time to vice ch >> thank you, mr. chairman. and if i had my iphone in my hand, i would hit retweet. for everything that he has just said. we do appreciate that you all are here. we do want to take advantage of the perspective that you have had, think about what has happened in the past 17 years, since '96. and the changes that we have seen, not only in how we communicate, but the rapidity of those communications, and entertainment, and how we access that, how we take it with us, how we consume it, so we know that the pace of change means that we have to be very judicious and careful, as we look at a rewrite. we know that there are issues that are going to come on the plate that we're going to have to discuss, also. as we look at not only the telecom rewrite but at the use of the virtual space, privacy,

data security, the way the virtual marketplace is used, and the way our constituents want to have a tool box to protect, as i call it, their virtual you online. so, we appreciate your time, your willingness to be with us this morning, and i yield back to the chair of the committee. >> yield back. >> gentleman from texas mr. barton want to use some of that time? >> thank you mr. chairman. i've served on this committee since 1986. i've served with three of the four former chairman, mr. wiley preceded me. we've had some agreements, we've had some disagreements. so it's good to have all four of you gentlemen here today. when i was chairman of the full committee, back in 1996, my commutety introduced a bill we

call the coke bill, the communication opportunity promotion enhancement act of 2006. it dealt with national franchising, net neutrality, public educational and governmental access, e-911 and what we now call void. it passed the house 321-101, but it didn't come up for a vote in the senate. i voted for the telecommunications act of '96, and the cable act of '92, and i hope this year to get to vote for another major bill that comes from the leadership of mr. upton, mr. walden, mr. waxman and miss eshoo. this is a good thing to be doing and we're going to get some good information from your gentlemen and we appreciate you being here. >> gentleman's time's expired. we'll now go to the former chairman of the committee, mr. waxman, for opening comments. >> thank you very much, mr. chairman. i appreciate your convening this morning's hearing, and launching the subcommittee's examination of potential updates to the

communications act. and i want to thank our distinguished panel for being here to help us think through these ideas, and i think i've been in congress during the time that all of you have been the heads of the fcc. technology has changed at a blistering pace since the enactment of the 1996 telecommunications act 18 years ago. the communications and technology industries are a thriving sector of our economy. as broadband plays an increasingly central role in the daily life of our nation, having a strong federal communications commission to oversee its successful growth is more critical than ever. yesterday, the d.c. court affirmed what never should have been in question, the fcc is the expert agency charged by congress to oversee broadband networks. in doing so, the court reaffirmed that the fcc has broad, flexible authority to regulate in the broadband and

digital age. however, while the court recognized the fcc's jurisdiction, it also overturned the specific rules the commission had adopted in the open internet order. i believe the fcc now has an opportunity, as well as a duty to exercise the authority the court recognized yesterday and reinstate the no blocking and nondiscrimination rules. an open internet is critical to the continuing growth of this economic sector. the internet is a vibrant platform for commerce, innovation, and free speech. having enforceable, open, internet rules of the road means that consumers are in control of their experience online. i'm pleased that chairman wheeler has stated his intention to expeditiously adopt a new set of rules following the court's guidance, and i look forward to working with the chairman and my colleagues in congress to make sure these pro-consumer,

pro-competition policies will continue to guide the expansion of broadband services. this subcommittee is now embarking on a journey to update the communications act, and regardless of the advancements in network architecture, or transmission protocol, the principles of competition and consumer protection remain as sound today as they were in 1934. i know chairman wheeler recognizes the importance of these values, and the action of the fcc that plans to take later this month to initiate technology transitions, trials, reflects that. i look forward to hearing from our witnesses about what congress can do to help the fcc meet the challenges of the broadband, and digital age. thank you, mr. chairman. i want to yield the balance of my time to mr. doyle. >> thank you, mr. waxman. mr. chairman, thank you for

holding this hearing and thank you to this distinguished panel. it's good to see all of you here in front of the committee. i just want to briefly concur with mr. waxman in light of yesterday's decision by the d.c. circuit, that i want to encourage chairman wheeler to work quickly to ensure that the internet remains an open platform for innovation, competition, and economic growth, which the fcc now clearly has the authority to do. i look forward to working with the commission and the stakeholders to put in place a robust framework that sustains an open internet. mr. waxman, i thank you for your courtesy, and i would yield back to you if someone else needs more time. >> -- a minute. if not i yield it back mr. chairman. >> gentleman yields back the balance of his time. we'll proceed now to our distinguished panel of witnesses and begin with chairman richard wiley who was nominated by president nixon and served as chairman of the federal communications commission from

1970 to 1977. as chairman for most of the '70s chierm wiley's tenure at the commission predates many of the major changes in the communications sector. chairman we're glad to have you here today. pull that microphone up close. thank you for being here. you'll need to push the button on the microphone there. one time. >> thank you very much chairman walden. ranking member eshoo and other subcommittee members thank you for the invitation to testify today. while i know it's not going to be self-evident, due to my youthful appearance, i've been involved for nearly 45 years in federal telecommunications policy. and from my own standpoint what has occurred during that period is simply amazing. when i was at the fcc in the 1970s, the average american enjoyed just three broadcast television stations. and one local and long-distance telephone provider, and the department of defense had just

begun to explore a revolutionary computer project known as arpinet. but today our citizens have access to hundreds of video channels delivered by countless providers, and transmission technologies, dozens of voice and tech services, numerous wire line and wireless companies, and of course, arpinet has morphed into the internet, which has become a universal medium of communications. interestingly the bulk of this stunning technological metamorphosis has emerged since the 1996 telecommunications act was passed. that legislation significantly altered the rules governing virtually every aspect of communications. the act's purpose was as simple in theory as it was complex in implementation. that is to provide for a pro-competitive, deregulatory national policy framework designed to accelerate the deployment of the then services

and open all telecom markets to competition. to this end the statute sought to eliminate cross platform barriers and to encourage competition among service suppliers previously treated as monopolies or ol ig oplies. to the priet of the drafters the 1996 act helped to bring about the vibrant competition that consumers enjoy today in a variety of communication sectors, via voice, data or video. whether delivered by twisted pair, coaxial cable, optical fine are or the electromagnetic spectrum, myriad providers today are offering their customers suites of advanced services in a marketplace that really could not have been imagined 18 years ago. in my view, where the statute and, indeed, fcc implementation has succeeded is when a lighter regulatory touch has been applied to markets. such as mobile, and information services.

the result has been that these sectors have thrived. for example, in the robustly competitive wireless marketplace, there are now more wireless subscriber connections than the population of the united states, just think of that, and mobile broadband has spawned an entirely new industry, mobile apps, one that is estimated to employ more than 500,000 developers and related jobs and contributes billions to the economy. a similar success story is unfolding in the delivery of the digital content where seemingly unlimited video streaming websites have developed to compete against traditional mvpds offering eagerly awaiting public new ways to consume video. this marketplace, i would suggest, is emerging because of innovation and competition, and not because of government regulation. conversely where the government has been less effective in maintaining is in maintaining

highly restrictive regulations on traditional industries like, for example, wire line telephony and broadcasting. the end result has been to disadvantage these sectors, even though they may be providing services that are often equivalent to those offered by their less regulated competitors. in the developing ip sent rick world, all types of providers should be able to market all types of services, employing the same computer oriented language that defines digital communications. and yet the 1996 act continues to regulate communications markets differently, based on the conduit used to reach the customer, as well as the geographic location, where traffic originates and terminates. now the underlying problem is not a failure of congressional or fcc vision. instead the reality is that a government has great difficulty

in writing laws, or promulgating regulations that can keep pace with advancing technology. and especially so at a dynamic and ever dr. changing industry like communications. thus i would suggest that the objective of statutory rewrite should not be to legislate premised on the current state of the marketplace, or even on predictions of what it may look like in the future, instead, congress may want to consider a flexible, and technologically neutral framework that will be capable of adapting to technical invention and innovation, whatever that may prove to be. in this regard, let me close by setting forth a few principles that might guide the drafting of a new statute. first the industry silos embedded in the 1996 act should be abolished and instead functionally equivalent services should be treated in the same manner, regardless of who provides them or how they are

delivered to consumers. second, the traditional dichotomy between interstate and intrastate services should be eliminated, because regulatory classifications based on geographical end points no longer make sense in an ip environment. third, legislation should be focused on maintaining consumer protection, and public safety regulations. conversely, economic regulations should be considered in the case of noncompetitive markets, or in the event of demonstrated market failure. and fourth, new regulations should be instituted with a lighter touch, as i said, accompanied by sunset provisions, so that the rationale for continued government intervention can be reviewed on a regular basis. thank you once again for the opportunity to testify. >> chairman wiley, thank you very much for your learned comments. we appreciate your counsel. we'll go now to chairman reed hundt who was nominated by

president clinton and served as chairman of the fcc from 1993 to 1997. chairman hundt's tenure at the commission saw the passage of the omnibus budget reconciliation of '93 which granted the commission the authority to auction spectrum licenses, and the telecommunications act of '96. so, chairman hundt, thanks for joining us today. we look forward to your comments, as well. >> thank you, chairman walden. thank you for inviting me. good good morning to ranking member eshoo and all the other members of this distinguished committee. i'm proud that many of you have become lifelong friends and it's a pleasure to be here with you. i also want to thank the d.c. circuit for giving me a flashback to law school so that i was late last night scrambling to read the key case right before this class. i have a feeling i'm not the only person here who did that, but i also want to note, i didn't have any staff, or

classmates, so, i apologize if i haven't read it correctly, but i thought that i would throw away my remarks, and for whatever it's worth, offer you my reading of the case. in my view the d.c. circuit has written first a very, very well reasoned and very important case. there's no question that this reflects that circuit's experience in these topic areas and that they've brought that experience to bear in a bipartisan way to express a view about how the united states ought to grant the authority to create the legal culture that governs broadband. what have they said? i believe the court has vindicated the wisdom of congress in the 1996 act. specifically, the court has said that when congress, in that act, in section 706, conveyed to its expert agency the quote,

authority to enact measures encouraging the deployment of broad band infrastructure, unquote, in doing that, according to the d.c. circuit, congress said to the fcc, you will be our instrument for creating a flexible, and a supple legal culture that will change over time as the market changes and as technology changes. but that can always be used to protect competition, to protect consumers, and fundamentally, to make sure that absolutely everybody in america is participating in the common medium of the internet. and that absolutely everybody in america is able to use it to publish their views and to review all the views of everyone else. not all those rules are in this decision. but almost all those words are actually in this decision. section 1706, of course, is just

one part of the 1996 act, but i know i don't have to remind many of the members here, maybe i don't have to remind any of the members here, that was passed by a very large bipartisan vote in the senate and in the house. we all were, those of you who were in public service then, remember being in the library of congress when president clinton, the democratic president, passed this law that was passed by a senate controlled by the republicans and a house controlled by the republicans. and all came together and said, we have a common vision, and that is that there will be networks, we did not know, technically speaking, what they would all exactly look like, but that there would be networks that would connect all of us to each other and to all of the resources of information that, in fact, would be utilized for entrepreneurship, for innovation, and for learning. and i have to say, this is what's happened. now no one here thinks the

government built these networks. no one thinks the fcc built these networks. but everyone should know that the legal culture that was created by congress and its expert agency, through the terms of republican and democratic chairs, the legal culture is the legal culture that is regarded all around the world as the absolute best legal culture for governing the internet. any one of us knows 12 things that we think should be done differently, or maybe two dozen, but we ought to recognize, just for a little while, that we, as a country, should pat our government on the back, and say for the last 20 years the legal culture that's been created that has governed the internet has really created the best possible environment for innovation, for entrepreneurship, for consumers. that's what's actually happened, and this court has said, and that law still exists, this court has said, already congress has enacted the law that gives

the fcc the authority to protect competition and consomers, and that authority lies in section 1706 and the court also said that congress can -- that the fcc can, if it choose, classify broadband as a common carrier. it could use either of these methods, it could use one of these methods, but it can accomplish the goals that are stated in the act and that have repeatedly been restated by this congress. the only thing the court said is, if you're going to pass rules that look like common carrier rules, and you're going to classify broadband, as an information service, then you're going to be creating a contradiction that we won't permit. you can't call it an information service and then pass rules that look like common carrier rules, because if it quacks like a duck, it's a duck. so, that's why it was sent back. i read a lot of articles that said that this was a victory for verizon, this is a victory for

congress. if it was a victory for verizon, it was a piric victory, it was the most perfect example of a pyrric victory since pyrrus. i want to thank congress for passing a law that works well and this court has said still will allow you to achieve your goals. >> thank you chairman hundt we appreciate your comments and your staying up all night to cram for our hearing. now turn to chairman michael powell, who was nominated by george w. bush, and served as chairman of the fcc from 2001 to 2005. during mr. powell's chairmanship they saw a significant increase in the deployment of broad band to american homes as well as convergence of services toward the development of broadband -- toward the bundles of services common today. chairman powell thank you for joining us today, and please go ahead. >> thank you, mr. chairman. and as a former chairman, i'm happy to be sitting around with a bunch of these other chairmen,

offering as best we can our historic perspectives on how to prudently go about rewriting the act should that be your intention. and i'm pleased to be with ranking member eshoo again and all the distinguished members of the committee. i think it goes without saying and all of us will say it in different ways that the world has changed quite radically from 20 years ago in terms of markets and services but don't ask us, ask your kids. ask them to name three broadcast networks, if you will, ask them to do without the internet for a week, and for god sakes ask them to put their phone down at dinner and see what you reaction you get. i think you'll be convinced. that transformation has taken place largely because of an enormous revolution in network architecture in the form of the internet, which has unleashed a form of intermodal competition heretofore wasn't really possible and it's really introduced an exciting world and we should remember, gave birth to a host of companies and opportunities that never were envisioned before. the companies that aren't here, google, facebook, amazon, ebay,

twitter, instagram, you name it, all able to be born and flourish because of this transformation. i would say that any consideration of the act should start with not only cataloging its ills, but cataloging its successes. much as reed was alluding to. i think it's really important to note that over this period we have seen the most stunning amount of investment in infrastructure and architecture that we've ever seen. we have reached 90% of americans faster than any other technology in world history. innovation and growth have continued at exponential rates with broadband increasing over 19 times just in the last decade. doubling basically increasing about 50% annually. that's a stunning achievement in something we should make sure we keep going. i, so i think, you know, being guided by the old maxim of do no harm as an important cautionary tale, as i thought about how you might think about architecting a new regime, i'm guided by the

idea of the internet itself, which is the fundamental principle of simplicity as a design principle. it has been a very, very powerful one. in the internet, and i think it offers some guidance in the space, as well. so i'd like to, toward that end, offer i'm going to see mr. wiley's four principles and do him three better and offer you seven as briefly as i can. the first is we've heard a lot about innovation. i do think the principle goal of the government should be to nurture that innovation. this is the kind of fomenting change we have never been able to harness as fully as we are today. innovation has allowed us to bring completely new products and services and network changes to the market. it's created a form of creative destruction that keeps the market energetic and keeps monopoly in check. and i think it's created new kinds of transparency for the american consumer through crowd sourcing and visibility. and we should study the conditions that go in to

innovation and make sure we harness them. i think three are critical. innovations really do require freer markets. and a market that moves at moore's law of speed the pace of adaptation transformation and change are incredibly fast. and there needs to be a constant and intense dialogue between producers and consumers. we should be careful to protect that. innovation requires risk taking. as we know, most new ventures fail. there has to be room in government policy for failure, there has to be room in government policy for encouraging taking those risks. and innovation requires investing more than a trillion as was talking about earlier since 1996, is stunning. but it requires a stable regulatory environment to provide that uncertainty because if investment slows innovation will slow with it. the second rule of simplicity, i think, is once you've created a lighter regulatory environment, by trying to pursue the maxim of less is more, organize it better. we certainly have heard about the challenges of silos and

buckets. clearly that had its place in another time when these technologies, applications and tief of companies were deeply intertwined, were not able to provide alternative services and other spaces. that day has moved on and we certainly crave a more unified, integrated kind of legal regime that doesn't make those sorts of legal distinctions. as i heard mentioned today i think yesterday's court decision and the multiyear debate on net neutrality that illustrates the almost tortuous challenges of addressing a modern circumstance in using provisions of last century's rules i think they're certainly widespread agreement on core principles around an open internet. at the somewhat past we've had to follow in an effort to implement them has made the matter more complex and controversial than necessary and the threat of radically upending a long-standing light regulatory foundation of broadband on which massive investment and growth have been wilt with good effect to implement one set of rules seems distressing any shift of

that magnitude i do think would require congress' the people's representatives to weigh in on. a third principle give regulators the ability and obligation to address changing markets. as we've said the markets move drastically and the fcc often has limited ability to make those migrations yes in places they have, there are other instances in which they've not been able to even when they concede that the fundamental circumstances have changed. fourth the law should ensure competitive parity and technical neutrality. there is a hodgepodge of applications of statutes i could point out in which certain rules apply to one sector of a service and not to other sectors. this has really just been an outgrowth of the passage of years and the changing nature of companies. but there are many rules that apply to cable for example that don't apply to dbs for no discernible reason. one valuable thing the committee can do is prune through the statute to harmonize those as

best as possible. the fcc should police markets not create them. i think this is generally well understood but there is a role for a cop on the beat. what i don't think there should be is a master chef who believes it's the commission's objective to make markets or create the conditions and circumstances for them. and finally, the last two, timeliness. if you're working in moore's law you need timely and prompt decisions from the government. lastly and most importantly the law still needs to preserve important societal values, and protect consumers from harm. and the fcc and the government will always have a sacred responsibility in that regard. thank you for your time. >> chairman, thank you. speaking of cops on the beat, we'll now go to michael copps, served as acting chairman of the federal communications commission from january to june of 2009, and served as commissioner from 2001 to 2011. prior to joining the commission, commissioner copps worked right here on capitol hill, and the u.s. department of commerce.

commissioner copps, chairman copps, thank you for being with us, and we look forward to your comments to round out our panel. >> thank you chairman walden, chairman upton, miss eshoo and mr. waxman, vice chairman, former chairman, all the members of the committee, i'm delighted to be here. we're here today to review whether the communications act needs to be updated or otherwise reformed. i've heard some say that simply because the act is old it must be obsolete. that no matter how well it has served us an act written 18 years ago cannot have relevance in today's altered world. as someone only a little younger than the original act of 19 34r, i would raise a caution flag or two. the declaration of independence and the constitution were written long ago, too, yet we still find them critically relevant in our lives. while it is praise worthy to ponder changes to the law i would suggest firstly that the framework of the current statute remains in many ways strong.

and secondly, that the current act's provisions can still do much to improve our communications landscape. to enlarge economic and social opportunity for all of us, and to nourish the kind of civic dialogue upon which successful self-government inevitably rests. in an ideal world most of us would welcome an up-to-the minute rewrite of the law to reflect how we believe it could be improved. the last such revision in 1996 was born of a unique political moment that aligned a sufficient and sundry number of stake holders across sectors and constituencies who were able to negotiate a compromise statute that while far from perfect at least envisioned delivering to every american no matter who they are, where they live, or their particular circumstances of their individual lives, the most advanced communications technologies and services feasible at reasonable and comparable prices. replete with consumer protections, rights of privacy, assurances of public safety and utilizing competition to help achieve these goals. putting the statute to work to deliver these benefits was my

mission at the fcc, working with some of the most amazing public servants anywhere. nowadays i carry out my public tra mission in the nonprofit sector at common cause. in the immediate wake of the new law's passage the commission indeed made important strides to carry out these congressional mandates. but alas things changed. some of the very entrants who helped negotiate the new communications act spent more time undermining the statute than implementing it. such efforts continue to this day as we saw in yesterday's court decision that left unaddressed would seriously jeopardize the future of the open internet. i appeared in front of this panel many times over the years to voice my dissent and commission decisions involving the reclassification of communications services, industry consolidation across both our telecom and media sectors, the elimination of policies that had long safeguarded the public interest, and the heavy toll thereby exexacted on consumer choices, consumer prices and slowing the

deployment of competitive low-cost, high-speed broadband, this sentry's most important infrastructure. we can debate for hours but a record of these hearings needs to show that many people do not share the easy optimism that others express about the state of america's communications readiness. as you consider legislation in the coming months, some will tell you that america is a veritable broadband wonderland. a triumph of free market entrepreneurship that puts us at the front of high tech nations. but there are stubborn facts we must never avoid. the united states originator of so much of the technology behind the internet has fallen from leader to lag ert in broad 3 band penetration. according to oecd our country is 16th in broadband connections per 100 residents. worst research shows americans are paying more an getting less than wired broadband consumers in get for countries. the department of justice has noted the wireless marketplace offers little in the way of choice even as mobile data plans are saddled with date 25 caps

that harm consume shun and innovation alike and once again for the third time the fcc found itself unable to certify that we enjoy a competitive wireless marketplace. surely the time is now for pro-active and pro-consumer measures to make quality broad band universally affordable once and for all. while we are not gathered here this morning to rehash those decisions, i do think it is important to understand that many of the false attributed to the current statute are more the result of powerful industry efforts to undermine it and of commissioned decisions that too often aid and abet the effort. so while we open discussions on revising communications, let us recognize that our present statute has been interpreted and implemented in ways not originally intended, and that many of us parts are still relevant, workable and consumer friendly. there is a statute to enforce and putting that job on hold while we consider changing it is not a good option. additionally i think most of us here this morning understand that finding a new correlation of interests that can come

together to forge the communicationsability of two,000 five teen or 2020 will be even more challenging than the jockeying that gave birth to the current law. as the world races ahead we have a duty to make the best possible use of the laws we have in order to make the best possible use of the laws we have in order to achieve the ongoing goals that congress laid out. these remain powerful interests, a statute that invokes the public interest over 100 times, that highlights the universality of consumer protection and that underlines the necessity for immediate and informs communities and engages citizens cannot be all bad. would i have some preferences for a reworked statute? of course. a good part of it would be making sure that the commission and industry follow through on what is already on the books to foster competition and consumer protection, to preserve privacy in this age of massive intrusion, to avoid never-ending industry consolidation, to put the brakes on gate keeping in

our media, both traditional and new, and to provide the fcc with sources it needs to discharge its responsibilities. my greatest disappointment at the commission is that we didn't do enough to encourage media that truly reflects the diversity of our people. can you believe that today there is no african-american owned full power commercial television station anywhere in the land? america is diversity. if our media fails to represent diversity, diversity of providers, content, viewpoint and ownership, it fails us. needs to be addressed with renewed urgency and additional resources. imagine that there are still areas where the majority of first americans cannot access even playing old telephone service, let alone the kind of high-speed broadband that is the most powerful tool they could have to create opportunity where there is so little opportunity now. i would hope we could find ways to stimulate basic communications research by

private/public partnerships. i'm not talking about the next glitzy app. determines who wins and loses in the global sweepstakes. i'm for making the commission more efficient, like doing away with the closed meeting rule that prevents more than two commissioners from even talking to one another. and i hope that reform needs to go forward whether or not it is accompanied by more far-reaching divisions. and i believe that when three commissioners have something they want to do at the frc, that item should go on the agenda. my list could go on and i welcome the opportunity to discuss such things today. but i always come back to democracy. because that's what concerns me most. our country is in trouble. reminiscent in many ways of the severity of the economic, global and social crises it faced in the 1930s and there are no happy outcomes. i just do not see how citizens can be expected to navigate

through all these issues and come out with smart decision for our nation's future when the telecommunications tools we need are not available to all and in the media environment where community outlets have been short circuited, investigative journalism hangs by a thread and wherein we expect some invisible hand to produce those things that the market itself no longer produces and which, in fact, the market alone has never produced. communications are vital to our economy, but they are the lifeblood, the lifeblood of our democracy. they must be available to all, open to all, always alive to the common good. we shouldn't see our communications world as part telecom, part media or part traditional media, part new media. we have one communications ecosystem and our job is to make it work for everyone, and i know of no greater challenge that confronts the congress, the commission or the country. thank you for holding this hearing today and for inviting me to be part of it. i look forward to our

discussion. >> chairman copps, thank you for your thoughtful presentation. we appreciate it. our subcommittee has moved forward on some of these initiatives and we welcome encouragement on the other side of the building on sunshine act and a few other things. would like to open up the questioning process now. since you presided over the federal communications proceedings that classified cable and telco delivered broadband services, do you think we would have seen the same level of broadband investment during the past decade had the fcc classified these services as common carrier communications services? >> i think the internet, at the time that classification decision was made was more unknown than known. i think it was a period of rampant experimentation. i think the capital required

broadband networks not in place, needed the flexibility to make those choices without the risk that they would be put back into the regulatory models. >> chairman wiley, does the federal communications commission need to continue to have broad discretions over mergers and acquisitions, or should the department of justice anti-trust review be enough? >> i think there has been implication from time to time. the justice department is looking at anti-trust aspects. i think two agencies need to work together and i think they have worked together through the years. so i think the process is appropriately developing. but i do worry sometimes that we see a great delays in the handling of these consolidations

and mergers, which i think is contrary to the best coverage involved and contrary to the public interest and consumers. >> and to both chairman powell and chairman wiley, can the frc ever future-proof regulations, given how rapidly technology is changing, and holding the commission back from flexibly addressing new technologies? >> no, i don't think any agency can future-proof the regulatory involvement more than congress could write a statutory that wouldn't fray in a market that's driven by change. there are tools to give greater flexibility and not more prescriptive restraints that we've seen in some regulatory vehicles. no, they can't future predict. the other guidance is i think asking the commission to engage in anything that requires predictive judgment about future

outcomes should be avoided where possible. >> yes. and that's why i suggested in my prepared testimony that we ought to have an opportunity to have a light touch here and in your statute have a very flexible, technology neutral approach to this. it's very hard to predict. 1996 drafters did not really foresee it to become a universal medium and i don't think they predicted broadband to be what it is today. i think you have to step back a little bit and allow the te technology to develop and allow innovation and invention to occur without stifling it. >> let's start with chairman powell and then each of you can take this -- should the internet be regularited as a common carrr

under title two? >> for me that's easy. no. people should fully understand what that means. even if that were able to gev you a better basis for recovering the two components of the rules, it would mean the instant application of thousands of pages of decades-old regulations instantly to the internet where they heretofore have not been on a basis, shatter expectation that would result, i think, would be exceedingly damaging and more than most people realize. >> chairman hundt, do you care to comment on that? >> just two points. the 1996 act was shorter than the rules for little league baseball. meaning congress does not necessarily have to write thousands of pages and, in its wisdom, it did not do so in 1996. and that act now has given the fcc the ability to achieve the fundamental goals.

as i mentioned earlier, you can choose to use the specific methods that are dictated by the common carrier treatment. but it absolutely does not have to use very many of these methods to accomplish its goals. in fact, the court, on page 61, outlined its view of what the fcc should do and said you could treat it as common carrier and have about 30 words that establish the principles. i'm not saying they should do that. i'm saying they can do that. >> do you think they should? >> i think what they should do -- and i hesitate to say to the current chairman what he ought to do, but since you asked, i think they ought to take a fresh look at all the facts in will you as exists right now. and they also ought to be down here, listening to you all in having a robust discussion. but the key point is, they have authority. >> got it. real quickly, the two remaining, because i've gone over my time.

wiley -- >> i think -- >> no, go ahead. >> i think it would be a big mistake to turn away from the information service pathway that we started and go back to common carrier regulations. however that might be defined. i think we want to provide an environment where there is, i think, opportunities for investment and encouraging innovation, allowing businessmen to try to experiment and try to find ways to serve the customer and i think to go back to a 1934 style common carrier regulation, which was really based on regulated the railroads, i think, doesn't make any sense. >> mr. copps, real quick? >> yes, i do. the course says we have the authority to do that. whatever we do, we need to do it quickly, promptly and provide some certainty in the marketplace. i have always stressed the importance of that reclassification. people talk about section 706. i've always said that there is authority there to do a lot of

things. but what -- we don't need now to get into months of third ways and fourth ways and fifth ways to thread this needle. we need clarity. business needs clarity. consumers need clarity and the commission needs clarity, too. and we have to make sure whatever we do that things like interconnection and those things, consumer protections are provided. >> appreciate that. i thank the indulgence of the committee and turn now to the ranking member miss eshoo for five minutes. >> thank you, mr. chairman. to each of our distinguished witnesses, what a rich, rich hearing with your testimony. thank you very, very much. to chairman hundt, thank you for your eloquent summation without any staff or other counsel to assist you late last night. in your testimony you discussed the importance of your decision

that this country made to allow internet service providers a full use of the existing telephone network without paying the owners anything. it's a very, very -- i mean, one of these essential platforms in the success of the internet. so, essentially, we said the incumbents could not be gate keepers that charge a toll for getting online. in your view, does yesterday's circuit decision reverse that long standing policy? >> no, it doesn't. and i think congresswoman that you put your finger on the central issue. yes, internet service providers are gatekeepers and they are also two-sided networks or two-sided gatekeepers. like any gatekeeper, there is

somebody on one side and somebody on the other side. the situation is very similar to the credit card industry. we all own credit cards and then there's the credit card company and on the other side of that is the restaurant. and it's very useful for restaurants that we all have credit cards and it's useful for us that all the restaurants will take them but it's not so useful if the gatekeeper says some of these restaurants, we're not going to allow them to participate in the system. translate that to the present. if the internet service provider were to say not all the people that are putting the content on their computers, we don't want all of them to be able to have access to all of the users, that's a problem if the gatekeeper behaves that way. >> thank you. >> that's the central issue. >> thank you very much. to chairman powell, it's wonderful to see you again. as you know, under current law, cable subscribers are able to

buy the so-called broadcast cable tier in addition to getting access to any other cable programming. as we transmission consent fees continue to rise and are inevitably being passed on to consumers in the form of below-the-line fees, i don't think it's a sustainable business model, most frankly. i just don't think that it can continue to work this way. do you think the so cold must buy -- lower their bills by electing to receive broadcast channels over the air? >> i don't. i think it should be an extraordinary circumstance in which the government tells the consumer, you have to buy a television package as a prerequisite of buying more of what you want, which is essentially what the rule does. the other grounds on which i think it's fatally flawed is

only cable subscribers have that obligation. dish and direct satellite subscribers do not have that obligation. and they're the second and third largest mvpds in the united states. yet a consumer who subscribes to directv does not have to, under the rule, buy programming but if they switch to comcast or cable, they do. that was the parody i was making. >> chairman copps, thank you for being here today. the man with real wisdom. the man that we always count on to put -- place democracy front and center of everything. you know so well that since citizens united, the last two election cycles that have set records for money spent, including hundreds of millions of dollars from undisclosed

sources, the bulk of this so-called dark money spend iingy outside groups that hide their donors go toward negative tv ads. we all know that. would you recommend changes to the communications act to ensure that voters are informed about who exactly is behind these anonymous tv ads? and is there anything in your view that the fcc can do on its own without congressional intervention? >> i would recommend them enforcing the statute that we already have. if you take a close look at section 317, which has to do with sponsorship identification and which goes back even before the telecommunications act of 1934 was written, goes back to 1927, ensuring that listeners and viewers more recently know by whom they are trying to be persuaded whether it's a commercial product or political

product. those rules were last revisited in a meaningful way by the fcc in the 1960s, which repeated that people have a right to know by whom they are being persuaded. since then we have all these new avenues of dark money and super pacs and all of the rest. we also have the authority recently reemphasized by the government accountability office, the recommendation that the commission update those rules and get on with the job. so, we can have this kind of information available to consumers so that when you see that negative ad and it says brought to you by citizens for purple majesties and amber waves of grain and it's really a chemical company dumping sludge into the chesapeake bay, potential voters, citizens have a right to know that and will know that. that's basic information that you need to have, if you're going to have a viable civic dialogue. this is something that the fcc can do.

it doesn't await a president making a proposal to do this. it doesn't involve congress having to pass a law. it involves the federal communications commission doing its job. it could do this in 90 to 120 days and update the rules to take mind of the new dark money avenues i was talking about earlier. so, this would be a real way to shine a little bit of sunlight on the dark world of tv political advertising. >> thank you very much. and mr. wiley, thank you for your wonderful, distinguished public service. i'll submit my questions to you in writing. >> all right. thank you. >> thank you, mr. chairman. >> thank you. we'll now turn to the vice chair of the full committee, the gentle lady of tennessee, miss blackburn for five minutes. >> thank you, mr. chairman. and thank you all for the time this morning. i want to pick up where the subcommittee chairman left off, talking about the responsibility of the fcc and what it would

look like going forward. i think that it's fair to say -- and mr. powell, i will address this to you. i have heard you say aol was on top at one point when you were -- on top of the game and where are they now, i think, was the comment. anyway, looking at where the fcc would be and as we look at the telecom act, should we look in terms of the fcc being more enforcement rather than regulatory in its scope or in its -- really in its scope? mr. powell and then mr. wiley, i would like to hear from you. >> i think some aspects of that deserves a fresh examination. i was a huge supporter of, served there with great people. it does an enormously great public service. int introspective management. it is one of the last of the new deal agencies that has

regulatory power. that is, the ability to set the prices, terms and conditions of market activity as opposed to having a more significant enforcement, policing or consumer protection role. not to say that some of that may or may not still be warranted. i do think that that is a kind of hold over from judgments of different administrative eras. if you're going to look at -- you should look at the -- >> look at the balance? >> the diochotomy and balance of that role. i do think that many have migrated more toward that role. i think they're worthy of second consideration. >> mr. wiley? >> i would agree largely with what chairman powell has suggested. i think the commission does have strong enforcement efforts today and some would say almost two strong in some instances. but i think, frankly, a lighter

touch is the way to go in this area. >> let me ask you this. privacy data security, front page news right now. it's going to be. do you think that now is the time for the fcc to focus on its core competencies or should it move over and look at privacy data security or leave that to the ftc? mr. wiley? mr. wiley? >> i didn't hear that. i didn't hear it. i'm sorry. >> privacy data security, leave it to the ftc and the fcc focus on its core mission or what is your thought on that? >> i think so. >> you think so? >> i would agree with that. >> okay. mr. powell, coming back to you, 706. we're hearing a lot about that today. and you may have others who think that, you know, the fcc -- that this is an invitation, 706 is an invitation to come in and

regulate internet services. as you look at 706, do you agree that the provision was intended to give the fcc the ability to forebear from regulations that would stifle broadband investment and innovation? >> i agree that the decision certainly gives them the power to forebear and for many years many people interpreted 706 as principally deregulatory. it speaks of removing barriers and obstacles, less so about introducing them. i certainly was serving at a time where the commissions have held that was not a separate basis of authority. and in fairness to the fact, every commission had so held until recently. so, that was the position of the law when i was there, at least. i will say, though, that i think if the commission is going to have a role in broadband, i highly would prefer that be under the construct of the light

regulatory information services definitions that reside around 706 than to make a radical transformation to title 2 as a regulatory framework for those questions. >> okay. thank you very much. mr. chairman, i will yield back the balance of my time. >> the gentle lady yields back. the chair now recognizes the gentleman from california, the ranking member of the committee, mr. waxman. >> thank you very much, mr. chairman. my colleague, miss blackburn, suggested that the fcc needs to act more like the federal trade commission, ftc. consumer protection work. i believe we need an agency like the fcc that can write forward-looking rules of the road for industry and consumers. chairman hundt and copps, do you agree with that? >> absolutely, mr. waxman.

forward-looking is -- here is the best example of a useful forward-looking law. it's in the incentive auction legislation that you passed where this congress said we want the fcc to establish before the auction a generally applicable rule about how much spectrum anybody can buy. that has to be forward looking. you don't want to go into the auction with your money and not know whether or not you're going to be permitted to win -- keep the license that you thought you were the high bidder on. that has to be forward looking. that's a great example of you all asking for a forward-looking rule and really deserving a forward-looking rule. >> we all talk about how rapidly the telecommunications technology and services are changing. the commission has to be aware of that, have the flexibility to react to that and certainly to fulfill its responsibilities to look into the future and try to

determine how best to fulfill its mission, which includes consumer protection, includes privacy and includes ubiquity of services. >> mr. powell, in light of yesterday's decision, the d.c. court circuit recognized the authority of congress in the act. do you believe that the agency can properly oversee the growth of broadband infrastructure services? >> i do. for a matter of record as the chairman of the fcc and the commission that classified broadband the way it is today, we quite pointedly recognize that the -- the importance of that role to a continuing degree. and we believe that existed within that title 1 framework to take care of those circumstances. whether you agree or disagree the court certainly validated

yesterday from a judicial standpoint that title 1 and 706 do provide that flexible authority. >> mr. wiley, if you agree the fcc has the authority, do you think it ought to use it? >> the court said that the commission could have authority in this area. i would strongly advise in my own view the commission to let the marketplace develop and if problems do exist, then to step in. there are avenues, if we find blocking, if we find discrimination, there are avenues that can be taken. i think the problem is sometimes we're in search of a problem here that may not exist. i think if you look at all the suggestions of the carriers that have come out of the decision from yesterday, they all want to keep the marketplace open, all want to give consumers access to various kinds of content. and i take them at their word.

i think that's going to develop. >> if we want to keep the marketplace open, isn't it reasonable to anticipate that some of the players will not want it to be so open if it's to their financial advantage? shouldn't the fcc play a role to make sure prospectively that we haven't opened competitive market with the consumers being in charge? >> i completely agree. if i might, i think it's important -- let me say this. i have the view that the case in the statute have the following meeting. section 1706 gives the fcc the authority to accomplish the goals you just stated without also requiring the fcc to make a classification decision. that is to say, it can make a classification decision and act with the authority that would come from that, but it doesn't need to do that in order to pass rules that are authorized under section 1706. meaning 1706 and the common

carrier provision are two independent bases for fcc action. that's why the fcc can choose both or either in order to have a decision making that would accomplish the rules you describe. >> didn't the courts say the fcc made the wrong choice and they have two titles they can rely on? you are saying they don't need either title? >> i think what the court said is if you do choose the information services classification, then you're bound by the restrictions in that. but you don't need to make that choice in order to accomplish the goals that you are desiring, which the court has said that it approves of the goals. >> and you don't need to be -- regulators common carrier either? >> beg your pardon? >> you don't have to regulate it as a common carrier. >> you could choose that, or 706 or both. what you can't do is choose

classification and pass common carrier rules. >> thank you. that's very helpful. thank you, mr. chairman. i yield back my time. >> the gentleman yields back and the chair now recognizes for five minutes the former chairman of the full committee, mr. barton. >> thank you, mr. chairman. i'm going to make a brief statement before i ask a question. i was here in 1996 and that act was a philosophical change from where the committee had been and, to some extent, where the country had been in terms of telecommunications policy. you had a republican congress, house and senate for the first time in over 50 years, maybe 60 years. you had a democratic president,

mr. clinton, who came from a kind of conservative pro-business background down in arkansas. and the former chairman of the committee, mr. dingle and mr. waxman and mr. markey and some of those folks had a very regulatory approach. although not totally so. and the teleco act of '96, mr. bliley and mr. fields, we decided to go with a market approach. and mr. copps, as he has pointed out, markets don't always work. but generically if they're open and transparent, unless there is a natural monopoly, they do give a lot more choice to people. and that's what the teleco act of '96 did. it rejected the philosophy that

the government knows best, that the regulatory knows best, that if they have access to appropriate information, people can make choices that are good choices. and we see reflected today in some of the questions that mr. waxman especially just asked, you know, that some of my friends on the democrat side just don't like a market approach. how dare it be possible that under title i informational services you can have an open, transparent internet and you don't need the fcc to tell you what to do. my god! that's scary. we better get that fcc back on the job. they just maybe -- you know, if they can't do it under title ii

as a common carrier, well they're just going to have to figure out how to regulate under title i. well, you know, if you look at the explosion and what's happened -- i mean, i have -- i had somebody, a young person, a very young person, about 9 years old, come into my office down in texas and apparently did not know there was such a thing as a hardline telephone. did not know what that was on my desk. this young lady thought a phone was just something you carried around with you. her parents were young, didn't have hard line phones in their home. her dad worked out of his truck, doing stuff, contracting and stuff. she didn't know what it was.

so, this thing mr. upton and mr. walden are starting, working with mr. waxman and miss eshoo, it's a good thing. where i have to depend on the intelligence of mr. copps, mr. hundt, mr. wiley or three or four other wise people at the fcc to know what's best for me in the telecommunications policy. i think if we set the ground rules -- i agree you have to have a traffic cop. but i don't agree that you've got to be so prescriptive that the market just flat gets strangled before it even has a chance to get under way. so my question -- and i'll throw it open to the panel -- is there still a need for a title i?

i mean for title ii, for common carrier? in the telecommunication marketplace today, could we deregulate the telephone companies in totality because, you know, there really is no such thing as a natural monopoly anymore? >> if we can find a way to assure that some of the qualities that people fought for long and hard in terms of privacy and public safety and consumer protection do not accompany the new tools of broadband and the internet as they accompanied telephone, then i think we're in trouble. i like the market approach, too. and it was decided long ago that the telecommunications industry, the media industries would appropriate under the capitalistic system. you don't blame business for trying to seize market control or capture the market or even to have gatekeeping. but we've always, since the very early in the last century, had

protections against untrammelled building toward monopoly and duopoly. i wasn't as intimately involved with the '96 act as you were, but i followed it with some degree of interest as being somewhat more proactive. i read that act as instructing the federal communications commission to do what it needs to do to encourage bringing the most advanced telecommunications feasible to all of our citizens no matter where they live and reasonably comparable prices, reasonably comparable services, allowing them to access media that serves communities and provides information that are necessary to exercise a citizen's responsibilities in a democratic society. so, i think, yes, a light touch where possible. but, you know, we sit here and talk about what we have to do

away with these stove pipes and all. i agree with that to some extent. in trying that, if we're going to say we're going to treat a telephone call entirely different than you make a telephone call somewhere else, that's not functionally equivalent or treating technologies alike. >> i know my time is way over, but it's something -- it's something to think about, because we've got a real chance and the rest of this congress and the next congress to build on what we started in '96. >> i would just like to say that i agree with much of what you're saying. i think in a competitive marketplace that we see today with the kind of ip centric world, i think economic regulation has to be considered with some skepticism, because if the markets are competitive, if you don't have market failure, then the question is why should

the government be stepping in? consumer protection, e-911, those kind of things, that's a different story. we're talking about economic regulation here. and i think it's more questionable. and i certainly wouldn't be thinking about going back to common carrier world in an information services environment. i don't think that makes sense. >> thank you. the gentleman's time has expired and the chair recognizes for five minutes the gentleman from pennsylvania, mr. doyle. >> thank you, mr. chairman. once again, thank you to our witnesses for your testimony today. we've talked a lot about neutrality and the court decisions. i would like to maybe go to a couple of different topics and ask chairman hundt and chairman copps about special access. how can the fcc enhance competition in the special access marketplace? and is new statutory authority necessary or do you think the

commission has the sufficient authority to ensure that the markets are competitive? >> on special access, yes, i think the commission has the authority to make up its mind. i was before this committee. i think you were here, too. perhaps it was mr. markey or somebody who asked us all back in 2007 to sign letters saying we would have this thing resolved since september and we all said whoopee, let's do that. and it hasn't been done. enormous amounts of money are at stake here. the availability of competitors to is at stake here. i am pleased at some signs now that the fcc is beginning to move and i especially want to commend you. i know you were a big proponent of getting this data collection process going and that's the prerequisite of doing some --

something final on this. the commission also has to look at allegations of anti-competitive practices and special access, such things as loyalty mandates and excessive early termination and shortfall penalties. but getting this right is important. and each year that goes on is billions of dollars going to maybe where they should go or maybe where they shouldn't be going. >> thank you. commissioner hundt? >> i echo commissioner copps' thoughts. this is a forward-looking rule. or to put it another way, we could always use a forward-looking rule on this topic. >> commissioner copps, we have been waiting years and years and years and i hope before my tenure in congress is over that well-see the fcc do something on special access. and i intend to be here a little bit longer.

commissioner copps, the fcc recently closed a very successful low-power fm application process and currently is considering thousands of lpfm applications. i personally want to thank you for your efforts in that regards and ask you what other opportunities you see for the fcc to further empower communities in innovative ways. >> first of all, i want to thank you. without you and your colleagues, this wouldn't have happened. we wouldn't have had that window, first one open since 2000. it's a window of enormous potential. so, number one, we want that to move forward with all dispatch and maybe go from 800 low power stations to maybe thousands of them. going beyond that, though, we just have to look at whatever kind of options we can think of to encourage community radio to

revive the channels and not just cast aside. noncommercial media, nonprofit media. that applies not just to media companies, but to telecom companies, newspapers and so many other things. there's a lot of potential here in a market that doesn't seem to be able to provide all the tools that we need for media and for news, for nonprofit media to step in. dragging its feet on making a lot of these determinations that it should be -- so, low power, yes. looking at channels 5 and 6, all sorts of options out there. put some special emphasis on using community radio, diversifying communities and native lands. it's just a field that's rife with potential, if we could just step up to the plate and realize our responsibility to do it. >> thank you. gentlemen, thank you for your insight today. we appreciate it here on the committee. and i'll yield back, mr.

chairman. >> thank you very much. the gentleman yield backs the balance of his time. and, mr. powell, thanks again for you being here today. if i could just start with some questions to you -- >> yes, sir. >> it's kind of interesting. reviewing your testimony and also mr. wileys, you both used very similar language in spots. and in your opening statement you said that this market requires a greater degree of business flexibility, fewer p prescriptive rules. technology-neutral basis and creates a better investment climate. i also saw that mr. wiley also had said in his testimony about the government can't keep up and there's a need for flexibility and technology-neutral framework in his testimony. so, very similar language. in your testimony when you go through it, i find it interesting because you're going through your seven points and

for simplist simplicity. since 1996 we've seen $1 trillion invested in internet infrastructure. and then you also laid out the simplicity that has to be there. but also in that simplicity, you said practicing simplicity can be scary. it takes courage to discard old ideas and rules that aren't needed. can you give a couple of examples of those? >> yeah. it's a great, challenging question. i think i might actually go back to some of what mr. barton was talking about. if you think about one of the wisest things that was done in the 1996 act, it has nothing to do with the individual rules but the fundamental judgment that the government rejected the monopoly thesis and decided instead that competition was the more fruitful approach. common carriage law inherently

is about a government-sanctioned monopoly. it's essentially the queen of the realm who grants an exclusive license to a ferryboat captain in exchange for all the privileges of that monopoly, they agree to be bound to serve all the citizens in a nonzrimtry way and other things that the zorch wishes to have as part that have benefit. mutual in regards they get the exclusive profits and the realm gets the benefits of serving all the citizens. in some ways in 1996, the government sued for divorce from companies through exclusive monopoly and instead said go compete. raise your own capital. no guaranteed return on investment. no guaranteed success. but yet the lingering notions of common carriage, which are still in the statute and, by the way, are still being raised in the context of the net neutrality debate still hover around our regulatory questions.

to me, whether the country comes to some committed conclusion that even with its challenges and the need for oversight that were really about competition and were ready to truly let go of common carriage is a fundamental example of how to make that decision. >> thank you. and another question. when you're looking at assessing the competition and the communications industry, do you think an updated communications action modify how the fcc currently conducts its competitive analysis? >> i think there is some ambiguity there when managed in responsible hands works fine. at times, it doesn't. i am worried about the fcc marginer review process in part because it professes to do a competitive analysis following anti-trust guidelines

administered by other departments. but under the public -- which i do think is valuable, it turns into a competition of conditions. anti-trust lawyer, i used to believe the fcc, if they're doing something bad, shoot them. if they're not, don't let them cure harm by how many good jelly beans you can put on the scale and make the thing go away. and then by doing it in a way that it extracts these concessions as a voluntary proffer, you make sure that the case can't be appealed by the courts. i think insulating the review process from judicial review through the conditioning mechanism and allowing the commissioning mechanism to be a vehicle by which the commission with legislate beyond its authority can get companies to do things in the context of that proceeding. borders on kind of administrative improbableabil y improbableability. does that happen every time? no.

does it happen sometimes? yes. you should examine the review process and see whether better controls can be in place. >> thank you very much. i see my time has expired and the chair now recognizes five minutes the gentle lady from california, miss matsui. >> thank you, mr. chairman. i want to thank all of the former chairmen for being here. this has been a really interesting and informative discussion. under section 254, carriers have certain obligations to provide universal access. in the d.c. circuit's decision yesterday, the court made clear the fcc has a similar charge under 706 to ensure that all americans have access to broad band and that the fcc has authority over broad band providers to meet that mandate from congress. i have two questions for all the chairmen relating to the court's decision yesterday. the first, do you agree the fcc should and must promote universal access to broad band for all americans? mr. wiley? >> yes, i would agree with that.

>> yes. >> mr. powell? >> absolutely. there's no way you can be a functioning member of society without access to this technology. >> okay. then does the court's decision yesterday affirm the fcc's authority to transition the universal service fund to broadband? chairman wiley? >> i think the fcc has done a good job in looking at that. i am concerned somewhat with the size and the growth of the universal service fund. and i think the commission has to look at the compensate -- the pay covering that. some issue has to be looked at. >> but generally yes? >> yes. >> generally? >> yes. i would commend them for migrating the fund to general broadband. and the ruling yesterday only strengthens the commission moving in that direction. >> good. chairman copps? >> yes. >> great. i appreciate your views. biggest unintended consequences

avoided by the court's decision because transition usf to broadband is really a critical step toward achieving universal access and adoption in this country. chairman hundt, you said that yesterday's circuit decision is a victory for congress and the smart, flexible approach of the 1996 telecom act. how can we continue that success? are there any unintended consequences we should watch out for as this committee starts the process of updating the communications act? >> which i believe chairman wheeler has already said that he intends to do. and naturally that should be and will be an open proceeding. i'm sure this committee will have an ample opportunity to express its views.

i don't, myself, have the ability to forecast where that will come out or should come out, because i think it's really, really important to examine all the new facts about emerging network architectures and about competition problems on both sides of the two-sided network. i would just say that's why it's so useful that the court has said that the fcc's authority is broad and powerful, because the technologies in the network architectures and the competition problems are constantly changing. and the fcc and rule making has the ability to adapt to those changes, sometimes eliminating rules, sometimes writing new rules. this is a very, very workable process that we have here. and, as i said before, congratulations to this committee for the 1996 act, which did create this legal culture. >> chairman powell, would you like to comment?

>> i'm sorry. can you refresh the question? sorry. >> well, i'm really -- >> sorry. >> you know, we -- as chairman hundt commenting that the court decision, he felt, was a victory for congress and for this smart, fixable approach of the '96 act, are there any unintended consequences that we should watch out for as we re-examine and update the communications act moving forward? >> i more or less would agree with chairman hundt. i think to the degree that, you know, in some ways i saw a quote the other day that i thought summed it up great. it's not a victory for any side but it might have been a victory for the debate. and that is that the commission continues to have a meaningful role in the oversight protection of broadband without crossing the line into the more dangerous concerns around common carriage. if that's ultimately the

outcome, maybe that's workable. unintended consequences, i do think even the court struggled with them itself, 706 is an extraordinarily broad, unconstrained provision. how it's interpreted and how responsibly it's interpreted, i think, is important. i think congress hasn't spoken with much specificity about broadband regulation. to take a position as open-ended and vague as 706 and see that as the foundation for everything broadband going forward has potential risks and dangers, but i think that will be worked out over time through its application, through dialogue with congress. >> thank you very much. chairman copps? >> while i'm pleased that the court recognized the authority of the commission, i don't know that i'm ready to declare victory yet. if it is a victory for the debate, that's not necessarily a good thing, because we've had so many years of debate while the evolution of the internet continues and gatekeeping shows

the rise of its ugly head. it's a victory if the commission reacts and acts promptly and provides some certainty and some guarantees. but we've lost a couple of years, looking for third ways and other ways and i don't want to lose a couple of more years going down that road. >> well, i think there's an opportunity here. yes? >> i think it's a victory. i think it's a victory for technical innovation, a victory for investment and ultimately a victory for the consumer. and i think thus we ought to see how the marketplace develops in this area and see whether problems, as i said earlier, really come about, as some people predict. >> i think this is an interesting moment in time. and we have to provide a thoughtful way as we move forward. and i appreciate all your comments. thank you very much. i yield back. >> gentle lady yields back. the chairman now recognizes the gentleman from illinois. >> thank you, chairman.

welcome, all. it's good to have you. i think it would be safe to say that no one envisioned this technological world we live in, no one envisioned it in '96. in a rewrite for public policy elected officials or even folks of the commission to envision what would world would be like ten years after a rewrite, that's got to be almost -- that's impossible to do. is that -- most people view that as correct? no one knew in '96 what would come. so that talks about what these basic premises that i enjoy, democracy, freedom, marketplace, capitalism. one thing that hasn't really been addressed is consumer choice. and how that really does drive innovation and drive -- and understand marketplace. i remember going to the consumer

electronics show and the mp3 was being unveiled and i just was amazed at how much capital flowed for just music in this space, in the technology space. that's the same thing now with internet, broadband, downloads, you name it. it's all migrated to that. we don't ever want to lose the aspect of the power of the individual consumer in this debate versus what some people would say would be the power of government regulatory arena or agency. and i think that's true for these segments of society that feel they don't have access. i think that you can pull together based upon technology the ability to get the word out

through broad band, information, newsletters and the like. technology has allowed us to really -- there's really no excuse for people not to have access to information flow today even if they go through universal service fund or go to the library to get on broadband through what we've been able to do through the e-rates and all that which we talked about a lot through your day, mr. hundt. in your opening statements, a couple of you talk about silos. you are all members of the commission and you all were chairmen, which is a different position than being a standard commissioner. you have the responsibility for the whole body of workers within the fcc. so, we've got the bureaus and the other things other than the bureaus. you go on the website and see all these other little offices and stuff. consumer and government affairs, enforcement, international media, public safety, wireless.

so in a rewrite of the '96 act, should there not be some discussion in how we reform the commission itself based upon what current technology is today? and i think, mr. wiley, you kind of talked about this a little bit? and just a guess of where am i heading in the future? there is a future, right, mr. copps? there is a future. but how do we reform the fcc itself and start tearing down some of these silos, which some of you have addressed are a problem? and if we can go from left to right, mr. wiley, if you want to go first and that will be the end of my questions. >> i think what's changed in the internet world is that you find different parties doing the same kinds of services, providing the same kind of activities that you wouldn't have thought of before. you wouldn't have thought of broadcasters being in the

technology end or cable being in the wire line field. but this is happening now. and i think, therefore, the commission probably does have to change its internal structure. if you have -- in a digital world if you have functionally equivalent services being provided by different parties, i think they should be regulated in a functionally equivalent way. and that's not the way the xigs has do commission has done it through the years. it's not the way they're organized. it's going to take some change. >> thank you. mr. hundt? >> the french say that works in practice, but maybe doesn't really work in theory. and i think it's really, really important to focus on practice. the current structure allows the fcc chair in what i will definitely describe as an open process to reorganize the fcc to meet the objectives that are set by any particular congress in any particular situation. and that's a good thing.

so, when this congress had the wisdom to ask the fcc to auction the spectrum in 1993, i was allowed, thanks to you -- but not because of a statutory mandate, but because of flexibility, i was allowed to create a wireless bureau, which previously did not exist. at any given moment it's hard to say exactly what the administrative structure ought to be. and i think the current system, which tells the chair, figure it out. tell us what it is. you're held accountable. that's a good system. >> i do think form follows function. and i think -- certainly when i was chairman, we merged a few bureaus. cable was a separate bureau from broadcasting. today it's the media bureau. changes we made to try to reflect. a common principle is organize around the way it's seen through the eyes and ears of consumers. to me at the time, television was television to most americans

and making sure you had cross pollenization of the bureaucrats, professions -- the bureaucracy and professionals who managed that i thought was important so they saw their functions through the same eyesu can follow. the chairman is also ceo. the statute assigns them responsibility. i don't think we talk enough about the ceo role and the management of that operation, but i think there's plenty of flexibility to respond to that if it's clear what it is what we're trying to execute. >> i don't think there's any magic formula. certainly there have been times when the stove pipe approach has been too much in presentation. michael tried to work against that and go toward a wholistic view and so did the chairman. that being said though, you need experts in these specific bureaus. there is a specific telecom

expertise and wire line and wireless and details of that and special access and everything else we're talking about. so i think you still have to have those bureaus but the chairman establisheded a consumer task force whose job it was to go across those agencies and look at -- look at those bureaus to assess the impact on consumer well-being. that's a good approach. it's a management thing and something that i think is a product of good leadership at the commission and good oversight by the committee. >> we need to move onto mr. dingell for the next five minutes. mr. chairman. >> i want to commend you for this hearing. i think this has been an important hearing and events of this week tell us that it's time the committee is going to have

to starred looking at what we're going to do about bringing the '96 act up to date. i have enjoyed the comments by my dear friend, mr. barton, announcing my position as being strongly regulatory, sometimes i have a hard time recognizing my position when it's set forth by other members. in any event, that's not important. i would like to remind everybody that this business of the '96 act started when we began to try to get judge greene out of the business of regulating the telecommunications industry. it also started when we started trying to get the amount of spectrum that was held out of use by industry and business and

government and get that available to people. and to see to it that we had a fair program for dealing with our legislation and a fair program for dealing with these matters. i would like to welcome our friends, the chairman here, for their appearance and their assistance to us and what it is that they have done with us over the years. if there's an attempt made to update the communications action, i will offer my support. yesterday's court decisions vacating the anti-discrimination and anti-blocking rules of the federal communications commission open internet order is proof that congress needs to bring our communication laws into the 21st century. only clear direction from congress will strengthen consumer protections, promote

competition and give industry the regulatory certainty it needs to innovate in the future. as we go about this important work, i caution that we do so with great care. on the benefit of a carefully collected and substantial body of evidence. this is going to require rigorous oversight by the committee and considerable work to get the information that we have need of so that we can legislate properly. i hope that the undertaking will be bipartisan in order so that any final product that we complete here moves through the senate and to the president's desk for signature. we have to resolve a number of very important hard questions to form our work as we move forward.

i respectfully suggest that these questions include but are not limited to the following. first, how do we improve and protect americans access to content while also preserving the ability of private companies to monetize their investments for future growth? likewise, how do we best foster the ongoing development of future technologies that will ensure american leadership in the field of technology and communications. and then we have to decide how we are to promote the more efficient and fair use of value and increasingly scarce commodities like spectrum, which we've not administered too well of late and have administered on

the amounts we could get for in money rather than how it would serve the nation to allocate this spectrum. lastly, we're going to have to decide how we will ensure that the federal communications commission, the national telecommunications and information administration, and other related bodies function smoothly. protect consumers and promote growth rather than hindering it. regardless of these answers and answers to these questions and others, i submit that our work should proceed from the conviction that public interest is still and will always remain the central concern that we have with regard to the communications act. i have had the good fortune to be one of the authors of almost every major piece of telecommunications legislation passed by the congress in the

past three decades. the public interest is in the heart of each going back to the 33 and 34 act. i see no reason why that should be any different this time around. the only issue worth exploring is what that standard hats meant in year's past and whether there's any reason to give the commission different gliuidance for the future in interpreting it as we address the other questions that i've just outlined. mr. chairman, i wish you god's speed in this endeavor. i offer you my support and i'm delighted that the chairman of the commission has been here this morning to assist us in beginning this process which i hope will go forward with reasonable speed, with great care, and again with great attention to the public interest. i thank you all for listening to

me. >> chairman dingell, thank you for your kind comments and generous and willingness to improve our communication and other laws. we look forward to working with you. my only disappointment is you did not have a list of yes or no questions for this panel. with that, we'll turn to mr. terry from nebraska and we look forward to your comments and questions, sir. >> yes, you do. thank you. for our esteemed guests here today, i want to follow-up on what my friend from california began and that's with high cost areas. i want to take it from a little bit different angle and get your input. as kind of mentioned here, we've seen a convergence of technologies and services that are all kind of being wrapped into one anymore. the same as -- we talked about

it in my early days on this committee in voice and barton brought that up. now it's in video. and so when we talk about a rural telecom and the internet as a basis of delivering video today, it's kind of making -- well, it's altering the way that rural telecoms used to work. so we have a current legal structure with this qra and a mindset on treating rural telecoms like old copper wires which a lot of them are still using. i just want to ask your opinions and reform for or within the fcc should rural and high-cost areas

and it comes back to inner city where you have low take but my cost. how do we think about this differently in making sure that if you live in rural america or you're setting up a wind farm where you want to continuously oversee but remotely thereby requiring broad broadband for all of that data? do we need to think about things differently than high cost rural high cost inner city. >> i'm not an expert in the rural telephone area, but i still think there's a concern that's different than in the big cities. i think therefore high-cost funds are something that have to be part of the whole equation in my opinion and you know that

better than anybody in nebraska. so i don't have any huge input to you today as far as how to change the system. >> i guess to clarify since video and internet are becoming the same and your telecom is maybe your sole provider of that, it's all meshed together. does that change anything? mr. hunt? >> i think that many people have said we really want broadband to be the network for everyone in the country. in rural areas as i'm sure you know, congressman, there are many places where the cable broadband penetration is as low as 15% and 20%. not anything nearly as high as it is in washington, d.c. or in the suburbs.

now, that's a problem that the fcc really does need to think about in conjunction with the industry that michael represents so ably and in particular, not to touch too many other buttons, the recent increases in the prices of the content have a disproportional impact in rural america. they are taking a lot of money out of the wallets of the people in those areas and those are same areas where broadband is expensive so as people pay more for broadcast content and cable channel content, they have less available to purchase broadband. this is a problem that's real. and existing right now. it gives me a chance to pass the solution over to chairman

powell. >> congressman, i think you make a couple of important points that we should put top of mind which is the challenge of reaching that last 5% to 7% is because under traditional market fundamentals they're uneconomic and if they're uneconomic the only way to cure something is change the economic equation. this is why i had no problem understanding and respecting the government has a meaningful and significant role in terms of our objectives in universal service and affordability to play a role through the universal service program or any other properly constructed program to try to change economic equation that attracts the infrastructure that those communities deserve. i think it's a more optimistic scenario in the modern world than it was before. in the old world we had single technology we tried to string, twisted copper wires between two farms 200 miles apart and that

was expensive. one of the things i think really opens up an opportunity today is because of a common ip platform we can deliver almost any kind of service almost any kind of network. that means that wireless and probably its companion of satellite available services have real hope and promise for rural america. that is they have very dynamically different costs. a satellite sees rural nebraska no different than it sees manhattan. wireless has a lower cost infrastructure for some of those areas. i think than isn't a complete answer but putting a lot of energy and investment into how those services will solve this problem is useful. i think as the chairman of the s.e.c. is moving toward a common ip network, the conversion that you're talking about can get harmonized and universal service program get harmonized along with it. >> thank you.

agree. >> i have a little different answer. reasonably comparable services at reasonably comparable prices is the injunction on the charge of the telecommunications act reforming usf which the commission is in the process of doing with lots of wrinkles and problems to work out, no question about that. certainly an important part of the equation. but anybody who thinks that universal service fund alone is going to bring this country the kind of high-speed low cost broadband we need to have competitive in the 21st century is not looking at the situation as it is. this has to be an infrastructure mission. our country has had infrastructure missions before when we came together to build highways and railroads and rural electricity and so on and so

forth. that's what we need now. we won't be competitive and get out of the holes that we're in unless every citizen in this country has that access and it's reaching that last 5% to 7%. that's extremely important. way more than half of our homes don't have high-speed low cost broadband that we need to be competitive. we need to look at that not just as an fcc problem but a problem confronting our government or society and act upon it and figure out whether we are really serious of being competitive in the global sweepstakes. >> the gentleman yields back. look to the gentleman from new mexico. >> mr. chairman, thank you very much. i must say i was concerned with some of the approach that was being taken in the line of questioning leading up to those last responses to my colleague where for the first time i heard the importance of rural america. coming from a western state,

from a congressional district that represents 17 of new mexico's 22 tribes and the sprawling nature associated with what the west brings us, many parts of rural america where our food is grown. where energy is generated critically important to be able to get coverage to these areas. and as i joked with chairman wheeler when we had him in front of us a couple weeks ago, i explained to him that these last flights home, it's been great to see tsa debating whether we can make phone calls at 30,000 feet. i know that i have streaming video content at 30,000 feet. i can communicate with my office and anyone else that i so choose to. so if i can communicate with constituents and get the video content that i want at 30,000 feet, why can't i do it on the ground in rural america. the technology is here. there's no reason that we can't push it out.

three responses i can't say thanks enough for that. chairman, with the response associated with aggressive push to infrastructure investment in america is absolutely needed. we shouldn't forget as we talk about different ideals and philosophies that we have on this committee and even in this congress and across the country. it was in many conservative and rural parts of america that benefited from government investment with major water projects that provide us power now that could be in question because of water flows. another topic of conversation. nonetheless, we need to make sure that we're addressing. chairman powell, you talked about twisted pears and what that brought us. decisions made as a result of the '96 agent act and section 7068, i'm not sure what we're arguing about with concerns in that particular area. it's encouraging deployment of reasonable and timely basis and advance telecom especially for

educational purposes. there may be some concerns with some of my colleagues on price cap regulation but regulatory and measures for competition in local members, this could be read by any member on this committee encouraging ideals that we all share. one thing that hasn't been talked about very much and even given the fact that there was a huge data breach with target, 70 million customers that were impacted, is the security of this network. i would hope that and i would like to get your opinion in 706a provides us the necessary standards to be able to bring safeguards or if you think that's something that needs to be addressed and i would like to invite comments from each of you. mr. hundt? >> as chairman powell said, section 1706 is very broad, and i think that it is an opportunity and duty for the fcc

to dig into it and to create an appropriate framework with the help of this committee and its counterpart in the senate. if i might continue your theme of rural america, there are a number of other provisions as well in the '96 act that the fcc can use to try to achieve the goal of completely widespread broadband even in rural and high-cost areas and one that i would identify is the current proceeding to reimagine the erate. the erate -- i just recently met with the chief librarian in puma county, arizona, which isn't very far away from you and you know the geography is not dissimilar. they have a fantastic system of broadband for not just the central library in tucson but all of the branch libraries. all over this sparsely populated

geography. the library is the number one public internet access point in southern arizona. therefore, it's the proper focus of extra erate support and the proper focus of the combination of network architectures that might resemble what chairman powell is talking about. we shouldn't decide that part. we should decide that's a very flexible tool also that can be used to deliver the right participation in the american community to rural america. >> chairman powell? >> i would really like to put punctuation on what you raised. i think it goes to the committee's desire, i hope, to kind of harmonize and see communication landscape as a single ecosystem. all of the wonderful benefits we're bragging and celebrating are continuously and daily at risk. i think cyberthreat, data

retention, breach, are all issues that are the achilles' heel of all of the promise of the network that we're celebrating. but they require very complex solutions that look through an entire ecosystem. 706 is not particularly up to that job. why? even for no other reason that you can't have a discussion without software involved. the cybersecurity question on a global ecosystem basis means a conversation with every element of that massive connective chain and that's the web companies, the infrastructure companies, wireless companies, content companies, there's just no way in my opinion even with its breath that one could look hopefully to that as single point of authority to make the most meaningful impact on this issue mostly because 50% of that ecosystem aren't even implicated by that provision. >> i hope 706 is up to the job. i think it does confer a lot of

authority. i don't want this to become just a solution dejor and we talk about 706 for another two years and then another court strikes that down or whatever. i want to highlight one thing you mentioned in terms of getting broadband out and i commend you for your interest and work with native americans and one area where i think a rewrite would help would be to more formally institutionalize and put some flesh on the bones of the trust relationship and the consultive mechanisms that we have between the commission and native americans. it's not -- it's working better than it has. i think there has been more emphasis in recent years obviously back in the chairman's time there was an interest in moving us forward and getting us into a new trust relationship. but that's 13 or 14 years ago.

the situation as you point out is so dire when one member of a tribe can't call somebody else but you can make the call from 30,000 feet. that's something wrong there. that may be a concrete area where the congress with actually lend a hand. >> appreciate that. gentleman's time is expired. we'll now go to the gentleman from new jersey for five minutes. >> thank you, mr. chairman. and to the distinguished panel, this is among the most interesting hearings in which i have ever participated. it's my honor to be able to meet all of you. i gather there is a consensus from the distinguished panel that the 1996 legislation needs to some extent statutory update and revision, is that accurate, from the panel? >> i would agree. >> i don't agree. >> and chairman hundt, if you would indicate you do not agree

there needs to be statutory update? >> i think the d.c. circuit has made it clear that the '96 act has given the authority to the fcc to address all of the economic and social problems that this committee in recent years and in past years has asked the fcc to address. >> other than distinguished h e members? >> i agree with what chairman hundt has said. it's nice to have additional clarity but time is of the essence here. we have a statute that i think can deliver on a lot of the things that need to be delivered and we should be about that. it is so difficult to see the correlation of forces coming together to give birth to an act after what we went through in 1996, and i don't think it will be any easier in 2014 to do that than it was 18 years ago. >> chairman powell?

>> i think by any measure a deliberate process would take a number of meaningful years which is recognized in setting out a multiyear process. i think there are sufficient conditions to justify institution of that kind of examination over that period of time because i think the market is radically different and the relevancy of law applied to reality should be a core principle of governance. >> i think the very fact that you didn't have the internet really developed. you didn't have broadband. you didn't have all of the technological changes that have occurred since 1996, really gives substance to taking another look and i think that gives congress an opportunity, i think, to perhaps make some suggestions to the regulatory body that i think would be very helpful. >> thank you, chairman.

>> i have not read it and i certainly will read yesterday's decision. am i accurate that the fcc decided in 2004 that internet access services would not be classified as telecommunications services? is that true, chairman powell? >> yes, sir, that's correct. >> and if that decision were to be revisited, that could be revisited by the administrative agency? is that accurate as to how it could proceed? >> it is accurate. it could. >> if there were to be a revisiting of the 2004 decision that this is not classified as telecommunications services, then there would have to be