of our decisions are five oh. the difficult decisions often become con tensetentiouscontentious. >> do you think decisions like this that are highly contentious

splitting the commission is going to lead to a lot of litigation the. >> the big guys have said they are going to sue and have been saying from day one. >> when some of your commissioners think it is a legal action, do you think that invites litigation? >> the beauty of it is you get two lawyers in a room and you will have three opinions. >> that's cute but i'm not sure there is a beauty here at all to be honest. years of litigation are going to create uncertainty. do you think uncertainty is good for investment in this part of the economy? >> one of the things -- >> do you think uncertainty is good -- >> uncertainty is never good. and there is all kinds of uncertainty. including what is the commission going to do? we have set out a certain set of rules. people know what the rules of the road are now. what the yardsticks are. they didn't -- that didn't exist before. and remember that under the 2010 rules they were not stayed by

the court. and so they were effect for four years. >> can you give me an campbell -- >> there was great investment during the period when they were in effect. >> can you give me an example of regulating the large part of economy that's resulted in spurring innovation and jobs? >> lookout the period of 2010 to 2014 when the previous internet rules were in place and we had unprecedented growth. >> commissioner pai can you respond to that. >> there are other examples too. such as when dsl was regulated under title two during its greatest period of growth. there is -- i mean i think there are other track records here that establish this kind of growth. >> i respectfully disagree with the chairman. the explosion in particular when it comes to wireless investment was specifically because of the 2010 order exempted wireless from the net neutrality rules. and one of the reasons we now live in an increasingly mobile world is because the fcc was

relatively restrained in 2010 kpa ird to now. time is only going to tell and the best example is europe. europeans have significantly less access to high speed broadband than we do. 82% of americans. 438% of the europeans. and there is reasons for that. and the reason is until february 26th we were relatively constrained and stuck with that bipartisan consensus that stood us since the clinton administration. >> i have additional questions i'd like to submit for the record. >> senator sullivan, thank you. and we'll make sure those questions are submitted. since i can't see anybody else coming in. [ laughter ] it's senator mansion's turn. chair recognizes the senator from west virginia. >> thank you senator. i appreciate that so much. this is such an interesting topic and i keep thinking back

to those who are old enough or grew up basically before there was mobile phones. cell phones. internet. computers. >> television. >> i didn't want to go but we can go there if you want to. and then, you know, in west virginia there is still discussions did al gore really invent the internet? or was it something we all contributed to and all of us being involved. i think when you look about where we are we all will agree this is an intricate part of our life today and we all depend on it. we might not know all of the answers to the questions we just put forth but bottom line we don't want to lose what we have. and rule states such as west virginia told us when you divest yourself with the telephone ma bell it would be better. it wasn't. they told us if we deregulated airlines it would be better. it wasn't. deregulation and they said when

you deregulate the utilities it will be better. it wasn't. so basically with all of that being said in a rural area, rural states we're a little bit leery of how much merit you wantbetter you want to make it for us. with that we still want our access. we style want to have all of our schools connected in west virginia. every school in our state is connected. we made sure of that. how do we now table able to take that homework home and make sure the child still has the ability to do that? i can assure you there is not enough market in west virginia for all of our friends on wall street or slk valleyilicon valley. i know that. i'm still looking for the balance. and the fcc you are still taking a lot of flak on this. i do look at it as the necessarisy utility.

so there is some of us on our side of the aisle looking for that middle road. without going to court. can we help alleviate that. can we do legislation working with our colleagues on our republican side, working together as americans and finding a solution to this. without battling it out in a court system and ended up -- it is going to be costly no matter what happens and the consumers end up paying. so mr. chairman orb any of you. mr. o'reilly maybe since you haven't had a lot to say with this. and then finding out, who have you all among yourself, the five of you tried to find commonality commonality. >>. let me suggest an answer. the commission is a creature of congress. so any time congress can speak on something i think it is helpful. so whatever you are able to agree in terms of legislation that is helpful. i don't know the particulars but i leave that to your capable hands to whether you can get

legislation and what you think the best outcome should be in terms of policy decisions. >> when you look at the gdp -- i looked at china. china is at 9 trillion. vush russia is 2 trillion. great britain is 2 trillion. we're at 17 plus trillion. so we've done something right in spite of ourself. and we want to make sure -- we want to make sure that we can continue to grow. and internet's been a big part of that gdp. you got to give us some direction here. if you five can't find some areas, you know, of agreement or consensus -- and right now i see you split three two. pretty even. you're all probably friends. y'all talk and work together but on this you're split. if you can't come together, how in the world do you expect us to work together? right here to mr. clyburn.

>> miracles do happen. [ laughter ] >> i think we're on the same wave length. >> i am a believer. well one of the things i don't think we could have envisioned just a few months ago is that this body, congress recognizes the importance for needs and rules for free and open internet. we are encouragers, enablers of the innovation and investment. and that's why this conversation is healthy and important. we might not agree on the particulars but we agree on what we think the end game is and that is a robust, open and free platform that will allow every community to be the best it can be. >> so would it be accurate for me to evaluate saying that the system we have right now, the way we're operating the internet right now is giving us the access and protection that we need. the average citizen in america. but also allowing the innovators and creators to continue to invest and get a return on that

investment. and does it come down basically i'm just -- corporate america, i'm just not getting exactly what i intend for my stockholders to see i'm getting return on investment so i won't put the money into it because you haven't let unfeathered, let me go? >> one of the things i think is lost on some of the -- >> i'm sorry. are you forgive me? >> i waited a long time. so maybe he'll give me a couple extra. >> so there are pro competitive elements of this order that nobody is talking about. when it comes to poll attachments that has been -- you know in your community. that has been a bottle neck. this order help us, gives us the tools to enable that type of investment to get rid of the barriers to that. when we talk about our national priorities of connecting america, completing that stool of getting -- my colleague talks

about the homework app. it is important for us to have connectivities in our schools and libraries but it is just important that learning does not stop when people get home. so enabling more people to connect with poll attachments to provide service will hopefully make things more affordable for more people and allowing them to connect at home. all of these things are linked and that is why it's so important for us to continue this conversation. we might not agree on every footnote, which is my internal joke. but we agree on the end. very internal. >> i would encourage y'all to work together. >> thank you. >> senator i would answer that question simply by saying title two takes away from the direction of the more broadband options and one of the most important things about the net neutrality debate for me is that there are a number of different sec policies within our legal

authority that we could pursue to give folks in west virginia and folks in kansas and south carolina the same broadband options that people take for granted. we could make it easier to deploy wireless infrastructure. and get more wireless spectrum so they can deliver high speed broadband in places like mountainous wvest virginia where you can't lay fiber. we could modernize the e rate program to make it fairer for rural schools to be able to get funding for the program and connect kids with digital -- >> how that's delivered, correct? >> sorry. >> it's possible of losing control how it's delivered? whose going to make the decision how i get that. >> all of us would ultimately set the regulatory framework and then the private sector then would have incentive. >> i'm not objecting to this. i understand where your coming

from. i want the best of both worlds i guess. i've got a pretty good world right now. can i make it without throwing the baby without the bath water and i guess that's what i'm looking for. >> in this hearing room i keep hearing the echo of years ago sitting at this table when senator hols was up gsholings up there in the chair and he kept saying i'm a born again deregulator. because he learned, as you said, what are the realities when you say the people who run it are the people who are going to make the rules. and what we're trying to say that this is the most powerful and pervasive platform in the history of the planet and there ought to be some rules that are made by people other than those who run it. >> and i would say that for my senator from west virginia that perhaps on this issue we here

can find consensus and inspire those five to find consensus. >> can i pick up on that and say yay. >> yeah. if we could work together seriously though on a solution because i think there is -- i think that would make a lot of sense for a lot of reasons. >> senator wicker has one more question he'd like to ask. >> one more line of questioning. >> senator mansion is right. we got it pretty good now. innovation is pretty good now. and i do wonder if this is a solution in search of a problem. but talking about rural america. commissioner clyburn. thank you for visiting mississippi. thank you for visiting rural sunflower county. in the mississippi delta. and there you saw a ground breaking telemedicine program that is treating and attempting to defeat type two diabetes. so thank you for coming. this program depends on usf

supported robust mobile brbd broadband connections. twhaz what is the fcc prepared to do to ensure the support remains available so rural wireless networks remain up and running and enabling access to these critical life-saving and cost-saving advances in medicine. >> you know about phase 1 one of mobility fund as well as connect america fund. we are moving ahead in the next phases of that which we hope will be further enablers for investments. we've got broadband experiments in a rural initiatives that will help us work out the kinks for us to go to the next stage of broader series of investments. so what we're doing is on a very parallel course working out the kinks in terms of ip transition and the like. and really continuing to fuel innovation and monies in

investment. and working with communities with the private sector, with government officials to ensure that the monies that are needed to close these gaps, to ensure that ruralville mississippi has the conductivity it needs to further the positive health outcomes that i witnessed in that area. incredible outcomes. >> when you were there did we get you down to see the b.b. king museum? >> i missed that unfortunately. >> world class. >> we didn't allocate enough time. but if you invite me back i'll be glad to. i didn't get a chance to do too much eating. so if you could work on that next time i'd appreciate it. >> the mississippi center and the delta council have written you to provide support for rural

areas. can the commission assure rural consumers like the once i'm talking about, that there will be no dereductions in their access to wireless services? and what assurances can you give this committee that rural consumers will not lose their current ability to choose among quality providers? >> i think commissioner clyburn thank you senator. and can i get an invitation. i'd like to see lucille. >> absolutely. >> i think commissioner hit the nail on the head in terms of we are now looking at moving to phase two of the mobility fund. and that it has to fit into all the other activities which we spoke about earlier in this hearing in terms of what we're doing for universal service. i am a -- you know, we talk about the great job that the university of mississippi medical center is doing. i'm a huge believer in what

mobile health can do. i was -- before i took this job, i was the chairman of the u.n. foundations and health alliance where i was literally going around the world saying here is how you can use mobility to solve these problems and we want to make sure these kind of opportunities do exist in this country country. >> thank you and thank you for a second round my colleagues. >> thank you. we're almost there guys. >> not quite. mr. chairman i have a letter that the leadership conference on civil and human rights. they are weighing in on this. i ask that it be entered in the record. >> without objection. >> let's go back. you know, this flap started that

prompted four million comments. i take it that is fairly unprecedented. >> the record. >> and a lot of that was expressing their angst because they thought that their internet was going to be messed with. is that correct? >> yes, sir. >> and by messing with it if we think back to what was in the public's mind at the time it was were they going to have to pay more because certain content was going to have to pay more to get onto the internet pipes. is that correct? >> that was one of the major issues. the so called fast lane issue. >> okay. and by you drawing the order as you have drawn it, does that

allow you, the fcc as a regulator, as a referee, along with future regulators, if someone suddenly wants to charge more for certain traffic on the internet than other types of traffic that an fcc is going to be a referee there now or in the future to prevent that. >> we have ha flat out ban on those kind of paid fast lanes. >> and that is in the order. >> yes, sir. >> mr. pai, do you disagree with that? >> i agree it is in the order. but i also agree -- >> no. the obvious question is do you disagree with that provision in the order? >> oh, yes i do. absolutely. because number one there is to paid prioritization now. there are no fast lanes now. this is entirely hypothetical concern >> okay. and i'll tell you mr. pai, it

wasn't of no concern to four million people. >> well you put it well senator when you said they had angst about what was going to happen. if you look at the actual document there is no evidence in the record of any systemic failure specifically with paid prioritization. moreover even if you greed there was a problem as the chairman testified before the house last year you cannot ban paid prioritization under title two. and i agree with him. >> you're putting words in my mouth here. >> i'm quoting you. >> i said there is a waiver process under title two that is a way out of. what we have done as you know, is to have a flat out ban on paid prioritization. and to specify what the waiver test ought to be. so if you are going to represent my position let's be specific on what that is. >> let me ask you chairman wheeler.

is there a difference in the issue about the application of title two that is before the court this time that was different the last time that this issue was before the court? >> yes sir. >> would you explain that to the committee. >> the issue before the court in the 2010 rule was the court determined that -- that the kinds of requirements that the commission had put in place were only requirements that could be applied to a common carrier. and because of the fact that the agency had not said that broadband providers were common carriers they therefore couldn't reach and impose on them. a point that is of interest in that lawsuit. and is relative to what commissioner pai said a moment ago about paid prioritization.

is that the verizon's council during oral argument said i have been explicitly authorized by my client to tell the court that the reason we are appealing this decision is that we want the kind of unregulated environment that would allow us to do the kind of things you have been talking about. such as paid prioritization. and it was those issues that were all involved in that decision. >> let me give you chairman wheeler the chance. there was one of the senators here. i think it was senator johnson, he had asked a question. commissioner pai had answered it. you requested an opportunity to respond and there was not time. do you recall -- >> do you remember -- this is like watching a tennis match

sir. i'm not sure i remembered the question. >> i think that was where you wanted to voice you agreement with what i was saying. >> is that -- no wonder i forgot. thank you senator. >> i've got some additional questions, i'm submit them for the record. because of the lateness of the hour. >> do you have a response to this last question. >> >> the previous question. i just want to make sure we are absolutely accurate. quote there is nothing in title two that prohibits paid prioritization, period. >> so let's just quit playing on words. >> moreover the representation of the oral argued was completely misconstrued. >> i will stipulate i said that and what that statement says is not how you are interpreting it. >> you can go to youtube and watch it. >> so just timeout. does title two provide a waiver process? >> there is no waiver process in title two. you can interpret the rules to fashion some sort of make work. >> there is in all of title two

a process where you can apply to the commission for a waiver. >> under what section? >> and if you take that -- don't take that out of context the reason what i was saying in that hearing was that there is always an opportunity under title two to come in and seek a waiver under our general procedures. it is -- >> okay. if that is the argument then obviously if the fcc has general waiver kit apply to anything under the sun. >> i sure fouled up in my explanation of things then, didn't i. >> i take you at your word then that you didn't believe title two banned prioritization. and think i agree with that. and the record speaks for itself. >> -- a referee. >> it's very fun to sit between the two of them. [ laughter ] >> mr. chairman, i think that the meetings of the fcc must be

very interesting. >> it is must watch tv senator. >> let me just say that i have the shared responsibility with the chairman of this committee as the majority of this committee, to see if there is any common ground. and i'm not sure there is common ground if the issues are as divided as they are. and that saddens me. because i think that reasonable people can usually come together and find a consensus. but commissioner pai, if the chairman says -- and this has been typical throughout the last three hours and 15 minutes if the chairman says the sky is

blue you will say no it is a different color. >> senator. the best -- >> and that is what's gone on all day. >> senator, the best example of many willingness to find consensus is my track record of the two and a half years i've had the pleasure of serving. under others we had 89d% in unanimous votes. that percentage has gone down precipitously down to 50%. even on net neutrality the chairman's office asked would you be interested in talking about a possible solution. i said yes. they never got back to us. on this particular issue and great number of high profile issue we consistently put a proposal on the table that would allow us to find consensus. all of my statements are on the record. you can look at them on my website and they have been repeat willed i rebuffed for god knows what reason. but my door is always open. and perhaps my opt nism, i

really believe we can get to yes because the first two years of my tenure we did get to yes. >> so since i'm the one that'simpugned. and you have my permission since this is my time. >> there is a difference between staking out of position and saying this position which is contrary to the goals of the majority if you don't agree with this position then you are not compromising with me. but we'll let that slide. i just want to -- i've heard commissioner pai on this. here is a communications daily head line. wheeler sitting on mrrm in redining m approximate d in hopes of consensus with republicans. here is a statement from commissioner pai. on our location orders. saying at the time i expressed concern the proposals would fail to meet that test and that concern was borne out by the

record so i'm pleased we have now adjusted course and now adopting requirements that commend these two. i want to commend the parties that work cooperatively on this effort. there is a -- i sit down with all of my colleagues, every other week. we have a regular meeting for an hour. on the schedule at least for an hour to say what are the issues. and what do we need to work on. and i say that we can continue to produce results that where we respect each other. and but we need to be real careful of talking about how redefining things and then saying because you won't take my redefinition, you won't compromise. that is not compromise. >> i'll just conclude by saying that i have a great deal of

faith in senator thune as a partner as we go forth on a lot of issues on this and whether or not we can work out something on this, it's to be determined. but i can assure you that the conversations between senator thune and me are quite civil, and in the best spirit of friendliness. thank you, mr. chairman. >> thank you, senator nelson. i think this discussion demonstrates that we do need to figure out how to resolve this issue. and indeed, the ambiguity, the uncertainty, all the discussion that's going on right now suggests to me that we need some clarity. and if we want to ban prioritization, let's do it in law. i mean, that's a fairly straightforward way of solving this issue and eliminating of what will be a lot of

uncertainty. i look forward to working with you and members on both sides. i hope we can find that title x, as you refer to it, the sweet spot. all right. i assume that the senators from the northeast are back, because they want to ask some questions? can you be very, very quick? >> certainly, mr. chairman. >> the gentleman from massachusetts. >> we seek common ground on brevity. >> say that not for my benefit, but theirs. >> i understand that. and i want to thank all of you for your perseverance here today. i wrant to second what my two colleagues have said we certainly will seek common ground. but i think there is a clear policy that has emerged from the fcc on an open internet and net neutrality, and that policy now, even if it is a result of a divided commission, it's law. and if it's challenged, as i

indicated earlier i certainly would do everything in my power to support it. because i think clarity is to be greatly sought and prized here. i want to explore another area which relates to a letter that i received from a connecticut radio station wcgh in greenwich. the local owner of that local radio station wrote to me regarding notification he received from verizon that verizon legacy services provided to the station would be immediately terminated in 90 days and the station must find alternative service option. he was upset, understandably, that his other option cost 2.5 times what the station currently pays. and also would take weeks to ib stall.

wgch serves more than 1 million people with information that they need and deserve on emergencies, weather and catastrophes, and listeners rely on that service. so as ip transition moves forward and more legacy providers go through this process of obtaining permission for the commission to discontinue existing services in favor of newer technologies and more and more consumers receive notices of discontinuance, i want to make sure there are protections for consumers. chairman wheeler i understand the commission is committed to making sure the consumers are properly informed. but i would also like to know what the commission is doing to ensure that consumers have recourses and enforceable standards so they're not literally like wgch not cut off from service in the process. >> yes, sir. we have just finished the comment period on the rule-making on this issue. we shorthand call it copper

retirement. and there are three principles. the first principalsle is public safety. you cannot reflect the ability for people to call 911. when you go to fiber that becomes an issue, because fiber doesn't have power that comes with it. so how are you going to deal with that a power outage situation. secondly is that the consumer needs to know what's going on. so there has to be transparency. none of this, surprise! we're going to be changing things. which sounds like the story you're talking about. and thirdly, is that small and medium operators like your medium companies like you're talking about, need to continue to have competitive choices. and so we've teed up all three of those questions in this rule-making, and we'll be wrestling with bringing them forward in an order.

but you put your finger on a very important issue. >> and what will be the timing for that? >> i hope to be able to work with all of my colleagues to deliver that -- you know sometime around football season, shall we say. i'll give myself a little leeway there. we take this quite seriously. >> i want to just conclude on the subject that i raised during the end of my last question. it seems to me one of the brightest areas one of the most promising areas in the video marketplace these days seems to be the flexibility offered to consumers by online video services. and i'm talking about netflix amazon, prime, apple tv. just yesterday, as you may know,

the "wall street journal" reported apple is in talks with tv networks to offer a less expensive, slimmed-down service a bundle of 25 channels this fall. but here's the comment that struck me. and i'm quoting for now, the talks don't involve nbc universal, owner of the nbc broadcast network and cable channels like usa and bravo, because of a falling out between apple and nbc universal parent company comcast corporation. the people familiar with the matter said, end of quote. i'm concerned about competition. among broadband providers. i think that concern about anti-competitive behavior is real as the quote indicated. these new -- these companies that offer new services new competition require high-speed internet access to reach.

their customers. that risk of anti-competitive behavior is one of the reasons that i raise a concern about the comcast merger that we discussed with time warner. and in fact, if i may quote you, you said the underpinning of broadband policy today is that competition is the most effective tool for driving innovation investment and consumer and economic benefits. unfortunately, the reality we face today is that as broadband increases, competitive choice decreases. my time is expired. perhaps gratefully in your view but i just want to invite your comment, if you have any other comments, or from other members of the commission.

because i think that central principal and goal of competition is so important. i know that you can't comment on the merger, i'm not asking you to, but if you or any of your colleagues have a comment on this general area, i would welcome it. >> yes i have opinions. i will surprise you. but i will look down the table and -- i don't want to hog this. jessica? >> sure. television is going to change more in the next couple of years than it has over the last several decades. we all now want to watch what we want to watch when we want to watch it on any screen handy. and i think the commission going forward needs to be mindful of all of these new services and help find ways to make them successful so consumers have more choice, and there's more competition in the commission of video services. >> i've heard from so many of the members of this committee about cable pricing and these kind of things. the answer is in competition.

that competition is coming over the top. it is coming over the top through the internet. here's one of the reasons why there has to be an open internet. because historically, cable systems have chosen who will be on. i will take this service, not that service. and we cannot be in that kind of a situation if we want to have true video competition. >> thank you. >> senator markey? >> thank you, mr. chairman, very much. may i ask you, mr. chairman did the fcc follow the processes used by both democrat and republican commissions when crafting these latest net neutrality rules? >> yes, sir. >> yeah. these are tough decisions. it's a process though. and out of the process came a

decision. that i agree with. i think it's an historically correct decision. but i don't think there should be a question whether or not you use the process that allowed all voices to be heard in the final vote 3-2. it's based on the totality of everything that all five of you had the opportunity to hear, 3-2. it was a process. it gave everyone the ability to hear what they needed to hear. and i think you made just the right decision. and i think you made the right decision looking at the whole history of the fcc and what you've done for our country. back in the 1970s, you know, the ceo of sprint and mci came into my office and they had less than one-half of one-half of one-half percent of the market. and they wanted the fcc to change the rules so you didn't have to dial 23 numbers before you dialed the number your mother made you memorize in case you were ever in a car accident. and that's what created those

industries. the fcc saying no, competition. the fcc passed the rules and said no a cable company doesn't have to put up a step pole on each street. you can use the telephone pole and pay a reasonable fee to do so. we don't want the street filled up with poles. it was reasonable. add it to the competition. at&t didn't want to be broken up. but we all had -- it can't stay there forever. you've got to move on. it's all about competition. it's all about innovation. when you did the light touch on wireless, 1993, the fcc using title 2 was all intent on unleashing hundreds and hundreds of billions of dollars of new investment. it worked. the fcc made the right decision. you know the agency of expertise. when we created the third, fourth, fifth, sixth, seventh telephone license, we had to do it because the other two companies had monopolies.

and the phone was the size of a brick and nobody had one. the fcc made the right decision to advance competition. that's what this is all about. the cable industry did not want at&t and the telephone company to get into cable. they wanted a monopoly. at&t did not want the cable industry to be able to provide telephone service. right? these are big players here. big players. and i understand it. big players don't want little people coming in. ruining this nice little world that they have going. and even the decision you just made on municipal broadbands that's just saying to individual communities all across the country, you can't provide competition. and that's a 3-2 decision here. 3-2, 3-2 3-2. i understand. i understand the commissioners

vote no. these are tough issues. those are tough issues on allowing mci and sprint to be born back in the 1970s. tough decisions. taking on the monopoly issues, taking on the big companies. so we're at a crossroads here. where the innovation the investment dollars, the creativity the content creators are not the big companies they're thousands of little companies that all benefit from net neutrality. you've got it just right. it's the heart of our economy. it's where young people want to go. of all races. it's where the venture capitalists are putting their money. and as you correctly pointed out, all these companies then reported within days after you passed this rule that it wasn't going to affect their long-term investment in their infrastructure going forward. they all said the exact same thing. but you know what else happened? all over the country a whole bunch of people between the ages of 20 and 35 said this is great. i've got new apps, i've got new

technologies, i have new services, i can reach 310 million americans. as soon as we do that in america, then we're selling out across the world. branded, made in america. it's these new companies that make the difference. and just like sprint and mci all the way through today that's what the fcc's all about. and you're the agency of expertise. and you've used this existing framework brilliantly over the years. brilliantly. and i think you got it right again. and i think it would be ill advised for the congress to move in and try to be the agency of expertise, when there's now a consensus that's already been built by the statements of the largest companies that they can live with it, that they'll invest at the same pace. but the enthusiasm that comes from the smaller software and apps companies, new internet answer apps has been overwhelming. i say this to put into context

of history how far we've come in a brief period of time. you don't have to when a long distance call comes into your house now, yell, hurry hurry, it's a long distance call! what we're doing here is we're not letting people get away with it. they know there's another way of doing business. that's what net neutrality under title 22 makes in the process of our country. >> i assume there wasn't a question in there. [ laughter ] >> the first question was to the -- >> that's okay. >> it was a leading question. but it was a question. >> and the senator from massachusetts is undecided in our draft bill. [ laughter ] i want to just in terms of fcc reauthorization, it got asked once before and a couple of you responded to it but i want to

ask a question of all the commissioners. is that something you think we ought to do? is it time to reauthorize the fcc? >> that's a decision that you make, that congress has made the decision not to thus far. if you want to change that decision, you're the congress, you make the rules. >> i agree, that's up to congress. but i also agree it's always good to review federal agencies and practices. >> yes. >> it's congress' decision, but i agree it's time to move forward with something. >> mr. chairman, can i say? 25 years is a long time. >> yeah. your hair was a different color back then. and very quickly, one reform that you would recommend that we make, or a top reform, as you think about fcc reauthorization? anything come to mind?

>> i put a number on the table already and talked about it in my statement. but one i haven't talked about, that i think there's a need to have an accountability of our enforcement procedures. we issue a number of n.e.l.s and judgments in that case but there's no tracking what's happening to the money. are we actually getting the money that we're assigning penalties for. i think that would be very helpful. i tried to get the material for this hearing and the information just came back well, we don't track that. we should know if we're penalizing somebody, is it actually being paid? that's one thing i would add to the multiple layers that i've already talked about. >> i've talked about this for a number of years, but our deliberative process is a bit cumbersome. so sunshine accuform would be at the top of my list. >> i would add, section 5 of the

communications act, to ensure that the full commission has an opportunity to weigh in on serious and substantial policy questions, which currently often result undelegated authority by the bureaus. >> i think we need a program to bring in more engineers. we have more wireless technologies at any point in history. if we were able to bring in more engineers, and equipment authorizations, that are multiplying, we would be a lot faster to make sure that innovation makes its way to the marketplace. >> i think it's a series of good ideas. i would be like to be much more forthcoming in response to the laundry list, sir. >> all right. well look, i -- it's been a long day. i appreciate your indulgence. i would just say in closing, i think the issues that we've discussed and debated today, there are strong feelings about. i still believe, maintain for a long time that we're better served in the long run if we can

provide clear rules for the road. and i think a clear direction of the fcc, but limited tailored to me is a better way to approach the issue of how best to achieve an open internet. and as i mentioned before, we've got a bill senator nelson and others and i have chatted about it, i would hope going forward that the commission could play a constructive role not discourage us from legislating. but perhaps it would be helpful if we decide to do something that would put something in the statute that i think again, addresses the issue of uncertainty and lawsuits which is going to plague, i think, this order for some time to come, that you all could play a contributing role to that, and not work against that. >> can i just be supportive of those comments sir? i think that we're in a situation of we will, we will provide you whatever expertise

that we can, including from different points of view. and this is going to be a classic situation of, we'll report and you decide. >> okay. >> i would ask that question as well of the chairman. and he has assured me that he will. my sense is, as a result of what we've heard today, from the five commissioners, is that we're going to have to let this percolate a little bit before we can actually sit down and have this consensus building that you all -- that you and i are talking about. >> okay. with that, the hearing record will remain open for two weeks, during which time senators are asked to submit any questions for the record upon receipt the witnesses are requested to submit the written answers to the committee as soon as possible. thank the panel. this hearing is add joushd. adjourned.

earlier today joint chiefs of staff joined defense secretary ashton carter. general dempsey told the committee that the u.s. commission against isis will

likely extend beyond three years. you can see the entire hearing at c-span.org. here's his comment on isis. >> one of the questions i had was, the hostility. if the hostility -- it doesn't say anything about the determination of hostilities at the three-year period. is it your feeling that the hostilities could continue that we could have actions against isil beyond the three years as currently written and implemented? >> again, the three years is not a prediction about the duration of the campaign to defeat isis. it is a recognition of the way our political system works. and the recognition that a new president and a new congress in three years may wish to revisit this issue. as i said i understand and

respect that. but it isn't a prediction about the duration of the campaign against isil. >> general? >> my military experience and judgment suggests that the answer to your question is, it will likely extend beyond three years. this weekend the c-span cities tour has partnered with media com to learn about the literary life of columbus georgia. >> inside the museum is remains an ironclad, the css jackson. it was an ironclad built here in columbus during the war. the oval shapes are actually the gun ports of the jackson. and the jackson is armed with six rifles. the particular brook rifle that we're firing today is one of the guns built specifically for the jackson. it was cast at the selma naval works in selma, alabama, and completed in january of 1865.

the real claim to fame is directly connected to the fact that there are only four ironclads from the civil war that we can study right now. and the jackson is right here. and this is why this facility is here. it's first and foremost telling the story of this particular ironclad. and to show people that there are more than just one or two ironclads. there were many. >> watch all of our events from columbus, saturday, at noon eastern, on c-span2's book tv, and sunday afternoon on c-span3 on "american history tv." secret service director joseph clancy faced criticism from congress yesterday about a string of security lapses and misconduct by agents. members of a house appropriations subcommittee questioned him about two secret service agents, allegedly driving into a white house barricade while drunk.

this is about 1 hour 45 minutes. >> it's a new system. we've got to get used to it. today we welcome joe clancy, the recently appointed director of the united states secret service. his first appearance before our subcommittee. director clancy welcome. appreciate you being here. and thank you for your willingness to serve dhs and our nation. fiscal year 2016 budget for the secret service is $1.9 billion. an increase of $273 million above fiscal year 2015.

this increase is due in large part to preparations for the upcoming presidential campaign cycle, deployment of the former obama detail, and additional funds based on recommendations of the mission panel reported out in december for the need for significant reform in the service. director, we look forward to the discussion of these increases with you. learning whether you plan to address any of the recommendations contained in the various reviews of your service, that have occurred over the past few months. i want to address an instance that was news last week. according to reports, two senior secret service agents on the president's protective detail arrived at the white house complex checkpoint in a government car after allegedly

consuming alcohol. as the agents proceeded toward the checkpoint, they drove through the scene of an active investigation. the standing rules of behavior was not reported to headquarters until days later. the agency trying to restore its reputation after a well publicized scandal this brings embarrassment and renewed scrutiny to the secret service. simply put this conduct should not be tolerated, and congress is disappointed to see it on display again. director, i look forward to hearing your comments on this issue. first, i would like to recognize our new distinguished ranking member for any remarks she may make. >> thank you, mr. chairman. director clancy, welcome to your first appearance before the subcommittee. and congratulations on your appointment as director. i hope you will find this us to

be tough but fair partners in making the secret service the best that it can be. the agency has indured a significant criticism over the last several months indeed, over the last few years. and unfortunately, much of it has been justified. i, like chairman carter, and others in the committee was disappointed to learn last week to learn about another incident of a potential agent misconduct. this time it involved senior personnel, including a member of the president's, obama's protective detail that drove a government vehicle through an investigation scene allegedly after consuming alcohol. perhaps even more disturbing if true, is an allegation that a supervisor overruled an initial decision by officers on duty to conduct sobriety tests. i applaud your quick notification of the inspector general in this case. but i hope you won't wait for the conclusion of the ig

investigation to start addressing what went wrong. if the allegations of misconduct are accurate, i worry that they may be indicative of a larger cultural problem at the secret service. we will certainly be discussing that incident this morning. i don't want it to completely overshadow the good work that the vast majority of secret service officers and agents are doing every day. i saw that good work firsthand when i visited your los angeles field office last week. i was particularly impressed by the quality of a staff briefing in which usss personnel were discussing the final security plans for the president's visit to los angeles the next day. in the interest of time, i won't elaborate on everything i saw, but i do want to highlight one program that the los angeles field office is implementing in a very impressive way. the los angeles electronic crimes task force.

as you know ectf of a strategic alliance of law enforcement, academia and the private sector, dedicated to investigating and deterring cyber crime. it is a round table concept comprised of local state and federal law enforcement partners. the ectf facilitates collaborative investigations through the exchange of information, shared assets, and common strategies. this month i am proud to say that the l.a. ectf was selected out of 80 nominations to receive the 25th sen turium award from the peace officers association of los angeles county. director clancy, we stand ready to help the secret service to regain the respect it deserves for the good work done every day by your dedicated officers and agents on behalf of our country. thank you for joining us this morning. i look forward to discussing your proposed budget for the

coming year, as well as your plans to point the secret service in the right direction. >> thank you. now i'd like to recognize the chairman of the appropriations committee, mr. hall rogers, for any comments he would like to make. >> thank you, mr. chairman. thank you for being here with us this morning, mr. director. this constitutes the first hearing of this subcommittee. and i'm immensely pleased that we've finally managed to pass a full year spending bill for the department. to support our men and women on the front lines. and bolster critical security agencies and fund vigilant anti-terrorism and law enforcement efforts on our home turf. unquestionably, your organization is a vital piece of this puzzle. the secret service carries out a unique but absolutely critical

dual mission of protection and investigation. the investigative component of your charge is essential for the financial infrastructure of the country. and by extension, the entire u.s. economy. your mission is to protect our president, their family and other dig anynitaryies from a host of threats. that requires unparalleled skill, and yes, professionalism. unfortunately, the service has been beleaguered by a series of embarrassing and unacceptable lapses in security and other missteps. this will not stand. just when we think we've assessed the problems associated with september's white house fence jumper and developed a plan to close existing gaps in security moving forward, news broke that two agents drove around a security barricade at the home where our president

lives, during an active bomb investigation. drunk. now, you personally committed to me and others the leverage in your lifetime of service to this organization, to restore the secret service to its once storied reputation. i certainly want to take you up at your word, and give you every chance to achieve that goal. but incidents like these demonstrate just how far you've got to go. and how short a time you've got to do it. we're going to provide the adequate funding for your agency. but it's going to be on a short string. we expect results. your fiscal year budget request includes $1.9 billion, which constitutes a $273 million

increase over enacted levels. including to the presidential protective service this supports the service's network of 42 domestic field offices 60 resident offices and resident agency offices, and 24 offices abroad. notably, this request includes a significant increase to accommodate your responsibilities leading up to the '16 election and prepare for president obama's detail when he transitions out of office. $87 million is also included to support security enhancements at the white house complex, pursuant to the recommendations of the protective mission panel. mr. director we all look forward to hearing how you intend to use this money. to right the ship so the secret service can focus on its truly critical mission at hand. we want to thank you for taking

on this chore and for being here today. we look forward to your answers. >> thank you, mr. chairman. now i'd like to recognize the distinguished ranking member of the appropriations committee miss loy. >> thank you very much. i would like to thank chairman carter for holding this important hearing today. and welcome to director clancy. and thank you for joining us. the secret service has had a long and storied history of excellence and professionalism. but recent incidents have diminished its reputation over the last few years. and raised serious questions about its ability to protect the president. clearly we have a lot to discuss. just last july this committee expressly stated that it was, and i quote, deeply disappointed with recurring allegations of misconduct within the secret

service. going a step further, we withheld a substantial amount of headquarters funding in the fy '15 appropriations bill until new guidelines for professional conduct were submitted. it's hard to believe here we are again. not only were we rocked by the white house fence jumper last september, but now we're confronted by yet another unfortunate incident that appears to entail significant misconduct. on march 4th, two possibly intoxicated secret service agents drove a government car through an active suspicious package investigation. i say possibly, because according to news reports no sobriety tests were administered. the agents were not arrested. and they were allowed to leave the scene. the president's budget requests nearly $87 million for

protective mission enhancements. in the wake of recent secret service missteps, while i agree that more resources are necessary for security enhancements, hiring and training funding alone won't be enough to solve the secret service's problems. this latest episode seems to be more evidence of a cultural issue that has not been adequately addressed by changes in senior management. director clancy, you just recently assumed your position. but you've been with the agency for an impressive 30 years. we want to work with you to restore the public's confidence in the secret service. we want to support you with the resources you need. but the responsibility is ultimately yours. you must provide the leadership and insist on the accountability that is necessary. i look forward to a productive

discussion this morning. thank you, mr. chairman. >> all right. director clancy -- i'm sorry? we're going to recognize you for your opening statement. i'm going to ask you, if you can, to try to keep it to five minutes. >> thank you, mr. chairman. good morning chairman carter and distinguished members of this committee. i am pleased to appear before you today to discuss the president's fiscal year 2016 budget for the secret service. as a newly appointed director i'm honored to lead the men and women of this important agency through this challenging time. despite the allegations of misconduct involving two senior level agents at the white house complex on march 4th, 2015, i have been impressed by the selfless dedication of the work force as a whole and our people's taking on the reforms of the betterment of the mission.

with respect to these recent allegations, secret service has turned over the investigation to the department of homeland security's office of the inspector general. to ensure a thorough and independent review of this incident. i've committed our full cooperation with this investigation, and eagerly await the oig's findings. turning to our budget. i want to thank all members for your work on the 2015 department of homeland security appropriations act. for a second year in a row, this subcommittee worked diligently to provide the secret service with the additional resources to support our staffing our training, and operational needs. in addition, the 2015 bill includes $25 million to begin the necessary enhancements associated with the protective mission panel's recommendations that were included in a report to secretary johnson on december 15th of 2014. the panel's recommendations have brought focus to staffing

training, and leadership deficiencies in the agency. and technology and perimeter security requirements at the white house complex. however, since the secret service's mission extends beyond the issues addressed in the panel's report i am committed to zero basing the agency's budget to determine the full extent of our operational requirements. the 2016 budget builds on the protective mission enhancements that are under way this fiscal year. my written statements provide a thorough overview of the budget request. but i would like to highlight a few areas in the limited time i have. the $86.7 million requested in 2016 to address specific recommendations made by the panel can be broken down across four categories. first, personnel initiatives. second training center improvement. third, white house security infrastructure improvements. and four, protective technology upgrade. my priorities are to staff the agency at a level commensurate with the demands of the mission and ensure that our employees

receive the training they need to do their jobs effectively. this includes critical in-service training for our agents and officers as well as ethics and leadership development. one of the biggest demands is associated with the campaign protection, with less than two years remaining before president obama's term in office comes to a close, the secret service is preparing for campaign protection requirements similar to 2008, the last time no incumbent president ran for office. during every campaign, the secret service's budget temporarily grows to accommodate the surge in protection requirements. of the $204 million requested in 2016, for campaign protection and campaign related nfses a total of $59 million simply reflects the anticipated time the agents in the field will work protection hours in support of the campaign. when people ask how it is the secret service can protect

multiple candidates, i point to the special agents who serve in the field offices around the country. without the support of highly trained special agents who have the experience with investigations and protection, the secret service would be unable to handle the surges in protective operations associated with presidential campaigns, nsses, and other major events. securing the two nominating conventions is one of the most expensive and challenging aspects of campaign protection. these high-profile nsses typically last three to four days and attract more than 50,000 participants each. the secret service begins work months in advance to plan and coordinate comprehensive security operations to identify and mitigate threats that could cause harm, and to protect our dignitaries, and to the general public attending these events. to mitigate the risk of cyber attack on critical systems and key infrastructure that could adversely affect the security

plans, special agents train in the critical protections -- the critical systems protections are responsible for securing venues that are increasingly automated. the secret service recruits from within the agency's electronic crimes special agent program. specifically the computer for ensic disciplines. they train in this area for the successful investigations into many of the largest known data breaches in recent memory. just last month a secret service-led investigation resulted in the arrest and extradition of a russian national who will face charges that he allegedly conspired in the largest international hacking and data breach scheme ever prosecuted in the united states. the performance by men and women on the front lines begins with superior leadership. to that end, i have worked to open the lines of communication between the rank and file and their supervisors.

i made significant changes in top leadership positions across the secret service to inspire a renewed focus on staffing, training, protective operations investigations, and professional responsibility. i am in the process of restructuring the secret service's executive leadership to better leverage the experience of civilian professionals, while allowing law enforcement personnel to focus on their core areas of expertise. with the support of the department, and the congress over the next several years, i am confident that we can put the secret service on a path to success for many decades to come. chairman carter, this concludes my testimony. i welcome any questions you have at this time. >> we thank you, director, for that report. i want to start off with you know, the 800-pound gorilla in the room.

what happened the other night at the white house? i was in the ukraine on a fact-finding mission with a subcommittee of this body when we learned of this. and i called directly from the ukraine immediately to my staff to find out what happened. because it kind of knocked me out of my chair considering the discussions you and i have had. >> yes, sir. >> and first of all i would like to give us a picture of what you think happened. because i think what was reported in the foreign press at least was it sounded like they crashed through a barrier, and the first thought was an iron gate or something like that, ignoring a crime scene tape, in a state of intoxication. and inquiries further, it may not have been exactly that picture that we have. so i'd like you to give us a picture of what happened. and then i'd like to talk to you a little bit about the protocols

that may or may not have been violated. and what protocols are in place to cover this situation here. alcohol is part of the stressful world that an awful lot of people live in. in my courtroom, there was a cartoon on the wall that -- where the judge is addressing a young trial lawyer and he says, the most important two-tenths of the law relative to trial work caffeine by day, alcohol by night. it was meant to be a joke. it's actually a tragic truth. that in stressful jobs those two become a major part of how people get through the day. but alcohol, as we all know, messes up your judgment and there have got to be protocols that address this. and we have to deal with it, because it's part of the lives we have. and we are protecting the most important position on the face of the earth. that's your job. whoever sits in that white

house, he is the most -- he or she are the most important persons on earth politically in this world. more power than anybody else. and therefore, more enemies. so talk to me about what happened, and let's talk a little bit about protocols. >> yes, mr. chairman. one march 4th, 2015, our understanding is that two senior level special agents came to the white house. the initial report -- i did not hear this incident until monday. this was on wednesday night. i found out monday. once i found out monday, and what i heard initially, the initial reports from an anonymous report was that as you stated, two senior level special agents had crashed into the white house. and they were inebriated. i had not heard about that. i asked my staff if they had heard about it.

they had not heard about it. i had asked them to get as much information as they could on the event. and then there wasn't a lot of information available. but we decided -- i decided to immediately send it over to the department of homeland security, office of the inspector general. i thought it was very important that we have an independent investigation, that there be no perception at all that we were involved, that we would not even start doing any interviews. we would give that case that investigation to the oig. i will also say that i brought my staff in on monday, and we discussed why -- i didn't know prior to monday of this event. and we had a good stern talk about that. and then instructed the staff to go out to their management to ensure that these events -- any

event of misconduct or operational errors have to be relayed up the chain. i will say take time to change maybe some of this culture. there's no excuse for this information not to have come up the chain. that's going to take time, because i'm going to have to build trust with our work force. and the best way for me to earn that trust with our work force is by my actions. now, i know there's -- i'm very eager to hear the results of this investigation. i don't know how long it will take. but i am committed to due process. what i have done is removed those two senior level agents to nonsupervisory positions, outside. they're not working at the white house. they're outside of their offices. and we will await the findings of the oig.

>> on the issue of drinking. are there protocols set up to discuss the fact that you know, every one of your people are carrying a weapon and i -- this -- you know this is purely hearsay. someone told me that the protocol for the fbi is, if you know you're going to a place where alcohol is going to be consumed, and it's a retirement party where more than one drink might be consumed that they expect their agents to report that to the superior, to leave their weapon at home and to tell their superior they would no longer be available for call. because they would not be -- might not be in a condition to be available for call. do you have any types of protocols -- and i don't know if that's true or not. that was something that was told to me. but this was a retirement party

for a member of your group, and it was a party. and people were expecting there would be drinking at the party. do you have any protocols like that in the secret service? >> we do have a ten-hour rule, mr. chairman, where you are not permitted to consume alcohol ten hours prior to your duty assignment. off hours we don't have protocols for off-hour going to a reception or party or what have you. there are protocols for driving in government vehicles. i will say that. you cannot obviously be under the influence. not by a legal limit, but you just cannot be exhibiting any indication that you're under the influence of alcohol driving a government vehicle. and that will all be looked into with the office of the inspector general. i will say that i did see a very short clip a very short video

footage of the incident that evening. i did see the vehicle that the two agents traveled in. where they drove at a low rate of speed onto the white house complex. so that's something that the oig will have, and i'm sure will investigate that. >> going forward are you going to look into protocols that would affect the situation like this? >> yes mr. chairman anytime we have an incident of this level we certainly have to look at our protocols, look at our policies. are they sufficient. and to be candid, i have been away for several years and was not as familiar with these policies as i should have been. they have to be readdressed. even the indication that you made, to be able to get into a vehicle after having one beer, one glass of wine. that's something we're going to have to address.

>> certainly a dwi laws are pretty rough. >> yes, sir. >> pretty rough. you and i have talked about this. it breaks my heart to think that once again one of the agencies that has been a legend among the american people, in the last six years, has just gone downhill substantially. absolutely substantially. it's a crime. our people need heroes. you are an agency that were considered heroes. that protected every president, no matter what party they were in, and did it in a very effective and efficient way. and this is very heartbreaking. to have this continued conduct. i know you're new on the job, but i told you when we visited you've got a big job. and you're going to have to make heads roll. if there's a place to send people in your agency that is the mojave desert of the secret

service, maybe some people need to be sent to the mojave desert so they know their behavior is unacceptable. you think about all that. the chairman's got plenty of hearings he's got to attend so i'll now return to the chairman for any questions he may have. >> thank you, mr. chairman. i can't believe you did not learn of this incident from wednesday, when it happened, until monday. what happened? why did you not learn of this incident immediately? >> yes, sir. that's what we're trying to find out through the office of the inspector general. >> i don't care about the office of the inspector general. god love them and good luck to them. you're in charge. >> yes, sir. >> this is an administrative problem you've got, among other things. why did you not get word from

your subordinates about this incident for, what, five or six days? >> yes, sir. not knowing all the facts -- first of all, you're right, mr. chairman, there's no -- at the least of the description of these events i should have still been informed of what transpired that evening. anytime you have a senior level on the president's detail who is alleged to have even come through a secure area, as he did that evening i should have been informed. we're following up on that. and there will be accountability. i know that our work force is listening today, as we go through this hearing. and they're waiting to see what -- how people are going to be held accountable. and this is my first test. and we'll wait for these facts to come out. we'll wait for that due process. and we'll go back through the reports that were written that evening. we'll go back through, and the oig will interview these mid-level supervisors, and going

up the chain. mr. chairman, you're absolutely correct. and i think part of this again goes to a culture of trust. do you have the trust in your leadership that you can bring this to leadership's attention. and i've got to work to earn that trust. and i'm going to do that through my actions. >> your actions, in my judgment should be punishment termination, firing people who have subordinated their command. you can't run an agency like this, for god's sake, or any other agency, unless you have discipline in the ranks. and this is a breakdown to put it mildly, of discipline within the ranks of your agency. and that's a cancer that can consume you. now, who -- did -- were these people given a sobriety test? >> they were not sir to my

understanding. >> why not? >> sir i can't answer that. >> who said not to do that? >> sir, i can't answer that either. i don't know that those facts have been -- >> well who discovered that this had happened? >> sir it was an anonymous e-mail that first was published and i want to say it may have been several days later. i don't have the facts on when that was released, that e-mail. typically, an event like that, there would be some chatter. there would be some discussion, if it occurred the way it had been described. >> well, who is the agent in charge at that time at the white house? >> there was a watch commander. there's a captain level who would have been in charge of the white house complex at that time. certainly during that incident. >> who was that? >> by name sir? >> yes, sir. >> i believe it's braun sir. >> bronson? >> braun.

b-r-a-u-n. my staff can correct me if i'm incorrect. >> he was the person in charge of the white house detail at that period of time? is that correct? >> yes, sir. >> did he report any of this activity to anyone else? >> no, sir. >> have you talked to him? >> i have not spoken to him, sir. again, as frustrating as it is for all of you on the committee, it is frustrating for me as well to wait to do this. >> why do you have to wait? >> sir, i don't want to interfere with this investigation. in the past, when we've seen investigations where different people have interviewed witnesses, stories are perceived differently. and i don't want to have any impact on that investigation. >> have you asked braun for a report on what happened? >> i have asked to see the report, and i have seen nothing

that indicates any -- any report indicating that this event as described had occurred. >> what kind of barricade was it that they broke? >> sir, it was a -- it's an orange construction type barrel, which when the vehicle approached initially it backed up, because on 15th street and e street, which you may be familiar with this orange barrel didn't allow the vehicle to go through. it was to the right of the bumper. so they nudged this barrel out of the way. the barrel did not fall over. they nudged it over. they moved up to the checkpoint where the officer typically would be positioned, and it appeared that they were showing their badges to go through the checkpoint. and then that's the extent of the video that we saw as they continued to progress forward.

>> why were they there? >> sir my understanding is that the passenger the passenger in the seat, in the vehicle, was returning to get his vehicle. they had been at the reception, and they left together to -- the passenger had his vehicle parked at the white house complex. >> well, needless to say, we're -- we want to get to the bottom of it. right away. and i'm disappointed that you have not waged your own vigorous, tough investigation of this that occurred on white house grounds by security agents who appeared to be inebriated.

to say you're not investigating because you want the inspector general of the department to investigate is hogwash. what do you think? >> sir, basing it on my limited experience since i came back, i read a report, sir, on 2011, the shooting from constitution avenue that some rounds had hit constitution avenue. and one of the officers i remember reading when i first came back was that he was -- this individual was interviewed three different times by our agency, by the o.i.g. i believe, and by federal bureau of investigation. and my recollection is that each of those interviews was different. and so which distorted the facts. what were the facts? and what did that officer truly see and hear? and for right or wrong that resonated with me. and i didn't want any perception that we would be -- it can be

intimidating if someone from my staff goes to one of these uniformed officers and said what did you hear? what did you write? what happened that evening? they may tell me and my staff one thing, and another from the oig, they may interview them and they may have a different perception of the words spoken, words are important. and i'm frustrated, i'm very frustrated that we didn't know about this. i didn't know about this till monday. i'm frustrated that i can't act until we get all the facts, because i know that our workforce is waiting. what's your action going to be? but i just don't want to act improperly too soon. let me just say this, the president, the first family, they're safe. we moved these individuals to nonsupervisory positions.

rather than administrative leave, where they're getting paid for no work. we can still get work out of them. but in a different capacity. >> they're still getting paid. >> yes, sir. >> no reduction in pay. no penalties financially or otherwise. right? >> no financial penalties. sir, i would say that i'm sure they're paying a penalty right now. >> well, unfortunately, this is the last in a long line of episodes somewhat similar. drinking, carousing, on and off duty, that this agency has suffered these last few years. it's not working right, mr. director. >> yes, sir. >> if we've got to have some

changes. and you've got to be the one that makes those changes. and i don't sense at this moment that you have the determination to make that happen. am i wrong? >> sir, i would disagree with you with all respect. i will say that there is an element within our agency, there's an element within our agency that does cope with the stresses that many of you have mentioned today, by using alcohol. there's no question we had that element. we also have other elements that -- in our agency that go to a different route. some go to exercise. some go to religion. some go to their family to cope with these stresses. but we do have an element that goes to alcohol. three, four weeks ago we kicked off an initiative, a worklife initiative to look at those stresses that our people are under. they are considerable. there's no excuse for the actions. we have to take -- there has to be self-discipline, self-accountability. but we've got to find a way to help some of these people that are going towards alcohol to solve their -- as a coping mechanism.

>> well, i'm concerned about their health, as well. but i'm more concerned about the health of the president of the united states and who's protecting him from harm. >> yes, mr. chairman. >> and if we've got special agents on the grounds at night in the white house ramming a barricade, drunk, it seems to me that the only discipline that you could exert would be caused by the ability of you and your staff to terminate as punishment, so that every other agent knows, boy i don't want to go there. that director's going to fire me. that's what makes the mind work. what do you think about that? >> i agree with you. i think deep down, within our agency, as in others, people want to see discipline. people want to be disciplined. they want to have people held accountable. i just want to respect the due process. as frustrating as that is.

and let my actions speak for how we're going to move forward in this agency. >> we'll be watching. >> yes, sir. >> and waiting. >> yes, mr. chairman. >> thank you, sir. >> mr. chairman, i believe -- >> ms. lowey. excuse me. >> thank you. and i want to thank you, but there's so many hearings today. i just want to follow up briefly, because with all due respect, i'm just shocked by your testimony. first of all, you said it wouldn't have been reported to you other than a whistle-blower. i mean it wasn't someone in the chain of command that reported it to you. and then you said, what really shocks me, it will take time to change the culture. i don't understand this one bit. it seems to me it should take time to help people who think this is the culture to go get another job.

how can we as members of congress have respect for an agency that feels it's okay -- we're not talking about someone drinking at a party. we're talking about a respected member of the secret service who was absolutely drunk. how many people do you know, how many friends have you -- do you know who may go to a party and then take a car and go ram into a fence or some other barricade? i find this testimony shocking. following up on my colleague, i just don't understand it. i would think it would take five minutes to change the culture before you even know the fact, you can say, based on the allegations, if in fact you are not aware that this kind of activity is inappropriate for a member of the secret service,

you better get it now and go find another job. that's why i'm so puzzled. i can't believe you said it will take time to change the culture. can you explain to me why it's okay for a member of the secret service to get so inebriated that they would take a car and run into a barricade? >> if those are the facts, and they may come out exactly as you stated them, then you're absolutely correct, and that -- we will -- we have a table of penalties which explains exactly how they could be disciplined. when i said that the culture, it's going to take some time for the culture to be changed, specifically i'm talking about, if there was an event that night, as is described. let's assume that it was as you described it. why wasn't that reported up the -- to my office? and i think that's a long-standing process, possibly,

where people don't want to relay bad information. and we have to prevent that. but to your point, you're right that we -- my actions are going to determine how that culture is changed. but i don't have the ability to just fire people at will. in the government i don't -- my understanding is you cannot do that. it doesn't mean that due process -- after due process there aren't some actions. >> maybe my statement is not clear. i understand due process. but do you think it would be inappropriate to send out a very strong message that this kind of behavior is absolutely inappropriate, wrong, for a member of the secret service? did you do that? >> i did that. that statement went out, without going into the specifics of the events, on march 15th. although we referenced that. we did put out a statement saying that there's accountability, this type of activity is not tolerated, and

that we've got to -- we've got to shape the future of this service. >> i guess i just don't understand, because in my time in congress, which is 26 years, i've had such enormous respect for the secret service. protecting so many of our people in public life, including members of congress. so i just don't understand, even off duty, how a respected member of the secret service could get so inebriated that they take this kind of action, going into a fence, knocking down a barricade. i don't get why it would take time to change the culture, and that's why i'm puzzled, sir, with your comment. and i would hope it's very clear that if they're off on a thursday and not on duty, they