every device free of cost and we should make sure that's available as soon as possible. >> thank you very much. >> senator wicker has returned. so senator wicker, senator sullivan, senator manchin. >> thank you very much. >> eight hearings in five days? >> five hearings in eight days. >> well, i've had four hearings in one day. i breathlessly rushed back in and thank you all for filibustering till i could get here. mr. pai, let me ask you. you know, sometimes we vigorously disagree with our colleagues. it's clear you vigorously

disagree with the majority of this panel on the so-called open internet rule. and i appreciate you doing it cheerfully but also forcefully. and 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. >> senator, thank you for the question. i could go through all 67 pages but i'll abbreviate it for the sake of the panel and for everyone watching. in short there are problems with process and substance. my view is the agency failed to comply with the administrative procedure act. in terms of giving public fair

notice and an opportunity to comment on the proposal it adopted. here's the indisputable truth. the fcc never proposed title 2. it adopted a proposal in may of 2014 that was based on section 706. through the course of the summer it was wide reported that section 706 was the lead proposal. tlart was reported that the hybrid proposal based on the mozellea initiative was the lead proposal. only after the president's anounlts on november 10th that title 2 was quote unquote my plan and i'm quote asking the fcc to implement it did the fcc suddenly change course. >> what would need to have been done for the proposal to actually have been made? >> i say and i'll say this before the president made his announcement when i held the only fcc hearing that allowed people to comment on net neutrality down in college station, texas. my view was whatever the proposal was the american people should be allowed to see it and comment on it. we should have a new round of notice and comment. that would avoid the pickle the

agency is now in where it's going to have to litigate whether there was sufficient notice and there simply wasn't in this case and i think the best evidence of that is i ut saw a lot of speculation in the press once we got the document on february 5/16 what's in it what's not in it when changes were made in the leadup to february 26th what does it mean that broadband subscriber access was removed how does that affect internet connection none of those details were public and no one knew how to comment on it because they didn't know what was in the plan. >> now with regard to the substance. >> with respect to substance i think that both the text of the communications act and the fcc's own precedents make it difficult for if not impossible i would argue for title 2 to be applied to the broadband industry. i'll just give you one example of that. with respect to mobile broadband section 332 explicitly prohibits private mobile service from being classified as a common carrier. to be sure through the order if you've had a chance to read it you'll see all sorts of legal gymnastics in which the fcc cleverly tries to redefine the public switch network in order to have it apply to the

internet. to the mobile broadband services. but i don't think a reviewing court is certainly going to see that that passes muster. similarly with respect to wire line title 2 i would argue that there are substantial legal hurdles that the agency is going to have to broach in order to make title 2 stick. so both for reasons of process and substance i think there are srs -- serious litigation risk for this order. >> is there any question in your mind that this is going to result in years and years of litigation? >> the best proof is what has happened in the past. this is the fcc's third bite at the apple. the first two times resulted in unsuccessful challenges at the d.c. circuit. the first case which was the comcast bit torrent case took two years to resolve. the 2010 open internet order was only resolved by the dc circuit in 2014. it will be busy for quite some time trying to figure out which court to challenge this in and the courts will have a long time to savor as many details. >> 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's 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, well, title 2 as applied to mobile has been successful because it's been somewhat diluted. but two points to that. number one mobile as my commissioner -- as colleague commissioner o'rielly pointed out, mobile data has never been a title 2 service. but secondly it strained credulity to argue that the increase -- the tremendous increase in mobile investment has been attributable to title 2 application to mobile voice. obviously, to anyone who's objective looking at this the introduction of the smartphone in 2007 generated an explosion in mobile data usage which carriers then had to struggle to keep up with and they did that by investing billions of dollars in spectrum and billions more in wireless infrastructure. and it was because mobile data was lightly regulated as an information service that we saw all this benefit to consumers. i would also argue that it's sort of paradoxical to me at least that in january the fcc

made a big show about 25 megabits per second being the starpd for broadband but then in february decided that mobile broadband would be subjected to title 2. as my colleague has pointed out, you can't have it both ways. mobile doesn't count when it comes to this artificially high threshold but it does count when we want to regulate it extensively. >> thank you very much. >> thank you, senator wicker. senator sullivan. >> thank you, mr. chairman. and thank you commissioners. let me ask a couple basic questions. you can keep them short but i want to try to get a number of different responses. fcc reauthorization. when was the last time that happened? by congress. >> i think the chairman said 25 years ago. >> do you think that's a good idea? why? >> mr. chairman, chairman

wheeler, why do you think that's a good idea? should we do that? i think the chairman -- >> congress makes the rules. congress decide not to for 25 years. if congress decides to do it again, congress makes the rules. >> commissioner pai. >> i think it's a useful exercise because it allows congress to modernize our operations and make sure our rules keep pace with the times. and i think that's important for congress to be involved with. >> let me just follow up on that. you're an independent agency. so big policy decisions. who makes those calls? congress? the president? you? who's responsible for making big policy decisions that impact telecommunications? >> i didn't know who you were -- >> i'm sorry. i'm just -- i've got so many questions this is -- >> clearly congress has historically set down the

parameters and said this is what we want the agency to do -- >> do you think regulating the internet is a big policy decision that wasn't contemplated 70 years ago that should be 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. 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 case of the internet. >> so commissioner pai? >> i agree. that's why i said in the wake of the verizon versus fcc decision of 2014 that now the fcc twice having failed in court to have its own open internet rules sustained we should turn to congress for guidance. >> is there anything in the law real quickly that gives the president kind of -- >> so let's say chairman thune or ranking member nelson go to

the senate floor and give a big speech on the internet on how they want it to be controlled, how they want it to be regulated, it's well thought out, and then the president gives a speech too. is there anything in the law at all that says this agency should give more deference to the president? >> absolutely not. >> absolutely not. >> okay. in terms of consensus, do you try to work consensus as commissioners? there's obviously some pretty differing opinions of this rule. is that the typical approach to try to work on consensus? do you think that's important to try to achieve consensus? mr. chairman a lot of times if you're the chair you want to work on consensus. do you think that's important? >> i totally agree. 90% of our decisions are 5-0. the difficult decisions often become contentious. we've had a series of 4-1 decisions. >> do you think that decisions

like this that are highly contentious, splitting the commissioners as mentioned do you think it's going to lead to a lot of litigation? do you think this decision's going to lead to a lot of litigation? >> the big guys have said they're going to sue on this one. they've been saying it from day one. >> well, when some of your commissioners think it's an illegal action do you think that invites litigation? >> you know, the beauty of it is you that get two lawyers in a room and you'll have three opinions. >> well, that's cute but i'm not sure that there's a beauty here at all, to be honest. years of litigation are going to create uncertainty. do you think uncertainty's good for investment in this part of the economy? >> one of the things that the -- >> do you think uncertainty's good for investment in this part of the economy? yes or no? >> uncertainty is never good. and there's all kinds of uncertainty including what's 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. that didn't exist before. and remember that under the 2010 rules they were not stayed by the court. and so they were in effect for four years. >> can you give me an example -- >> there was great investment during the period when they were in effect. >> can you give me an example of regulating a large part of the economy that's resulted in spurring innovation and dramatically increasing economic activity and jobs? >> look at the period 2010 to 2014 when the previous open internet rules were in place and we had unprecedented growth. >> commissioner pai -- >> there's other examples too such as when dsl was regulated under title 2 during its greatest period of growth. there is -- i think there are track records here that establish this kind of growth. do you have a sense of that? >> i respectfully disagree with the chairman. i think that the explosion in particular when it comes to wireless investment was specifically because the 2010 order exempted wireless from the

net neutrality rules and especially one of the reasons why we now live in an increasingly mobile world is because the fcc was relatively restrained in 2010 compared to what it did now. time is only going to 2e8 and i think the best example is europe where europeans have significantly less access to high-speed broadband than we do. 82% of americans only -- sorry. 48% of europeans. and when it comes to wireless in particular the u.s. has 50% of the world's 4g lte subscribers. there's a reason for that. and the reason is because until february 26th we were relatively restrained and stuck with the bipartisan consensus that has served us so well since the clinton administration. >> mr. chairman, i'm out of time. i have additional questions i'd like to submit for the record. thank you. >> senator sullivan thank you. and we'll make sure that those questions get submitted for the record. and since i can't see anybody else coming in -- [ laughter ] senator manchin's turn. the chair recognizes the senator

from west virginia. >> thank you mr. chairman. i appreciate that so much. this is such an interesting topic. and you know 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 -- i can go there if you want to. and then you know, in west virginia there's 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 the answers to the questions that we just put forth, but bottom line is we don't want to lose what we have. in rural states such as west virginia they told us that when you divested yourself of the telephone ma bell it would be better. well it wasn't. they told us also that basically

if we deregulated the airlines it would be better. it wasn't. deregulation hasn't -- they said when you deregulate the utilities it will be better. it wasn't. so basically, with all that being said, you know, in a rural area, rural states we're a little bit leery of how much better you want to make it for us. so with that we want to make sure that we still have our access, we're still able to have all of our schools connected in west virginia. every school in our state's connected. we made sure of that. how do we now be able to take that homework to home and still make sure the child has the ability to do that? i can assure you there's not enough market in west virginia for all of our friends on wall street or in silicon valley to do that. i know that. but i'm still look for the balance. somehow we can all -- i understand where the fcc -- i know you're taking a lot of flak for this but i understand.

i do look at it as a necessary sti of the utility to some extent. by know i wouldn't have had what i had if the market hadn't been able to do what it did. there are 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 help 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 ending up -- it's going to be costly no matter what happens. and the consumers end up paying. so i would say, mr. chairman just coming down are any of you, mr. o'rielly, maybe since you haven't had a lot to say with this, and finding out have you all among yourselves, the five of you, tried to find commonality here? >> let me suggest an answer also to senator sullivan's question. the commission is a creature of congress. anytime the commission can speak on something i think it's

helpful. so whatever you're able to agree in terms of legislation i think that's helpful. i don't know the particulars but i leave it to your capable hands to whether you can get legislation and what you think the best outcome should be in terms of policy decisions. >> you know, when you look at the gdp of the -- i looked at china. china's at 9 trillion. russia's at 2 trillion. great britain's at 2 trillion. we're at 17-plus trillion. so we've done something right in spite of ourself. and we want to make sure that we can continue to grow. the internet's been a big part of that. gdp. you've got to give us some direction here. if you five can't find some areas of agreement or consensus and right now i see you split, 3-2, pretty evenly split, i think you're all probably good friends. you 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? i'm going it skip you. i'll come right back. miss clyburn, i'll go to you. >> miracles do happen. i am a believer. >> we're on the same wavelength. >> well, one of the things that i don't think we could have envisioned just a few months ago is that this body, congress recognizes the importance and needs -- need for rules for free and open internet. we are encouragers, enablers of innovation and investment. and that's why this conversation i think is healthy and important. we might not agree on the particulars, but we agree on the end, 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 what we're saying, it would be accurate for me to evaluate saying that the system that we have right now, the way we're operating the internet right now is giving us the access and protection 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. has it come down to basically that basically corporate america i'm just not getting exactly what i intend for my stockholders to see, i'm getting a return on investment, so i won't put the money into it because you haven't let unfettered -- let me go? you want to jump -- >> one of the things i think is lost in some of the -- >> i'm sorry. >> i'm sorry. will you forgive me? >> maybe he'll give me a couple extra. >> he said he would forgive and -- >> go ahead. >> so there are pro competitive elements of this order that nobody's talking about. when it comes to pole attachments that has been -- you know in your community that has been a bottleneck. this order helps 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, of completing that stool, of getting rid of -- my colleague talks about the homework. it is important for us to have connectivity at schools and libraries, but it's just as important that learning does not stop when people get home. so enabling more people to connect with pole attachments to provide service will hopefully make things more affordable for more people, allowing them to connect at home. all of these things are linked. and that's 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 -- >> i would encourage you all to continue to work together. >> with the chairman's indulgence, senator, i would answer that question simply by saying title 2 i think takes us away from the direction of getting more broadband options and one of the most unfortunate things about the net neutrality debate at least to me and i say this both as a commissioner and

as someone who grew up in rural america far away from any big city is that there are a number of different fcc policies within our legal authority that we could pursue to give folks in west virginia and folks in kansas and folks in south carolina the same broadband options that medium here in washington take for granted. we could take it easier, for example, to deploy wireless infrastructure. we could get more 5d spectrum out there so wireless isps could deliver broadband in places like mountainous west virginia where you can't lay fiber. we could make it easier to embrace the transition so these carriers don't have to invest every single dollar in copper but could deliver fiber to west virginians. we could modernize the erate program to make it fair for schools who currently don't get a fair shake out of the program to be able to get funding for that program and connect kids with digital opportunities. these are all -- >> how that's delivered, correct? >> i'm sorry? >> it's a possibility of losing control of how it's delivered? who's going to make the decision how? i get that. >> all of us would ultimately set the regulatory framework in the private sector then would

have a maximum incentive to do -- >> i understand. i'm not objecting to this. i understand where you're coming from, and i want the best of both worlds, i guess. >> right. >> okay? i've got a pretty good world right now. can i make it better without throwing the baby out with the bathwater and losing the protections i've got? i think that's what i'm looking for. >> senator, i think you raise an excellent point, and i've got to -- i have to say that in this hearing room i keep hearing the echo of years ago sitting at this table when senator hollings was signature up there in the chair and he kept saying in his great south carolina drawl "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 is 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. yes, sir.

>> and i would say to my -- the senator from west virginia that perhaps on this issue we here can find consensus and inspire those five to find consensus. >> senator, could i pick up on that and say yea and verily? >> if we could work together, though seriously on a solution because i think there's -- 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. but senator manchin is right. we've 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, specifically ruiville in the mississippi delta. and there you saw a groundbreaking telemedicine program that is treating and attempting to defeat type 2

diabetes. so thank you so much for coming. this program depends on usf-supported robust mobile broadband connections. what is the fcc prepared to do to ensure that sufficient usf support remains available so that rural wireless networks remain up and running enabling access to these critical--saving and cost-saving advances in medicine? >> you know about phase one of mobility fund as well as our connect america fund. we are moving ahead in the next phases of that, which we will hope will be further enablers for investments. we've got broadband experiments and 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 are doing is on a

very parallel course working out the kinks in terms of i.p. transition and the like and really continuing to fuel innovation and moneys in investment and working with communities, with the private sector, with government officials to ensure that the moneys that are needed to close these gaps to ensure that ruralville, mississippi has the connectivity 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 indianola to see the b.b. king museum? >> i missed that, unfortunately. 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. >> chairman wheeler. university of mississippi medical center and the delta

council have written you imploring you to preserve universal service support for rural areas. can the commission assure rural consumers like the ones i'm talking about that there will be no reductions in their access to wireless services and what assurance could you give this committee that rural kurmz will not lose their current ability to choose among quality providers? ? i think commissioner clyburn -- thank you, senator. can i get an invitation? i'd like to see lucille. >> good. absolutely. >> i think commissioner clyburn hit the nail on the head in terms of we are looking to moving to phase 2 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 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. before i took this job i was the chairman of the u.n. foundations and health alliance, literally going around the world and saying here's how you can use mobility to solve these problems. and we want to make sure that those kind of opportunities sure do exist in this country. >> thank you. and thank you, my colleagues for the second round. >> thank you, senator wicker. senator nelson, you want to ask another question or two? we're almost there, guys. >> not quite. mr. chairman, i have a letter that the leadership conference on civil and human rights, they're weighing in on this i asked that it be entered into the record. >> without objection.

>> let's go back. you know, this flap started that prompted 4 million comments. i take it that's 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? >> yes, sir. we have a flat out ban on those kinds of paid fast lanes. >> and that's in the order. is that -- >> yes, sir. >> mr. pai, do you disagree with that? >> i agree it's 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 no

paid prioritization now. there are no fast lanes now. this is an entirely hypothetical concern. >> okay. >> and as the chairman pointed out last -- >> i'll tell you, mr. pai it wasn't of no concern to 4 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 agreed there was a problem as the chairman testified before the house last year you cannot ban paid prioritization under title 2. and i agree with him. >> you're putting words in my mouth here. >> i'm quoting you. >> let's be real clear. i said that there is a waiver process under title 2 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're 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 2 that is before the court this time that was different the last time that this issue was before the court? >> yes, sir. i think the -- >> would you explain that to the committee? >> the issue before the court in the 2010 rule was the court determined 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 prioritize prioritization is that verizon's counsel 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 that you've been talking about such as paid prioritization. and that it was those issues that were all involved in that decision. >> let me give you, chairman wheeler, the chance -- there was one of thestones here. i think it was senator johnson. that he had asked a question. commissioner pai had answered it. you requested an opportunity to respond. and there was not time in the

toern's -- do you recall -- >> this is like watching a tennis match, sir. i'm not sure i remember the question. >> i think that's where you want 20d voice your agreement with what i was saying? >> is that what it was? no wonder i forgot. thank you, though, senator. >> senator, could i just -- okay. >> i've got some additional questions i'll submit for the record. >> great. >> because of the lateness of the hour. >> you had a response to this last question? >> senator, just to the previous question i just wanted to make sure we are absolutely accurate. i'm quoting the chairman on may 20th of 2014, "there is nothing in title 2 that prohibits paid prioritization." >> so let's just quit playing on words. >> moreover the representation at the oral argument was completely misconstrued as well -- >> wait i will stipulate to the fact i said that. and what that statement says is not how you are interpreting it. >> you can go to youtube and watch it. >> what -- so -- so just time out. does title 2 provide a waiver

process? >> there is no waiver process in title 2. you can interpret the rules to fashion some sort of -- >> there is in all of title 2 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 2 to come in and seek a waiver under our general procedures. it's -- >> i mean, okay, if that's the argument then obviously the fcc has general waiver authority. it can apply to anything under this -- to argue that title 2 -- >> i should have followed up in my explanation of things then, didn't i? >> i take you at your word then you that didn't believe that title 2 banned paid prioritization. i agree with that. and the record speaks for itself. >> well let me just say -- >> it's very fun to sit between

them. [ laughter ] >> mr. chairman i think that the meetings of the fcc must be very interesting. >> it's must-watch tv senator. >> let me just say that i have the shared responsibility with the chairman of this xhiscommittee, as the majority of this committee, to see if there's 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's a different color. >> senator, the best -- >> and that's what's gone on all day. >> senator, the best example of my willingness to find consensus is my track record over the 2 1/2 years i've had the privilege of serving as a commissioner. under chairman janikowski and chairwoman clyburn we had 89% of unanimous votes in terms of meeting items. that percentage has gone down precipitously down to 50%. you will find even on net neutrality in may of 2014 the chairman's office asked us would you be interested in talking with b. a possible solution i? said yes. they never got back to us. on this particular issue and a great number of high-profile issues we consistently have put a proposal on the table that would allow us to find consensus not just on net neutrality. incentive auction, e rate, you name it. all of my statements are on the record. you can look at them on my website. and they've repeatedly been

rebuffed for god knows what reason. but my door is always open and -- perhaps my foolish midwestern optimism i really believe that we can get to yes because in the first two years of my tenure we did get to yes. >> so since i'm the one who's being impugned here -- >> and he and you have my permission, since this is my time. >> you know, there's a difference between staking out a position and saying this position which is contrary to the goals of the majority, if you don't agree with this position then you're not compromising with me. but we'll let that slide. i just want to -- here's just -- i've heard commissioner pai on this. here's a communications daily headline. "wheeler sitting on mprm on redefining nvpd in hopes of consensus with republicans." here's a statement from commissioner pai on our location orders. saying "at the time i expressed

concern the proposals would fail to meet that test. that concern was borne out by the record in this proceeding. so i'm pleased we've adjusted course and are now adopting requirements that meet these two watch words. i want to commend the parties that worked 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 hope that we can continue to produce he results that -- where we respect each other. 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's 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 committee. 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. and i think this discussion demonstrates that we do need to figure out how to -- how to resolve this issue. and indeed the ambiguity, i mean, 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 paid

prioritization, let's do it in law. i mean that's a fairly straightforward way of solving this issue and eliminating what will be a lot of uncertainty in a certain amount of lawsuits. 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 i want to ask some questions. can you be very very quick? >> with that suggestion certainly, mr. chairman. we will seek common ground on brevity. >> you say that not for my benefit but for theirs. >> i understand. and i want to thank all of you for your patience and your perseverance here today. i just want to second what my two colleagues have said, that we're certainly going to 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 the result of a divided commission is the law. and if it's challenged as i indicated earlier, i would certainly 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, wgch in greenwich, the local owner of that radio station, rocco fort 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 that the station must find alternative service options. and he was upset understandably that his other options would cost 2.5 times what the station

currently pays and also would take weeks to install. wgch is a station that serves more than a million people with information that they need and deserve on emergencies severe weather, catastrophes, and listeners rely on that service. so as i.p. 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 these kinds of notices of discontinuance, i want to make sure that there are sufficient protections for consumers. mr. chairman, chairman wheeler i understand the commission is committed to making sure that consumers are properly informed, but i'd also like to know what the commission is doing to ensure that consumers have recourses and forcible standards so they're not literally like wgch cut off from service in the

process. >> we have just finished the comment period on rule making on this issue. we shorthand call it copper retirement. and there are three principles. the first principle is a public safety principle. you can't negatively affect the ability of people to call 911. interestingly enough, when you go to fiber that becomes a real issue because fiber doesn't have power that comes with it. so how are you going to deal with that in 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 is kind of like -- 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 rulemaking and we'll be wrestling with bringing them forward in an order. but you've 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. but 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 and that risk of anti-competitive wafer isbehavior is one of the reasons i've raised concerns about the comcast merger that we've 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's broadband increases competitive choice decreases. my time has 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 principle and goal of competition is so important. i know you that can't comment on the merger. i'm not skug to. but if you or any of your colleagues has a comment on this general area i would welcome it. >> yes, i have opinions. i know that will surprise you. but i will look down the table, see if anybody -- i don't want to hog -- does anybody want to -- 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 that consumers have more choice and that there's more competition in the provision of video services. >> i've heard from so many of

the members of this committee about cable pricing and these kinds of things. the answer is in competition. that competition is coming over the top. it is coming over the top through the internet. it is 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. >> very good. thank you. >> thank you senator blumenthal. senator markey. >> thank you, mr. chairman. thank you, mr. chairman, very much. may i ask you, mr. chairman, did the fcc follow the processes used by democratic 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 a historically correct decision. but i don't think there should be a question about whether you use the process that allows all voices to be heard and the final vote 3-2. 3-2 is based upon the totality of everything that all five of you had the opportunity to hear. 3-2. the process gave everyone the ability to be able to hear what they needed to hear. okay? and i think you made 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 the ceo of sprint, mci, came into my office and they had less than 1/2 of 1/2 of 1/2 of 1% of the market and they wanted the fcc to

change the rules so you didn't have to dial 23 numbers but 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 best rules said no, a cable company doesn't have to put up a separate pole down each street, you can use the telephone pole and pay a reasonable fee to do so. we don't want the whole street filled up with just poles. huh? it was reasonable. added to the competition. at&t didn't want to be broken up. but we all had black rotary dial phones. your kids can't stay there forever. we're already 100 years into that era at that point. 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, it was all intended on unleashing hundreds and hundreds of billions of dollars of new investment. it worked. the fcc made the right decision. the agency of expertise.

when we created the third, fourth, fifth, sixth, seventh cell phone license the reason we had to do it is the first two companies had monopolies charging 50 cents a minute and the phone was the size of a brick and nobody had one. that's cents a minute and the phone was the size of a brick. people have two devices in their pocket. but 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 companies to get into cable. they wanted a monopoly. at&t did not want the cable industry to be able to provide telephone service. they all fought. these are big players here. big players. 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 across

the country, you can provide competition. and that's a 3-2 decision here. 3-2, 3-2, 3-2, i understand. i understand the commissioners who vote no. these are tough issues. they were tough issues on allowing mci and sprint to be born back in the 1970s. tough decisions. you're 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 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 it wasn't going to affect their long-term investment in infrastructure going forward. they all said the same thing. 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 got new apps. i got new technologies. i have new services, i can now reach 310 million americans. as soon as we do that in america, and come up with the idea, then we're selling it across the world, branded made in america. it's these new companies that make the difference. just like sprint and mci, all the way through today, that's what the fcc is all about. 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 is now a consensus already built by the statements of the largest companies that they can live it, what they'll invest at the same pace. but the enthusiasm that comes from smaller software and apps companies, the new internet

startups has been overwhelming. so i just say this to put in context the whole history of how far we've come in a brief period of time. you don't have to -- when a long distance phone call comes into your house any longer yell hurry, hurry, it's a long distance call. at&t had charged two bucks for a minute for 200 years because they could get away with it. we're not letting people get away with saying no, there's another way of doing business. that's what net neutrality makes possible for our country. thank you so much. >> thank the senator from massachusetts. i assume there wasn't a question in there somewhere. [ laughter ] >> there was, in fact, the first question was to the commissioner and he answered -- >> that's okay you don't have to answer. >> it was a leading question, but it was a question, and he answered. >> and mark, the senator from massachusetts down is undecided on our draft bill.

i want to just in terms of fcc reauthorization very quickly, it got asked once before and a couple of you responded to it. i want to ask the question of all 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's decision. i do agree it's time to move forward with something. >> i yield to the expert body. >> chairman, can i say 25 years is a long time. >> yeah. >> i'm agreeing with you. >> your hair was a different color back then. [ laughter ] >> and very quickly, one reform that you would recommend that we make or a top reform as you

think about fcc reauthorization any come to mind. >> i put a number on the table already. and talked about it in my statement. one that i haven't talked about i think there's a need to have an accountability of our enforcement procedures. issue a number of nels and judgments in that case but there's no actual tracking of what happens to the money. are we actually getting the money we're actually assigning penalties for. and i think that would be very helpful. i tried to get this, get the material for this hearing, the information just came back, we don't track that. i just think there's something wrong. we should know if we're penalizing somebody, is it being paid? what is the ramifications. that's one thing i would add to the multiple layers i've already talked about. >> and i've been talking about this for a number of years, but sunshine agriform makes our deliberative process cumbersome. so sunshine agriphone would be top on my list.

>> in addition to the proposals and the process reform act, i would add reform of 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 are often resolved on undelegated authority by the bureaus. >> i think we need a program to bring more engineers. we have more wireless technologies evolving faster than at any point in human history. i think that if we were able to bring in more engineers to review some of those new technologies and equipment authorizations which are multiplying, we would be a lot faster making sure innovation makes its way to the marketplace. >> this is a series of good ideas. i'd like to be much more forthcoming and more detailed in response with that laundry list, sir. >> okay. >> look, 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, you can tell there's strong feelings

about. i still believe, maintained for a long time that we're better served in the long run if we can provide clearer rules for the road. and i think 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 bale with senator nelson and others on the committee about it. i would hope going forward that the commission col play a -- could play a constructive role, not discourage us from legislating. and but perhaps be helpful if we decide to do something that would put something in statute that i think again addresses the issue of uncertainty and lawsuits which is going to plague this order i think for sometime 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 a classic situation of we'll report and you decide. >> okay. >> i 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 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 will be asked to submit any questions for the record. upon receipt the witnesses are requested to submit their written answers to the committee as soon as possible. thank the panel. this hearing is adjourned.

>> on c-span 2 book tv saturday 10:00 p.m., peter walson, said government housing policies caused the financial crisis. and it could happen again. and sunday at 5:00, jeffery sax on a plan to battle poverty political corruption, and environmental decay. and saturday morning at 10:30 eastern on c-span3, a discussion on the last major speeches of abraham lincoln and martin luther king jr. then the 1965 "meet the press" interview with mart tin luther king jr. final our whole schedule at c-span.org. callut at 202-626-3400.

e-mail or tweet. join the c-span conversation like us on facebook. follow us on twitter. >> you're watching c-span3. here's what's ahead. next, homeland security jay johnson on his department's 2016 budget request. that's followed by ohio governor john kasich at a breakfast in manchester, new hampshire. later, the confirmation hearing from sally quillian yates. and then customs and border protection commissioner on the agency' mission. with live korge of the u.s.

house to c-span and c-span 2 on weekends c-span3 is the home to american history tv with programs that tell our nation's story. the civil war's 150th anniversary visiting battlefields and key events. american artifacts touring museums and historic sites. history book shelf with the best known american history writers, the presidency, looking at the policies and legacies of our nation's commanders in chief. top college professors delving into america's past. the new series real america, featuring educational films from the 1930s through the '70s. c-span3, created by the cable tv industry and funded by your local cable or satellite provider. watch us in hd, like us on facebook, and follow us on twitter. james comey says a change in isis is that the agency is having trouble compiling an accurate profile of those americans who decide to take up

arms with the terror group. he added that the age range is pretty wide. his comments came wednesday before the house appropriation sub committee on justice where the director defended the agency's 2016 budget request. this is two hours. >> all right, i'm going to call today's hearing to order. mr. secretary welcome, we're happy you're here today. it's good to have you back to testify on the president's 2016 budget for the department of

homeland security. last year you testified on a budget that was already developed. this request, however, is a true reflection of your priorities and we look forward to having a robust discussion. >> mr. secretary, there's a lot to like in this request. and i have some concerns too. but for the first time since i've been chairman, i'm pleased with many of the recommendations in your request. the request prioritizes dhs's front line operations and personnel. doesn't include a lot of unauthorized fees as an offset. and complies with the law by funding 34,000 detention bands.

with a focus on preventing terrorism, securing the border, administering immigration laws, safe guarding cyberspace and strengthening national preparedness, i believe the request is a very constructive first step in the appropriations process. i would like to include $1.1 billion for cp's position of protecting america's borders while still allowing the flow of free trade and travel is vital to our economy. 3.3 billion to deter legal entry into the united states with full funding for the 34,040 detention beds, 129 fugitive operation teams and the increased use of alternatives to detention. 4.4 billion for tsa to fund screening personnel, training equipment and other resources in

support of more efficient and more traveler-friendly screening methods. and 1.9 billion for the united states secret service, a $273 million increase to improve perimeter security of the white house or better training, and to cover the costs of several upcoming events including the 2016 presidential campaign. it's worth noting that the budget propose -- this proposal mirrors recommendication -- recommendations made by the united states secret service protection panel. and 818 million to protect and strengthen the government's ability to counter cyber attacks on critical information, technology systems and

infrastructures. funds are included to care for at least 150,000 unaccompanied children, and i look forward to hearing from you on the latest apprehension trends for whether the 162 million contingency fund is required. i want to commend you for making management reform a top priority. improving decision-making processes and strengthening back office functions is never easy, yet the department is making progress under your leadership. i am pleased to see many senior level vacancies have been filled. even gao gives dhs positive marks in their latest high-risk report. so thank you and keep up the good work. for all that's good in this request, there are some problems. to begin with, 1.5 billion

increase absorbs almost 75% of the non-defense discretionary spending available under the limits of the budget control act of 2013. mr. secretary, the congress intends to live within the confines of the law even if the administration does not. as a result, i doubt dhs's budget will rise as steeply as the request proposes. within fema, a $38 million climate change is proposed as well as state and local grant programs. across all dhs components hiring front line personnel is not happening in a timely manner, resulting in large carryover balances. ice and secret service aren't keeping up attrition. nppd has major staff shortages, cbp continues to struggle.

to hire the 2,000 officers funded in fy-14, i understand only 700 are currently on board. hiring problems doesn't just have -- doesn't have just budgetary implications. at dhs, an inadequate floor structure could lead to public safety concerns. mr. secretary, this is a problem we need to fix, and i think you're the man to do it. however, i would be remiss if i did not mention two major frustrations. last week in the press, i read that ice released 30,000 criminal aliens into the united states in communities in 2014. once again, the releases were made without notice to congress, and we don't know whether the releases endanger public safety. what really annoys me, however,

is that many of the criminal aliens were released from detention because their countries of origin would not repatiate them and that's a real problem. i realize the law requires this result, but it's wrong and we need to figure out how to fix it. also back in 2013, this committee was surprised by the release of approximately 36,000 criminal aliens. we had a pretty good discussion about that at the time. and 2014, dhs appropriations bill, we had language requiring the department to notify this subcommittee prior to the implementation of further releases. we had the same language in the 2015 dhs appropriations bill, yet your department gave us no notice until after the fact. this committee is concerned about the department's failure

to inform us as required. quite honestly, as i've told you already, i'm getting real tired of learning about these releases in the press rather than from the department as required. and so for that reason, i'm very concerned about that. lastly, mr. secretary, you know that i'm completely opposed to the executive actions issued by a memo under your signature last december. those memos jeopardized the fy-15 conference agreement and transformed it from a law enforcement and public safety measure into a battleground for a fight between the executive and legislative branches of government. though the fight was the legitimate use of the legislative process, the actions caused unnecessary decision and partisan ship, and it it is

damaging dhs's mission to protect americans from terrorist threats and securing the border. i directed this subcommittee staff to report to me on departmental actions that appear to violate the injunction issued by the federal district court in brownville, texas. i'm putting this department and you on notice and as an attorney, you know and i know, that you will respect the authority of the court and that you will demand the same from your staff. with that i would like to recognize ms. roybal-allard, our distinguished ranking member for any remarks she may make. >> good morning, mr. secretary, and welcome. i would like to commend you for your efforts of making the department of homeland security more cohesive and better focused on acquisition best practices. those kinds of processes and capabilities are sometimes overlooked, but we understand

they are ultimately the foundation for almost everything the department does and that you need to get them right. your efforts are all the more compelling because they are the beginning of long-term endeavors, the full payoff which will likely be enjoyed not by you but by your successor as secretary. we have just come through a very difficult appropriations cycle for the department. frankly, congress is not doing its job when an agency's funding remains in legislative limbo for the first five months of a fiscal year. i know the basis for that delay was the disagreement over the legality of your immigration enforcement approach, even though the federal courts are the appropriate place to sort that out. and i hope we can avoid any repeat of unnecessary delays to appropriating your funding for fy-16. fiscal year 2016 net discretionary budget requests for the department of homeland security is $41.4 billion as scored by the congressional budget office.

this does not include an additional 6.7 billion in disaster relief funding and does not countdown toward the discretionary cap. the total is 1.7 billion above the current level. a significant portion of that increase is needed for second-year funding and step increases for cbp personnel addressing mission panel recommendations and other needs of the secret service and for federal cybersecurity enhancements. much of the budget requests for the department seems well justified, but there are some areas where i am concerned about cuts, particularly for the grant programs. if the committee is forced to do its work within the constraints of the current discretionary budget cap we will be hard-pressed to address the department's needs for funding grants and other purposes for the coming year. before i close, i want to try and frame the discussion we may

have this morning about immigration. mr. secretary, we know you have a tough job to do. and perhaps the toughest part is the enforcement of our immigration laws. it is tough because it exposes a tension between values we as americans hold dear. we are a country of laws and respect for the law is paramount to our democracy and our way of life. however, we are also a country that values human life, humane treatment of every individual and due process. we value keeping families together, protecting children, and we believe in second chances. while it is essential that we protect our borders and enforce our immigration laws, we must grant all people due process and treat them with fundamental human dignity and respect. and i hope in our discussion this morning, we can keep these american values in mind. mr. secretary, i look forward to your testimony and our

discussion today, and i look forward to continuing to work with you this year in support of the department's important missions. >> at this time i'll allow and yield to mr. rogers, chairman of the full committee for an opening statement. >> thank you, mr. chairman. mr. secretary, welcome again to these premises. i'm pleased we finally managed to pass a full year spending bill for your department to support our men and women on the front lines and bolster our critical security agencies and fund vigilant anti-terrorism and law enforcement efforts on our home turf. i'm absolutely committed to moving all 12 of our appropriations bills through the regular order process to ensure that we responsibly fund all federal agencies, including homeland.

mr. secretary, in years past, my colleagues and i have expressed disappointment in budget submissions from dhs that were political in nature, not reflective of the security needs of the country and chock full of budget gimmicks that made our job on the appropriations committee needlessly difficult. with a few exceptions that i will highlight later, i am happy to say that i cannot make those criticisms about this budget submission after cbo scoring. the requests has a $1.7 billion increase over enacted levels it includes important funding for our front line operations, including 98.8 million increase to support 21,270 border patrol

agents and essentially level funding for coast guard appropriations. request for ice includes sufficient funds for the 34,040 detention beds required under law, and you've done away with many of the unauthorized fees the department previously proposed to offset critical security spending. while this budget submission is indeed a vast improvement over those we've seen in the past, it does not mean that i am left without concerns. first, and probably most important, i question whether this request constitutes a realistic funding level. unfortunately, the president's budget request government-wide is billions of dollars above the level of our committee that we will ultimately be allocated to support non-defense discretionary spending. and is supported by unrealistic

tax increase, that the president knows are doa in congress. that's not responsible budgeting. and i question whether your recommended level is possible given all of the domestic priorities at stake. second, the president's executive order on immigration remains, as the chairman has said, the elephant in the room. the president's unilateral action demonstrates intentional disregard for the legislative authority of the congress under the constitution, jeopardizes the ability of this committee to move forward with appropriations for the department, poisons the well for any meaningful immigration reform package and even jeopardizes your very well-intentioned agenda to better unify dhs' practices and policies. you've unfortunately become the poster child for this ill-thought-out immigration

policy because your department is charged with implementing it. mr. secretary, there are separation of powers in this country. and you simply cannot expect the congress to stand idly by when the president circumvents this entire branch of government. mr. secretary, i've been involved with funding for this department since it started. actually, before it started. and we take seriously our responsibilities to support our men and women on the front lines as they protect our homeland. because of the importance of the dhs mission to our country's security, we on both sides of the aisle on the appropriations committee have worked earnestly to cast politics aside and focus on the critical task at hand. it's supremely disappointing to me that the president's egregious circumstanceum vention

of congress has shifted the conversation away from where it ought to be, on keeping this country safe from threats domestic and foreign, and making sure the men and women who protect us all stay safe. we look forward to hearing your testimony. we welcome you to the hill, sir. i yield. >> thank you, mr. rogers. it's now my pleasure to recognize ms. lowey for an opening statement. >> thank you, mr. chairman. and i'd like to thank chairman carter, ranking member roybal-allard for holding this here today and join them in welcoming you, secretary johnson. thank you for joining us. the department of homeland security is tasked with the mission of securing our nation from consistent threat. and this is no easy feat. to keep us safe, 16 different agencies and offices have to operate on a cohesive and cooperative basis.

i do hope that today, and for the next few weeks and months, we can focus on that mission, get to work on a comprehensive immigration bill. let's do it, let's do it now. and while we're focusing on homeland security, let's focus like a laser on the important work that you have ahead. last week at the louis armstrong new orleans international airport, a man attacked tsa agents with wasp spray and a machete after being questioned about his boarding pass. this incident serves as a reminder of the risk dhs personnel take every day to keep us safe. on any given day, dhs personnel will process nearly 1 million travelers entering the u.s.,

provide 3.7 million in federal disaster grants to individuals and households, patrol 3.4 million square miles of u.s. waterways, conducting 54 search and rescue missions, and seize approximately $300,000 in undetected or illicit currency. yet last month, republicans took the department of homeland security to the brink of a shutdown. secretary johnson, despite what your department accomplishes, for more than five months, you were forced to operate under a continuing resolution instead of having a full year funding bill. i'm very pleased that eventually we passed a clean bill, fully funding dhs, and it is my hope we will move forward on a bipartisan basis and not hold the nation's security hostage over partisan games.

the fy-16 request is $41.2 billion in net discretionary budget authority, a 3.8 increase from fy-15. this includes 11.2 billion for fema with 6.7 billion for the disaster relief fund cap adjustment. it also includes 818.13 million for cybersecurity advancements, a 65.1 million increase from fy-15. i was particularly pleased to see that given the growing threat and the importance of our focusing like a laser on the cyber threat. i just want to mention one other thing in closing. while it's still too early to know what actually occurred, the

chief french prosecutor handling the investigation said today that the germanwings plane was deliberately crashed by the co-pilot. this should be a reminder that as global threats persist, dhs' mission must remain the same, keep us safe. now more than ever, we must support the department in fulfilling this most essential, yet complex goal. i look forward to a productive discussion this morning, and thank you very much. >> thank you, ms. lowey. at this time, mr. secretary, we're going to recognize you and ask if you could to summarize what you've presented in five minutes if possible, and we will have your entire testimony entered into the record. at this time i recognize you. >> thank you, chairman carter, chairman rogers, ranking member roybal-allard, congresswoman lowey, other members of the

committee, nice to see you again. let me begin by saying that you do have my full statement, and i'll just say a few things in my five minutes. first of all, as sincerely as i can, i want to thank the members of this committee who i know worked very hard to get us a full year appropriation for fy-15 and the leadership that you showed to get us there. the possibility of a shutdown of my department was very personal to me. i know people in our department who would have been affected very dramatically had we gone into shutdown. for example, there is a person in our administration who is in stage 4 cancer who depended upon her paycheck to make her co-payments for her cancer treatment. i was going to have to furlough her if we went into shutdown.

and so on behalf of the 225,000 men and women of my department, thank you for your leadership in getting us a full year appropriation. like members of this committee, i am very pleased by our fy-16 budget submission of 41.2 billion net discretionary spending. i think it meets our vital homeland security missions. for me, counterterrorism remains our top priority. it's the reason this department was founded. we still live in a dangerous world. i believe the global terrorist threat has evolved to a new phase, and it is more complex and harder to detect. it relies more on independent actors, smaller scale attacks, very effective use of the internet and actors who could strike with little or no notice in the homeland as we have seen demonstrated in other parts of the world. there is a large threat still

surrounding aviation security. i'm pleased that this submission funds our key aviation security priorities. wave of the future, we need to partner with our key counterterrorism allies abroad and in the interagency on tracking individuals of suspicion in international travel. i believe that is important. i believe we need to strengthen the security of the visa waiver program in which 38 of our allies are participants. i believe we need to ramp up countering bioextremism efforts at home. i personally participate in those efforts. cyber security is a concern of mine in our department. i'm pleased this budget funds our cyber security mission. border security, i'm pleased that total apprehensions on the southern border this fiscal year

are down month to month about 20% from where they were this time last year, unaccompanied children are down about 40% less than they were this time last year. still, there is a lot more work to do. i believe we can build a stronger border. this submission funds new technology for the border, which our border patrol personnel tell me we need. i am pleased that this submission funds those things. chairman, you and i have discussed the issue of bonding out of those convicted of crime who are in deportation proceedings. in response to questions i'm happy to talk to you about the things we've done to tighten up that process, including notification to local law enforcement when that happened. we're recapitalizing the coast guard, as you know. this budget is part of that. we're funding the enhancements to the secret service that the independent panel has recommended, and has been noted here, we're doing a number of

things to reform the way in which we manage ourselves and conduct business. we have our unity of effort initiative which has led to greater efficiencies in the department. we've filled all the vacancies, almost all the vacancies. we will announce soon a new president's nominee for tsa administrator, who is embedding now. we're doing things to improve the morale within the department, and as you noted, we are working to get off the gao high-risk list. gao has noted that dhs is a model for government agencies and their efforts to get off the list. i've also noticed that we've received many compliments of our enhanced notes to congress despite the number of committees that exercise oversight on us. so gentlemen, chairmen, i

believe we're moving in the right direction in our homeland security measurements and the way we conduct business. i'm happy to respond to your questions here this morning. >> thank you very much, secretary. you more or less ended on an issue that i was going to bring up right now. my first question is dhs is suffering from significant backlog of vacancies, cbpis, mppd secret service. for example, only 700 of the 2,000 cbp officers in fy-14 are on board. many secret service officers are maxed out on overtime because there just aren't enough staff. high attrition outpasses hiring. officers responsible for infrastructure protection and cyber security are almost 20% below the level funded for personnel. i'm worried about the operational components and that they're spread too thin.

we're putting the department's critical mission at risk. further, i am extremely concerned with what is happening to the hundreds of millions of dollars which congress appropriated for staffing while the people are not actually on board. what are the causes for the hiring lags? what is the average hiring time frame for law enforcement officers at dhs, and how does this compare with other federal organizations like the fbi? does the current hiring process need to be changed, and if so, how? are there impediments that delay the process? >> chairman, first of all, the new leadership team that i have at dhs is very focused on staffing at lower levels. the issue of the customs personnel that you referred to,

you're correct that we are authorized to go up to an additional 2,000 in customs personnel. we're at about 700 now. i would attribute that to two reasons. one, an issue with getting enough personnel to conduct the lie detector test. second, we had an issue with our contractor that conducts background checks. the contractor was the subject of a cyber intrusion, a major cyber intrusion which caused a huge backlog for us and other agencies of government. notwithstanding that, we are aggressively moving forward in filling the vacancies that exist throughout the components that you mentioned. this is a priority of mine, it's a priority of the leaders. i will get back to you for the record on the average wait time to get the law enforcement positions filled and how that compares to other agencies. be happy to do that, sir. but it's something we are

aggressively moving forward on. >> i appreciate that, because we're looking at these numbers. the cbp is obviously one that flashes because that was a big issue at our airports and even on our border crossings. i had people in my office yesterday talking about that. happy we've got them. want to know where they are. so those kinds of questions -- in addition, 750 vacancies within the border patrol. 200 in the secret service. 500 in mppd. 200 in ice. all of this is fully funded. i think that's a real concern for us, and the question becomes, if we're not filling those positions but we funded those positions, what's happening to the money that was funded for personnel and how is it being spent? and if you've got information about that, i would appreciate you getting us something on that.

>> my second question has to do with something i seem to be having to talk about every day with my three subcommittees. i've got cyber security and i join you and chairman mccall that we've got a major cyber security responsibility in this department. and the possibility of a cyber security breach at certain levels in this country could be catastrophic. what's the impact of the mppd cyber program if we are forced to cut programs to last year's level due to the defense function physical constraints, meaning a reduction of up to 100 million below the request? would you prioritize infrastructure protection programs ahead of cyber? >> well, that would be hard to

do. as you know, this nation is -- the private sector dot gov is subject on an hourly basis to cyber intrusions and attacks. i read about them virtually every day. so our funding request includes a large amount for our einstein system to secure the dot gov world and to enhance in many respects or end kick facility which we use to interface with the dotcom world. this is a major priority of mine. i'm pleased that there is legislation in congress that will likely move forward on a bipartisan basis codify the role of dhs, dealing with the private sector, and i believe that we need to also move out in enhancing the hiring of our

personnel. we got good legislation last year to enhance our ability to hire key personnel. i'm personally including a number of top cyber security experts for our department right now, making phone calls myself to bring in some good cyber security leaders from the private sector. i'm addressing the rsa conference in california next month, something like 25,000 cyber experts. they asked me to be their keynote speaker. i intend to do that and take the opportunity to build trust and partnerships with the private sector. this has to be a joint effort between us and the private sector. there is something like 800 million in our request for cyber security. i think it is key that we have that level of funding. i also believe that we need that level of funding for our cyber security law enforcement efforts. secret service itself has a lot of cyber security expertise in this area which we need to continue to support. last month, for example, we brought to justice a major

alleged cyber criminal from, i believe, russian origin. he was extradited from holland. he was arraigned in federal court in new jersey. he was part of a ring that was stealing millions in credit card information from individuals. that was a case built by the secret service. they were the lead agency. so we need to continue to fund our cyber security law enforcement efforts as well. so we're moving in the right direction, but there is a lot of work to do. >> i also mirror your concerns, and in discussing with the private sector what we are asking them to do, and i find i raised this issue a couple times last week because i've had to talk about cyber a lot. right now our position in this country is a defensive position. although we have offensive

capabilities at the governmental level, our position is basically defense. we are defending ourselves from attacks. and we're asking our -- some large and some small businesses, basically saying, you know, we can't defend everybody, so you have to build your own defense. we're going to be having these little pods of defense all over the country, and another one of our challenges is being sure that they know how to play the game so we don't end up accidentally with somebody getting so mad because they got attacked that they counterattack. it's kind of a funny thing to have to think about, but the reality is there. and some of the people who have real talent, like microsoft or dell or some other people that are out there, could make a pretty good counterattack. so that's a real challenge for you because you've got to help challenge these people, and i

guess i'm just asking you to comment on the private sector relationship and how we're making that actually work. >> three observations. one, you're correct that some sectors of the private world are way more sophisticated than others. the financial services sector is very, very good at cyber security. there are others in the supply chain, there are smaller businesses that are not and need to come a far way and are most in need of dhs' help. they're all reliant upon the government for information sharing so that they get the larger picture. the other thing i've observed over the last 15 months in office is even among the most sophisticated company, if an individual employee is vulnerable to an act of spearfishing, there's the intrusion right there. if the individual employee

decides to open that e-mail with the attachment from a source he doesn't recognize, that can lead to a major, major intrusion. i've seen that even in the most sophisticated government agencies and in the private sector. the other thing that i think is very important in terms of an effective partnership with the government is liability protection. liability protection, if a private actor shares a cyber threat indicator with dhs that's something we support doing, providing liability protection for those who share cyber threat indicator information with us as a carrot and an inducement for information sharing. so we wrestled with that issue for a while, and i'm glad to know the administration supports it, and i believe many in congress support it as well. i think that's key to our cyber security legislation

efforts. >> i, too, support liability protection. at this time i'll yield to my colleague, ms. roybal-allard. >> i want to follow up on the cyber security issue, because as you know, it has significant presence in my state of california. recently, i had the opportunity to talk with many of those companies from the silicon valley to get their perspective on the department's cyber security approach. what i took from those conversations is that there is definitely a lot of work that still needs to be done, especially in two areas. first in finding ways to encourage the private sector to adopt good cyber hygiene practices, which as i understand it could address at least about 90% of the problem. and secondly fostering the exchange of information with the right kinds of privacy and

liability protections as you mentioned. hygiene is very, very expensive and with regards to privacy and liability, they also expressed an uneasiness and a lack of trust of how information would be used by the government. >> are you satisfied, first of all, with this effort that the office of cyber security and communications has the resources that it needs to fulfill its mission and that it is using the right approach to promote the appropriate flow of information between the federal government and the private sector, and not the other way around? also if you could also address how will the president's recent executive order on promoting private sector cyber security information sharing, how will that change things? >> a couple of things. i think that the key to

effective cyber security partnerships with the government and the private sector is building trust and a level of familiarity with the private sector. so i spend a fair amount of time interfacing with the same kind of companies you just referred to. in silicon valley, wall street, elsewhere, i've spoken to ceos in the financial services sector in silicon valley and so forth, so building trust, recruiting government officials from those industries also so that they have familiar faces that they're working with in government is key. as i mentioned a moment ago, i believe that liability protection for sharing information with the government is key. in my private life, i'm a corporate lawyer. i know how boards of directors think, i know how general counsels of corporations think,

so i believe liability protection for information sharing is also key. the executive order the president signed in february will go a long way toward information sharing in that we are encouraging the use of information sharing private actors. isao is the acronym, i-s-a-o. we're encouraging the use of these organizations sector by sector, to serve as portals for information-sharing. it doesn't have to necessarily be only the government with whom you share information for the purpose of cyber security. so i think those things are key in the answer to your question. >> how far can we go with the private sector on cyber security without new liability protection legislation? what are the limits? >> i think without liability protection, that is a significant obstacle. and i think that if we are to make significant advances here,

some form of liability protection provided by congress is appropriate. and so i'm a big proponent of that. >> on another subject, last november you issued a memo directing the implementation of the priority enforcement program which took the place of secure communities. can you reiterate the impetus for establishing the program and what the status and timeline are for fully implementing this new program? >> there are, as i understand it, something like 122 jurisdictions around this country that have enacted limitations through acts of city councils county commissions, executive orders, placing limitations on their cooperation with our immigration enforcement personnel. i think that is bad for public safety. and so we eliminated the secure

committees program which had become very legally and politically controversial, it was leading to all these restrictions and replaced it with the new program. the new program replaces detainers with requests for notification which i hope solves the legal issue that is arising in litigation, and we're indicating a defined list of priorities, a defined list of criminal offenses for which we will seek a transfer of somebody from a state or county or local jail so that we remove the controversy there. overall, i think it's key that we do a better job of focusing our resources and getting at undocumenteds who have been convicted of crimes who are in jails. there are these huge obstacles that have to be eliminated and it requires a partnership. so the leader of ice, the leader of cbp and i are on a campaign around the country now to engage

mayors, city councils, county commissioners to talk to them about the new program that we put in place so that they will come off of the barriers and limitations that they have imposed on their ability to cooperate with us. beginning next week, i'm going out to meet with major city mayors. i've been talking to mayors' conferences and governors' conferences about this. now i'm going jurisdiction to jurisdiction to say, we've got this new program, please come off the limitations. because it is an inhibitor to go after criminals. it's a real inhibitor. >> are you surprised that the ice personnel fully understand the issue of last november and they're following that guidance with respect to the issuance of detainers and request for notifications? and do you think that state and local jurisdictions will be more willing to cooperate with these notifications? >> the latter question first, i

hope and expect that state and local jurisdictions will be more willing to cooperate with us. i think that the learning and the training with regard to our new priorities is a work in progress. i had some immigration reform groups into my office last week to talk about that issue. i heard some concerns, and we're working with our ice personnel to make sure they understand the new guidance. >> there are some suggestions recently that congress could enact a law making it mandatory for state and local jurisdictions to act on detainers from ice aside from the fact that many state and local jurisdictions would oppose such a requirement. what is your thinking of that and also the constitutionality of it as opposed to something that could be required by law? >> i think that would be counterproductive. first of all, i think there are constitutional issues with a federal requirement that a local

sheriff or a police chief detain somebody in their jails. i also think that we would get a lot of pushback on that and it would be counterproductive to our efforts. it would be a step back. i want to encourage these people to cooperate with us and not impose that on them. i think it would be very controversial if we did that. >> mr. rogers. >> mr. secretary, at a time when the budget for other dhs components is going up, coast guard budget would be reduced, the operations part, by 3%, acquisitions by 17%. the coast guard budget reduced by $238 million from fiscal '15. at a time when, due to the policy changes with cuba and the

caribbean we're seeing a higher need for cutters to interject people fleeing cuba, for example, the drug trade example the drug trade continues to thrive in the caribbean, we had a good discussion yesterday on this subcommittee with admiral zucant, commandant of the coast guard, who says that he's lucky now to interdict 20% of the drug traffic coming through the caribbean. i'm puzzled why we're proposing some some substantial cutbacks in operations, and more importantly acquisitions by 17%, when we need more cutters out there. what can you say about it? >> well as you know, chairman, we're in the midst of a

recapitalization of the coast guard right now. we've just completed the eighth national security cutter. this request asks for six more fast response cutters to get us to 38 of the 58 we say we need. and we're about to -- i'm about to receive an affordability study on the medium size cutter the offshore patrol cutter. so we're moving in the direction of revamping that whole fleet. the reason the top line is less is because with the new fleet is greater efficiency in terms of personnel. it requires fewer people to run -- to man the new fleet. the other thing i'll say about cuba, we saw a brief spike in migration in december. hard to know whether it was in reaction to the president's statement or not. but the coast guard did respond very aggressively to that, and dealt whereith it and the numbers

have gone back down in the migrant world off florida. the basic answer to the question, i asked the same question, why does the top line look less given all the needs. it's greater efficiencies achieved with the new fleet. >> well i may beg to differ with you about that. but i think we are short-changing a very important part of homeland security when we do not capitalize the needs of the coast guard. secondly, and quickly, secret service. we've had numerous incidents now over a couple of years of drunkenness, agents on duty, and other misconduct including the latest example of the incident at the 15th street gate. that agency needs discipline.

we all have the highest of regard and respect for the secret service. however, some agents are tarnishing that image. and it needs to be cleaned up. the director has referred the latest incident to the inspector general of homeland security to investigate. and i know that you have certain things you have to wait for because of the ig has the jurisdiction to investigate. however, the leadership of the agency, and i have the highest regard for mr. clancy as an agent, but i think the agency needs an outside tough administrator, director. what's your opinion about all that? >> first of all, you're correct the march 4th incident is under investigation. what i know about that incident so far, and the facts are not all in yet, but what i know

about that incident makes me very upset. especially given the prior string of incidents. i a have seen the videotape of what happened. i've personally been to the southeast gate to look over the scene. look at the orange barrel that was moved out of the way. and it upsets me. and i have a lot of confidence in joe clancy to deal with the matters of discipline and instilling discipline in his rank and file. you're correct that the independent panel recommended an outsider. we had joe in place as an acting. to his credit, he came out of retirement, came back to the secret service, an agency he loves, to help clean this organization up. and while he was acting, he made

some really tough personnel choices. and changes in the senior levels. people he had known for years. so that impressed me and the president as someone who has the ability to seek independently and make hard choices. so we have appointed director clancy to be the permanent director. in addition, we are creating the position chief operating officer of the secret service. that job i want to see us -- and we are engaging in far and wide job search for somebody who has the ability and the experience to address a lot of the things the independent panel identified. the ability to put together a budget, the ability to look outside the agency for the latest developments in technology. and so the newly created coo position which will be at the deputy director level will be

intended for somebody who has the outsider's perspective, to be value added to that agency. it is in many respects an insular thinking agency. so we need to bring in the best practices in terms of how we manage that organization. but in terms of incidents like march 4, i have a lot of confidence in joe to straighten the organization out, change does not happen overnight. it's very very important in its mission, and i think joe clancy's the right person to get us there. >> well he didn't know about this for five days. >> that's true. >> it happened on wednesday -- >> which meant i didn't know about it for five days plus. >> and found out he said through an e-mail. instead of up the chain of command. that concerns me a lot that the agency needs discipline, and it needs an outsider in some

position there to be sure that we're not jeopardizing the president's life, by taking care of people who have been our friends for years within the service. and that smacks to me that that may have happened on the latest incident. so mr. secretary we're looking to you to bring that agency in to conformity with the high standards with which it's been associated with all these years. we must discipline that agency and make it work like it's supposed to. the importance of the job they have, to protect the life of the president of the united states among other things demands remedy. thank you. >> i couldn't agree more, sir. >> thank you, mr. chairman. we have six minutes, call it six

minutes until votes. i know you've got a busy schedule. i'm going to go ahead and go to you. >> why don't i pass. >> mr. fleshman's going to come back and take the chair, and we'll continue the hearing while the others go vote. >> how many haven't voted over there? >> i'm still here with you. >> okay. just a question about fema. after september 11th, congress came together and passed bipartisan legislation that authorized programs such as yours, the homeland security security program and transit security program. we did this because we know our communities, know how important it is know how important the threats they face are. we want to be sure that our responders have every tool available to detect, to prevent, and respond to acts of terrorism.

yes, the president's fiscal year 2016 budget proposes to consolidate the four major state and local programs into a single pot, even though congress has not authorized doing so. under the proposed national preparedness grant program, my first question is, what guarantees can the department provide that important grant funds such as uasi and the state homeland security program will be sufficient to prevent acts of terror and natural disasters? what would be deemphasized under the proposed program compared to the current grant programs? for instance would port and transit systems see fewer grant dollars, if separate programs are eliminated to them? how would funds to the most at-risk areas be safeguarded under the budget request? >> ma'am, as i think you know,

the consolidation question is one we discuss every year. our view -- i know it's administrator fugate's view that the most effective approach is to administer grants at the state level, so the governors can best assess what is appropriate for their states. congress makes its own judgments in that regard every year. as i'm sure you know, this year, with regard to the uasi grants we had language that says we should distribute in a way so that up to 85% of the risk, and only up to 85% of the risk, is satisfied with grant making. so we're working through that now.