[Senate Hearing 114-607]
[From the U.S. Government Publishing Office]
S. Hrg. 114-607
OVERSIGHT OF THE
FEDERAL COMMUNICATIONS COMMISSION
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
MARCH 2, 2016
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri MARIA CANTWELL, Washington
MARCO RUBIO, Florida CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin TOM UDALL, New Mexico
DEAN HELLER, Nevada JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado GARY PETERS, Michigan
STEVE DAINES, Montana
Nick Rossi, Staff Director
Adrian Arnakis Deputy Staff Director
Rebecca Seidel, General Counsel
Jason Van Beek, Deputy General Counsel
Kim Lipsky, Democratic Staff Director
Chris Day, Democratic Deputy Staff Director
Clint Odom, Democratic General Counsel and Policy Director
C O N T E N T S
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Page
Hearing held on March 2, 2016.................................... 1
Statement of Senator Thune....................................... 1
Statement of Senator Nelson...................................... 3
Letter dated March 1, 2016, to Hon. Tom Wheeler, Chairman;
Hon. Mignon Clyburn, Commissioner; Hon. Jessica
Rosenwercel, Commissioner; Hon. Ajit Pai, Commissioner; and
Hon. Michael O'Reilly, Commissioner, Federal Communications
Commission from Claire McCaskill, U.S. Senator............. 4
Letter dated March 8, 2016, to Hon. Claire McCaskill from
Ajit V. Pai, Commissioner, Federal Communications
Commission................................................. 6
Letter dated March 16, 2016, to Hon. Claire McCaskill from
Tom Wheeler, Chairman, Federal Commissions Commission...... 6
Letter dated March 16, 2016, to Hon. Claire McCaskill from
Jessica Rosenworcel, Commissioner, Federal Communications
Commission................................................. 7
Letter dated March 24, 2016, to Hon. Claire McCaskill from
Michael O'Reilly, Commissioner, Federal Communications
Commission................................................. 8
Statement of Senator Wicker...................................... 33
Statement of Senator Schatz...................................... 35
Statement of Senator Markey...................................... 37
Statement of Senator Ayotte...................................... 39
Statement of Senator Booker...................................... 41
Letter dated March 1, 2016, to Chairman Tom Wheeler,
Commissioner Mignon Clyburn, Commissioner Michael O'Reilly,
Commissioner Ajit Pai, and Commissioner Jessica Rosenworcel
from the companies of Access Humboldt, American Library
Association, AT&T, Benton Foundation, Center for Media
Justice, Center for Rural Strategies, CenturyLink, Comcast,
Common Cause, Common Sense Kids Action, Connected Nation,
Inc., Cox Communications, EveryoneOn, Frontier
Communications, Media Mobilizing Project, Multicultural
Media, Telecom and Internet Council, National Digital
Inclusion Alliance, National Hispanic Media Coalition,
OCA--Asian Pacific American Advocates, Public Knowledge,
Schools, Health & Libraries Broadband Coalition, The
Greenlining Institute, and Verizon......................... 43
Statement of Senator Fischer..................................... 44
Letter dated March 14, 2016, to Hon. Deb Fischer from Tom
Wheeler, Federal Communications Commission................. 45
Statement of Senator Moran....................................... 47
Statement of Senator Johnson..................................... 50
Statement of Senator Gardner..................................... 53
Statement of Senator Daines...................................... 56
Statement of Senator Peters...................................... 58
Statement of Senator Klobuchar................................... 60
Statement of Senator Sullivan.................................... 61
Statement of Senator Blumenthal.................................. 64
Witnesses
Hon. Tom Wheeler, Chairman, Federal Communications Commission.... 10
Prepared statement........................................... 11
Hon. Jessica Rosenworcel, Commissioner, Federal Communications
Commission..................................................... 15
Prepared statement........................................... 16
Hon. Ajit Pai, Commissioner, Federal Communications Commission... 18
Prepared statement........................................... 19
Hon. Michael O'Rielly, Commissioner, Federal Communications
Commission..................................................... 22
Prepared statement........................................... 23
Hon. Mignon L. Clyburn, Commissioner, Federal Communications
Commission..................................................... 27
Prepared statement........................................... 28
Appendix
Response to written questions submitted to Hon. Tom Wheeler by:
Hon. John Thune.............................................. 71
Hon. Roger F. Wicker......................................... 74
Hon. Roy Blunt............................................... 76
Hon. Kelly Ayotte............................................ 76
Hon. Ted Cruz................................................ 77
Hon. Jerry Moran............................................. 78
Hon. Ron Johnson............................................. 80
Hon. Dean Heller............................................. 81
Hon. Steve Daines............................................ 82
Hon. Maria Cantwell.......................................... 83
Hon. Claire McCaskill........................................ 85
Hon. Amy Klobuchar........................................... 88
Hon. Richard Blumenthal...................................... 89
Hon. Edward Markey........................................... 92
Hon. Cory Booker............................................. 92
Hon. Tom Udall............................................... 93
Hon. Joe Manchin............................................. 94
Response to written questions submitted to Hon. Jessica
Rosenworcel by:
Hon. John Thune.............................................. 95
Hon. Roy Blunt............................................... 98
Hon. Ted Cruz................................................ 99
Hon. Deb Fischer............................................. 99
Hon. Dean Heller............................................. 100
Hon. Steve Daines............................................ 101
Hon. Claire McCaskill........................................ 101
Hon. Richard Blumenthal...................................... 103
Hon. Joe Manchin............................................. 104
Response to written questions submitted to Hon. Ajit Pai by:
Hon. John Thune.............................................. 104
Hon. Ted Cruz................................................ 106
Hon. Ron Johnson............................................. 106
Hon. Dean Heller............................................. 108
Hon. Claire McCaskill........................................ 109
Hon. Richard Blumenthal...................................... 110
Response to written questions submitted to Hon. Michael O'Rielly
by:
Hon. John Thune.............................................. 111
Hon. Ted Cruz................................................ 113
Hon. Deb Fischer............................................. 114
Hon. Ron Johnson............................................. 114
Hon. Dean Heller............................................. 115
Hon. Claire McCaskill........................................ 116
Hon. Richard Blumenthal...................................... 117
Response to written questions submitted to Hon. Mignon L. Clyburn
by:
Hon. John Thune.............................................. 118
Hon. Ted Cruz................................................ 121
Hon. Deb Fischer............................................. 121
Hon. Dean Heller............................................. 122
Hon. Claire McCaskill........................................ 122
Hon. Richard Blumenthal...................................... 125
Hon. Cory Booker............................................. 125
OVERSIGHT OF THE
FEDERAL COMMUNICATIONS COMMISSION
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WEDNESDAY, MARCH 2, 2016
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10:05 a.m. in
room SR-253, Russell Senate Office Building, Hon. John Thune,
Chairman of the Committee, presiding.
Present: Senators Thune [presiding], Wicker, Blunt, Ayotte,
Fischer, Moran, Sullivan, Johnson, Heller, Gardner, Daines,
Nelson, Cantwell, Klobuchar, Blumenthal, Schatz, Markey,
Booker, Manchin, and Peters.
OPENING STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
The Chairman. This hearing will come to order. Welcome to
today's hearing on Oversight of the Federal Communications
Commission. During our oversight hearing last March, I
expressed my amazement that an agency as important as the
Federal Communications Commission has not been reauthorized by
Congress in 25 years, making it the oldest expired
authorization within the Commerce Committee's expansive
jurisdiction.
Reversing a quarter century of legislative inertia takes
time, but together we are beginning to make some progress. For
example, today's hearing marks the first time this century the
full FCC has appeared before this committee twice during a
single Congress. Another example is our unanimous approval last
year of Senator Heller's FCC Consolidated Reporting Act, which
would make the Commission's various marketplace examinations
less burdensome on the agency, as well as more informative to
Congress.
Reauthorizing the FCC is our responsibility as legislators
and representatives of diverse constituencies who are
increasingly affected by a regulatory agency with nearly half a
billion dollar budget. It's time for this committee to get back
to regularly authorizing the Commission as part of its normal
course of business. To that end, in the next few days, I will
introduce the FCC Reauthorization Act of 2016, and it is my
intent to mark up the bill in the coming weeks.
We have before us today a very familiar face, Commissioner
Jessica Rosenworcel, who is appearing before the Committee for
the fourth time this Congress. Commissioner Rosenworcel's re-
nomination is currently pending before the full Senate.
Commissioner, I support your confirmation, and I was
pleased to process your nomination through the Committee last
year. I appreciate your public service at the FCC and your
prior service to this committee.
Last year's oversight hearing came shortly after the very
successful auction of AWS-3 spectrum, which netted more than
$41 billion in winning bids. That record-setting auction was
the product of the 2012 Spectrum Act, which also authorized the
innovative incentive auction of broadcast TV airwaves that is
scheduled to begin next month.
In the incentive auction, the FCC is charged with a
balanced mission: one, reallocate the spectrum voluntarily
relinquished by TV stations to commercial wireless users, and,
two, protect both the TV stations that continue to operate
following the auction and their viewers. Congress provided
nearly $2 billion to reimburse stations forced to relocate
during the so-called post-auction repack, and the FCC has
established a timeline to complete the repacking process.
Concerns have been raised, however, that the reimbursement
funds and time allotted for repacking may be inadequate. I am
hopeful that will not be the case. Nevertheless, these concerns
deserve and will receive the close attention of this committee.
I know my colleagues and I all wish to see a successful
incentive auction and a successful repacking process.
While local broadcast TV remains an important and popular
medium, the broader video market continues to dramatically
change and grow. In fact, the video services market is one of
the most dynamic segments of the communications space. It is
driving tremendous innovation in consumer electronics, dynamic
experimentation in video distribution business models, and
growing broadband data consumption by consumers.
It is not a coincidence that the parts of the video market
seeing the most innovation are also the least regulated. Amidst
this increasingly competitive video reality, the FCC recently
proposed a partisan rulemaking to have the government somehow
produce better results than the astonishing and consumer-
empowering disruption that is already happening.
Ranking Member Nelson sent Chairman Wheeler a letter
shortly before the FCC's adoption of this new technology
regulation proposal. I agree with Senator Nelson's sentiment
that, and I quote, ``Advances abound in the competitive video
navigation device market, and that Section 629 should always be
implemented with an eye toward what is actually happening in
the marketplace.''
I want to further echo Senator Nelson's warning to the
Commission that Section 629 does not contemplate imposing
regulations by which third parties gain for their own
commercial advantage the ability to alter, add to, or interfere
with the programming provided by content providers. Again,
that's from Senator Nelson's letter.
The bottom line is that today's video market is
increasingly competitive, and traditional pay-TV subscribers
are rapidly finding new, more user friendly, and less expensive
ways to receive the TV services they purchase on an increasing
array of consumer devices, including some made by the largest
companies on the planet.
Finally, I would like to address the issue of standalone
broadband support for small rural carriers. Because of flawed
Universal Service Fund rules, these providers lose all support
for serving households that choose to subscribe to broadband
while not simultaneously purchasing landline telephone service.
Last March, all five of you commissioners made commitments to
me and this committee to fix the counterproductive loophole by
the end of 2015.
It is my understanding that an item is currently on
circulation at the Commission that would fix the standalone
broadband problem and which reflects a negotiated compromise
and some other complex USF reforms that have been linked to
this simple objective. While the 2015 deadline for standalone
broadband has recently passed, I am glad the extra time appears
to have given a fair chance for rural providers to assess the
impact of those complex reform proposals on their businesses
and on the rural broadband customers they serve.
I look forward to seeing the full plan, assessing its
impact on South Dakotans, and continuing to provide oversight
of the FCC's implementation of these reforms as Chairman of
this committee. In the meantime, I would like to thank all of
you for fulfilling your commitment to fix the standalone
broadband issue for rural consumers across this nation.
Now, before I conclude, I would like to say a word
regarding the report issued earlier this week by Chairman
Johnson. Among other things, the report finds that the FCC, and
I quote, ``Failed to live up to standards of transparency.'' I
want to thank Chairman Johnson and his staff for their work on
this report, and I hope the Commission, rather than resorting
to a defensive posture, will look for ways to demonstrate the
kind of transparency expected of our independent agencies.
Today's hearing provides one opportunity to do just that.
So I look forward to hearing your testimony and appreciate
very much having all our commissioners here before us today,
and I look forward to having an opportunity to ask you some
questions later.
But I turn now to our distinguished Ranking Member, the
Senator from Florida, Senator Nelson, for his opening
statement.
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Nelson. Thank you, Mr. Chairman, and I return the
compliments to you in the way that the two of us have worked
together in a bipartisan way on a number of thorny issues,
trying to boil them down to a common approach, and I am
encouraged that we will continue in the Committee, thanks to
yours and your staff's approach to leadership.
On behalf of Senator McCaskill, which we all know is going
through a difficult time, I want to ask that her letter to the
Commissioners and then their responses, when they submit them,
be submitted into the record and entered into the record as a
part of today's hearing.
The Chairman. Without objection.
[The information referred to follows:]
United States Senate
Washington, DC, March 1, 2016
Hon. Tom Wheeler, Chairman
Hon. Mignon Clyburn, Commissioner
Hon. Jessica Rosenworcel, Commissioner
Hon. Ajit Pai, Commissioner
Hon. Michael O'Rielly, Commissioner
Federal Communications Commission
Washington, DC.
Dear Chairman Wheeler and Commissioners Clyburn, Rosenworcel, Pai, and
O'Rielly:
At a March 18, 2015, Federal Communications Commission oversight
hearing held by the Senate Commerce, Science, and Transportation
Committee, I suggested four specific reforms of the Lifeline program
that should be implemented by the commission as part of any effort to
expand the program to cover broadband service. Given the opportunity to
disagree with any of the reforms, a bipartisan majority of the
commission raised no objections, and in fact most spoke favorably of
the proposed reforms.
Based on my work closely examining the Lifeline program for more
than four years and my work over the course of my career in bringing
transparency and accountability to government programs, I continue to
believe any final Lifeline modernization order should include the
following reforms:
1. Take eligibility determination out of the hands of
telecommunications carriers;
2. Improve competition among participating telecommunications
carriers;
3. Make sure consumers have ``skin in the game''; and
4. Place a cost-cap or other cost-control mechanism on the program.
I was pleased to see that the Notice of Proposed Rulemaking
approved by the commission on June 18, 2015, proposed removing carriers
from eligibility determination and creating minimum service standards
for carriers. I was also pleased to see that the NPRM sought to make
increasing competition among carriers a priority, which will benefit
both the consumers that participate in the program as well ratepayers
who fund it. While the NPRM requested comment on whether and how to cap
the Lifeline program, I am concerned it did not go further.
When a Republican-majority commission last expanded the Lifeline
program in 2008 to allow the participation of pre-paid wireless
carriers, the commission did so without putting additional
accountability or cost-control measures in place. The result was a
program that grew from $800 million in 2008 to $2.1 billion in 2012.
Although spending on Lifeline in 2014 was down to $1.6 billion, likely
as a result of reforms adopted in 2012, the program is still spending
twice what it was in 2008 while reports continue of waste, fraud, and
abuse.
Particularly given that the NPRM included no estimate for what
expanding the Lifeline program to cover broadband could cost, or for
what savings could be realized by other proposed reforms, the
commission should adopt a cost cap or other effective cost control for
the Lifeline program to prevent a repeat of the unchecked increase in
spending that was seen the last time the program was expanded. There is
simply no justification for allowing the Lifeline program to remain the
only Universal Service Fund program without a cost control mechanism in
place.
The goal of a spending cap is not to deny telecommunications
services to those who need them most, but rather to ensure the Lifeline
program is accomplishing its intended goals. A cap imposed by the
commission can also be revisited by the commission should spending
approach that level and a determination can be made at that time
whether eligibility criteria should be changed, the level of subsidy
reduced, or the cap increased.
With the commission poised to vote on a final Lifeline
modernization order as early as this month, I request that you each
provide a written response by Wednesday, March 16, 2016, indicating
your position on applying a cost-control mechanism to the Lifeline
program.
Modernizing the Lifeline program to cover broadband service as
opposed to basic phone service is a worthy goal and one I support in
concept if accompanied by appropriate structural reforms to the
program. Commissions under President Ronald Reagan and President George
W. Bush created and expanded the Lifeline program without adequate
accountability or cost controls in place. In 2012, the commission took
its first step in the 30-year history of the Lifeline program to impose
some accountability in the program for providers and beneficiaries.
Those measures fell short of what was needed. However, this commission
has the opportunity to adopt the reforms necessary to both bring the
program into the 21st century and restore the confidence of the
Congress and the American people that the Lifeline program is working
effectively.
Sincerely,
Claire McCaskill,
U.S. Senator.
______
Q. With the Commission poised to vote on a final Lifeline
modernization order as early as this month, I request that you each
provide a written response by Wednesday, March 16, 2016, indicating
your position on applying a cost-control mechanism to the Lifeline
program.
Thank you for the question, Senator.
I agree that the Lifeline program, like all of the Federal
universal service programs, should have robust cost controls and
oversight to protect against waste, fraud and abuse. The explosion of
fraud occurred due to (in)decisions from previous administrations, but
under this administration, our focus has been on addressing program
deficiencies and reigning in abusers of the program.
In 2012, the FCC's substantial clean-up of Lifeline's inherited
vulnerabilities saved American consumers in excess of $2.75 billion.
Additionally, the duplicates database, non-usage rule and other
measures adopted nearly four years ago have put the program on a more
sound footing. While I was Acting Chairwoman, the agency took swift and
strong enforcement action proposing fines of over $100 million against
providers that violated our rules. But I agree, more must be done.
Specifically, the provider should no longer determine program
eligibility. I have been vocal in my call for this since November
2014.\1\ Allowing providers to determine customer eligibility has
created incentives for fraud, increased privacy concerns and has left
us with a program structure that is less than dignified. A neutral,
third-party verifier, coupled with the existing national duplicates
database, will eliminate the ability of carriers to enroll ineligible
consumers and ensure only qualified consumers sign up for service.
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\1\ Remarks of Commissioner Mignon Clyburn, Reforming Lifeline for
the Broadband Era, American Enterprise Institute, November 12, 2014,
available at https://apps.fcc.gov/edocs public/attachmatch/DOC-
330453A1.pdf.
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We also need minimum levels of service. The lack of any standards
has been extremely profitable to some at the expense of their consumers
and the universal service fund. The number of minutes offered today is
so low that consumers may have more of an incentive to get another
phone in order to stay connected. That should be eliminated as we
impose minimum standards. And, while I disagree with the FCC putting
its thumb on the scale and distorting the market to require a minimum
payment or to mandate that the service be ``free,'' I do agree we need
minimum standards so that consumers have a floor that provides robust
service. In addition, the FCC should institute additional reforms to
ensure that consumers have choices comparable to what the rest of us
receive. To me, this means lower cost options as well as higher cost
plan offerings with more or less data where consumers pick the plan
that fits their budget and meets their needs.
I believe these programmatic changes will not only put the Lifeline
program on a sound footing, but the proposed modifications will
actually exceed any cost control measures that are in place for the
other universal service programs. Even so, I am open to a budget
provided that it is consistent with our treatment of other universal
service programs and does not, for example, foreclose over half of the
eligible population from participating. The FCC does not artificially
limit the number of rural carriers that can receive high cost funding
and we should not place more constraints on those who are our most
vulnerable. Indeed, the budget for the high cost program is $4.5
billion annually, of which $2 billion is allocated for the smaller
carriers that serve 3.88 million lines, whereas, according to USAC,
over 38 million households qualify for Lifeline. The value of getting
these low income households connected with broadband, or ensuring they
can stay connected for $9.25 a month, has a far greater societal impact
than the billions of dollars allocated to ``connect'' (or more
accurately stated, to pass by) the remaining unserved households.
Indeed, the potential reverberating benefits back to society of reduced
healthcare costs, skilled jobs with a better education and the ability
to provide a pathway out of poverty and off of government benefits
programs are endless.
I believe the Commission should keep all of this in mind as we set
a budget for Lifeline.
Sincerely,
Mignon L. Clyburn.
______
Federal Communications Commission
Washington, DC, March 8, 2016
Hon. Claire McCaskill,
United States Senate,
Washington, DC.
Dear Senator McCaskill,
Thank you for your recent letter on the need to reform the FCC's
Lifeline program. I share your concern that last year's Notice of
Proposed Rulemaking did not go far enough on whether and how to ca p
the Lifeline program. Like you, I am concerned that spending in this
program has almost doubled since the end of 2008. And like you, I am
concerned that waste, fraud, and abuse are still rampant.
In your letter, you asked for my position on applying a cost-
control mechanism to the Lifeline program. I unequivocally support
applying a budget to the Lifeline program. The Commission promised that
it would put the program on a budget in 2013. Now, it's time to follow
through. Every other program supported by the Universal Service Fund is
on a budget. Like you, I believe that there is s imply no justification
to treat the Lifeline program differently.
I look forward to continue working with you and other members of
the Senate Committee on Commerce, Science, and Transportation to
resolve this issue.
Sincerely,
Ajit V. Pai,
Commissioner.
cc:
The Honorable John Thune, Chairman, Committee on Commerce, Science, and
Transportation
The Honorable Bill Nelson, Ranking Member, Committee on Commerce,
Science, and Transportation
______
Federal Communications Commission
Washington, DC, March 16, 2016
Hon. Claire McCaskill,
United States Senate,
Washington, DC.
Dear Senator McCaskill:
Thank you for your letter recognizing both the need for appropriate
structural reforms to the Lifeline program and the value of modernizing
the program to cover broadband.
Last week, I circulated a proposed Order for my colleagues'
consideration that would modernize the Commission's Lifeline program to
meet a critical 21st Century need: making broadband more affordable for
low-income Americans. At the same time, the proposed Order would put in
place a number of key programmatic reforms designed to protect the
integrity of the Lifeline program and build on the Commission's recent
efforts to root out waste, fraud, and abuse in the program.
Your letter specifically asks for my views on the importance of a
``cost-cap or other cost control mechanism'' for the Lifeline program.
I agree that such a mechanism is prudent to safeguard the financial
stability and integrity of the Lifeline program while ensuring access
for all eligible consumers. I have therefore proposed that, for the
first time ever, the Commission take the necessary step of implementing
a budget mechanism for the Lifeline program. The proposed approach has
two parts.
First, the proposed Order would set a Lifeline budget of $2.25
billion, indexed to inflation, that takes into account current
participation rates, possible growth of the program as eligible
consumers are made aware of its benefits, and safeguards in place to
prevent waste, fraud, and abuse. This proposed budget acts as a
ceiling, which allows for responsible organic growth from the current
spending level, based on increased participation by eligible consumers
generated by the program's support for broadband service. By
establishing a reasonable budget in conjunction with complementary
structural reforms, our goal is to meaningfully, but responsibly,
narrow the digital divide that has left 64.5 million people in the U.S.
disproportionately those with the lowest incomes-without an Internet
connection. The Commission took a similar approach in setting a budget
for the Connect America Fund to put the Commission on a path to
responsibly modernize the high cost universal service fund.
Second, the proposed Order establishes a process for the full
Commission to promptly evaluate and address Lifeline funding in advance
of the program hitting that $2.25 billion budget. Specifically, if
expenditures in the Lifeline program reach 90 percent of the budget in
a given year, the proposed Order requires Commission staff to notify
the Commission and prepare a written analysis of the causes of the
spending growth, with action by the full Commission within six months
of receiving the report. This mechanism will ensure that the Commission
has the notice and comprehensive information it needs to determine the
reasons for growth in the program and a process to promptly make any
necessary changes to the program in response.
That budget mechanism would work in concert with other proposed
structural reforms to further ensure the integrity of the modernized
Lifeline program. Under the proposed Order, the Commission would
establish a National Eligibility Verifier that removes
telecommunications carriers from making eligibility determinations;
make targeted changes to encourage robust competition in the Lifeline
program; and implement minimum service standards to ensure eligible
subscribers' benefits are directed only to quality services that are
worthy of universal service funding. I expect that these rules will
make Lifeline a truly 21st Century program that effectively and
responsibly makes broadband service accessible for low-income
households.
I also appreciate your recognition of the successful program
reforms the Commission has implemented since 2012 to prevent waste,
fraud, and abuse in the Lifeline program, such as creating the National
Lifeline Accountability Database to prevent subscribers from receiving
more than one benefit. As a result of these and other reforms,
disbursements in the Lifeline program decreased from nearly $2.2
billion in 2012 to under $1.5 billion in 2015. The proposed Lifeline
Order now before the Commission builds on these efforts. Through the
budget mechanism and other reforms, like implementing a National
Eligibility Verifier, the Commission would take the additional steps
necessary to shut the door on the program's remaining fiscal
vulnerabilities and ensure responsible spending in the program.
The proposed Lifeline Order was designed with two equally important
goals in mind-to help connect low-income Americans to the Internet and
to ensure the fiscal integrity of the program going forward. We need
not choose between the two. We can and must have both.
I appreciate your interest in this matter and our work on this
issue has benefited from your input and guidance. Your views are
important and will be included in the record of the proceeding and
considered as part of the Commission's review. Please let me know if I
can be of any further assistance.
Sincerely,
Tom Wheeler,
Office of the Chairman.
______
Federal Communications Commission
Washington, DC, March 16, 2016
Hon. Claire McCaskill,
United States Senate,
Washington, DC.
Dear Senator McCaskill:
Thank you for your March 1, 2016, letter regarding the Lifeline
program at the Federal Communications Commission. As your letter
acknowledges, this program got its start more than three decades ago,
back when President Ronald Reagan was in the White House and when most
communications involved a cord. Today, the Lifeline program supports
telephone access in approximately 13 million low-income households
across the country. However, broadband is clearly the communications
technology of our time. As a result, I believe the program needs to be
modernized to reflect this reality. Moreover, I believe if the FCC does
this right, this program can help address the Homework Gap by making it
possible for more students in low-income households to get the
connectivity they need to do basic schoolwork.
As you note, the Lifeline program has been subject to abuse,
largely as a result of its expansion and rapid growth beginning in
2008. The FCC cracked down on this abuse in 2012 with, among other
things, new auditing requirements and the creation of the National
Lifeline Accountability Database. Recognizing that additional measures
were necessary, last Summer the FCC began a rulemaking to explore how
to continue to further update and modernize the program. I fully
supported this rulemaking.
This this end, I appreciate the reform ideas that you set forth at
the March 18, 2015, Senate Commerce, Science, and Transportation
Committee oversight hearing. Your letter specifically asks about my
position with respect to one of these ideas--applying a cost control
mechanism to the Lifeline program. I believe that the FCC should apply
a cost control mechanism to the Lifeline program and regularly review
other internal controls. The Lifeline program needs such measures in
order to ensure accountability and prevent abuse going forward.
Thank you for your attention and interest in this program.
Sincerely,
Jessica Rosenworcel.
______
Federal Communications Commission
Washington, DC, March 24, 2016
Hon. Claire McCaskill,
United States Senate,
Washington, DC.
Dear Senator McCaskill,
Thank you for your letter of March 1, 2016, regarding potential
reforms of the Lifeline program. I very much agree with your suggestion
that the Commission should institute a budget for the program and have
long advocated this approach. Like you, I envision such a ``budget'' as
a spending cap that would need to be revisited by the Commission in the
event any increase in the amount is considered necessary. I have shown
some willingness to moderate this position to some degree, but none of
my suggestions have yet been embraced by my colleagues. In order to
protect contributing consumers, I remain hopeful that the Commission
will ultimately implement such a mechanism for real cost control of the
program.
Sincerely,
Michael O'Rielly,
Commissioner.
The Chairman. And I would also say to my colleague from
Florida that I think all of us on this committee express our
thoughts and prayers to our colleague, who is a very active and
respected member of this committee, and hope and pray for a
quick recovery.
Senator Nelson. Thank you, Mr. Chairman. And this is
significant because it has been over a year since all five
commissioners have appeared before this committee, and a lot
has happened in the interim.
Now, I really appreciate, Mr. Chairman, what you said about
Commissioner Rosenworcel's re-nomination and the confirmation
that we attempt to get as soon as possible, and I want to
recall for the record that at the end of the 113th Congress, we
had--now, this is December 2014--we had one Republican FCC
Commissioner, Mike O'Rielly, who is here, awaiting
confirmation. The Democrats agreed to confirm Commissioner
O'Rielly's nomination without pairing him with any other
nominee in exchange for a promise that Republicans would
confirm Democrat Jessica Rosenworcel quickly in the new
Congress.
Senator McConnell promised Senator Reid--and I am getting
this straight from Senator Harry Reid--and promised then
Chairman Jay Rockefeller that they would move the Rosenworcel
nomination without delay in the new Congress if the Democrats
in the last Congress, that is, in 2014, agreed to move
Commissioner O'Rielly's nomination.
Commissioner Rosenworcel's nomination is now on the
Executive Calendar. I know, Chairman, that you are working with
Leader McConnell to make this happen. We don't want to lose her
leadership and thoughtful approach to the crucial issues.
But, Mr. Chairman, this has been now over a year. As
promised, it didn't happen in the first year of the new
Congress, last year, 2015. Here we are in the second year of
the new Congress. Finally, she's on the calendar. I hope we
will move to fulfill the promise that was made in order to
confirm Commissioner O'Rielly. And I want to thank all of the
Commissioners for appearing today.
As our Nation grows ever more Internet-enabled, more
connected, and more mobile, this FCC's role becomes ever more
critical. You are the expert agency that Congress created over
all things communications. You have a statutory mandate to
protect consumers, promote competition, ensure universal
service, and preserve public safety. And as technology
transitions, these core directives do not necessarily follow.
So that's where you come in.
In terms of protecting consumers, I want to call your
attention to the ongoing problem of spoofing. Last week,
Senator Fischer and I introduced the Spoofing Prevention Act of
2016, designed to update the law and provide the FCC with more
enforcement tools to combat these abusive phone scams.
Americans lose millions of dollars each year to these scams,
and that's especially true of vulnerable senior citizens.
We must protect the public from these scammers, and I hope
that the Committee can act swiftly on Senator Fischer's and my
legislation. In the meantime, I expect the FCC to do everything
that it can under current law to stop these scammers.
Now, with regard to promoting competition, there has been
intense interest in the past few weeks on your recent set-top
box proposal. I support the existing statutory obligation to
promote competition and choice in how consumers access their
pay television programming. But it is essential that any new
FCC rules in this area must not harm the production and
distribution of video content, and my letter to the Chairman
said just that.
The FCC, too, has worked hard to keep the U.S. competitive
in our national spectrum policy. In a matter of weeks, the
Commission will launch the first voluntary spectrum incentive
auction. The agency deserves much praise for getting us to this
point.
At the same time, many of us have heard concerns about what
may happen after the auction during any repacking of TV
stations. Obviously, we will continue to watch the FCC's work
closely in order to make sure that TV viewers are not
disenfranchised at the end of this important process.
I want to recognize the work being done by the Commission
related to 5G, the next-generation wireless services. The
nation is once again on the verge of a wireless revolution, and
the work on a new spectrum frontier for such services is vital
to American leadership in this area. Tomorrow, this committee
will take up the bipartisan MOBILE NOW Act that Chairman Thune
and I have referenced. That bill is designed to help move the
ball forward on 5G.
With regard to universal service, as important as it is to
promote cutting-edge communications technologies, it is equally
important that all Americans have access to these networks. I
know that the FCC has been spending significant time
considering reforms to the Lifeline program. I want to make it
fairly obvious that we must have a Lifeline program that helps
low-income Americans obtain access to broadband in order for
them to participate in today's digital economy. Failing to do
so risks exacerbating the digital divide.
With regard to public safety, a call to 911 remains the
most important call any one of us will ever make. I hope you
all will keep that in mind, and I look forward to your
testimony.
The Chairman. Thank you, Senator Nelson. We're going to
proceed now, and we'll start on my right and your left with the
Chairman of the Commission.
So Chairman Wheeler, if you'll go first, then we'll just
work down the dais from there. So thank you for being with us.
And, by the way, I would add, too--I know it's hard to
enforce the timeline, but there are some of you on the panel
who have been on this side, and you know how nice and how much
the staff would appreciate it if you would confine your
comments to as close to 5 minutes as possible. I know you have
written statements, too, that we will certainly include in the
record.
Mr. Chairman?
STATEMENT OF HON. TOM WHEELER, CHAIRMAN,
FEDERAL COMMUNICATIONS COMMISSION
Chairman Wheeler. Thank you very much, Mr. Chairman, and
members of the Committee. I know we all look forward to
discussing the matters of importance that you have identified
as well as some others. So I will heed your admonition and be
brief.
Four quick topics: First, as has been referenced, we're
only 26 days away from the world's first incentive auction.
Next week, we will have a workshop and a WebEx for broadcasters
who are desiring to participate so that they can work through
their processes and begin to understand even more. The
following week, we will release the forward auction
participants. The third week, we will have practice sessions
after we have distributed to the participating broadcasters
their own security token so they can actually practice and
stress the system. And the flag falls in 3 weeks and 5 days.
But who's counting?
Second, I have just returned with my colleagues,
Commissioner Rosenworcel and Commissioner Clyburn, from the
Mobile World Congress, the big gathering of the mobile industry
in Barcelona, where the buzz was all about 5G. Commissioner
Rosenworcel made some remarks there that were spot-on insofar
as the importance of spectrum in 5G. Your MOBILE NOW
legislation is an important part, as you both, Chairman Thune
and Ranking Member Nelson, have referenced.
But I want to make sure that everybody understands there's
a difference between the way we approach 5G spectrum and the
way the rest of the world does, because we've just met with the
rest of the world. We will allocate 5G spectrum faster than any
nation on the planet. We already have a proceeding underway. We
will bring that proceeding to closure this summer. We will then
get out of the way and let innovation and competition reign.
Now, I've been approached by various other governments
saying, ``You need to wait until there are standards.'' It's
not our philosophy to engage in such industrial policy. We are
world leaders in 4G because of the fact that we made spectrum
available, and we let competition and innovation reign. I
believe that that is the same strategy that will bring us to
world leadership in 5G.
Third, the last time we were together--Mr. Chairman, you've
referenced this--we pledged rate-of-return carrier reform and
broadband support to unserved areas before the end of the year.
As you said, we met the goal, but not the calendar. Thank you
for your understanding.
It was a complex issue, but thanks to the work of
Commissioners O'Rielly and Clyburn, we have a bipartisan plan
that was not only negotiated with our offices, which is no easy
undertaking in and of itself, but also negotiated with the
major associations of the parties involved, which increased the
complexity. Commissioner O'Rielly dove into the specifics of
the issue and exhibited the kind of bringing people together
attitude in finding solutions that made him such an effective
member of the staff of this body. Commissioner Clyburn, who had
over a decade of experience dealing firsthand with this issue
at the state level, brought that kind of expertise and
experience and helped us through that process.
None of us got everything we wanted, nor did any of the
associations get everything they wanted. But we have a solid
bipartisan reform and broadband funding for unserved areas, in
particular, that will serve the test of time.
Last--and this is not last in priority. It's just last on
the list. Public safety, as embodied by 911, is dangerously
close to a crisis as the digital world passes it by. Twenty-
first century lifesaving is being blocked by 20th century
technology.
We at the FCC have done all within our power to move the
next-generation 911 capabilities of digital ahead. We've
improved 911 location accuracy. We've been pushing for text to
911 deployment. We've improved network resiliency, and we just
completed a year-long process where we brought all the experts
from around the country to spend a year developing a plan for
just what does it take to get to the next-generation 911.
We have submitted that task force plan to this committee.
Congress holds the key to whether there will be a next-
generation 911, and we look forward to working with you in
achieving that goal.
Thank you, Mr. Chairman.
[The prepared statement of Chairman Wheeler follows:]
Prepared Statement of Hon. Tom Wheeler, Chairman,
Federal Communications Commission
Introduction
Chairman Thune, Ranking Member Nelson, and Members of the
Committee, thank you for this opportunity to join with my colleagues to
discuss our work and mission at the Federal Communications Commission.
It has been almost a year since I last testified before this
Committee. The Commission has been hard at work to facilitate dynamic
technological change to enable economic growth and ensure that our
communications networks reflect our core values--universal access,
public safety, and consumer protection. Preserving and promoting
competition continues to be the underlying foundation of our agenda.
I am proud to report that the Commission has made significant
progress in support of these goals, and we continue to see that
America's communications technology sector is thriving and consumers
are better served and protected.
Today, I'll highlight some of our most significant actions since we
last met, and also preview some of the issues we will be focused on
moving forward.
Rate-of-Return Modernization
In recent months, I've had the privilege of visiting Kentucky and
Montana to learn first-hand about digital opportunities and
connectivity challenges in rural communities. On my recent visit to
eastern Kentucky I visited two towns being reshaped by the broadband
revolution. McKee, Kentucky or as some call it, ``Silicon Holler,''
where there is now fiber to every home and business in the county, and
Hazard, KY where I had the privilege to meet a former coal miner who is
now working as a coder in the innovation economy. It was a striking
reminder that the Commission's work can be a critical component to
renewed economic growth. Our 21st century economy demands nothing less
than vigorous broadband connections for rural, urban and suburban
alike.
The Commission has a Congressional mandate to preserve and advance
universal service so that all Americans have access to reasonably
comparable communications services at reasonably comparable rates.
Promoting universal access to communications is not just a statutory
obligation; it's smart public policy. Expanding Internet access opens
up new opportunities for economic growth, job creation, education,
healthcare, public safety, and many other national challenges.
In 2011, the Commission voted unanimously to expand rural broadband
access by modernizing the Universal Service Fund. The Commission took
an inefficient program for delivering telephone service and created the
Connect America Fund to support expanded broadband connectivity in
rural America. These reforms have already delivered significant
benefits. CAF-supported projects are in the process of connecting 1.7
million Americans in 45 states, and, over the next six years, CAF is
poised to invest $9 billion and leverage private investment to deliver
broadband to 7.3 million rural Americans. In addition, universal
service reforms have dramatically reduced waste within the program.
Last year, I pledged to Chairman Thune and other Members of this
Committee that we would bring forth a solution for the next phase of
universal service modernization: reforming support for ``rate-of-
return'' carriers. As the result of months of arduous efforts by
Commissioners Clyburn and O'Rielly and their staffs, we recently
circulated a bipartisan Order to fulfill that promise.
The proposed Order sets forth a package of reforms to address rate-
of-return issues that are fundamentally intertwined--the need to
modernize the program to provide support for stand-alone broadband
service; the need to improve incentives for broadband investment to
connect unserved rural Americans; and the need to strengthen the rate-
of-return system to provide certainty and stability for years to come.
The proposed Order will help to ensure that Federal universal service
funds are spent wisely, for their intended purpose, and takes concrete
steps to bring broadband to the millions of rural Americans who remain
unserved today.
I am grateful to Chairman Thune for his leadership on this issue
and his patience as we worked on this important bipartisan reform.
Incentive Auction
An unquestioned headliner of the Commission's March 2016 agenda is
the Incentive Auction. The FCC staff has been working tirelessly to
design this first-of-its-kind auction ever since Congress authorized it
in February 2012. All systems are go to launch this historic auction in
26 days.
Getting to this point represents the culmination of four years of
hard work at the Commission, following the groundbreaking work of this
Committee and Congress in enacting the Spectrum Act. It has required
tireless efforts by our auction task force and multiple bureaus and
offices, the active involvement of my fellow Commissioners, and input
from stakeholders and public interest groups representing the full
range of opinions.
We are encouraged by the strong interest that we have seen both
from broadcasters interested in selling their spectrum and the broad
assortment of parties interested in buying it.
Our key goal is to repurpose as much spectrum for mobile broadband
as the market demands to meet growing consumer needs, and that means
deploying networks using these frequencies in a timely manner. To
ensure preservation of service for broadcast viewers and timely network
deployment, we have been focused on post-auction planning for over a
year, including the release of the draft relocation reimbursement form
and a reimbursement cost catalog, and we've already begun to pivot and
to accelerate our planning for the post-auction transition.
I recognize that getting the transition right is as important as
getting the auction itself right. Like the auction, the transition will
be a complex, multi-disciplinary effort that will span several years.
The task force approach has served us well in designing and
implementing the auction, and I believe it is the appropriate structure
for ensuring that the transition has the focus and attention it
requires. I therefore intend to maintain the task force when the
auction is complete; as we move forward, its mission will evolve from
auction to transition.
Spectrum Frontiers--5G
Just as bipartisan support helped enable the incentive auction,
there is growing bipartisan interest in the next big thing in spectrum
policy: 5G. With very fast speeds, scale to support billions of
sensors, and reduced latency, 5G will allow us to realize the full
potential of so many promising, yet nascent broadband-enabled
breakthroughs. It won't just unleash commercial broadband, satellite,
or government uses, but applications on the horizon, like Internet of
Things and connected cars, and others we can't accurately predict
today.
Fundamentally, we're approaching 5G as we have with previous
generations of wireless by adopting a flexible use policy and assuring
that spectrum is available to be deployed when the private sector has
arrived at the requisite technical standards and network architectures.
This approach made us successful as global leaders in 4G LTE.
At this point, none of us knows exactly what 5G will be, but we can
be certain that the spectrum requirements will be dynamic and ever
changing. Accordingly, our spectrum policy must be equally dynamic to
address a wireless reality that is still evolving. We must continue to
employ flexible use policies and reliance on private-sector innovation
and investment, while increasing our commitment to spectrum sharing,
opening new bands for broadband, and smart approaches to wireless
infrastructure.
I commend Chairman Thune and Ranking Member Nelson for coming
together to introduce the MOBILE NOW Act, which aims to facilitate
investment in 5G technology by removing barriers to infrastructure
deployment--a goal we share at the Commission. Commissioner Pai has
been a strong advocate for eliminating barriers to wireless
infrastructure deployment and I look forward to working with him and
the other Commissioners on this important issue moving forward. Rest
assured that spurring 5G innovation and deployment is one of the
Commission's highest priorities.
In fact, the Commission launched what we call our Spectrum
Frontiers rulemaking to explore the use of millimeter wave spectrum--
the airwaves at 24 GHz and above--for 5G. I was disappointed that one
of the bands the FCC identified for possible 5G use--28 GHz--was
rejected for study by the International Telecommunication Union at last
year's World Radio Conference in Geneva. While international
coordination is preferable, I believe we should move forward with
exploration of the 28 GHz band, and we plan to act on the Spectrum
Frontiers proceeding this summer.
I just returned from the Mobile World Congress in Barcelona where
5G was the primary object of interest at the conference. Commissioner
Rosenworcel spoke eloquently at that meeting about the need for 5G
spectrum and how it will improve the quality of mobile services and
enable new, heretofore unknown services. My bi-lateral meetings with
foreign regulators in Barcelona made it clear- they are looking
pointedly at the United States, watching our 5G-related initiatives
very closely.
Competition/Set-Top Boxes
Going back to my nomination hearing, the most consistent theme of
my messages to Congress--or any audience--has been that ``competition,
competition, competition'' is the most effective tool for driving
innovation and consumer benefits.
One area where competition is virtually non-existent and consumers
are literally paying the price is the set-top box marketplace. Today,
99 percent of pay-TV customers lease set-top boxes from their video
providers, paying an average of $231 a year. Even when the company has
recovered the cost of the box, consumers must continue to pay a rental
fee month after month. Collectively, these consumers are spending $20
billion annually. Senator Markey and Senator Blumenthal deserve
recognition for shining a spotlight on this issue.
Last month, the Commission launched a proceeding to introduce
competition into the set-top box marketplace, as Congress mandates.
Specifically, we propose establishing open standards for video
navigation devices like set-top boxes, the same way we have standards
for cell phones and Wi-Fi routers. The new rules would set the stage to
provide device manufacturers, software developers and others the
information they need to introduce innovative new ways for consumers to
access and enjoy their favorite shows and movies on their terms, while
at the same time maintaining strong security, copyright and consumer
protections.
This proposal will not require changes in the programming business
practices of pay-TV providers; it will not require consumers to
purchase new boxes; and it will not harm minority programming
opportunities. Again, this is all about whether the standard for set-
top boxes should be a closed standard or an open standard.
Lifeline Modernization
At a time when our economy and lives are increasingly happening
online, be it job applications, math homework, or neighborhood
listserves, it doesn't make sense for Lifeline--the Commission's
program to help low-income Americans afford access to the vital
communications--to remain focused only on 20th century narrowband voice
service. Competing and thriving in the 21st century economy requires
affordable broadband.
Building on earlier reforms adopted under Chairman Genachowski and
Chairwoman Clyburn that cracked down on waste, fraud, and abuse and
weeded out over a billion dollars in payments to ineligible recipients,
the Commission initiated a proceeding last June to recast Lifeline for
the broadband era.
The first principle of Lifeline reform is allowing the program to
support both fixed and mobile broadband service. We will establish
minimum standards of service that Lifeline providers must deliver to
receive funds. We will also improve Lifeline's management and design to
get to the heart of the historic issues that have undermined this
program's efficiency. We will streamline the requirements to become a
Lifeline provider and take a hard look at the burdens we place on those
providers to make it easier for carriers to participate in the Lifeline
program. Too many of our country's leading service providers as well as
many local, innovative, small providers do not provide Lifeline
service. The more service providers we can encourage to participate,
the better that service will become.
Commissioner Clyburn has been a tireless champion of this effort,
and I am working with her and my other colleagues to propose final
rules in the not-too-distant future.
Next-Generation 911
I remain committed to working with Congress and other stakeholders
to improve our 911 system. Public safety is one of the primary and
essential missions of the Commission, and it cannot be left behind in
this technological revolution. But, in too many communities, the
communications technology behind the 911 system is dangerously out of
date. Too many Public Safety Answering Points have been unable to
incorporate Next Generation capabilities and functions into their
operations. PSAPs also face constant challenges to maintain adequate
funding for ongoing operations.
We at the FCC are committed to doing everything in our power to
make the NG911 transition happen. We have taken action on such issues
as improving 911 location accuracy, pushing the deployment of text-to-
911, and improving the reliability of legacy, transitional, and Next
Generation 911 networks. We have also convened our PSAP Task Force,
which has recently come back with great recommendations on how to build
the Next Generation architecture for PSAPs. Modernizing the Nation's
911 system will take work from many stakeholders and I am encouraged by
the recent creation of a coalition to lead a national effort to
successfully implement NG911 for all states and territories by the end
of 2020.
I know that public safety is also a priority of this Committee, and
I would urge its Members to do all in their power to make sure our
Nation's PSAPs have the tools and resources they need to accelerate the
transition to NG911.
Privacy
At the direction of Congress, the FCC has worked for years to
implement laws that protect the privacy of consumers when they use
communications networks and services, notably with rules to protect
Customer Proprietary Network Information (CPNI). We need to make sure
our policies are keeping up as communications technology continues to
evolve.
The Open Internet Order expressly determined that privacy
protections of Title II should be applied to broadband providers and,
in fact, the provisions of Section 222 apply to broadband providers
right now. But we have a responsibility under the Communications Act to
consider whether further guidance and consideration by the Commission
could better protect the privacy of consumers.
We're committed to taking a thoughtful, rational approach to
addressing privacy protections and data security for consumers' use of
Internet access services. We've begun the process of talking to
stakeholders about section 222 in the broadband context, and continue
to invite conversations about core privacy principles--transparency,
choice and security--while also taking into account the FTC's
complementary leadership and precedents, consumer expectations and the
thriving innovation economy.
Conclusion
The Commission has focused on harnessing the power of
communications technology to grow our economy and enhance U.S.
leadership, while preserving timeless values like universal service. As
my testimony reflects, we have made significant progress toward these
goals to the benefit of the public. And, to be clear, this is not an
all-inclusive list. We continue to work on efforts to remove barriers
to infrastructure deployment, empower Americans with disabilities, and
improve the agency's internal operations, to name a few.
I look forward to discussing these actions with the Committee today
and working with you and my fellow Commissioners to build on this
progress and maximize the benefits of communications technology for the
American people.
The Chairman. Thank you, Chairman Wheeler.
Commissioner Rosenworcel?
STATEMENT OF HON. JESSICA ROSENWORCEL, COMMISSIONER, FEDERAL
COMMUNICATIONS COMMISSION
Commissioner Rosenworcel. Thank you. Good morning, Chairman
Thune, Ranking Member Nelson, and the members of the Committee.
Thank you for the opportunity to appear before you today. It's
my fourth time this Congress. But who's counting?
As my colleague mentioned, last week, I had the privilege
of speaking at the Mobile World Congress in Barcelona. It's a
global gathering to discuss wireless technology. The good news
is that the United States leads the world in the current
generation of wireless technology known as 4G. While we have
only 5 percent of the globe's population, we have over one-
third of its 4G deployment. But what I learned in Barcelona is
that we have work to do to maintain our leadership role.
Now, the good news is that wireless policy is front and
center. This month, at the FCC, we will begin the world's first
spectrum incentive auction, and, of course, this week, in front
of this committee, you will consider MOBILE NOW legislation to
advance our Nation's leadership in wireless policy.
So in light of all of this, I am going to focus my remarks
today on three aspects of the future of spectrum policy. First,
the future of spectrum policy requires looking at millimeter
wave spectrum. Today, the bulk of our wireless networks are
built at 3 Gigahertz or below. But in the future, we are going
to have to bust through that 3 Gigahertz ceiling and start
looking at airwaves north of 24 Gigahertz. We are going to have
to look at airwaves that go to infinity and beyond.
Now, the signals at these high stratospheric frequencies do
not go far. But if we combine them with dense networks of small
cells, we are going to be able to have wireless networks that
are 10 to 100 times faster than what we have today. These
networks are going to be a formidable part of the next
generation of wireless technology known as 5G.
The race to 5G is on. What I learned last week is that our
counterparts in Europe and Asia are already making headway. So
it is imperative that the FCC complete its outstanding
millimeter wave rulemaking and get it done this year.
Second, the future of spectrum policy requires not just
more licensed spectrum but also more unlicensed spectrum. In
short, we need more Wi-Fi. Unlicensed spectrum like Wi-Fi
democratizes Internet access, encourages permissionless
innovation, and contributes $140 billion to the U.S. economy
every year. It's good stuff. So in any effort to increase the
licensed spectrum pipeline, we need to explore a cut for
unlicensed. Call it the Wi-Fi dividend.
Right now at the FCC, we have a golden opportunity for a
Wi-Fi dividend in the upper portion of the 5 Gigahertz band.
Thanks to the encouragement of this committee, we have smart
framework for testing this band for unlicensed use while also
protecting automobile safety. We need to work with our
colleagues at the Department of Transportation and the
Department of Commerce and get this testing underway.
Third, the future of spectrum policy requires that we focus
on the ground as much as on the skies. Spectrum gets all the
glory, but the unsung hero of the wireless revolution is
infrastructure, because no amount of spectrum will lead to
better wireless service without good infrastructure on the
ground. That means we need dig-once policies, we need smarter
practices for deployment on our Federal lands, and we need
updated policies for the deployment of small cells, which are
going to be critical for next-generation 5G networks.
Now, if we do these three things, we will create dramatic
opportunities for new wireless services across the country. And
let me finish by highlighting that last point, not in technical
terms, but in human terms. We have problems to solve, resources
that are constrained, and communities that need help navigating
what is possible in the digital age.
But we are on the cusp of cars that drive themselves,
streets that can be safer, commute times that can be cut,
emergency services that are more effective and healthcare that
is more personalized, and communities with more capability
across the board because they are more connected. It's already
happening.
The City of Chicago is deploying wireless sensors to help
solve problems before they occur with childhood asthma, flash
flooding, and street congestion. Coachella, California, has
made Wi-Fi available on its school buses to help bridge the
homework gap and help students who lack the connectivity they
need to do basic school work. And wireless smart sewer systems
have saved the City of South Bend, Indiana, millions by
providing real-time analysis of waste water.
These efforts are exciting, and they can be bigger and
bolder if we have forward thinking steps with spectrum policy
and if we take them right now.
Thank you.
[The prepared statement of Commissioner Rosenworcel
follows:]
Prepared Statement of Hon. Jessica Rosenworcel, Commissioner,
Federal Communications Commission
Good morning, Chairman Thune, Ranking Member Nelson, and members of
the Committee. Thank you for the opportunity to appear before you along
with my colleagues at the Federal Communications Commission.
Last week I spoke at the Mobile World Congress in Barcelona. It's a
global gathering to discuss wireless technology and the good things we
can do with this invisible infrastructure. The United States has led
the world in deployment of the current generation of wireless
technology, known as 4G. While we have only five percent of the world's
population, we have one-third of all 4G deployment. But what I learned
in Barcelona is that we have work to do to stay in the lead.
The good news is that wireless policy is front and center right now
at the FCC. This month we will begin the world's first spectrum
incentive auction. I know these matters are front and center for this
Committee, too, as this week it will take up MOBILE NOW legislation. In
light of this, I want to focus my statement today on three aspects of
the future of spectrum policy.
First, the future of spectrum policy requires looking at millimeter
wave spectrum. Today, the bulk of our wireless networks are built on
spectrum below 3 GHz. But in the future we need to bust through this
ceiling and look high--really high--to infinity and beyond. We need to
explore spectrum above 24 GHz and even north of 90 GHz. At these high
frequencies, propagation is a challenge. But we can turn this
limitation into a strength if we combine these stratospheric
frequencies with dense networks of small cells. This will enable us to
deliver wireless speeds more than 10 times higher than what we have
today. This approach will be a major force in the next generation of
wireless services, known as 5G. The race to 5G is on--and our
counterparts in Europe and Asia are already making progress. So it's
essential that the FCC get going, by completing our outstanding
millimeter wave spectrum rulemaking this year and leading the way with
the 28 GHz band.
Second, the future of spectrum policy requires not just more
licensed spectrum--but also more unlicensed spectrum. In short, we need
more Wi-Fi. Unlicensed spectrum, like Wi-Fi, democratizes Internet
access, encourages permissionless innovation, and is responsible for
$140 billion in economic activity every year. Historically, the
legislative process has overlooked the value of unlicensed spectrum
because it gets low marks in the scoring process at the Congressional
Budget Office. But this accounting misses the mark--because the broader
benefits of unlicensed spectrum to the economy are so great. So in any
effort to increase the licensed spectrum pipeline, we need to explore a
cut for unlicensed--call it the Wi-Fi dividend.
Right now at the FCC we have a golden opportunity for a Wi-Fi
dividend in the upper portion of the 5 GHz band. Thanks to the
encouragement of this Committee, we have a smart framework for testing
this band for unlicensed use while also promoting vehicle safety. We
need to work with our colleagues at the Department of Transportation
and Department of Commerce and get this testing underway.
Third, the future of spectrum policy requires that we focus on the
ground as much as on the skies. Spectrum gets all the glory. But the
unsung hero of the wireless revolution is infrastructure. Because no
amount of spectrum will lead to better wireless service without good
infrastructure on the ground.
We can begin with Dig Once policies--which can pave the way for
more broadband deployment by ensuring that when construction crews are
building or repairing roads, broadband conduit is deployed at the same
time. We should also take a comprehensive look at tower siting on
Federal lands--which make up as much as one-third of our national real
estate. We can expedite deployment here by creating an open data
inventory of infrastructure and standardizing the use of contracts from
the General Services Administration.
At the same time, we need to think beyond traditional tower siting.
5G use of millimeter wave spectrum puts a new premium on small cells.
To get this infrastructure in place we will need to find ways to
harmonize municipal review by developing model practices and program
alternatives.
If we do these things, we will create dramatic opportunities for
new wireless technologies across the country.
Let me finish by highlighting that last point--not in technical
terms, but in human terms. We have problems to solve, resources that
are constrained, and communities that need help navigating what is
possible in the digital age. But we are on the cusp of cars that drive
themselves, streets that can be safer, commute times that can be cut,
emergency services that are more effective, healthcare that is more
personalized, and communities with more capability across the board
because they are more connected.
There's evidence it's already happening. The City of Chicago is
deploying wireless sensors to help solve problems before they occur--
with childhood asthma, flash flooding, and street congestion.
Coachella, California, has made Wi-Fi available on its school buses to
bridge the Homework Gap and help students who lack the connectivity
they need at home do basic schoolwork. And wireless smart sewer systems
have saved the City of South Bend, Indiana, millions by providing real-
time analysis of its wastewater.
These efforts are exciting. But they can be even bigger and bolder
if we take forward-thinking steps with spectrum policy--and take them
right now.
Thank you. I will be happy to answer any questions you might have.
The Chairman. Thank you, Commissioner Rosenworcel.
Commissioner Pai?
STATEMENT OF HON. AJIT PAI, COMMISSIONER,
FEDERAL COMMUNICATIONS COMMISSION
Commissioner Pai. Chairman Thune, Ranking Member Nelson,
and members of this Committee, thank you for holding this
hearing. I'd like to focus this morning on four issues on which
this committee has led: direct dialing 911, contraband cell
phones, 5 Gigahertz spectrum, and millimeter wave spectrum.
First, ensuring direct access to 911 is important, both to
me and to members of this committee. Last month, Senators
Fischer and Klobuchar, along with Senators Cornyn, Cruz, and
Schatz, introduced the Kari's Law Act of 2016. I commend those
Senators for their leadership.
Many knew of the tragedy that inspired this legislation. In
December 2014, Kari Rene Hunt Dunn was attacked and killed by
her estranged husband in a hotel room in Marshall, Texas. Her
9-year-old daughter tried calling 911 four times as she had
been trained to do. But those calls never went through, because
the hotel's phone system required her first to dial a 9 before
911.
When I first learned about this sad case 2 years ago, I
started an inquiry into the status of 911 dialing. And to date,
we have made substantial progress across this country in fixing
the problem. When we started, for example, no major hotel
company required franchisees to permit direct to 911 dialing.
Today, nearly every major chain does.
But the job isn't done, and that's why the Kari's Law Act
of 2016 is needed. It would require that all multiline
telephone systems sold, leased, or installed in the United
States allow direct 911 dialing as the default setting. I hope
this bill becomes law soon.
Second, I want to turn to the threat posed by inmates' use
of contraband cell phones. These devices present a major threat
to public safety, and that threat has only grown worse of late.
Contraband cell phones are now flooding into our Nation's jails
and prisons. Inmates are using them to order hits, to run drug
operations, arrange gang activity, and victimize innocent
members of the public. I heard about these disturbing
developments firsthand last October when I visited a maximum
security prison in Jackson, Georgia.
We cannot let inmates treat prison as just another base of
operations for criminal enterprises. We need to act. Now, in
2009, this Committee passed bipartisan legislation to help law
enforcement combat this serious threat, and in 2013, the FCC
picked up the baton with a Notice of Proposed Rulemaking. In
it, the agency teed up technological solutions and regulatory
reforms.
We now need to follow through. To help do that, I announced
earlier this week that I would hold a field hearing on
contraband cell phones in South Carolina on April 6. I hope
that this event will reboot the conversation and build the
foundation for a robust FCC response.
Third, I want to thank the Committee for its leadership in
identifying and drawing attention to the 5 Gigahertz band, a
band ideally suited for unlicensed use. Four years ago, the
Spectrum Act called on the FCC to begin the process of opening
up this band, and the FCC did that in 2013. Since then,
Senators Marco Rubio and Cory Booker have introduced the Wi-Fi
Innovation Act, a substantial measure which would help move the
process forward.
Right now, there are up to 195 Megahertz of 5 Gigahertz
spectrum that the FCC could open up for consumer use. Putting
this spectrum to work could herald a new world of Gigabit Wi-
Fi. So the FCC needs to get this done. But progress hasn't been
fast enough. Both Qualcomm, through its re-channelization
approach, and Cisco, through its detect and avoid proposal,
have identified paths forward, and I hope that we get this
proceeding across the finish line and soon for the benefit of
American consumers.
Fourth and finally, I want to commend Chairman Thune and
Ranking Member Nelson for the introduction of the MOBILE NOW
Act and for the spirit of bipartisanship which they showed in
engaging in that measure. In particular, I want to commend them
for calling on the FCC to move forward on opening up the
millimeter wave bands for mobile use.
Companies are now investing heavily in mobile technologies
that rely on spectrum above 24 Gigahertz as part of their work
on 5G technologies. We should aid those efforts with rules that
will allow 5G to develop in the United States as quickly as
technology and consumer demand will allow.
Now, on that score, there is plenty of work to do. The FCC
recently adopted a notice of proposed rulemaking addressing
some bands above 24 Gigahertz, but we left 12,500 Megahertz of
spectrum on the cutting room floor. I called on the agency to
focus on those bands as well. So I'm glad that this committee,
too, is looking to move more massive swaths of millimeter voice
spectrum into the commercial marketplace.
Chairman Thune, Ranking Member Nelson, and members of this
Committee, thank you once again for holding this hearing. I
look forward to answering your questions and to continuing to
labor alongside you on these critical matters.
Thank you.
[The prepared statement of Commissioner Pai follows:]
Prepared Statement of Hon. Ajit Pai, Commissioner,
Federal Communications Commission
Chairman Thune, Ranking Member Nelson, and Members of the
Committee, thank you for giving me the opportunity to testify this
morning. Since 2012, it has been an honor to work with you on a wide
variety of issues, from encouraging broadband deployment in rural
America to saving taxpayers over $3 billion by cracking down on abuse
of the designated entity program.
I would like to focus my testimony on four issues where this
Committee has led. They are: (1) ensuring direct dialing for 911 calls;
(2) combating the threats posed by inmates' use of contraband
cellphones; (3) freeing up 5 GHz spectrum for the next generation of
unlicensed use; and (4) opening up spectrum bands above 24 GHz for 5G
and other innovative wireless technologies.
I'll start with the two public safety issues.
Direct Dial 911.--Ensuring direct access to 911 is important both
to me and the Members of this Committee. Last month, Senators Deb
Fischer and Amy Klobuchar, along with Senators John Cornyn, Ted Cruz,
and Brian Schatz, introduced The Kari's Law Act of 2016. I commend
those Senators for their leadership.
Many people now know the tragedy that inspired this legislation. In
December 2014, Kari Rene Hunt Dunn was attacked and killed by her
estranged husband in a Marshall, Texas, hotel room. Her nine-year-old
daughter, who was with her, tried calling 911 four times as she had
been taught to do. But her calls for help never went through. That's
because the hotel's phone system required guests to dial a ``9'' before
calling 911.
When I learned about this two years ago, I started an inquiry into
the status of 911 dialing at properties across the country that use
multi-line telephone systems. I wanted to understand the scope of the
problem and what we could do to fix it. At the time, I gave Kari's
father, Hank Hunt, my personal commitment that I would do my best to
ensure that no one would ever again confront that situation.
Hank has been a tireless advocate for this cause. One year ago, I
visited Marshall, Texas, and the 911 dispatch center where the call
from Kari's daughter would have--and should have--gone. I was honored
to stand with Hank and report on the progress that had been made in
just one year's time.
The progress continues to this day. The American Hotel & Lodging
Association, which has been a leader in changing industry practice,
just sent me a progress report. When we started, none of the major
hotel companies required franchisees to permit direct 911 dialing. Now,
nearly every hotel chain, including Best Western, Carlson Rezidor,
Hilton, Hyatt, La Quinta, Motel 6, Starwood, and Wyndham has
established such a requirement as part of its brand standard. When we
started, direct dial 911 calls would not have gone through at 55
percent of franchised hotels. Now, that percentage is substantially
lower. Consider InterContinental, which includes Holiday Inn, Crowne
Plaza, and Staybridge. At the start of my inquiry, it reported that
nearly 1,000 of its properties lacked direct dialing capability. Today,
each and every one of those properties allows direct dialing.
And the progress isn't limited to hotels. Even the FCC itself has
changed; it now allows direct 911 dialing. I want to thank Chairman
Wheeler for making this happen.
But the job isn't done. The Kari's Law Act of 2016 would take us
one step closer to accomplishing Hank's mission. It would require that
all multi-line telephone systems sold, leased, or installed in the
United States allow direct 911 calling as the default setting. So I
applaud the efforts of Hank, Members of this Committee, and the many
others who are making a difference on this issue. I hope this bill,
like Congressman Louie Gohmert's companion legislation in the House of
Representatives, becomes law soon.
Contraband Cellphones.--I want to turn next to another public
safety issue that this Committee has worked on. That is the threat
posed by inmates' use of contraband cellphones. This Committee has a
longstanding interest in this issue. For instance, in 2009, this
Committee examined bipartisan legislation designed to help law
enforcement combat this threat.
In 2013, the FCC picked up the baton by releasing a Notice of
Proposed Rulemaking. The agency teed up technological solutions and
identified possible regulatory reforms--everything from streamlining
our review of spectrum leases to making it easier for corrections
facilities and wireless providers to work together. To date, the FCC
has not taken further action in the rulemaking.
The use of contraband cellphones is a major public safety problem.
And the threats they pose have only gotten worse over the past few
years. They are now flooding into our Nation's jails and prisons.
Inmates are using them to order hits, run drug operations, direct gang
activity, and victimize innocent members of the public.
I've heard about these disturbing developments firsthand. Last
October, I visited a maximum-security prison in Jackson, Georgia, to
learn more about this problem. To put it mildly, I was disturbed by
what I heard.
Georgia Department of Corrections Commissioner Homer Bryson, Warden
Bruce Chatman, and other corrections officers told me that prisoners
are using contraband cellphones to extort the family and friends of the
incarcerated, putting inmates' safety and lives at risk. For example,
inmates texted the wife of one Georgia prisoner and demanded $1,000.
When she couldn't gather the money, she was texted an image of her
husband with burns, broken fingers, and the word ``RAT'' carved into
his forehead. In another case, a woman received images on her phone of
her incarcerated boyfriend being strangled with a shank held to his
head. She was told that unless she forked over $300, the beatings would
continue. She could only afford to send about half that amount. Sadly,
the assaults didn't stop, and after a severe beating, he died.
The problem is not limited to any one state. In South Carolina, for
example, a gunman kicked down the door of a corrections officer in the
early morning hours and shot him six times in the chest and stomach.
Thankfully, he survived. The hit was coordinated by an inmate using a
contraband cellphone, and it was ordered because the officer was too
good at his job--which involved confiscating contraband, including
cellphones.
These devices aren't only used for violent crimes. Inmates are also
using them to run phone scams and con innocent members of the public
out of their hard-earned money.
The bottom line is this: The status quo is not acceptable. We
cannot let inmates treat prison as just another base of operations for
criminal enterprises. The FCC needs to act.
To help meet that obligation, I announced earlier this week that I
will hold a field hearing on contraband cellphones in Columbia, South
Carolina, on April 6, 2016. By gathering more facts and discussing
possible solutions, I hope the field hearing will reboot the
conversation and build a foundation for a robust FCC response. The FCC
needs to do everything it can to help law enforcement combat this
problem. I intend to do my part to make that happen. I look forward to
working with my colleagues at the FCC and the Members of this Committee
on this matter.
I'll turn next to two spectrum issues that this Committee has been
considering.
5 GHz Band.--I want to thank the Committee for its leadership in
identifying and drawing attention to the 5 GHz band, a band ideally
suited for unlicensed use. The Spectrum Act, which was signed into law
four years ago last week, called on the FCC to begin the administrative
process for opening up the 5 GHz band. The FCC did that in 2013.
Since then, Senators Marco Rubio and Cory Booker have introduced
the Wi-Fi Innovation Act. That bill would require the FCC to test the
feasibility of opening the upper portion of the 5 GHz band to
unlicensed use--a portion of the band known as U-NII-4. Chairman Thune
and others have also played key roles in helping to move the ball
forward on this part of the 5 GHz band. I applaud those efforts.
Taken together, in the U-NII-4 band as well as the lower, U-NII-2B
band, there are up to 195 MHz of spectrum that the FCC could open up
for consumer use. It is not hyperbole to say that this could transform
the wireless world. For this spectrum is tailor-made for the next-
generation of unlicensed use. Its propagation characteristics minimize
interference in the band, and the wide, contiguous blocks of spectrum
allow for extremely fast connections, with throughput reaching one
gigabit per second. The technical standard to accomplish this,
802.11ac, already exists, and devices implementing it are already being
built. All of this means we can rapidly realize the benefits of more
robust and ubiquitous wireless coverage for consumers, more manageable
networks for providers, a new test bed for innovative application
developers, and other benefits we can't even conceive today. I think
you would be hard pressed to find a band that would be easier to open
up for consumer use.
So the FCC needs to get this done. But progress has not been fast
enough. I have been calling on the FCC to open these bands up since
2012. Both Qualcomm, through its re-channelization approach, and Cisco,
through its detect-and-avoid proposal, have identified paths forward. I
hope the agency gets this proceeding across the finish line, and soon.
Spectrum Above 24 GHz.--Finally, I want to commend Chairman John
Thune and Ranking Member Bill Nelson on the introduction of the MOBILE
NOW Act. In particular, I commend them for calling on the FCC to move
forward on opening up millimeter-wave bands for mobile use.
Not long ago, most would have thought of the millimeter wave bands
as dead zones when it came to mobile services. After all, nearly all
commercial mobile networks operate in frequencies below 3 GHz. But as
has been the hallmark of the communications sector, engineers are
finding a way and technology is advancing.
Companies are now investing heavily in mobile technologies that
rely on spectrum above 24 GHz as part of their work on 5G mobile
technologies. Over a year ago, I visited Samsung's 5G research lab near
Dallas, Texas. There, engineers are hard at work developing base
stations and mobile technologies that are crossing into these spectrum
frontiers. Their experiments with multiple-input, multiple-output
antennas no bigger than a Post-it note have already demonstrated that
5G technologies can use millimeter wave bands to deliver mobile speeds
in excess of 1 gigabit per second.
More recently, I attended Intel's demonstration of its millimeter
wave technology at the FCC's headquarters. It showed how spectrum above
24 GHz can be used to beam signals off tables, buildings, or other
objects to find the most efficient, highest-capacity connection between
a base station and mobile user. These and many other efforts will
enable consumers to enjoy the next generation of wireless connectivity.
What is the FCC's role here? In my view, we should put a framework
in place that will allow 5G to develop in the United States as quickly
as the technology and consumer demand allow. The U.S. has led the world
in 4G, and there is certainly a lot of running room left with LTE and
LTE-Advanced. But we must continue to lead as mobile technologies
transition to 5G. The key is to make sure that the FCC does not become
a regulatory bottleneck or send signals that would lead companies to
focus their research and investments abroad.
On that score, there's plenty of work to do. On the plus side, we
unanimously inquired about opening up numerous millimeter-wave bands in
2014, and the record contained robust support for moving forward on
them.
But our recent rulemaking only addresses some of the bands above 24
GHz. There's another 12,500 MHz of spectrum in the 24 GHz band, 32 GHz
band, 42 GHz band, and the 70 and 80 GHz bands that might be used for
mobile services. I called on the FCC to focus on those bands as well.
Although I wish that the Commission had found a way to do so, I'm glad
that this Committee is looking to move those massive swaths of spectrum
into the marketplace. I hope those efforts bear fruit and that the
Commission will take appropriate action soon.
Chairman Thune, Ranking Member Nelson, and Members of the
Committee, thank you once again for holding this hearing and allowing
me the opportunity to testify. I look forward to answering your
questions, listening to your views, and continuing to work with you and
your staff in the days ahead.
The Chairman. Thank you, Commissioner Pai.
Commissioner O'Rielly?
STATEMENT OF HON. MICHAEL O'RIELLY, COMMISSIONER, FEDERAL
COMMUNICATIONS COMMISSION
Commissioner O'Rielly. Thank you, Chairman Thune, Ranking
Member Nelson, and members of the Committee, for the
opportunity to participate in the Committee's FCC oversight
process.
The Commission has collectively recognized the need to act
on wireless issues and especially next-generation networks,
commonly referred to as 5G. To realize private sector
deployments, it is paramount that additional licensed and,
where appropriate, unlicensed bands be made available in both
the traditional sub-6 Gigahertz frequencies and higher bands,
including those above 24 Gigahertz.
The U.S. is currently the world leader in 4G wireless
communications because our Nation's wireless providers
endeavored to meet the insatiable consumer demand for new data
services and recognized the economic value in doing so. Any
unnecessary delay risks another nation setting the terms of the
next 15 years of wireless communications, something which we
should make sure does not happen.
Along the same lines, I find it necessary to express my
concerns with the outcome of last November's World
Radiocommunications Conference. Member nations were unable to
agree to even study certain bands for future mobile use. In
particular, the failure to study 28 Gigahertz of highly favored
band for 5G in the U.S. and other leading technology companies
means that the U.S. will move forward with our own studies and
deployment, bypassing the ITU and undermining its future.
Besides spectrum, companies will need to deploy additional
facilities in a timely and cost-effective manner. Unnecessary
siting expenditures will slow down 5G and broadband deployment.
Let me suggest a few ways in which burdens can be reduced for
small cell and tower siting.
First, the Commission must follow through on its commitment
to expand the relief provided to small cell and DAS
installations. In addition, despite the best effort of the
Congress, localities are still blocking far too many facility
siting attempts. Some options to deal with this include ending
repetitive permit requirements when multiple small cells are
sited in close vicinity and preventing permits from being
denied based on localities' estimate of sufficient
infrastructure and coverage. For larger towers, co-location
must be promoted, including by reducing burdens for replacement
towers and compound expansion, and by resolving the decades old
problem of twilight towers which will also promote co-location
and wireless deployment.
Changing topics, Congress should be mindful of efforts by
the Commission to expand its regulatory mission, including to
cover non-communication companies like edge providers. These
decisions often impact entities that are not familiar with the
Commission's activities and potentially subject them to get
another regulatory body or conflicting set of rules.
Separately, the Commission's creative license in regard to
statutory interpretation is beyond measure. In some instances,
the FCC has set aside the intent of Congress, deals struck at
the time, reams of its own precedent, and sometimes even the
English language to reinterpret a statute and to force old
statutory paradigms onto new innovations, all in a single
minded pursuit of a particular outcome. The result:
Permissionless innovation is being put through the unnecessary
wringer, which threatens American economic output, employment,
and innovation.
I would also like to bring to your attention three issues
where a change in law could be beneficial. First, payments made
in response to USF-related forfeiture orders or consent decrees
should go back to the fund, thereby reducing the amount of
money needed from consumers. Second, legislation in the area of
pirate radio could be helpful to give the Commission more
enforcement tools and better focus its efforts. Finally, as I
have often highlighted shortcomings in the Commission's
processes, I want to again acknowledge Senator Heller's
continuing reform efforts. Sadly, I must report there are no
updates on our end.
Thank you for your time, and I stand ready to answer any
questions you may have.
[The prepared statement of Commissioner O'Rielly follows:]
Prepared Statement of Hon. Michael O'Rielly, Commissioner,
Federal Communications Commission
Thank you, Chairman Thune, Ranking Member Nelson, and Members of
the Committee for the opportunity to participate in the Committee's FCC
oversight process. Since this time last year, a lot has occurred at the
Commission, and more difficult issues are expected in the coming
months. While fundamental differences remain on many matters,
individual Commissioners still seek to find agreement on particular
issues whenever possible.
Future Wireless Spectrum Demands
One instance where there has been general recognition at the
Commission for the need to act is on wireless issues. Much of the
recent dialogue pertaining to wireless communications has focused on
next generation wireless networks, commonly referred to as ``5G.''
Early visions, architecture designs and equipment demonstrations
indicate significant improvements in speed, latency and capacity. I've
seen this technology firsthand during my travels in the U.S. and
internationally, and expect to see more in the coming weeks. While
early reports are exciting and promising, it is important to proceed
with an open mind and an eye towards flexibility in order to promote
innovation and investment, as many of the concepts and eventual
standards may change in the years leading to wide scale deployment. To
that end, everyone may want to be slightly careful not to over-hype the
technology until it is further along a trajectory.
To realize private sector 5G deployments in the future, action is
needed now to allocate additional spectrum. It is paramount that
additional licensed and, where appropriate, unlicensed bands be made
available in both the traditional sub-6 GHz frequencies and higher
bands, including those above 24 GHz. The broadcast spectrum incentive
auction, if successful, may provide one source of new low-band
spectrum. Further, significant work has been done by the Commission on
freeing millimeter bands, and I look forward to completing a final item
in the summer and expanding the scope of bands in a further notice, per
my request. On that note, the Commission should be willing to consider
spectrum blocks that total less than 500 megahertz, and no high-band
spectrum block should be automatically off the table, especially since
we do not know where technological enhancements will take us.
The U.S. is the current world leader in 4G wireless communications,
because our Nation's wireless providers endeavored to meet the
insatiable consumer demand for new data services and have recognized
the economic value in doing so. That leadership position will be
challenged in the future, however, because other nations see the value
in being the first to deploy 5G. Any unnecessary or artificial delay
risks another nation setting the terms of the next 15 years of wireless
communications, something we should make sure doesn't happen.
Along the same lines, I find it necessary to express my concerns
with the outcome of last November's World Radiocommunication Conference
(WRC-15). While the U.S. may have achieved certain stated goals on the
non-commercial side, WRC-15 proved to exemplify a broken and outdated
process. Although I only attended the first week of the conference, I
can report that some attending nations participated in parliamentary
games for the sole purpose of protectionism. Lost in this process was a
recognition of the need to meet the spectrum demands of wireless
providers--here and abroad.
In a number of critical spectrum bands, the International
Telecommunication Union (ITU)-led body was unable to agree to even
study certain bands for potential harmful interference to incumbent
users if new wireless services were to be permitted. This lack of
collegiality and professionalism undermined the future of the
organization. In particular, WRC-15's inability to permit a study of
the 28 GHz band -highly favored for 5G use in the U.S. and other
leading technology countries--means that the U.S. will move forward
with our own studies and deployment, bypassing the ITU. As for those
governments that may not share our forward-looking approach, they will
be left on the sidelines.
Wireless Infrastructure
Going forward, the next generation of wireless networks also poses
another challenge that must be addressed--infrastructure siting. To
realize the promise of 5G, companies will need to expeditiously deploy
facilities in a cost effective manner. Unnecessary siting expenditures
substantially risk slowing 5G and broadband deployment. I look forward
to working with the Committee on this issue going forward, and I offer
a few ways in which burdens can be reduced for small cell and tower
siting.
First and foremost, the Commission must abide by its commitment to
expand upon the historic preservation and environmental process relief
provided to small cell and DAS installations, in its October 2014
Infrastructure Order within the time-frame allotted, which is rapidly
approaching 18 months. This process needs to be completed as quickly as
possible and under no circumstances should it extend beyond this fall.
In addition, despite the best efforts of Congress, localities are
still blocking far too many facilities siting attempts. The horror
stories are endless: permitting problems, excessive fees and de facto
moratoria, especially in obtaining the requisite site approvals in
rights-of-way. Some options to deal with this include ending repetitive
permit requirements when multiple small cells are sited in close
vicinity, and preventing permits from being denied based on a
locality's estimate of sufficient infrastructure and coverage. Everyone
wants the benefits of wireless broadband services, but that cannot be
accomplished without infrastructure.
For larger towers, collocation must be promoted. Process
improvements could include reducing burdens for replacement towers and
compound expansion. Oftentimes, it is cheaper to build a replacement
tower directly next to an existing facility on land already zoned for
that purpose than fortifying an old structure. Additionally, sometimes
the area of a tower site has to be increased slightly to permit backup
power facilities and provider backhaul equipment. Such changes should
not require a repeat of the arduous siting review process.
Resolving the decades-old problem of twilight towers will also
promote collocation and wireless deployment. Productive conversations
with shareholders are occurring, but we need greater accommodation in
order to develop a lasting resolution by this summer or fall. My goal
here is to solve this problem and any disputes in a quick but
thoughtful way, not punish or subject wireless companies to our
Enforcement Bureau and huge payouts.
Lastly, one of the most frequent complaints I hear about are
problems with siting on Federal lands. I appreciate this Committee's
efforts to tackle this problem, among others, in the MOBILE NOW bill.
Although the FCC does not have a role here, I offer to assist in any
way possible.
Areas of Concern/Troubling Developments
Congress should be mindful of efforts by the Commission to expand
its regulatory mission. For example, over the last couple of years, the
Commission has expanded the scope of its reach to cover non-
communications companies, like so-called ``edge providers.'' This
practice is exceptionally disturbing because these decisions often
impact entities that are not familiar with or do not closely follow the
Commission's activities. Beyond potentially subjecting these providers
to yet another regulatory body or a conflicting set of new rules, the
Commission is using the process to establish precedent under
questionable procedures.
Take, for instance, the case of First National Bank, which was
served a citation for possible violations of the Telephone Consumer
Protection Act based solely on its terms of service, without even
making a single so-called ``robocall.'' Before First National was ever
notified about the citation, the Commission had already tried the case
through the press, harming the company's reputation. Interestingly, the
citation was dismissed two months later without similar fanfare. The
Commission has also negotiated settlements with providers under cloak
of protected negotiations, meaning no other party was made aware or
allowed to comment, and then tried to treat the terms of those
agreements as some kind of precedent and apply them to other
unsuspecting companies.
Separately, the Commission's creative license in regard to
statutory interpretation is beyond measure. While an argument can be
made that the Commission has always taken some latitude when
interpreting the provisions in current law, a number of recent items
have stretched the boundaries of logical reasoning. It's what late
Justice Scalia might have referred to as ``interpretive jiggery-
pokery,'' and these newly ``found'' grants of authority have been used
to initiate questionable proceedings and implement suspect policies. In
essence, the FCC has been known to set aside the intent of Congress,
deals struck at the time, reams of its own precedent, and sometimes
even the English language itself to ``reinterpret'' a statute, all in a
single-minded pursuit of a particular outcome.
Moreover, this disingenuous approach to statutory interpretation is
being used as a means to force old statutory paradigms on to new
innovations, over and over again. Wireless broadband networks are
transformed into Title II wireline phone companies, over-the-top video
providers are being shoehorned into Title VI as MVPDs, apps offered by
video providers are magically set-top boxes, and ``tech transitions''
has become a rallying cry for saddling new fiber deployments and
services with legacy obligations, instead of actually transitioning
away from old technologies and the outdated rules that governed them.
Without attempting to re-litigate the Commission's Net Neutrality
decision, it seems necessary to remind everyone of the implementation
concerns expressed by many at the time. In particular, opponents of the
Commission's rules highlighted how innovation would be subject to the
whims of the Commission under the so-called ``general conduct
standard.'' Considering the Commission's approach to zero rating
offerings, it is apparent that our concerns were warranted.
Specifically, the Commission blessed such offerings one month,
unleashed a regulatory inquisition the next month, and then seemingly
dismissed concerns the following month. Along the way, the Commission
has been unwilling to provide any closure, thus ensuring that the
entities and their products remain under public suspicion.
``Permissionless'' innovation is being put through an unnecessary
wringer, which threatens American economic output, employment,
innovation, and other critical factors to our Nation's success.
Suggestions for Possible Legislative Changes
1. USF Penalties and Fines Redistributed
With your indulgence, I would also like to bring to your attention
an issue where a change in law could benefit all consumers that pay to
support the Federal universal service fund (USF or Fund). Under current
law, payments made in response to FCC or Enforcement Bureau forfeiture
orders or consent decrees--including those involving failure to
contribute to USF or outright fraud against the Fund--are remitted to
the U.S. Treasury. While this makes sense in many contexts, different
treatment may be warranted for USF actions. In those instances,
consumers have paid extra on their monthly phone bills to support USF
while companies have shirked their legal responsibilities or abused USF
programs to the detriment of consumers. Under those circumstances, it
would seem that an appropriate remedy would be to remit the USF portion
of the fines or ``voluntary contributions'' back to the Fund, thereby
returning at least a portion of the money that should have gone to USF
in the first place.
In the past, arguments have been made that it would be hard to
track down which consumers overpaid and reimburse them. But it doesn't
have to be that complicated. Payments that are made to the Fund in a
given quarter as a result of enforcement actions can be used to offset
overall program spending in the next quarter, thereby reducing the
amount that consumers need to pay on their phone bills that next
quarter. While this may not provide full compensation to each
individual consumer that was harmed, it is better than the current
situation where no money is returned to USF and no ratepayer receives
any offset. And with USF spending trending higher each year, I imagine
that even a modest reduction in fees on consumer phone bills would be a
welcome change. Further, by dedicating such collected monies to the
Fund, it should decrease concerns in this instance that the
Commission's enforcement activities could be driven by its desire for
additional budgetary resources.
2. Pirate Radio
In the last year, I have been drawing attention to the problem of
pirate radio. It may not be a huge concern nationwide, but it's
expanding at an alarming rate in places like Florida, New York, New
Jersey, and California. And as the equipment needed for high-powered
broadcasting is becoming less expensive and more widely available, we
can anticipate that the pirate problem will spread to more cities if
current trends continue. Far from the amateurish operations that some
may be picturing, modern pirate radio stations can be very
sophisticated, established, and lucrative.
Pirate stations drain resources from legitimate broadcasters and
cut off the public from critical emergency information. That they are
allowed to flourish and expand uninterrupted is a major failing on the
Commission's part. It is a fundamental responsibility of the FCC to
defend the radio band and all of our licensed spectrum from illegal
interference, regardless of who is doing the interfering, or why.
We need to increase enforcement activity in the field, first and
foremost. I also believe the fight to eliminate pirate radio could get
a significant boost from a concurrent outreach and education effort.
Legitimate building owners, advertisers, political campaigns, concert
promoters, and the like, want nothing to do with facilitating illegal
activities. But they may not be aware of the pervasiveness and
seriousness of the problem. So I'm working with the Chairman and my
colleagues to clearly outline the Commission's pirate radio policies
and enforcement goals in an advisory document we can use to spread the
word. Legislation in this area could be helpful as well, to give the
Commission more enforcement tools and better focus its efforts. Such an
undertaking would need to be fairly and carefully balanced so as not to
unnecessarily threaten legitimate businesses that find themselves
caught in the web of a pirate radio station's lies and deceit.
3. Process Reform
Finally, as I have often highlighted shortcomings in the
Commission's processes, I would be remiss if I failed to acknowledge
Senator Heller's continuing reform efforts, and note any developments
on internal reforms contemplated on our end. Unfortunately, there is no
update on this front, and the same failures of transparency and
fairness continue to impact the quality of both public input and
Commission decisions.
To discuss just one example, documents circulated to the
Commissioners for a decision are still not available for public review
at the same time, and far from being isolated to one particular issue,
the pitfalls of this approach are seen regularly. Stakeholders in
Commission proceedings often have incorrect or incomplete information
about what is being considered, and Commissioners are not even
permitted to discuss the substance beyond what the Chairman has chosen
to make public. So our ex parte meetings are far less productive than
they could and should be, and there are sometimes nasty surprises when
an item is finally released. Several people who met with me or my staff
last month regarding the set-top box proceeding noted the fact that
they were at a disadvantage, not having been able to read such a
complex document packed with novel statutory interpretations and
proposals before attempting to engage with the Commission on the
substance. And the problem will be exacerbated later this year when the
Commission heads into even more uncharted territory like privacy. There
is no need for this predicament, and it is easily remedied. The issues
may be up for debate, but transparency should never be.
The Chairman. Thank you, Commissioner O'Rielly.
Commissioner Clyburn?
STATEMENT OF HON. MIGNON L. CLYBURN, COMMISSIONER, FEDERAL
COMMUNICATIONS COMMISSION
Commissioner Clyburn. Chairman Thune, Ranking Member
Nelson, members of the Committee, good morning. What a
privilege it is for me to appear before you. Today, I would
like to center my testimony on two Congressional directives
relating to universal service and diversity.
I took seriously my commitment to you, Chairman Thune, to
modernize the universal service support program for rate-of-
return carriers and stop penalizing carriers whose customers
migrate to broadband-only lines. This collaborative process has
resulted in reforms that are a win-win for rural customers and
those who contribute to the Universal Service Fund.
Commissioner O'Rielly and the Chairman--I joined them, I'm
thankful to say. We presented a framework for consideration
that should modernize the program in a manner that is simple,
rewards efficiency, and sets forth a path to ensure that we
connect unserved households and disaggregate support in areas
served by an unsubsidized competitor.
But as laudable as this proposal is, the FCC still must
address the lack of broadband access on tribal lands and the
gaps that remain in mobile broadband coverage throughout this
Nation. Millions of Americans are stuck in digital darkness.
They lack the technological infrastructure needed to improve
their lives, particularly when it comes to healthcare. Life-
saving and life-changing technologies, like the one I witnessed
in Ruleville, Mississippi, that manages the care of patients
with chronic diabetes, are only possible if broadband is both
available and affordable.
When it comes to universal service reform, we have no
choice but to modernize--or allow me to boldly say this morning
completely overhaul--the Federal Lifeline program. We can never
forget that Section 254 of the Communications Act places equal
weight on the needs of low-income consumers as it does for
those living in rural areas when it comes to access to advanced
services. The FCC should never turn its back on this directive.
So let us roll up our sleeves, refrain from dwelling on
what may be wrong, and start working on fixing and finding
solutions to address whatever is deficient in Lifeline so that
low-income Americans once and for all may have access to those
life-changing opportunities that broadband has unleashed for
the rest of us.
Section 257 of the Communications Act tasks the Commission
with identifying and eliminating market entry barriers and
promoting the purposes of favoring diversity of media voices,
vigorous economic competition, technological advancement, and
promotion of public interest, convenience, and necessity.
However, I have spoken to dozens of independent programmers who
say they face insurmountable challenges when it comes to
acquiring carriage; that it is difficult to receive fair or
reasonable contract terms; and growth in their online
distribution model is prohibited or inhibited because program
distribution access is often restricted via contract.
For every independent programmer that reaches an agreement
with an MVPD, there are countless others who cannot even get a
simple telephone call returned. So I am pleased to say that my
fellow commissioners joined me in voting for an Independent
Programming Notice of Inquiry during our February meeting,
which will launch discussions about what role, if any, the
Commission should play in addressing obstacles that may be
preventing greater access by consumers to independent and
diverse programming.
Members of the Committee, I am truly grateful for the
opportunity to speak with you today and look forward to
answering any questions you may have.
Thank you.
[The prepared statement of Commissioner Clyburn follows:]
Prepared Statement of Mignon L. Clyburn, Commissioner,
Federal Communications Commission
Chairman Thune, Ranking Member Nelson and members of the Committee,
good morning.
What a privilege it is for me to appear before you today. I have
had the distinct honor, thanks in large part to this committee, of
serving as an FCC Commissioner for nearly seven years and, prior to
that, as a South Carolina state commissioner for 11 years. During these
last 18 years, I have been committed to ensuring that there is a
regulatory backstop in place to bridge divides in situations where the
market either is not functioning properly or forecloses opportunities.
This morning, I would like to center my testimony on two
Congressional directives relating to universal access and diversity.
Universal access. I took seriously my commitment to Chairman Thune
to modernize the universal service support program for rate of return
carriers and stop penalizing carriers whose customers migrate to
broadband-only lines. This collaborative process, of which you should
be proud, has resulted in reforms that I believe are a win-win for
rural consumers and those who contribute to the Universal Service Fund.
We have laid out a framework that modernizes the program in a manner
that is simple, rewards efficiency, and sets forth a framework to
ensure that we connect unserved households, and disaggregate support in
areas served by an unsubsidized competitor. Support will be directed
and targeted to areas that today lack access.
Did this come without difficulty? No, it did not. Real change is
rarely ever easy, but this modernization was necessary for us to
promote rather than discourage broadband deployment in communities that
need it the most. And, consistent with our 2011 reforms, there are no
flash cuts but a gradual transition so providers have time to adjust to
these changes.
I was pleased with the outcome and sincerely believe that this
coordinated effort with both Commissioner O'Rielly and Chairman Wheeler
satisfies our commitment to this Committee and adopts a sustainable
framework to achieve our long-term universal service goals.
Updating our rate of return system adds to the list of universal
service reforms that I am proud to say that I have supported since
arriving at the FCC, including the 2011 reforms to universal service
for price cap carriers, updating our E-rate program to close broadband
connectivity gaps within our schools and libraries, and ensuring that
rural health care providers have access to the telecommunications and
broadband services their communities need and deserve. Collectively
these reforms will help ensure that broadband access is a reality for
all parts of our Nation.
But as laudable as these universal service reforms are, the FCC
still has work to do when it comes to addressing the lack of broadband
access on Tribal Lands and gaps that remain in mobile broadband
coverage throughout this Nation. Millions of Americans are stuck in the
digital darkness and lack the technological infrastructure needed to
improve their lives, particularly when it comes to healthcare. I have
visited communities and witnessed firsthand the transformative power of
telemedicine, but such life-changing technologies like the ones I
witnessed in Ruleville, Mississippi, are only possible if broadband
service is both available and affordable. In areas where the private
sector has not invested because the business case cannot be made, the
FCC needs to do all in its power to step up and close these gaps.
Finally, it cannot be said that our job is done when it comes to
Universal Service reform if we fail to modernize, or dare I say,
completely overhaul the Federal Lifeline Program. The FCC allocates
over $8 billion annually for deployment of advanced services but we
lack any mechanism to ensure that once deployed, service is affordable.
We cannot lose sight of the fact that Section 254 of the Act places the
same weight on the needs of low income consumers as it does for those
living in rural areas when it comes to access to advanced services and
the FCC should never turn its back on that directive. We must abandon
the too common pastime of simply criticizing the existing program and
work collectively to find common sense solutions to truly fix whatever
is deficient in Lifeline so that low income Americans may once and for
all have access to those life-changing opportunities that broadband has
unleashed for the rest of us.
I look forward to working with the Chairman, my colleagues and
members of this Committee to close the gaps on Tribal Lands, adopt a
permanent mobility fund, and modernize the Lifeline for the 21st
Century.
Diversity. Section 257 of the Communications Act tasks the
Commission with two important goals, to: (1) identify and eliminate
market entry barriers for small businesses, and (2) promote the
purposes of ``favoring diversity of media voices, vigorous economic
competition, technological advancement, and promotion of the public
interest, convenience, and necessity.'' Since 2010, I have been calling
on the Commission to establish innovative and legally sustainable
approaches for greater participation by new entrants and small
businesses in all aspects of the communications industry. I am pleased
to report that last summer, we reformed our Part 1 Competitive Bidding
rules so that small businesses have increased flexibility needed to
secure financing and develop business models to effectively compete in
an increasingly consolidated wireless market. The upcoming incentive
auction will offer applicants a unique opportunity to acquire
substantial amounts of valuable wireless spectrum below 1 GHz. By
adopting these reforms before that historic auction, we are enabling
the deployment of mobile broadband networks in a manner that promotes
competition and encourages new entrants to join the wireless service
industry.
Fostering diversity is an important aspect of the Commission's
work. While we often speak about this issue in the context of the
quadrennial media ownership review, and rightly so, diversity is also a
concern in the multichannel video programming distribution marketplace.
In my years at the Commission, I have met with and spoken to dozens of
independent programmers who share a common refrain: each says that they
are facing insurmountable challenges when it comes to acquiring
carriage; that it is difficult to receive fair or reasonable contract
terms; and growth in their online distribution model is inhibited,
because program distribution access is often restricted via contract.
And for every independent programmer that can reach an agreement with
an MVPD, there are countless others that cannot get a simple phone call
returned.
During last year's AT&T/Direct TV merger, a number of these issues
were raised yet again by many parties, including independent and
network-affiliated programmers as well as small cable operators, who
repeatedly requested relief. While we concluded that it was best not to
deliberate these issues during merger considerations, the level of
concern, I felt, merited a separate proceeding where we could explore
and gain a better understanding of the video programming marketplace
and whether certain practices by operators, as claimed, are limiting
the ability to reach viewers. That is why I am pleased that my fellow
Commissioners joined me in voting for the Independent Programming
Notice of Inquiry, which was adopted during the February meeting.
Discussions about what role, if any, the Commission should play in
addressing obstacles that may be preventing greater access by consumers
to independent and diverse programming will be launched, triggering a
fact-finding exercise that will start a conversation on how best to
promote the availability of diverse and independent sources of video
programming. While I am not sure where this conversation will take us,
I am sure that it is time that we have it.
I am grateful for the opportunity to speak with you today and look
forward to answering any questions you may have on how the FCC can
continue to promote greater access to communications technologies and
services for all Americans. Thank you.
The Chairman. Thank you, Commissioner Clyburn.
Thank all of you for being here again and for sharing your
thoughts with us about the priorities of the Commission and the
things that we should be focused on here in the Congress as
well.
Chairman Wheeler, next January, there's going to be a new
President of the United States. Your term doesn't technically
expire until January 1, 2018. FCC Chairmen have traditionally
resigned from the FCC when a new President is inaugurated, and
that enables the newly elected President to nominate a Chairman
to lead the FCC who is from the same party as the new
President.
So my question--you can probably figure out where I'm going
with this--is do you intend to respect that tradition and
resign from the FCC when the new President takes office unless
explicitly asked to stay on?
Chairman Wheeler. Thank you, Mr. Chairman. This is a ways
off. I understand precedent. I understand expectations. I also
understand that 10 or 11 months is a long time. So it's
probably not the wisest thing in the world to do to make some
kind of ironclad commitment. But I understand the point you're
making.
The Chairman. And you understand the tradition that
historically is what's observed with regard to that.
Chairman Wheeler. I understand it.
The Chairman. Chairman Wheeler, it's my understanding that
Commission rules prohibit the disclosure of nonpublic
information to any person outside the Commission except as
authorized in writing by the Chairman. These rules limit the
ability of Commissioners and the FCC employees to discuss
certain nonpublic matters with outside stakeholders, making the
Chairman's waiver authority a potentially valuable tool when
dealing with outside interests.
Chairman Wheeler, yes or no, will you provide to the
Committee any written exceptions that you've signed while
serving as Chairman of the Commission?
Chairman Wheeler. Yes, sir.
The Chairman. Thank you.
Commissioner O'Rielly, you have recently written about your
concern that, and I quote, ``The application of this rule in
the current Commission serves as a roadblock to effective
public participation and ultimately damages the FCC's
credibility as an agency.'' Would you like to expand or share
your concerns?
Commissioner O'Rielly. Yes. I'll make two points. One is I
think that it inhibits my ability to talk to outside parties
who come in to see me. They will suggest certain ideas, ways to
change things, and I can't correct them in terms of anything
that they may be mistaken about. They may have some
information. They may be missing other parts. So it's hard to
have a full dialog on how to make a best idea and how to--and I
can, at the same time, test out ideas that I have before these
parties. So it inhibits my ability.
Two is I think that the rule as being applied is
discriminatory, because the rest of my colleagues don't have
the advantages that the Chairman has and that they have used at
the time at the Commission. There are a number of things that
have happened that--disclosure of nonpublic information that
we're not able to take advantage of. So I think fair
application of the rule would make more sense.
The Chairman. I'll direct this to all of the Commissioners.
It deals with Section 629--which I referenced in my opening
remarks--of the Communications Act which provides the FCC with
authority regarding paid TV set-top boxes. The section is
clearly aimed at actual physical equipment, which is obvious
when one considers the legislative history, the plain language
of the statute, and the consumer experience as it was 20 years
ago when the provision was added to the law.
So the question is if a paid TV service is offered in a
manner that requires no set-top box, in other words, no
physical equipment or devices needed to access the programming,
does Section 629 remain either necessary for or applicable to
that paid TV service?
Mr. Chairman, do you want to lead off?
Chairman Wheeler. Gee, Mr. Chairman, everything in the
world is going software. You know, the networks themselves used
to be run by hardware and are now run by software. That doesn't
mean that we don't have jurisdiction over those kinds of
activities. I think the statute talks about equipment, device
and devices, and in a software world, you cannot consider the
kind of functionality that the statute talks about and not
consider software.
The Chairman. Commissioner Rosenworcel?
Commissioner Rosenworcel. The Chairman's point is
fundamentally correct that so many functions that took place
over hardware are now taking place over software. I think what
is also fundamental is that Congress wanted to make sure that
this market was competitive, and whether we're dealing with
hardware or software, I think we want to find a way to make
that happen.
Commissioner Pai. Mr. Chairman, I think this question
raises the basic approach that Commissioner O'Rielly raised
concerns about, which is that the agency is taking statutes
that were written, in this case, almost a quarter century ago
and expanding them dramatically to assert jurisdiction over an
entirely new marketplace.
In my view, as a policy matter, instead of doubling down on
1990s era technology--I mean, very few consumers I know are
enthusiastic about their set-top boxes--we should encourage
efforts to migrate to an apps-based economy, where instead of
spending a couple of hundred dollars on a box and $15 a month,
you could spend zero to $5 on an app which would allow any
navigational device, from a tablet to a smart phone, to effect
the same functions.
The Chairman. Commissioner O'Rielly?
Commissioner O'Rielly. Short answer, no, and I'm happy to
expand upon that. I agree with my colleague's point in terms of
the elimination of boxes going forward.
Commissioner Clyburn. I agree that the current construct
may on its surface seem limiting. But what we have the capacity
to do, and I trust that we will continue to have the
flexibility to do, is look through and recognize that though
the words may be different, the application and the
functionality, I believe we should look through current lenses
and apply and interpret the framework which has either worked
well or needs room for improvement in order to really
interpret, again, through today's lens how we approach the
directive that you have given us to ensure a competitive
marketplace when it comes to what we now refer to as a set-top
box.
The Chairman. I have just one quick ``yes or no'' question
for all five commissioners, and then I'll ask in a later round
to follow up. Do you agree that a consistent legislative
reauthorization process would produce a more responsible and
productive relationship between the FCC and the Congress?
Chairman Wheeler. It is your right to write the rules, sir.
The Chairman. I assume that's a yes.
Commissioner Rosenworcel. Yes.
Commissioner Pai. Yes.
Commissioner O'Rielly. Yes, I defer to Congress on that.
Commissioner Clyburn. I also defer to Congress.
The Chairman. All right. Well, if there's a specific
provision that you suggest that the Committee include in an FCC
reauthorization bill, I hope that you'll feel free to follow up
after the hearing with any suggestions that you might have
about that because it's something that I think would be very
useful in terms of making the relationship between the Congress
and the FCC more productive, probably more trusted, and more
understood, for sure.
Senator Nelson?
Senator Nelson. Set-top box. We don't want to threaten the
vibrant market for quality video programming. So, Mr. Chairman,
how do you respond to the concerns that I raised about the
impact your proposal could have on existing copyright and
contract provisions for video content? Does the FCC--does your
proposal impact third parties, whether they'll be able to alter
or add to video programming or advertising contained in such
programming?
Chairman Wheeler. Thank you, Senator Nelson. I think there
are probably several responses to that. One, that which the
cable operator puts out should remain sacrosanct and untouched,
and nothing in our proposal creates an opportunity for that to
happen, because copyright law remains in place, because the
language that we used actually was lifted from the cable card
language now being used by cable companies in their cable card
and has proved sufficient to protect against that.
And, third, is we actually asked in paragraph 80, I think,
in the notice, ``But if you think that's not good enough, tell
us what would make it good enough, because it's not our goal to
cause harm.''
Senator Nelson. OK. Let's go to spoofing. Chairman, now, I
laid out what's happening. I mean, citizens are really getting
taken, and they're losing thousands of dollars. And the sad
cases are someone's life savings because, particularly, a
vulnerable senior citizen has been fooled by the number that's
calling. Mr. Chairman, many of the provisions in our bill that
we recommended to Congress in the FCC in 2011--I know you're
going to agree that it's important for Congress to give you the
tools necessary to combat the sophisticated spoofing scams.
Commissioner Rosenworcel, I appreciate your attention to
phone scams. What has the FCC learned from its inquires into
the phone scams? Do you agree that more needs to be done to
inform consumers about their options for avoiding or stopping
these scams?
Commissioner Rosenworcel. Yes, Senator. Thank you for the
question. We've got bad actors, scammers, and fraudsters right
now who spoof telephone numbers to defraud consumers and try to
wrongfully obtain something of value from them. We've got to
put a stop to it. I know you were responsible for the Truth in
Caller ID Act about 5 years ago, and that has been a helpful
source of authority for the FCC.
But what we found in the intervening years is that fraud
has moved offshore. It's now coming from international
locations. It has also migrated to texting. So what I
appreciate about your new legislation is that you're giving us
the jurisdiction to resolve those problems and try to get these
bad actors out of the business of spoofing once and for all.
Senator Nelson. Senators Klobuchar and Blunt have joined
Senator Fischer and me on that legislation.
Chairman Wheeler. Senator, can I just pile on for one
second?
Senator Nelson. Please.
Chairman Wheeler. I may be the only member on this panel
who has actually been victimized by this. I came home a couple
of weeks ago, and my wife says to me, ``The IRS is calling and
saying we owe them money.'' This was news to me, and----
Senator Nelson. You didn't fall for it, did you?
Chairman Wheeler. So I said, ``Boy, they called the wrong
number, because I'm the Chairman of the FCC.''
[Laughter.]
Chairman Wheeler. And so we got the information, and I took
it to our enforcement bureau, and they started drilling down,
and guess what? This was a U.S. number, but it was coming from
abroad, and we couldn't get to it. So, believe me, we
understand and are with you on this.
Senator Nelson. By the way, the Do Not Call List--it
doesn't work.
[Laughter.]
Senator Nelson. I mean, it's gotten so bad, I don't want a
landline. And now I'm getting the calls I don't want on a cell
phone. I hope you all will look at that.
All right. Well, I've run out of time. I'll do a second
round.
The Chairman. Are you tired of hearing from those
Presidential campaigns in Florida?
[Laughter.]
Senator Nelson. As a matter of fact, that's right. And I
was wondering when you were asking the Chairman a few minutes
ago about what he intends to do in the future--you mean, you
don't think that President Trump would re-nominate him?
[Laughter.]
The Chairman. Well, I guess he won't be running Democrats
for Trump in Florida, I assume.
Senator Wicker?
STATEMENT OF HON. ROGER F. WICKER,
U.S. SENATOR FROM MISSISSIPPI
Senator Wicker. Commissioner O'Rielly, you gave the
shortest answer concerning Section 629, so I'm going to ask you
to expand, because we have the benefit here of someone who has
been on both sides of this dais on this issue. You were a
staffer here during the consideration of the 1996
Telecommunications Act, so can you tell us what you believe
Congress intended when it drafted the language 20 years ago. Do
you believe the FCC's proposal aligns with Congressional
intent?
Commissioner O'Rielly. Thank you, Senator. There are a few
of us in a number of different roles that are still involved
from the 1996 Act. Having worked for then Chairman Tom Bliley,
who was the author of this provision, I can tell you that I had
an opportunity--I was in every meeting that we had on the
Telecomm Act relating to his work, and this was one of his
priorities.
His intention of that provision was to make the
availability of set-top boxes or navigation devices in retail
establishments. And on behalf of a particular retailer at the
time that no longer exists, Circuit City--you may have heard of
it. It's the previous Best Buy of the world. It no longer
exists. And the issue has somewhat moved on in the time.
So my argument is--and I made this point when this issue
was adopted--is that the provision itself is looking at a
previous time when set-top boxes were on the hardware side of
the equation. We didn't contemplate at the time that it was
going to be, you know, an application world in 1994 and 1995.
You also have to keep in mind the context, and I made this
point in my statement. You have to look at the context of the
deal that was struck. We had to work with then Speaker
Gingrich, who was representing on behalf of his constituent,
Scientific Atlanta from Georgia. We also had to work with
Senator Coverdale, who also represented Scientific Atlanta, in
terms of the scope of what we were able to achieve in that
provision.
I don't believe, when you look at the text of the language,
when it talks about boxes, interactive communications equipment
and other equipment, that it gets to the application side, that
it gets to an application-only world that Senator Thune talked
about in his question. I think it is over-broad and penalizing
going forward.
Senator Wicker. Now, Commissioner Pai seems to suggest that
a $5 or $10 app would suffice and make this proposed rule
change irrelevant. Do you agree with him?
Commissioner O'Rielly. I do. I'm not even sure it's in a $5
or $10--I have 20 video apps on my phone that exist today, and
I can get them directly from the programmer, and I can get them
directly from my cable provider. So those apps are free, and I
watch programming on my phone, on my tablet, and I can watch it
on my TV through those applications without having to have a
set-top box.
Senator Wicker. So in terms of helping the consumer, it
just seems to me there is a question of who is being helped by
this rule.
Commissioner Pai, Senator Nelson seems to make a pretty
good point about his concerns. Chairman Wheeler says you've got
nothing to worry about. So what do you say to that? Help us
out.
Commissioner Pai. Senator, thank you for the question. I
think while everybody agrees that this programming stream
should remain sacrosanct, to borrow the Chairman's phrasing,
unfortunately, nothing in the document actually protects it.
So we asked repeatedly, for example, of interested parties
before our vote: Would the programming stream remain intact?
Would a third-party set-top box manufacturer, for instance, be
able to extract ads that were in the programming stream and
insert their own, and/or insert their own ads layered on top of
it? We were told, ``Well, no. We're going to rely on market
forces to govern that.''
But I think, as Ranking Member Nelson adequately pointed
out, the copyright and all these other intellectual property
issues involve very delicate contractual and other arrangements
that are going to be disrupted. And I think that's part of the
reason why we heard from an incredible panoply of programmers,
especially minority programmers, who told us, ``We don't want
this kind of disruption, because it's ultimately going to
decrease the amount of compensation and protection we have for
our intellectual property.''
Senator Wicker. Thank you, sir.
Commissioner Clyburn, thank you for your interest in rural
America. On this panel, we have Senators from states with
significant rural populations--Mississippi, South Dakota,
Missouri, Nebraska, Kansas, Nevada, Colorado, and on and on.
Thank you for coming to Sunflower County, Mississippi.
Commissioner Clyburn. Absolutely.
Senator Wicker. And you're going to be back in Mississippi
soon?
Commissioner Clyburn. Yes, sir.
Senator Wicker. I hope we can visit at that time. You and I
discussed this earlier, but I think you'll acknowledge the
incredible benefit to public health and education in ensuring
that we continue to connect wirless-only households through the
Mobility Fund. It seems to me the FCC must do no harm to
existing coverage in rural states when considering future
changes in the USF support for wireless. What do you say to
that?
Commissioner Clyburn. So from a number of degrees, I agree
with you. I have been speaking for a number of years about the
FCC establishing a permanent Mobility Fund. You and I both know
when we travel down from Jackson to Ruleville--which I did take
that drive--that there are spots along the road where we have
absolutely no coverage. We feel extremely vulnerable. The
citizens that live off the side of those roads are extremely
vulnerable, particularly those who are wireless-only consumers.
They deserve connectivity.
So I look forward to continuing to work with you to see
that we have the resources in place to target Universal Service
funding to those areas where it is absent, to reform the
Universal Service program, the Lifeline program, to ensure that
those who do not have connectivity--there are 5 million people
in this Nation without any phone service. We need to address
them, particularly.
So I look forward to continuing to work with you, coming
back to Jackson and outside of the area. I'm spending more time
in Mississippi than in South Carolina, incidentally, another
rural state. And I'm, again, looking forward to working with
you to truly connect, particularly, those unhealthy doughnut
holes where there is no connectivity whatsoever.
Senator Wicker. Thank you, ma'am.
The Chairman. Thank you, Senator Wicker.
Senator Schatz?
STATEMENT OF HON. BRIAN SCHATZ,
U.S. SENATOR FROM HAWAII
Senator Schatz. Thank you, Mr. Chairman. I want to thank
the Commissioners for their dedication and their expertise. We
don't always agree on every particular action you're taking,
but I think we all agree on the objectives of the FCC, and I
think one area where we've been able to achieve some pretty
good bipartisan agreement is in spectrum policy.
Senator Moran and I have been working together with the
Chairman and the Ranking Member on an amendment to Chairman
Thune and Ranking Member Nelson's MOBILE NOW bill to make sure
that more unlicensed spectrum is available in the future. I
think we need a clear plan to support continued innovation in
the unlicensed band, because it has become an affordable way
for people from all walks of life to get online and a way for
carriers to offload traffic.
Our experience with Wi-Fi is the best example of the
opportunity ahead, and I believe if we want to continue to
empower consumers and provide entrepreneurs the space to
innovate, we've got to focus on Wi-Fi.
Commissioner Rosenworcel, thank you for your leadership,
not just on 5G, but on the Wi-Fi dividend. What I'd like you to
do is just flesh out why you think this is so important and
what you think the unique policy challenges are in the context
of the Communications Act and also the FCC's authorities.
Commissioner Rosenworcel. Well, thank you, Senator Schatz,
and thank you for your work on behalf of unlicensed spectrum
policy, because good spectrum policy requires both licensed and
unlicensed spectrum. There's no better evidence of that than
taking a look at Wi-Fi. It has democratized Internet access. It
has created a space for permissionless innovation, which is
vital for the Internet of things, and it's also how so many of
our carriers manage their licensed networks, because they
offload their traffic onto that. On top of that, it's an
economic boon--$140 billion of activity every year.
But, traditionally, unlicensed spectrum has kind of been an
afterthought. It was reserved for scraps of spectrum we didn't
know what to do with. And the truth is we actually need an
unlicensed plan that involves low-band, mid-band, and high-band
spectrum. It shouldn't be an afterthought. It should be front
and center in our spectrum policy.
Senator Schatz. Can you talk about the mechanics of why
it's so difficult to have a plan? I mean, I think it's
important for the public to understand that the financial
incentives are just not there when you're talking about the
auctions, because this is really a commons.
Commissioner Rosenworcel. You're absolutely right, because
everybody here knows the Congressional Budget Office combs
through legislation, and on spectrum policy, it always delivers
high marks when we sell spectrum at auction. But it delivers
low marks if we reserve it for unlicensed or Wi-Fi activity,
which is a shame because of the broader economic benefit of
having unlicensed around. So I think that accounting is dated.
It misses the mark, and it shortchanges our wireless future.
Senator Schatz. Thank you, Commissioner.
Chairman Wheeler, I wanted to talk to you about the zero
rating programs. I know that you specifically sort of held
harmless those programs in the Open Internet Order. But I'm
personally struggling with my view on this, and I think some of
the members of the Committee are likewise. There are obviously
great opportunities for consumers, to provide additional access
to the Internet.
On the other hand, it's not at all clear to me that some of
the programs are all that different from that which is
prohibited in the Open Internet Order. So I'd like you to kind
of flesh out first of all what your overarching thinking is
regarding this and then how the Commission goes ahead and
evaluates the plans that are being provided by individual
companies.
Chairman Wheeler. Thank you, Senator. I would just take
one--I'm not sure that we held harmless in the Open Internet
Order. What we did in the Open Internet Order was to
specifically say that this is something that should not be
decided here in the Open Internet Order, because, as you point
out, can you make the case that it is helpful, because in some
cases it increases choice and lowers cost? Yes. Can you make
the case that in some instances it is harmful because it is
used as a tool against competition and a tool to operate
against other folks? Yes.
So the question becomes: How do you make those kind of
judgments? And that's the power of the regulatory agility that
is in the Open Internet Order. So what we have been doing is
collecting information and going through a process right now in
which we are developing the data points necessary to reach the
kind of conclusions that you're specifically talking about
here. The staff is far down the path on this. As you indicate,
this is not a light lift, but this is something that we are
undertaking.
Senator Schatz. Well, I'll finish with this, with the
indulgence of the Chairman. This is, I think, squarely the
jurisdiction of the expert agency. But I think the policy
makers have to think through the balancing act going forward,
because I think zero rating programs are going to be coming
fast and furious, and some of them are going to be right on
that edge of at least violating the spirit of the Open Internet
Order, and some of them are going to be great and easy to
approve. But, you know, there are going to be some policy
questions that percolate up to the Committee. Thank you.
The Chairman. Thank you, Senator Schatz.
I have Senator Blunt, who has left us. So Senator Markey,
followed by Senator Ayotte.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you, Mr. Chairman, very much. Going
back to the set-top box, I'm very familiar with this provision.
Chairman Bliley and I are the co-authors of that provision in
1996. By the way, I'm also the author of the Do Not Call List,
and it's just----
[Laughter.]
Senator Markey. It's just as relevant today as it was a
quarter of a century ago, and we do want that, obviously, to be
updated and enforced as diligently as possible.
I, obviously, had many, many, many conversations with Tom
Bliley on what our legislative intent was, and I know what we
wanted to do. We wanted to just break down this monopoly that
existed that forced consumers to purchase--not purchase,
actually--to rent a set-top box from the company.
The reason that we were both concerned with it was that we
had just finished the process of preventing consumers--to
purchase phones. For 75 years, Americans had been forced to
rent a phone, a black rotary dial phone, from the phone
company.
It's a good business model, $3 a month, 12 months a year,
for 50 years. That's what our mothers and fathers had to do.
It's a good business model if you can make someone rent
something and pay you $1,800 to rent this, at that time, hunk
of junk. Companies were ready to move on and innovate--new
companies. So we had to break it down so that you didn't have
to rent anymore.
So along comes the cable industry and adopts the same
model, that the consumer is forced to rent a set-top box. They
can't go out and get a different box from an innovative
company. That's what Tom Bliley and I wanted to see
accomplished.
And where are we 20 years later? Here's where we are.
Ninety-nine percent of all Americans are still renting a set-
top box. That's not innovation--99 percent. What's the average
per family? Two hundred and thirty-two dollars per year to the
cable companies, to the satellite companies, to rent the box.
So we haven't seen any innovation. We haven't seen any
breakthroughs. We're still waiting for the revolution where you
can go down to the store or download the app that allows you to
have a new way of accessing this information in the modern era.
That's what it was all about.
So for the purposes of this discussion, net neutrality is
to content what this set-top box rulemaking is to ensuring that
the devices, the access points, allow for the consumer to
control, the consumer to decide. So that's pretty much what
this whole debate is about.
So, Mr. Chairman, how closely can we analogize this
revolution to the black rotary dial phone revolution in terms
of our need to open up innovation so that the consumer has more
choices?
Chairman Wheeler. Well, thank you, Senator. I think the
analogy is spot-on, and here's the fascinating thing about it.
You know, the cable industry was for it before they were
against it. They filed with us in 2010, saying that they wanted
exactly the kind of things that we're talking about here now.
Today, however, everybody is inventing all these imaginary
horribles.
I mean, the most interesting thing to me--and I pointed it
out to Senator Nelson. We stole the language from the cable
card license agreement because that's been working, and we put
it in the item. But it is now announced to us that that
language, which has been working for the last several decades,
is now a complete and total failure. And one can only scratch
their head and say, ``Gee, there must be a bigger agenda being
played here than the facts.''
Senator Markey. And can I just say we're still in the set-
top box era. Comcast, just one company, a great company, by the
way--but Comcast is installing 40,000 set-top boxes a day in
America--a day. So we're in the set-top box era.
There's a 99 percent control by these companies, and to
pretend otherwise is just to ignore the real life experience of
every single American who has that clicker with that set-top
box in front of them, and they would like another choice if we
can provide it for them. They might stick with the incumbent,
but I'll tell you one thing. The incumbent is going to start to
innovate real fast with regard to what that box can do, because
there's nothing like Darwinian, paranoia-inducing competition
to spur innovation that makes consumers feel good and lowers
the price that they have to pay to rent the box if that's what
they want to continue to do.
So thank you all so much for your great work.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Markey.
Senator Ayotte?
STATEMENT OF HON. KELLY AYOTTE,
U.S. SENATOR FROM NEW HAMPSHIRE
Senator Ayotte. Thank you, Chairman. I want to thank all
the Commissioners for being here.
I wanted to ask Commissioner Rosenworcel--this is an issue
that I've raised repeatedly before the Commission when you've
come before this Senate committee, and that is the Universal
Service Fund issue. I appreciate some of the reforms that
you've made on the distribution side, and, obviously, there are
additional issues that have been raised here today with the
Chairman that I hope are also addressed on the distribution
side.
I also continue to remain concerned on the contribution
side. I urge you all to take a nice trip through New Hampshire
and have the same experience in many rural parts of New
Hampshire where there is no telecommunications coverage. But
we're 50th in terms of support under the Universal Service
Fund, out of 56 states and territories. We are a net donor,
where my constituents are paying over $37 million in a year,
and they're getting back approximately $15 million in return.
It's a very bad deal for my constituents, given that we have
real needs in my state where it would help the economic
development and wellbeing of my constituents.
I know that as the Chair of the Federal-State Joint Board,
Commissioner, you have said you're going to wait on what you
might do on contribution reform based on what the court does on
the Open Internet Order. And I'm trying to understand why we
have to wait, because recently, the Congress permanently
enacted the Internet Tax Freedom Act, which would say very
clearly where policymakers are on both sides of the aisle on
this issue. We should ensure that you aren't taxed when you
have access to the Internet, because we want to make sure
everyone has access, and that's obviously the goal of the
Universal Fund itself.
So I would ask you, Commissioner: Why do we have to wait
for the Open Internet Order to make reforms to the contribution
side, especially when Congress has so clearly spoken, most
recently with a permanent extension of the Internet Tax Freedom
Act? My constituents are really tired of waiting for
contribution reform, and they're putting a lot of money into
this, and we're not getting the value back from the fund.
Commissioner Rosenworcel. Thank you, Senator, and you're
right. We have talked about this extensively. I want to start
by saying I am a New Englander. That's where I grew up. So I
know exactly what you speak of in terms of the inability to get
service in parts of New Hampshire and northern New Hampshire,
in particular.
Senator Ayotte. That's right.
Commissioner Rosenworcel. So that's familiar to me. To the
extent that you're saying that we are not acting, I just want
you to know that we're actually working. We're working
extensively behind the scenes.
Just two weeks ago, I met in Washington with my state
colleagues who are on the joint board who are from all across
the country, Florida, Washington state, Michigan, and state
staff who are from other locations, and we talked extensively
about new models for moving forward, because our existing
Universal Service system, which supports communications in so
much of rural America, is right now dependent on an assessment
on old fashioned long distance service, which we all know does
not represent the future of communications. And if we want to
make sure that we get high-speed broadband everywhere,
including places in New Hampshire, we know we're going to have
to update the way that we collect that, and we are working
behind the scenes now, combing over models and trying to
understand the impact on consumers and businesses if changes
are made.
Senator Ayotte. So the thing that I would like to
understand--and I'd also like Commissioner Pai to jump in,
because I know he has expressed some opinions on this as well.
Why does the Open Internet Order jeopardize the potential to do
contribution reform? What risks are there with this Open
Internet Order that, in fact, it could end up with a Universal
Service tax on Internet services? Presumably, this would be
contradictory to the policy that is very strongly bipartisan as
reflected in ITFA that we don't want to tax access to the
Internet.
So if you could both comment on that, I'd appreciate it.
Commissioner Rosenworcel. So I want to be clear. I agree
with that policy. We're not looking to change it. We're just
looking to modernize the system. To the extent that we're
talking about why this court case matters, it's just
fundamentally statutory. Under Section 254(d) of the
Communications Act, the collection obligation is on
telecommunications services, and so we need to make sure that
that definition is a stable one so that we assess ways to move
forward.
We're looking at a variety of ways, numbers-based
contributions, expanding the contribution base with traditional
telephony. We're looking at a connections-based system. In
other words, we're looking at models with our state colleagues
from all across the country right now with the goal of making
sure that rural communication stays strong.
Senator Ayotte. I would like to have Commissioner Pai, with
the Chairman's latitude, also comment on this issue.
Commissioner Pai. Thank you, Senator. I'll try to be brief.
I have concerns both in terms of timing and in substance. In
terms of timing, when the FCC adopted the Open Internet Order
on February 26, 2015, the joint board was slated to give us a
recommendation on contributions reform in April 2015.
If you look buried in footnote 1471 of the 317-page Order,
we say we anticipate a short extension of the Joint Board's
deadline would be appropriate. We are now almost a year after--
over a year after the Open Internet Order. We still have no
recommendation.
Now, I think that it's pretty clear that a broadband
Internet access tax would be pretty unpopular, especially in
light of the bipartisan chorus, as you pointed out, that state
and local governments should not be able to tax the same. And I
think it's remarkable that in light of the fact that the FCC
has declined to refrain from imposing these regulations on all
these other areas, all these other Title II regulations, that
this one, a politically salient one, is being put off for a
later time.
I think that it's also telling that the agency is already
spending money in anticipation of getting a greater amount of
revenue from the Universal Service Fund. For example, we
boosted the e-rate budget by $1.5 billion a year last year. By
all accounts, next month, we are going to expand the Lifeline
program to broadband without any meaningful budget or cap. So
that money is already being spent, and it has to come from
somewhere.
I would respectfully submit to you that, ultimately, it is
going to be in the form of a broadband tax. Every one of your
constituents is going to have to pay more for Internet access
to fund the FCC's spending obligation that's already made
through the Universal Service Fund. So both in terms of timing
and substance, I believe that we should be straightforward with
the American people and decline this opportunity to impose a
broadband tax.
Senator Ayotte. Well, I hope we would. My constituents are
not going to want to pay that tax, and I don't think there's
support for that tax. So I hope that we would clearly take that
off the table.
The Chairman. Thank you, Senator Ayotte.
I have Senator Booker followed by Senator Fischer followed
by Senator Moran.
STATEMENT OF HON. CORY BOOKER,
U.S. SENATOR FROM NEW JERSEY
Senator Booker. Commissioner Wheeler, would you just
respond to that, the expenses and the tax issue, because I
think it's important to hear your thoughts.
Chairman Wheeler. The challenge that Commissioner
Rosenworcel and her team are facing is that there is a
diminishing amount of services money on which a fixed amount of
overhead is being charged. That means that it has to
continually go up.
Now, sometimes we sit around and our colleagues complain,
``Oh, my goodness. The Universal Service Fund has gone up. Look
at the percent that it is today.'' Well, the math says it has
to, and if it doesn't, you won't be able to fund build-out in
rural areas. You won't be able to fund schools and making sure
they're connected. You won't be able to make sure that
everybody has access.
This is a pressing problem. This is a complex problem, and
the thing that was really interesting about Commissioner
Rosenworcel's response--I'm sitting here and I'm saying, ``Boy,
is the right person on point on this,'' because she talked
about multiple solutions, not just the one that you keep
hearing about.
Senator Booker. So if I can--I really want to talk about
innovation and leading the globe in innovation--very, very
grateful for Senator Ayotte, Senator Fischer, and Senator
Schatz in leading, really, some of the innovation work that
we're doing about the Internet of things. I'm really very
excited about the fact that we are now looking at making sure
we're focused on unlicensed. In fact, I definitely wanted to
follow up--which I don't think I'm going to have time--about
the progress of testing the 5 Gigahertz section.
But just while we're there, I just really want to, then,
just jump into the issue of Lifeline, because it's something
that I think is extraordinarily important. And I'd like to be
able to submit for the record, without objection from the
Chairman when he comes back, a letter that was signed by a
group of broadband providers, public interest groups, really
public-private groups, talking about the urgencies of the
digital divide in our country. It's amazing to see--it's signed
by everybody from Comcast and AT&T to the National Hispanic
Media Coalition. It's pretty extraordinary.
So just to stick with this for a second, because when it
comes to the Lifeline program, I just want to know if we are
getting a good return on our investment. What are the economic
and social justifications for modernizing this program, really,
and the urgency to cover broadband?
So, Commissioner Rosenworcel, would you comment on that for
me?
Commissioner Rosenworcel. Absolutely. Listen, today, it is
absolutely necessary to have access to broadband to have a fair
shot of prosperity in the digital age, and we have too many
households that do not have access. That's important for
emergency services, for healthcare, for getting and keeping a
job, and what's especially important to me is that it's really
critical for homework.
We have 5 million households in this country with school
age kids who can't do their homework because they don't have
broadband access. That's a homework gap that we can help use
the Lifeline program to bridge, and I think we should be doing
it without any delay.
Senator Booker. And, Commissioner Clyburn, would you like
to add to that?
Commissioner Clyburn. This is a 30-year-old program that in
the beginning really worked hard and was successful in
connecting those last few million people who could not afford
access to a voice-only product. We do not live in a voice-only
world. The individuals that need this the most have cut the
cord, the traditional cord, and have moved on to the mobile or
wireless spectrum.
We need to modernize. We need to throw away the old and
come up with a new construct, one that recognizes and addresses
the needs of today, a program that is fiscally sound with all
of the protocols in place to ensure that once and for all,
whatever vulnerabilities we have are addressed, that the
provider is no longer the one who is greenlighting individuals
who are--the consumers who are certified or justified to be on
the fund.
We need to get rid of as many vulnerabilities as we can in
order to serve those who are vulnerable. We are poised to do
that by the end of this month, and I'm looking forward to
continued feedback and a successful program that will properly
serve those who are on the wrong side of the opportunity side.
Senator Booker. Real quick, I was going to talk about
innovation.
Commissioner Clyburn. Oh, I apologize.
Senator Booker. No worries. I just want to--for the 10
seconds I have left, could you just talk about the--we've made
a lot of progress on the inmate calling, but now we're seeing
some threats where the next frontier is, these video conference
calls.
Commissioner Clyburn. Right.
Senator Booker. You're doing some really good work on that.
Can you use my last second to talk about that for a second?
Commissioner Clyburn. Well, we put forth a further notice
that will look at what is called a video visitation model that
many facilities have gone to. There are lots of people who
cannot visit in person their loved one. They're going to a
video model. We have heard reports that this is financially
taxing on them. So we're going to look at that to see if this
regime is as broken as the one which we are already poised to
fix.
Senator Booker. Thank you, Commissioner.
I wanted to submit this to the record earlier.
The Chairman. Without objection. Thank you, Senator Booker.
[The information referred to follows:]
March 1, 2016
Chairman Tom Wheeler,
Commissioner Mignon Clyburn,
Commissioner Michael O'Rielly,
Commissioner Ajit Pai,
Commissioner Jessica Rosenworcel,
Federal Communications Commission,
Washington, DC.
RE: WC Docket No. 11-42, Lifeline and Link Up Reform and Modernization
Dear Chairman Wheeler and Commissioners Clyburn, O'Rielly, Pai,
and Rosenworcel:
The undersigned parties--broadband Internet access providers and
consumer and public interest organizations--share the Commission's goal
of modernizing the Universal Service Lifeline program to help ensure
that all Americans have access to modern communications services. We
all agree that it is time that Lifeline eligible consumers have the
opportunity to use their benefit to reduce the cost of subscribing to
broadband Internet access service.
In order for the addition of broadband Internet access to have the
desired impact, however, we also believe that the Commission must make
other critical changes to the program. First, eligibility and
recertification functions currently performed by service providers must
be promptly and completely handed over to a third-party verifier/
administrator. This step will both strengthen the program and reduce
the costs to providers of serving the Lifeline market. Second, the
Commission should encourage broad provider participation in the new
broadband Lifeline program. To do so, the Commission should centralize
and streamline the process of authorizing providers to offer Lifeline-
supported broadband Internet access service. The Commission has the
legal authority to make this change and the policy rationale for doing
so is compelling. All Lifeline-eligible consumers deserve broadband,
and without widespread provider participation, eligible consumers may
not have access to Lifeline-supported broadband Internet access
service.
To fulfill the vital purpose of bringing broadband to those who
otherwise cannot afford it, we want both the broadest participation
possible and the flexibility to create innovative solutions. This
requires a uniform national policy that, while preventing fraud and
abuse, encourages maximum participation and encourages innovative ways
to provide affordable broadband. Unfortunately, creating such a
broadband Lifeline program is incompatible with the current process of
approving authorized providers.
We look forward to continuing to work with the Commission on
updating the Lifeline program and the creation of a new Lifeline
program targeting broadband for the needs of today's consumers.
Sincerely,
Access Humboldt
American Library Association
AT&T
Benton Foundation \1\
---------------------------------------------------------------------------
\1\ The Benton Foundation is a nonprofit organization dedicated to
promoting communication in the public interest. These comments reflect
the institutional view of the Foundation and, unless obvious from the
text, are not intended to reflect the views of individual Foundation
officers, directors, or advisors.
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Center for Media Justice
Center for Rural Strategies
CenturyLink
Comcast
Common Cause
Common Sense Kids Action
Connected Nation, Inc.
Cox Communications
EveryoneOn
Frontier Communications
Media Mobilizing Project
Multicultural Media, Telecom and Internet Council
National Digital Inclusion Alliance
National Hispanic Media Coalition
OCA--Asian Pacific American Advocates
Public Knowledge
Schools, Health & Libraries Broadband Coalition
The Greenlining Institute
Verizon
Senator Booker. Thank you very much.
The Chairman. Senator Fischer?
STATEMENT OF HON. DEB FISCHER,
U.S. SENATOR FROM NEBRASKA
Senator Fischer. Thank you, Mr. Chairman.
Chairman Wheeler, as you know, this past December, a group
of seven Senators and myself wrote to you expressing our
concerns about the FCC's recent actions in the area of
municipal broadband. I believe that broadband services should
be available to all Americans no matter where they live, in
rural and urban areas alike. I'm concerned that the FCC seems
to be picking winners and losers in the market, and that he
municipal broadband networks that you are encouraging run the
risk of over-building private sector networks and taking those
limited Universal Service Funds away from companies that really
do rely on them to provide that broadband to rural America.
Recognizing this, in Nebraska, we did pass a law that
prohibits municipalities from providing broadband or
telecommunications services. So, Mr. Chairman, in your response
to our letter, you said that the Commission has not authorized
any municipal broadband providers to receive rural broadband
experiment support at this time.
It's interesting that you say that, given that last month,
the FCC's Wireline Competition Bureau released an order that
removed the Electric Power Board of Chattanooga from further
participation in the rural broadband experiments program, the
very municipal broadband provider for whom the FCC recently
preempted in Tennessee's state law. In that order, the bureau
said that the Electric Power Board had been provisionally
selected to receive $710,000 in rural broadband experiments
funding. Public notices from last year suggest that they are
not the only ones.
So, Mr. Chairman, has the FCC authorized municipal
broadband providers to receive funding through that rural
broadband experiments program, whether provisionally or not,
and if so, how much money?
Chairman Wheeler. Thank you, Senator. I recall the letter
and specifically doing the research behind it. I will be happy
to submit for the record the details. If there have been
developments since then. I don't know them off the top of my
head.
Senator Fischer. So you don't know if the FCC has
authorized that funding for municipal broadband providers
through that rural fund?
Chairman Wheeler. I'm sorry. Through the----
Senator Fischer. You don't know if the FCC has authorized
municipal broadband providers to receive funding through that
fund?
Chairman Wheeler. Well, I just heard you say that that was
done in Chattanooga. It was a bureau level decision, and I was
either not aware or have forgotten.
Senator Fischer. If you could get back to us on that, I
would appreciate it.
Chairman Wheeler. Be happy to, yes, ma'am.
Senator Fischer. I think there are obviously some questions
out there. Thank you, sir.
[The information referred to follows:]
Federal Communications Commission
Washington, DC, March 14, 2016
Hon. Deb Fischer,
United States Senate,
Washington, DC.
Dear Senator Fischer:
I am following up on your question from the March 2 hearing
regarding broadband networks owned by municipal governments. You
specifically asked whether or not the FCC has authorized municipal
broadband providers to receive funding through the Rural Broadband
Experiments Program. The direct answer to your question is that the FCC
has not--and will not--authorize disbursement of Rural Broadband
Experiment funds to any municipally-owned broadband provider for areas
where a competitor has been providing service. I provide below the
status of all such networks that have been involved in that program.
In July 2014, the Commission adopted rules for a limited program of
rural broadband experiments and established a competitive bidding
process to select projects from entities willing to deploy robust
broadband to consumers in areas within price-cap telephone companies'
territory where no competitor was providing broadband service. Bids
were due on November 7, 2014. The Wireline Competition Bureau (Bureau)
announced a first list of provisionally selected bidders on December 5,
2014, and announced additional provisionally selected bidders on March
4, 2015. As of June 2015, the Bureau announced that no additional rural
broadband experiments bids would be selected. Four of the provisionally
selected bidders could be characterized as providers owned by municipal
governments.
In order to be authorized to receive funding, all provisionally
selected bidders must meet several requirements: specifically, the
Bureau must find each provisionally selected bidder is financially and
technically qualified, has received eligible telecommunications carrier
(ETC) designation by the state commission (or the FCC, if the state
lacks jurisdiction), and has an acceptable irrevocable stand-by Letter
of Credit. In each case, there are deadlines for submitting the
requisite information, and the Bureau must affirmatively find the
submission to be satisfactory in order for the applicant to proceed.
Only after all of those requirements are met will the Bureau authorize
the disbursement of support. Prior to that time, there is no funding
commitment under Federal law; the provisionally selected bidders merely
are applicants for support.
Of the four bidders noted above, one affirmatively withdrew its bid
prior to the deadline to submit financial and technical information.
Two more were removed by the Bureau for failing to comply with the
requirements. The last of the four provisionally selected bidders--Lake
County d/b/a Lake Connections in Minnesota-remains under consideration,
but has not yet met all of the Commission's post-selection
requirements.
Lake Connections was provisionally selected to apply for about $3.5
million in support for a fiber-to-the-home project serving 7,000
locations in 847 census blocks. After a challenge process specifically
designed to ensure that the areas in question were unserved by
unsubsidized competitors, the Bureau determined that two of those 847
census blocks were served by a competitor. These blocks were removed
from the project and the application for support was reduced
accordingly to $3.49 million. Lake Connections timely submitted the
required financial and technical information and timely submitted a
letter of credit commitment letter. Lake Connections has filed a
petition for waiver of the deadline for submitting proof of its ETC
designation; although it filed its ETC petition with the Minnesota
Public Utilities Commission on January 29, 2015, it was not designated
until December 2, 2015. The Bureau would need to grant Lake
Connections' petition for waiver of the ETC filing deadline prior to
finding it ``ready to authorize.'' Were the Bureau to do so, Lake
Connections would then have to produce a letter of credit prior to
being authorized to begin receiving support.
I appreciate your interest in this matter. Please let me know if I
can be of further assistance.
Tom Wheeler
Senator Fischer. Commissioner Pai, earlier in your career,
you spent time working as an attorney with the Department of
Justice, and as I'm sure you know, the states of North Carolina
and Tennessee have filed legal challenges to the FCC's--I call
it a troubling order, preempting laws in those states that do
restrict the ability of municipalities to provide broadband
services. And you probably know that the Department of Justice
has declined to defend the FCC's order in court.
Can you tell me how rare an action that this is? And
doesn't it suggest that the FCC overstepped its legal authority
by preempting these state laws?
Commissioner Pai. Thank you for the question, Senator. I
think, indeed, it is exceptionally rare for the Department of
Justice not to take the position of one of the agencies that it
is charged, typically, with defending in court.
I think it speaks to the fact that this particular order
had significant legal vulnerabilities, which is what I focused
on in my own dissent, because I believe that under the
Constitution and the laws of the United States and Supreme
Court precedents like Nixon v. Missouri Municipal League, it's
pretty clear that the agency could not find the requisite clear
statement from Congress to support the preemption of state laws
such as Nebraska's.
Senator Fischer. I would hope this committee would take
note of that and possibly look at legislation that will help
the FCC in recognizing state laws in the future when we have
these issues come up.
Also, Mr. Chairman, I am concerned about what will happen
to low-power television stations in Nebraska after this year's
broadcast incentive auction. In Nebraska, we have a population
of less than 2 million people, and many of those folks live in
rural areas where it's not possible to receive a signal from
full-power stations in the state.
We have a number of low-power television stations, and they
are valuable for ensuring that Nebraskans, especially those who
would normally receive their broadcast content from Iowa or
South Dakota--that they can receive that local content, not
that we have anything against South Dakota, Mr. Chairman. Of
course not.
You have consistently declined to say whether low-power
television stations will be able to keep their spectrum after
this incentive auction. Can you assure me that every reasonable
effort will be made to find a channel for those low-power
television stations so that they do not have to go off the air?
They are providing a very worthwhile and valuable service.
Chairman Wheeler. Yes, ma'am. As you know, the statute does
not establish any priority for low-power stations. So we've
been trying to work our way through that. I think there aretwo
things to bear in mind. One is we don't know--we'll start
knowing in 26 days--but we don't know right now what the
spectrum layout is going to look like afterwards.
What we have done is to say to the low-power companies:
``We will help you after the auction if, heaven forbid, there
is a situation. We will help you find a new channel. We will
help you share''--because the beauty of digital is you're now
into channel sharing--``and you can maybe even get a little
upgrade by sharing with a Class A, which gives you a little
more ooomph in your market.'' So, yes, ma'am, we have laid out
a plan to do that as soon as we know what the landscape looks
like.
Senator Fischer. Well, I really appreciate it, and if I can
help in any way with that, I would like to----
Chairman Wheeler. Thank you.
Senator Fischer.--because as people live around any border
of their state, it is difficult to be able to get that local
news, and I think that is very, very important. And as we
address that need of these orphan counties out there, I think
these low-powered stations really could be an answer for that.
So I thank you.
The Chairman. Thank you, Senator Fischer.
Senator Moran followed by Senator Johnson.
STATEMENT OF HON. JERRY MORAN,
U.S. SENATOR FROM KANSAS
Senator Moran. Mr. Chairman, thank you. Incidentally, to
the Senator from Nebraska, I grew up with Nebraska on-the-
border television and radio, and it wasn't that detrimental.
[Laughter.]
Senator Moran. Mr. Chairman and Commissioners, thank you
very much for your presence here. Let me start with the
spectrum conversation. I'll forego kind of my editorial
comments and see if I can get directly to this question and a
few more on some other topics.
When do you anticipate--this is for you, Chairman Wheeler.
When do you anticipate that the Spectrum Frontier proceeding
will be complete?
Chairman Wheeler. This summer.
Senator Moran. And do you anticipate that that completion
of the Spectrum Frontier proceeding will lead to an auction in
2017, or is that too early?
Chairman Wheeler. I don't know the answer to that, sir. I
mean, one of the things that has yet to be worked out--and
we're working through to get to that summer schedule--is how do
you deal with existing incumbents, and how do you deal with
their--and so I can't answer that question because we're not
there yet.
Senator Moran. So the consequences of this auction will
determine the necessary steps in following auctions, or they'll
learn something from----
Chairman Wheeler. No, sir. No, sir. What I'm saying is that
we've got the 600 Megahertz auction, which will begin later
this month. And then insofar as the 5G spectrum, the millimeter
wave band spectrum that Commissioner Rosenworcel talked about,
we are in the process of working through how you deal with
sharing and other issues for folks that are currently
incumbents there. That will lead to the kind of resolution that
we need to authorize use, which we will do this summer.
Senator Moran. It's not an auction issue. It's a technology
issue.
Chairman Wheeler. It's a tech, and that, then, will lead to
the question of how do you dispose of that spectrum.
Senator Moran. Given the nature of high-band spectrum, it
seems to me we're not only going to need more spectrum, but
we're going to need the support of infrastructure in its
deployment at higher frequencies. Are you on track to complete
the small cell proceedings before the end of the year?
Chairman Wheeler. Yes, sir.
Senator Moran. Let me turn to the issue of the impending
auction. One of the concerns I have is that the--my assumption
is that the spectrum crunch is the greatest in the urban areas.
And my concern is what does that mean to rural areas. So we
have the $175 billion cap. We have the 39-month timeframe.
What's the plan for clearing that spectrum compared to
rural versus urban? Is there a distinction? And the reason I
ask the question is I want to make certain that rural is not at
the end of the line when it comes to reimbursement or at the
end of the line when it comes to trying to find a contractor to
build a tower.
Chairman Wheeler. It's a great question. The reality of
when you go and run the spectrum auction is that auction is a
daisy chain--or spectrum is a daisy chain, and how you set up
spectrum in Chicago affects what happens in Kansas, for
instance. So they are all interconnected, which means that
there is not one higher ranking spectrum than other. If you
haven't got it right in one area, it daisy chains up and screws
up Chicago. So the answer to your question is we have to solve
it on a broad base.
Senator Moran. So I should not have the concerns that rural
will take a back seat while spectrum is utilized someplace
else, and then we have problems with accessing the fund or
enough time to get towers built?
Chairman Wheeler. Because of this daisy chain issue, if you
can't clear it in Kansas, you may not be able to clear it in
Chicago.
Senator Moran. So if there was a bias, it's technically
incapable of being accomplished.
Chairman Wheeler. Yes, sir.
Senator Moran. Good. And maybe this is to Commissioner
O'Rielly or to you, Chairman Wheeler. On the issue of rural
broadband--in fact, Chairman Wheeler, you and I had this
conversation when you came seeking conversation regarding your
nomination and confirmation.
Chairman Wheeler. Yes, sir.
Senator Moran. You and the Commission have been attempting
to reform the order of now several years ago in regard to an
issue that is very important to me and to Kansans. The
Universal Service Fund is important to us, as you would guess.
My question is: As you make USF reforms to that
reimbursement model, can you provide me an update first with
when the carriers will see an actual order? And, secondly, can
you assure me that there will be enough support not only to
recover the cost of providing the service, but the significant
previous investment that many carriers have made--Rural Utility
Services loans, private loans?
I've expressed this concern for a long time, that the RUS
and FCC seem to be at incompatible places in which your order
suggests to me that there may be a Federal agency that will be
owed significant amounts of money from companies who are no
longer able to make the payments. Their payments and their debt
serviceability was determined at a time in which the Universal
Service Fund was different than it's going to be under your
order.
Chairman Wheeler. Thank you very much, Senator. First point
is I hope we will have this bipartisan product voted on soon.
There are three votes for it today. That triggers what's called
a must vote, which ends sometime later this month. We are very
sensitive to the issue that you raised, and this is something
we talked a lot about with the various industry groups and we
believe that we will not cross that threshold.
However--and I don't, Mike, mean to throw this to you in
terms of now you get a question like this. But I really want to
emphasize how this was a bipartisan effort, and I shouldn't be
the only one speaking on behalf of it.
Commissioner O'Rielly. I appreciate the opportunity. I
should say I'm limited in what I can say since it's an item
before us. I would be happy to change those rules, as I
mentioned earlier.
Senator Moran. You're good at making your point.
Chairman Wheeler. I take back my time.
[Laughter.]
Commissioner O'Rielly. But to your point, we did spend
extensive time to ensure that a number of things that go into
the item that my colleagues are considering will have
transition periods. We also think that the changes that are
being asked of legacy carriers in terms of build-out and things
that will improve the experience for Americans will not have a
dire effect on their business plans or the loans that they've
taken out.
We also have made clear--and I've promised--that if there
are specific issues to any carrier that I'm willing and ready
to deal with any type of situation brought to my attention, and
that while we want to build a strong foundation, it is not
cement, so we will not consider if there are adverse impacts on
any----
Senator Moran. So there's a case-by-case opportunity.
Commissioner O'Rielly. It is to be sensitive to--that if
the facts that are presented before us are such that a carrier
would be dramatically impacted, we would want to be very
sensitive to that.
Senator Moran. Thank you.
The Chairman. Thank you, Senator Moran.
Senator Johnson?
STATEMENT OF HON. RON JOHNSON,
U.S. SENATOR FROM WISCONSIN
Senator Johnson. Thank you, Mr. Chairman. It seems as
others brought up sports broadcasting, I'm sure the Chairman
would agree with me that every American ought to be able to
have access to watching Packer games. And I appreciate----
Senator Klobuchar. The Chairman likes the Vikings games.
[Laughter.]
Senator Johnson. I would say you're probably not going to
agree with me, Senator Klobuchar, that there are way too many
people in Wisconsin in the western part of the state wearing
Packer uniforms on game days.
So I just want to ask the Chairman--I sent you a letter
making sure that you will expeditiously review any petition by
a Wisconsin broadcaster to allow those games be broadcast over
satellite, and I hope a broadcaster actually does so.
Chairman Wheeler. I'm sorry. I was coughing. This is----
Senator Johnson. I just wanted to make sure the FCC
expeditiously, hopefully grants, the petition of a Wisconsin
broadcaster to carry Packer games over satellite.
Chairman Wheeler. So what we're doing as a result of
STELAR, as you know, is following through and looking at each
of those. And I understand as a----
Senator Johnson. Just a simple yes would be----
Chairman Wheeler. Yes.
Senator Johnson. Thank you. I appreciate it.
Chairman Wheeler. I don't get to talk about Ohio State?
[Laughter.]
Senator Johnson. I'm really concerned--and the Chairman
is--we're concerned about Packer games.
Chairman Wheeler, you are Chairman of an independent
agency. The FCC is supposed to be an independent agency.
Correct?
Chairman Wheeler. Yes, sir.
Senator Johnson. Accountable to--a creation of Congress.
Correct?
Chairman Wheeler. Yes, sir.
Senator Johnson. Have you had a chance to read the report
that we issued out of my Committee on Homeland Security and
Governmental Affairs: Regulating the Internet, how the White
House Bowled over FCC Independence?
Chairman Wheeler. No, sir. But I have read summaries of it.
Senator Johnson. There are a number of troubling findings.
I'd like to ask a couple of questions. First of all, were you
aware that you had legal advisors in the FCC that are very
troubled about the thin record to support the FCC rulemaking,
potentially in violation of the Administrative Procedures Act.
Were you aware that within FCC--you were concerned about the
thin record?
Chairman Wheeler. Boy, I hope so. I hope that the lawyers
are constantly second guessing each other and me.
Senator Johnson. But you were aware of that during----
Chairman Wheeler. And that was what was going on. We were
having--believe me, it was fulsome debate and discussion at
that point.
Senator Johnson. So there was a proposal for a public
notice and actually written up, but you did not go forward with
the public notice to actually beef up that public record.
Chairman Wheeler. No, I----
Senator Johnson. Can you describe why that notice wasn't
issued?
Chairman Wheeler. Thank you, Senator. I think what we did
was that we hit pause, and I publicly announced that we were
hitting pause, for the purpose of enriching the record, and I
think I said at that point in time we know the big dogs are
going to sue on this, and we want to make sure that we've got
I's dotted and T's crossed.
Senator Johnson. Another concern was really the
circumvention by the FCC of the ex parte communication
requirement. In a 1992 Office of Legal Counsel opinion, they
were obviously concerned about that independence of the agency,
and they wrote, ``White House staff members should avoid even
the mere appearance of interest or influence, and the easiest
way to do so is to avoid discussing matters pending before the
independent regulatory agencies.''
Now, there were a number of meetings that we uncovered in
our investigation, e-mails going back and forth between
yourself and members of the White House, where, clearly, this
Open Internet ruling was being discussed, and yet there was
never a record made of those ex parte communications. I find
that very troubling.
Chairman Wheeler. Thank you, Senator. Knowing this was in
your report, I did go check the rules, and the rules say,
quote, ``that only substantial significant''--that the only
times that you need ex parte is when there is substantial
significance and is clearly intended to affect the ultimate
decision. And that applies to both communications with the
White House and communications with Congress.
Senator Johnson. Well, when you go down the timeline in
terms of the path you were going down in terms of the Open
Internet ruling, and then President Obama coming out with his
statement, and then the FCC turning on a dime, I would say
those discussions were pretty significant.
Chairman Wheeler. So the President filed an ex parte,
though, right? I mean, I just want to make sure we get the
record straight here, that an ex parte was filed by the
administration.
Senator Johnson. On one of those, but----
Chairman Wheeler. On----
Senator Johnson.--there were other ones, it reads in the
report.
You know, I was actually shocked at the Chairman's
statement during his opening statement that the FCC was going
to get out of the way and let innovation and competition reign.
Commissioner Pai, do you think regulating the Internet
under Title II is getting out of the way and letting innovation
and competition reign? Can you describe what's been happening
in terms of innovation investment in broadband and Internet
after this ruling?
Commissioner Pai. Thank you for the question, Senator. I do
not think it is getting out of the way of innovation
investment, and the agency itself didn't think that until
November 10, 2014. I think what we've seen in 2015 is the fact
that among both major wireline broadband providers and small
providers that investment in innovation is slowing. For
example, we've heard from a number of small wireless ISPs, one
of whom testified to Congress just last month that she is
shelving plans to upgrade her network in rural Arkansas to
serve her customers precisely because of the uncertainty and
the burden posed by these regulations.
Among major providers, we have seen the first ever decline
in broadband wireline investment in the Internet age, outside
of the tech bubble bursting in 2001 and the great recession in
2008. Now, I think that it is telling that some of these major
companies are now spending billions of dollars on companies
like AOL or even putting their investments abroad, and that's
because, presumably, they think the return on the investment is
now greater in areas outside of the broadband infrastructure.
That's an unfortunate thing for the American consumer.
Senator Johnson. So, possibly, with a little bit more
public notice, a more robust record, maybe we would not have
gone down what I think is a very harmful pathway.
Commissioner Pai. I think the internal documents in your
report prove that. If you look at the report, e-mail after e-
mail suggests the FCC career staff--and I once was one of
them--said, ``We do not believe that there's adequate notice
for all of these separate areas.'' Nine separate aspects of the
plan were thought to be lacking in terms of the public input.
Chairman Wheeler. With all due respect to my colleague,
what he has just portrayed as facts are not. Investment is up,
and I can quote you from the statements that the companies
themselves make when they are reporting to Wall Street, because
I have it here. Fiber is up 13 percent over last year. Usage of
the Internet is up, and that has driven what you want to be up,
which is increased revenue per subscriber for the Internet
companies in the last year since the Open Internet Order took
place. So I would just suggest that the representations that
we've heard are not necessary factual.
Commissioner Pai. But you're not challenging the assertion
there were nine aspects of this rulemaking that had a thin
record.
Chairman Wheeler. No. What I----
Commissioner Pai. Your own staff said that. You're not
challenging that.
Chairman Wheeler. I'm challenging his assertion about the
effects, and I'm saying insofar as the record is concerned, we
worked with the staff, and the job of the staff is constantly
to say, ``Hey, there are issues you need to address.'' And one
of the reasons that I pushed pause was to make sure we
addressed all the issues.
Senator Johnson. I'm out of time.
Commissioner Pai. So, Senator--well----
Senator Johnson. Mr. Chairman, can Commissioner Pai
respond?
Commissioner Pai. With the indulgence of the Chairman, so
it's telling that on one hand, we are saying that all this
investment is up, infrastructure is booming. Yet on the other
hand, just 1 month ago, the Chairman and a majority of the
Commission said that broadband is not being reasonably and
timely deployed pursuant to Section 706. Which is it? Is
broadband infrastructure broken, or is it not? I submit to
you----
Chairman Wheeler. Thirty-five million Americans that don't
have enough----
Commissioner Pai. I would submit to you that part of the
reason why it is not, part of the reason why I agreed with the
Chairman and my colleagues that broadband is not being
reasonably deployed in a timely way, is precisely because the
FCC's policies have failed. This administration's policies on
broadband have failed, and that's part of the reason why we see
this decline in broadband infrastructure investment.
There's a reason why Google, for example, has a greater
market capitalization than every cable company in the United
States combined. It's no accident that the regulatory
infrastructure we have built is now depressing broadband
investment.
Chairman Wheeler. We are not seeing a decline in broadband
infrastructure investment. You can say it and say it and say
it, but it doesn't make it a fact.
Commissioner Pai. The facts speak for themselves, and I'd
be happy to submit the sworn declarations from numerous ISPs
for the record.
Chairman Wheeler. I'll be happy to submit the information
that the companies provide under penalty of SEC to their
investors about their investments.
Commissioner Pai. I'll simply say it's striking what CEOs
with pending mergers before the SEC will say about the SEC's
top priorities.
Chairman Wheeler. I'm talking about AT&T and Comcast and
companies like that.
Commissioner Pai. Who are typically repeat players before
an agency that regulates them highly.
Senator Johnson. Thank you, Mr. Chairman.
The Chairman. This is good stuff, Senator Johnson.
[Laughter.]
Senator Johnson. Appreciate it. Happy to oblige.
The Chairman. Let's bring it back to the Green Bay Packers.
Senator Johnson. I think I've done my work here.
The Chairman. All right. We have next up Senator Gardner.
STATEMENT OF HON. CORY GARDNER,
U.S. SENATOR FROM COLORADO
Senator Gardner. Thank you, Mr. Chairman, and thank you to
the witnesses. And if this were on Denver TV, I'd love for the
four corners to have been able to----
[Laughter.]
Senator Gardner. Got that one in. Again, thank you to all
of you for being here.
The Federal Government owns an extremely high number of
valuable spectrum--a lot of extremely high valuable spectrum--
but many of us have no idea what the exact commercial value of
that spectrum is today. Some spectrum currently owned by the
Federal Government may not be useful to them but could be
extremely useful to the commercial market. Unfortunately, we
just don't know the economic opportunity cost of that spectrum
until it's valued by somebody.
Commissioner O'Rielly, would you be supportive of the NTIA
in consultation with the FCC and OMB helping to determine the
annual economic opportunity cost of spectrum in the Federal
Government's possession and follow that up with, in essence,
basically supporting finding the actual dollar value of
spectrum if it were to be used for commercial purposes?
Commissioner O'Rielly. So some of that would require
Congressional changes in law, and so I would leave that to your
capable skills. But in terms of the theory and the concepts, I
would. I have advocated to not only determine the opportunity
cost, but we actually ought to put it onto the budget of the
agencies, not on the private sector, but on the agencies
themselves so they have an opportunity cost.
So it's both the carrot and the stick. My colleagues have
favored good ideas on the carrot side. I want to be on the
stick side as well. I think you need both parts to make it
effective.
Senator Gardner. Commissioner Pai?
Commissioner Pai. I agree completely with Commissioner
O'Rielly on that.
Senator Gardner. Thank you.
Commissioner Rosenworcel, as you may know, I, along with
Senator Mark Warner from Virginia, have introduced a bill
earlier this week that would create a 16-member Commission to
study the encryption issue. There are many complex issues
confronting our country today when it comes to encryption,
namely, how do we ensure that our citizens' privacy is
protected while ensuring that we don't create a safe harbor for
terrorists and bad actors to communicate with one another?
Do you believe this is an area where we need to get bright
minds together from law enforcement and the private sector to
discuss how we move forward with encryption and technology and
all the concerns that come along with it?
Commissioner Rosenworcel. Yes, I think it's a smart way
forward.
Senator Gardner. Thank you.
Chairman Wheeler?
Chairman Wheeler. Yes, sir.
Commissioner O'Rielly. Yes, sir.
Senator Gardner. Thank you. Chairman Wheeler, as you know,
failed retransmission consent negotiations have resulted in
temporary blackouts negatively impacting television viewers
across the country. The FCC has undertaken a review of the
totality of circumstances test for retransmission consent
negotiations after Congress directed your agency to do so in
the 2014 STELAR legislation with the hope that we can reduce
the amount of such blackouts.
Can you provide the Committee today with any indication of
when the FCC plans to complete the current totality of
circumstances proceedings?
Chairman Wheeler. Thank you, Senator. We're on course and
speed to maintain--to achieve the date that you established in
the legislation.
Senator Gardner. Very good. When it comes to additional
spectrum and spectrum pipeline issues, the last auction
scheduled, obviously, is this year, and we all know it's not
going to produce enough spectrum availability that will satisfy
consumer needs. In fact, industry has said that mobile data
traffic will be over 600 times greater next year than it was
just 10 years ago.
Further, we are moving toward a 5G world that we've talked
about today, where we'll be able to do things we never thought
we had the possibility to do with speeds we never thought
imaginable. We'll be enhancing the way kids learn, speeding up
our financial transactions, taking telehealth to the next
level. But we need more spectrum to achieve this, and I think
we're all hoping that the FCC moves forward in a positive
direction. So my questions are these.
Commissioner O'Rielly, what else can we be doing in
Congress to free up more commercial spectrum? We've talked
about some of the ideas. But if you'd like to outline some
more, how do we create incentives for the Federal Government to
give up their unused spectrum?
Commissioner O'Rielly. So I talked about not only
opportunity cost, estimating opportunity cost, but putting the
burden on the budget as well. But there are a number of things
that we have to do. We have to work smarter and get a better
response from the Federal Government agencies. I know it has
been difficult to deal with. I spent 20 years working with
them.
It is a tough slog, but we need to have better direction
from them. Part of the difficulty is that NTIA itself
represents the agencies and not necessarily the best interests
of spectrum policy, and I think we ought to think about
changing that mission as well. And then in terms of things that
will help on Federal lands, I know there are a number of things
that the Committee is considering on siting facilities on
Federal lands, and I think that would be extremely helpful.
Senator Gardner. Very good. I know Senator Klobuchar and
Senator Daines are working on--as I am as well as a sponsor of
that--the One-Dig bill. After yesterday's Super Tuesday
results, we may just want to have it called the Keep Digging
bill. I don't know.
[Laughter.]
Chairman Wheeler. Can I add one thing? One dig, one climb,
one siting. That's what we need, so that it's not just--you
don't dig up the streets a lot. But you need to climb the pole
once, and you need to have siting on this antenna once. And all
those put together are things that I think we are all in
violent agreement on here but could definitely use some
legislative help on.
Senator Gardner. Well, I dig it. So that's good. And I want
to thank the broadcasters for working hard to find a solution
to some of the problems we've had in southwestern Colorado, the
four corners. I know they've been working hard to find a
solution for La Plata and Montezuma Counties to this issue of
whether or not southwestern Colorado can receive Colorado
broadcasters.
The two counties did get the Broncos this year, which was
incredibly important this season. But they did not have access
to Colorado weather or news, and we've got to fix that. I know
the FCC has adopted rules to allow counties to petition the FCC
for state signals, and I thank you for that. But what more can
you be doing to ensure that all Coloradoans get Colorado
broadcasts?
Chairman Wheeler. Are you addressing that to me?
Senator Gardner. Yes, please.
Chairman Wheeler. Moving with dispatch. We were frequently
up here--and Commissioner Rosenworcel was a real champion on
this issue. We were frequently up here saying, ``But wait a
minute. There's a hole in the law.'' You fixed the hole in the
law. You passed the ball to us, to keep the football analogy
going. You passed the ball to us. It's up to us to move with
dispatch.
Senator Gardner. If anybody else would like to comment on
that, feel free.
Commissioner Rosenworcel. I might be the only person here
who's been to La Plata and Montezuma Counties.
Senator Gardner. Thank you for that.
Commissioner Rosenworcel. So I'm just going to point that
out. And I spoke with people there who said in 15 years, they
never saw the Governor of their state on their television one
time.
Senator Gardner. They may regret that if it changes. I
don't know.
[Laughter.]
Commissioner Rosenworcel. Well, I think the point stands
that they deserve to have access to local news, Colorado
football games, and generally feel like they're part of the
state. So we should work with this market modification process
that you made available to us in the Stellar Reauthorization
Act to try to make that happen.
Senator Gardner. Thank you, and thank you for being there
as well.
Anybody else? I know I'm out of time, Mr. Chairman.
[No verbal response.]
Senator Gardner. Well, thank you.
The Chairman. All right. Thanks, Senator Gardner.
Senator Daines and then Senator Peters.
STATEMENT OF HON. STEVE DAINES,
U.S. SENATOR FROM MONTANA
Senator Daines. Thank you, Mr. Chairman.
Thank you all for being here today. It's exciting to hear
you all talk about the new technologies and how the U.S. can
truly remain a leader in innovation. I know we chatted a little
about over-building, about efficiencies, and so forth, and
thanks for the support, too, on the Dig-Once amendment. I think
that's a step forward, and, Chairman Wheeler, your enhancement
of that is something we ought to be looking at as well, to
expand that.
Chairman Wheeler, you've often talked about the need to
make sure that the Universal Service programs are well managed
and they're efficient. I certainly agree. But then I see the
Commission awarding money to entities and areas that already
have access to fiber, perhaps some over-building, some
redundancies, insisting we upgrade speeds in urban areas, while
certainly for many of us who are looking and representing rural
areas, we are underserved.
Can you really say that that is an efficient use of
Universal Service Funds? And should the Commission be focusing
on areas that have no connectivity, like many areas in Montana,
and for members here in this committee?
Chairman Wheeler. No and yes. So no, it is not an efficient
use of funds to subsidize competition, and that's not something
that should be going on. Can we do something about it? Yes, and
I believe we are.
Now, just one of the issues that I know you and I have
talked about and other members of the Committee is the Mobility
Fund, and we're going to come out with a new proposal for how
we fill--what did you call those--the high-fat doughnut holes
or something?
Commissioner Pai. Unhealthy.
Chairman Wheeler. Unhealthy doughnut holes. But we've got
to do that in a way that does not subsidize the doughnut where
there is competition, because we've got, for instance, at least
four licensees who are not covering that doughnut hole. We want
to make sure that we support one of them, one, to fill the
hole, but not to take that money and compete with the others
around, and that's going to be an art form. But that's
something that we're hard at work at.
Senator Daines. And that's important for rural states where
we are depending on--our small businesses are truly the
backbone. I had that experience myself in the software business
in Montana. A lot of the Commission's recent proposals from Net
Neutrality rules to the set-top box proposal seem to
disproportionately impact small businesses who do not have
hallways full of compliance staff.
In fact, I hear more than anything else from small business
owners about the compliance burdens that they routinely face.
And I want to thank, by the way, four of the Commissioners here
who have been to Montana, I think, in the last 6 months. I
think we could put you on the payroll for the Montana Chamber
of Commerce. So you get the quality of life draw and how that's
an important part of how we can drive this economy.
Commissioner O'Rielly, you visited Montana, and you had the
opportunity to see firsthand how small business owners
contribute to the state. Many of these businesses only have a
handful of employees and do not have armies of lawyers to wade
through the thousands of pages of regulations. Do you agree to
a reasonable--to exempt small businesses from some of these
regulatory burdens such as the enhanced transparency rules?
Commissioner O'Rielly. Absolutely, and I know you have
legislation on this front. I know there was legislation
considered in the House on this front. My colleague,
Commissioner Pai, and I have articulated a viewpoint that this
should have been addressed by the Commission. It wasn't
sufficiently, in our opinion. This should be something we can
do, and your legislation would adequately and properly address
this.
Senator Daines. Commissioner Pai, is that common sense, to
try to kind of stratify this to a certain degree in terms of--I
mean, it's an overused term in DC about one size doesn't always
fit all. But I think that makes sense for these small
businesses.
Commissioner Pai. Particularly on this issue, Senator. Both
the Obama administration, the Small Business Administration,
and literally every person who submitted a comment or a reply
comment in our record suggested this burden was undue and that
the agency should relieve them of that.
Senator Daines. Commissioner Rosenworcel?
Commissioner Rosenworcel. I agree with my colleagues here
to the right. This is something we can do at the agency. We
have exempted small businesses from the enhanced transparency
rule for the next year. But I think it would be useful if the
agency contemplated a longer or permanent exemption.
Senator Daines. It's regulations and uncertainty. That's
the one-two punch. So thanks for that added piece on trying to
provide some certainty here for our small businesses.
I want to pivot over to broadcast. Chairman Wheeler, you've
clearly prioritized unlicensed spectrum in the upcoming
incentive auction. Under the current proposal, it's not clear
that some low-power stations and translators will even be able
to stay on the air. This is a big, big deal, certainly, back
home.
What assurances can you give to these small businesses who
may be forced off the air and to the Montana communities who
rely on translators to receive the broadcast signals, including
the Denver Broncos?
Chairman Wheeler. Thank you, Senator. As I indicated
before, we don't really know what the auction is going to
produce. I think that the impact in areas like Montana will be
different than the impact in other parts of the country, and
that's a saving grace for you.
But what we have done is to say that for low-power
television, we will make special efforts, even though it was
never addressed in the statute, and, specifically, there was no
priority or dealing with the low-power challenge. We said we
will help them find new channels. We will help them share, and,
in fact, that sharing may even end up with Class A status.
I mean, this is something--we've heard you loud and clear.
I know that it is a matter of angst, because people don't know
until they know. But when we all know, we are ready to spring
to action.
Senator Daines. Thank you. Angst is a good word. Scared to
death also describes it back home in Montana. Thanks for your
concern for that, Chairman Wheeler. I appreciate it.
The Chairman. Thank you, Senator Daines.
Senator Peters?
STATEMENT OF HON. GARY PETERS,
U.S. SENATOR FROM MICHIGAN
Senator Peters. Thank you, Mr. Chairman, and thank you to
each of the Commissioners for being here today and for your
tremendous leadership each and every day.
Chairman Wheeler, I certainly enjoyed our recent discussion
in my office regarding the testing plan which the FCC is
leading with the Department of Transportation, the NTIA, to
determine whether the 5.9 Gigahertz band can be opened for
shared Wi-Fi use, and, as you commissioners have heard me say,
how important this is for our auto industry, in particular, for
saving lives, where we know that these applications will save
tens of thousands of lives, and we're on the cusp of having
some real cutting edge technology in that area.
So we want to make sure we do it right and certainly move
forward with due speed but also with an understanding of how
important this technology is as a lifesaving technology. So I
look forward to continuing to work with you as we ensure that
the three-part testing plan is executed both completely and on
schedule as well.
But I want to talk today a little bit about some of the
challenges that Michigan faces, in particular, northern
Michigan and our upper peninsula, when it comes to rural
broadband access. I hear from constituents who have great
skills to contribute to that part of our state. They are
working in tech industries. They are in the automotive advanced
manufacturing fields. But they'd love to go up to God's country
in northern Michigan and our upper peninsula because of the
incredible quality of life there, but they can't because their
livelihood depends on having reliable broadband access.
So I was pleased that AT&T, Frontier, and Century Link have
accepted over $60 million annually to expand service to some of
the most rural parts of my state as part of the Connect America
Fund, Phase I. But I think we are all aware that the work is
far from over. I think it's critical that the FCC support
mobile broadband as part of the Connect America Fund, Phase II,
and should strive to be technology-neutral when making awards
so we have a better shot at innovating our way out of this
problem.
But perhaps as a threshold matter, we need to ensure that
the FCC has the best available data to base its multimillion
dollar funding decisions. I was pleased to join a number of my
colleagues yesterday in a letter led by Senator Manchin and
Senator Gardner that asks the FCC to work with the FCC and
industry to address the shortcomings in the existing coverage
data. If we continue to rely on a map that overstates coverage,
we're not going to close the rural gap, and we're going to
waste an awful lot of money while trying to do that.
A nonprofit in my state, Connect Michigan, initially
received Broadband Technology Opportunities Program, the BTOP,
funds under the Recovery Act to develop an accurate and up-to-
date statewide broadband map that served as an invaluable
resource for residents wanting to know the speed, price, and
technology base of the broadband service available to them, but
also to serve the provider industry when looking to determine
what those coverage gaps are.
Connect Michigan then supplied that information to the
Federal Government for inclusion in the national broadband map.
But those funds have now dried up, and Connect Michigan is
piecing together funding and attempting to forge new
partnerships to keep their critical operations going.
So my question to you, Chairman Wheeler, is that I realize
that some states where BTOP-supported broadband data collection
and mapping efforts may have been more successful than others.
But I am concerned about the sufficiency of solely using data
supplied by carriers to fill in the national broadband map
rather than a more granule state-collected data that we have
used in the past.
I know the FCC is doing work now to collect Form 477 data
to prepare it for inclusion in the national broadband map. Do
you think the Form 477 data will prove to be more accurate than
previous data collection efforts by states and independent
third parties?
Chairman Wheeler. Thank you very much, Senator. The answer,
in one word, is yes, but we need to think about this through a
step-wise process. The first cut at coverage was one of the
coverage maps that the carriers use, that we see in their
advertising. That didn't work, because that's an optimal.
That's our franchise. That's our license area.
Second, then, we went out and had folks do drive tests, and
that worked in areas where there were roads, or, at least, main
roads, but didn't work in rural areas. Now, what we're trying
to gather is information out of the Form 477 that is much more
granular in that regard. The reports I'm getting is that we
are.
Now, there's one big problem, however. We have been denied
funds for the national broadband map for the last two fiscal
years. So we can't--there is no national broadband map that is
up to date. We've requested it, and the appropriators have axed
it. We are looking for other solutions, but that's kind of the
reality we find ourselves in.
Senator Peters. Well, to try to get more data, one
suggestion with broad support was for Federal agencies to work
together to create an accessible open inventory of assets as
well to bring in more data.
Chairman Wheeler. Yes. Right.
Senator Peters. And I want to commend Chairman Thune for
including in his MOBILE NOW legislation language that would
create a Federal infrastructure asset data base. But I think
it's important that the Committee also consider the value of
further incentivizing states and local governments to
participate in that database. In fact, I have sponsored an
amendment to the MOBILE NOW bill that would ask agencies
involved to complete a report on this issue, and then report
back to this committee within a year.
Chairman, do you agree that we would achieve a more
comprehensive and accurate understanding of where our broadband
infrastructure assets are in the United States if such a
database not only included Federal assets but also those owned
by state and local governments?
Chairman Wheeler. You cannot manage it if you cannot
measure it, sir. I am for all the more data we can possibly
get.
Senator Peters. And a strong supporter of that amendment.
Thank you so much.
The Chairman. Thank you, Senator Peters.
I think up next, we have agreement here for Senator
Klobuchar to go next.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Well, thank you. I'm just going to do
just 2 minutes, and I appreciate Senator Sullivan letting me go
ahead.
I understand the Commission is close to finalizing action
on an order to address a standalone broadband issue, and
Chairman Thune and I have advocated for this, and I want to
thank you for that.
Just really quickly, Chairman Wheeler, how do you expect
standalone broadband support to drive rural broadband
development?
Chairman Wheeler. I'd like to say through the roof. I think
that it is going to be very significant, because one of the
things that we all three agreed on is that we have to make sure
that the money is not just going into the market, but it is
going to the broadband holes in the market and it is filling
those areas that today aren't served with broadband.
Senator Klobuchar. Very good. And as you know, I've been a
strong proponent of dig-once. We're trying to work something
out with this committee. Do you think that dig-once policies
are a sensible way to try to facilitate broadband deployment?
Does anyone want to take that?
Chairman Wheeler. Yes, ma'am. Can I use the line that I
used while you were out? We need dig-once, climb-once, site-
once.
Senator Klobuchar. Very good. All right. The other
questions I'll put on the record. One is on the Charter-TWC
merger and just concerns Senator Lee and I have raised from the
content viewpoint. I know you can't comment, and I appreciated
the Commissioner bringing up the bill that we have on the 911
system that Senator Fischer and I have introduced with some
other Senators as well.
And I always appreciate the Commissioners' work on the
dropped-call issue and the rest of you as well. That continues
to concern us in Minnesota. So I really appreciate it.
Senator Sullivan, your indulgence--thank you very much.
The Chairman. Thank you, Senator Klobuchar. You did that in
under 2 minutes. Very impressive. It can be done.
Senator Sullivan?
STATEMENT OF HON. DAN SULLIVAN,
U.S. SENATOR FROM ALASKA
Senator Sullivan. A good example of bipartisanship on the
Commerce Committee here.
Well, thank you. I appreciate the Commissioners coming and
testifying today. As you have heard, there has been a lot of
discussion focusing on the challenges of rural states. I think
Senator Daines' point, the effect of regulations on small
businesseses in states is a big one issue that you're all aware
of. I think you all know that in Alaska, those issues are
magnified because a lot of our communities don't even have
roads that connect each other, let alone telecommunications. So
I appreciate the focus of all the Commissioners on these
issues.
Mr. Chairman, Commissioner Rosenworcel, I know that you've
been up. Have the other commissioners been to Alaska? Can I get
just a----
[Show of hands.]
Senator Sullivan. Great. Good. Well, we'd love to have you
back. I really appreciate--seriously, you can talk about, you
know, distance. Senator Wicker was going through the list of
rural states in his questions. He forgot us, and I was kind of
thinking that we have boroughs in Alaska that are bigger than
Mississippi.
[Laughter.]
Senator Sullivan. No offense to Senator Wicker. Anyway, let
me follow up on a couple of Alaska-specific questions, and then
I want to try and, address a couple of national issues.
Mr. Chairman, your visit spurred our wireline and wireless
carriers to work together with the FCC to address some of the
unique challenges that we have in Alaska. And, as you know,
these carriers are making progress on expanded wired and
wireless broadband capabilities, but they need certainty to
continue these very costly deployments. As you know, some of
these deployments are very costly.
As you and I have talked about recently, I am disappointed
that you're not considering the comprehensive universal service
plan proposed by Alaska's carriers, to what we're now referring
to as the Alaska Plan, at the same time as the national rate of
return order. Can you assure me today--and I'd like this from
all the Commissioners, if possible--that the Commission will
act on the Alaska Plan for rural wireline and wireless services
within 60 days of adopting the national rate of return order,
just so we have some certainty on that issue?
Chairman Wheeler. Thank you, Senator. I've got it on the
schedule for the second quarter. I hope that we adopt the rate
of return order yet this month. I'm trying to do quick math--
that moves us into early second quarter. It may be more like
mid second quarter, but I intend to have this before my
colleagues in the second quarter.
Senator Sullivan. So no later than second quarter?
Chairman Wheeler. Yes, sir.
Senator Sullivan. Can I get that from all the
Commissioners? It's a very important issue for my constituents.
Commissioner Rosenworcel. Yes, and I'll also point out that
in the current rate of return decision we have before us, I've
actually asked for the Alaska issues to be addressed right now.
Senator Sullivan. Well, I appreciate that.
Commissioner Rosenworcel. Recognizing there's rural and
then rural Alaska, which are two different things.
Senator Sullivan. Well, that would be ideal. But if we
can--and you and I have talked about it, Mr. Chairman--that
would be the best kind of second order effect, if we can get a
no-kidding, second quarter, you know, drop-dead date in terms
of certainty is very important.
Chairman Wheeler. No kidding, yes, sir.
Senator Sullivan. Right. Can I get that from all the other
Commissioners? Just a yes or no on that, as to your commitment.
Commissioner Pai. Yes.
Commissioner O'Rielly. Yes, absolutely.
Commissioner Clyburn. Absolutely.
Senator Sullivan. Great. Thank you. Going back to certainty
again, Senator Peters talked about the Connect America Fund,
Phase II. And, again, although that deployment started for
Phase II last September, the FCC has yet to publish an order
for Alaska's price cap carrier who submitted a detailed plan
over a year ago for using CAF 09II support to deploy broadband
to the thousands of unserved Alaskan households there.
Can you provide me a timeline when you think the Commission
is going to complete its work setting up the terms of a CAF
Phase II for the Alaska price cap carrier?
Chairman Wheeler. Yes, sir. In my thinking, the two are
rolled together, and these are both second quarter.
Senator Sullivan. Is that--again, I don't need to get it
from everybody, but if the Chairman agrees that that's a
timeline, I think that's important.
Commissioner Rosenworcel. Yes.
Commissioner Pai. Yes.
Commissioner O'Rielly. Yes.
Senator Sullivan. Great. Let me ask just a--this is kind of
broadening out.
Commissioner O'Rielly, I know you've been focused on a
couple of the issues. I just want to ask in a final question--
but, really, any of the Commissioners can mention it.
Commissioner Rosenworcel, you mentioned this, actually, in
your testimony.
But the issue of streamlining the infrastructure permitting
process clearly impacts Alaska, particularly on Federal lands,
of which we have--you know, over 60 percent of our lands are
Federal. But it's really important, as you know, to encourage
and deploy new technologies, to not burden them.
Can you give us a sense--first of all, is there consensus
on the Commission that this is something that we need to do? It
seems to me it's kind of a no-brainer, and yet the challenges
of this broader infrastructure deployment issue--we would be
very, very interested in your suggestions on how to streamline
the permitting process so we can make sure that--you mentioned
earlier in your testimony, that the infrastructure on the
ground gets built in time so the technology is not moving way
past it.
So I welcome any thoughts that you might have on this
broader issue, which I think is not just an issue for Alaska. I
think it's an issue for the whole country, particularly for
rural states, who are represented on this committee, and have a
lot of Federal land as well.
Commissioner O'Rielly. Yes, Senator. So I have put forward
a number of different ideas I think will be helpful to
facilitate infrastructure building and deployment going
forward. I will just highlight with you a number of things we
can do at the Commission and are doing, and we are pushing the
envelope and the legislation that this Congress has approved in
the past.
But I would suggest to you that the flip side of this is it
may require more legislation and it may require more
preemption, which I know is not a great word to use for folks
in the Senate. But it is something that is probably going to be
necessary. When you're talking about small cells
identification, it is work that's going to be necessary.
And we've had localities--I referenced one in the speech in
Florida--where they put up a monopole, and a couple of weeks
later they made the company pull the monopole down. So, I mean,
either you want broadband or you don't. We all agree that we
want it, so we're going to have to figure out to get the
infrastructure out there, and that sometimes displaces locality
decisions.
Senator Sullivan. Commissioner Rosenworcel, on the issue of
Federal lands, you mentioned----
Commissioner Rosenworcel. Yes, Federal lands are one-third
of our national real estate, and they are some of the slowest
places to deploy broadband. I know in the Middle Class Tax
Relief and Job Creation Act, this committee had a section that
required Federal authorities to have a master contract for
deploying infrastructure on Federal facilities.
I think the next step, if I could ask this committee to
take it, would be to actually require Federal authorities to
use that contract. It's the missing piece. And were we able to
do that, we would be able to harmonize those contracts on one-
third of our national real estate.
Senator Sullivan. Then you don't have the preemption issue,
obviously.
Commissioner Rosenworcel. Exactly.
Senator Sullivan. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Sullivan.
Senator Blumenthal?
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thank you, Mr. Chairman.
Everybody on this panel has provided very distinguished
service to our country. Thank you for that service and for
being here today. All of you, I know, are familiar with the
abuse of cramming, which is the unscrupulous practice of
wireless carriers allowing third parties to add charges on
monthly bills without authorization or even consent or
knowledge sometimes of consumers.
Commissioner Rosenworcel, I want to thank you for your
visits to Connecticut, your native state, and Hartford to join
me several times to discuss this abuse and to announce refunds
that are going back to consumers as a result of the
Commission's good work.
At the FCC hearing about a year ago, I raised the mobile
cramming issue and asked several of you if you would commit to
initiating an FCC rulemaking to apply the conditions of these
consent decrees to the whole market, which I think are very
important to protecting consumers long after the consent
decrees expire. The consent decrees are good, but all carriers
should be required to protect consumers from deceitful
practices and stop anyone from profiting from them.
So I'd like to ask each of you again to open a rulemaking
on wireless cramming and ask whether you will commit
individually to that rulemaking.
Commissioner Clyburn?
Commissioner Clyburn. Yes, I would be open to any framework
that will allow customers to gain control and for us to have
more tools at our disposal to protect them. It's a very serious
issue, as you mentioned. So yes.
Commissioner O'Rielly. I am in favor of more specific rules
on cramming rather than relying on other provisions in the act,
and I've raised that in a number of different items. I believe
it's very important to have--we've had the opportunity and just
haven't done it.
Commissioner Pai. Senator, to be clear, the power to
initiate the rulemaking resides first and foremost with the
Chairman. So if and when he presents a proposal for us, I'll
certainly give it the careful scrutiny that it deserves. This
is a critical issue.
Commissioner Rosenworcel. Yes. Thank you for giving me the
opportunity to appear with you to discuss this back in my home
state. Cramming is fraud. It's digital age pick-pocketing, and
it's good that we've had consent decrees with carriers that
have allowed it to occur. But it would be a lot better to
prevent it from occurring in the first place.
Senator Blumenthal. Mr. Chairman?
Chairman Wheeler. Yes.
Senator Blumenthal. If I may ask you, Chairman Wheeler, is
there a factor that's holding back the beginning of rulemaking?
Chairman Wheeler. Not really, sir. I mean, this is,
frankly, a resources and timing issue. I would point out, as I
know you are well aware, you know, that we took an enforcement
action on this against four major carriers for about a quarter
of a billion dollars, most of which went into consumers'
pockets, not into any treasury anyplace. So we are vigilant on
the issue.
And the interesting thing is that you can do that absent a
rule because the statute is clear. But if there is a need for
rules as well, then we ought to have them.
Senator Blumenthal. And I'm well aware of those enforcement
actions and commend you for that. That was the reason for the
various meetings that Commissioner Rosenworcel and I had,
simply to make consumers aware that they need to claim the
refund.
In the short time I have left, I want to talk about the
Enforcement Bureau, which I think is a critical part of the
FCC. As a former prosecutor, I know that folks caught breaking
the law aren't always happy about it, and they make various
claims, like lack of due process, so I'm not surprised to see
that happening in objections to the Enforcement Bureau catching
people who break the law. I think in many instances it's really
that simple.
I hear from constituents all the time about unexpected
increases in their monthly cable bills to never-ending robo-
calls that harass them, even thought they're on the Do-Not-Call
list, to all kinds of other abuses and violations of law that
the Enforcement Bureau pursues.
So I want to commend the Enforcement Bureau for its good
work and say to you--just ask you what may appear to be a
rhetorical question. But, just for the record, in terms of due
process, the Enforcement Bureau now provides for companies to
respond or challenge a forfeiture, does it not?
Chairman Wheeler. Yes, sir.
Senator Blumenthal. And there are opportunities for
companies to appeal a Commission decision to the Federal court
system, are there not?
Chairman Wheeler. Yes, sir.
Senator Blumenthal. And companies frequently and abundantly
take advantage of that right.
Chairman Wheeler. Yes, sir.
Senator Blumenthal. And in terms of resources, could the
Enforcement Bureau benefit from additional resources?
Chairman Wheeler. Yes, sir.
Senator Blumenthal. Thank you.
Chairman Wheeler. Can I just add one thing, though?
Senator Blumenthal. Of course.
Chairman Wheeler. Everybody thinks about enforcement in
terms of penalties. The fact of the matter is that if you have
done something wrong, there should be logical consequences. But
we're also protecting those who do things right. The most anti-
competitive activity that exists in the market today is when
your competition cheats.
So this is not just that you need to have a logical
consequence for your bad actions. This is how do we make sure
that the good guys aren't being penalized by the actions of the
bad guys. So enforcement is a very important pro-competitive
tool.
Senator Blumenthal. And I think you have just made one of
the central points about consumer protection, because the good
guys are the vast, vast majority of businesses. What these
rules do--laws, regulations, rules--is essentially protect good
guys in business from the unfair competition of people who
break the law to try to cut corners and, thereby, cut costs and
undercut their competition.
So in a certain sense--and I made this point about
antitrust enforcement, about consumer protection enforcement.
It is in a long-term sense pro-business, pro-jobs, because it
enables people who play by the rules to have a level playing
field. And I think that, of course, wise enforcement depends on
wise enforcers and the Enforcement Bureau having enough
resources to make good decisions about how to enforce the law.
But I think your central point is very well taken. Thank you.
The Chairman. Thank you, Senator Blumenthal.
I think Senator Nelson has a question.
Senator Nelson. Just a quick question. Given the fact that
the most important call that a person may make is 911, tell me
what your plan is on the next generation of 911 and what you
think we should do.
Chairman Wheeler. Thank you, Senator. I think we have taken
the 911 issue about as far as our authority takes us, and it
now comes to this Congress. We have just sent to this committee
the recommendations of a year-long task force on next-
generation 911. It is my understanding that the 911 providers
themselves are in the process of specifically turning that into
here's what is needed in terms of specific legislation.
But I fear that this is something--I was involved in the
1999 ``911 Act'' that made it a national number. I think it's
going to take once again Congress stepping up with a national
policy on 911.
The Chairman. Thank you, Senator Nelson.
The only thing standing between you all now and a restroom
break is Senator Markey and myself.
So, Senator Markey, do you have some followup questions?
Senator Markey. I like the sequencing, and then it's just
you.
The Chairman. That's right.
Senator Markey. So I like that.
[Laughter.]
Senator Markey. Thank you, Mr. Chairman.
On February 26 of last year, we opened the next chapter in
the history of American innovation, and that's because on
February 26, what will always be known as Internet Freedom day,
the FCC stood up for Net Neutrality and reclassified broadband
service under Title II of the Communications Act. It was a
major victory for consumers, for our economy, and for
democracy, because that day was a day when the FCC stood up for
the best ideas, not merely the best funded ideas, and we thank
you for being on the right side of history.
So what happened in 2015, then, in the United States as the
FCC promulgated those Net Neutrality rules? Well, nearly 68
percent of all venture capital funds invested in the United
States went toward Internet-specific and software companies in
2015. So congratulations, FCC.
You created this engine of innovation and capital flow into
these new companies, the smart companies, the innovative
companies, and it's clear that the FCC got this right. There's
a lot of other places you can put venture capital money, but
when 68 percent of it, following your decision, goes toward
that sector, then we've got what young people in colleges and
graduate schools all across America want to do. They want to
continue to innovate, and what you have done is make it a lot
easier for them to do so.
So what I'd like to do, then, Mr. Chairman, if I could, is
just ask you a couple of questions. The first is: Is it unusual
for an independent agency to communicate with the White House?
Chairman Wheeler. No, sir.
Senator Markey. Is it typical for an independent agency to
communicate with the White House?
Chairman Wheeler. Communicate with the White House,
Congress, and everybody.
Senator Markey. Have other presidents weighed in on FCC
rulemaking since the FCC's founding in 1934?
Chairman Wheeler. Yes, sir.
Senator Markey. Do you have any lists of those that come to
your mind that you think might have acted during that time?
Chairman Wheeler. Well, I happen to remember one time when
President Reagan called Chairman Fowler to the Oval Office, and
I remember that story, because I happened to be around at that
point in time.
Senator Markey. I remember that story very well, and I
don't begrudge President Reagan wanting to do that. But I do
remember that extremely well. I didn't agree with Chairman
Fowler on much, but I did appreciate the fact that the
president can talk to someone serving during his
administration.
Did the FCC follow the process used by both Democrat and
Republican Commissions when crafting the Open Internet Order?
Chairman Wheeler. The process has remained unchanged,
Senator.
Senator Markey. So I want to make clear the FCC has done
precisely what Congress intended the Commission to do, classify
broadband Internet access service according to its best
understanding of the technology of that day and how consumers
use that technology. I am confident that that is how you are
proceeding, and I thank you for that. I thank the Commission
for that.
I'm also pleased with the recent steps that the FCC has
taken to increase consumer privacy protections. As part of the
Commission's correct decision last year to reclassify broadband
under Title II, the Commission wisely chose to apply Section
222 to broadband, extending the duty to protect the privacy of
information that Internet service providers collect about their
customers because of the unique carrier-customer relationship.
I believe an ISP has a duty to protect the privacy of consumers
who use the company's wired and wireless infrastructure to
connect to the world.
Senators Booker and Blumenthal and I have written to the
Commission urging the Commission to initiate a rulemaking to
protect the privacy of consumers who use the broadband. And I
do believe you should have a comprehensive definition of
customer proprietary network information, ensure transparency,
require consumer consent if the information is going to be
reused so their privacy is protected, and protect consumers'
information by requiring ISPs to implement strong data security
measures.
Can you give us some idea, Mr. Chairman, when you plan on
moving forward on rulemaking on broadband privacy?
Chairman Wheeler. I hope it's very soon, and that includes
this month.
Senator Markey. That includes this month. Excellent. I also
sent you with other Senators a letter on the proposed
acquisition of Time Warner Cable and Bright House Networks by
Charter Communications. My hope would be that the Commission
would look at it, ensuring that the guiding principles are
competition, competition, competition, as you have said
repeatedly, Mr. Chairman, and that you ensure that it gets the
kind of review that ensures that the proper protections are in
place for the competitive marketplace, which we need.
Chairman Wheeler. Thank you, Senator.
Senator Markey. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Markey.
I have just a couple of final points I'd like to make. One
is I want to say, as I mentioned earlier, that this committee
will be marking up the bipartisan MOBILE NOW Act tomorrow,
which will help advance wireless innovation and deployment. A
key provision of Ranking Member Nelson's and my bill focuses on
the high frequency millimeter wave bands that are going to be
critical for next-generation 5G wireless services.
So our legislation intentionally builds upon the good work
that the Commission is doing in its Spectrum Frontiers
proceeding. So I was glad to hear earlier today that Chairman
Wheeler expects this order by summer.
Chairman Wheeler, you've been quoted as saying that in the
year that you have left in this job, every time that you appear
before the Congress, the number one item that you will talk
about is the absolute necessity of Congress dealing with the
issues in next-generation 911. That's a quote. And, actually,
that was your prepared testimony. I think it follows up on that
intent.
Chairman Wheeler. Yes, sir.
The Chairman. We've also recently seen an increase in
organized stakeholder advocacy on this issue, which echoes your
concerns. Will you be receiving--let me rephrase that. You will
be receiving questions from the Commerce Committee in the
coming days as we look more deeply into this issue. So the
question is: Do I have your commitment that you will cooperate
with this committee by responding fully and in a timely manner?
Chairman Wheeler. You bet. Yes, sir.
The Chairman. Very good. Thank you.
Senator Cantwell was on her way, racing back over here. But
I don't think she's going to make it.
So thank you all very much for your time today. I know it's
been a lengthy hearing, but a lot of our members, as you can
see, have great interest in the issues before the Commission.
Because the Committee may take up legislation to
reauthorize the Commission in the very near future, the hearing
record will remain open through close of business this Friday.
During this time, Senators are asked to submit any questions
for the record. Upon receipt, the witnesses are requested to
submit their written answers to the Committee by Friday, March
11.
This concludes the hearing. Thank you all. We're adjourned.
[Whereupon, at 12:42 p.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Question Submitted by Hon. John Thune to
Hon. Tom Wheeler
Question 1. Following the reclassification of broadband Internet
access service as a Title II public utility, Chairman Wheeler indicated
that the FCC will propose new privacy regulations. The Federal Trade
Commission (FTC) already has extensive experience in protecting
consumer privacy, and consumers and business already have experience in
applying the FTC's privacy rules and precedents; the Commission has
virtually no such experience beyond the very narrow confines of rules
implementing Sec. 222. Why would the Commission create a new, likely
inconsistent set of rules rather than adopting the FTC's privacy
protections? Given that the Commission's rules will only apply to BIAS
providers, isn't there a significant likelihood that functionally
identical activities on a smartphone will be governed by completely
different rules based upon who is providing the service?
Answer. The Federal Communications Commission (Commission) has a
long history of protecting the privacy of consumers when using
communications networks. Throughout the 1980s and 1990s, the Commission
set guidelines concerning incumbent telephone companies' use and
sharing of customer information.\1\ Then, in 1996, Congress enacted
Section 222 of the Communications Act providing statutory protections
to the privacy of the data that telecommunications carriers collect
from their customers.\2\ The Commission adopted implementing rules for
Section 222 and as industry practices and consumer expectations have
changed it has updated those rules. Today, the Commission is tasked by
Congress with protecting the private information collected by
telecommunications, cable, and satellite companies in Sections 222,\3\
631,\4\ and 338 \5\ of the Communications Act. Consequently, the
Commission has significant experience in protecting the privacy of
consumers.
---------------------------------------------------------------------------
\1\ See Amendment of Section 64.702 of the Commission's Rules and
Regulations, Final Order, 77 FCC 2d 384 (1980) (Computer II), recon.,
84 FCC 2d 50 (1980), further recon., 88 FCC 2d 512 (1981), aff'd sub
nom. Computer and Commc'n Indus. Ass'n v. FCC, 693 F.2d 198 (D.C. Cir.
1982), cert. denied, 461 U.S. 938 (1983); Amendment of Section 64.702
of the Commission's Rules and Regulations, Phase I, 104 FCC 2d 958
(1986); Application of Open Network Architecture and Nondiscrimination
Safeguards to GTE Corp., Report and Order, 9 FCC Rcd 4922, 4944-45,
para. 45 (1994); Application of Open Network Architecture and
Nondiscrimination Safeguards to GTE Corp., Memorandum Opinion and
Order, 11 FCC Rcd 1388, 1419-25, paras. 73-86 (1995); Furnishing of
Customer Premises Equipment by Bell Operating Telephone Companies and
the Independent Telephone Companies, Report and Order, 2 FCC Rcd 143
(1987), recon. on other grounds, 3 FCC Rcd 22 (1987); aff'd, Ill. Bell
Tel. Co. v. FCC, 883 F.2d 104 (D.C. Cir. 1989).
\2\ 47 U.S.C. Sec. 222.
\3\ 47 U.S.C. Sec. 222.
\4\ 47 U.S.C. Sec. 551.
\5\ 47 U.S.C. Sec. 338(i).
---------------------------------------------------------------------------
When reclassifying broadband as a telecommunications service, the
Commission chose not to forbear from Section 222. This decision was
made in recognition of the need to ensure broadband customers have
privacy protections. The Notice of Proposed Rulemaking (NPRM) that I
circulated begins the process of adopting rules under Section 222 for
broadband customers.
The NPRM focuses on transparency, choice, and data security. This
approach is consistent with the Commission's history of protecting
privacy, the FTC's guidance on privacy best practices as well as its
law-enforcement work, and various sector-specific statutory approaches.
The NPRM is tailored to the particular circumstances that consumers
face when they use broadband networks and with an understanding of the
particular nature and technologies underlying those networks.
The FTC has jurisdiction over edge providers. The NPRM, however, is
focused solely on broadband networks, which are not the same as edge
providers in all relevant respects. For example, consumers can move
instantaneously to a different website, search engine, or app, but once
they sign up for broadband service, consumers can scarcely avoid the
network for which they are paying a monthly fee. As the FTC has
explained, Internet service providers are ``in a position to develop
highly detailed and comprehensive profiles of their customers--and to
do so in a manner that may be completely invisible.'' \6\ Broadband
providers thus have the ability to capture a breadth of data that an
individual streaming video provider, search engine, or e-commerce site
does not.
---------------------------------------------------------------------------
\6\ Federal Trade Commission, Protecting Consumer Privacy in an Era
of Rapid Change: Recommendations for Businesses and Policymakers at 56
(2012), https://www.ftc.gov/sites/default/files/documents/reports/
federal-trade-commission-report-protecting-consumer-privacy-era-rapid-
change-recommendations/120326privacyreport.pdf (2012 FTC Privacy
Report).
---------------------------------------------------------------------------
As the expert agency on communications policy issues, the
Commission is well positioned to ensure consumers have the right level
of control over the information they share with their broadband
provider. But, we also recognize that we have complementary authority
to the FTC in this space and the Commission is determined to continue
its close working relationship with the FTC. In fact, the Commission
and the FTC recently entered into an updated consumer protection
Memorandum of Understanding (MOU). In the MOU each agency recognizes
the others' expertise and agreed to coordinate and consult on areas of
mutual interest.\7\
---------------------------------------------------------------------------
\7\ See FCC-FTC Consumer Protection Memorandum of Understanding
(2015), https://apps.fcc.gov/edocs_public/attachmatch/DOC-336405A1.pdf.
Question 2. I understand that you are close to finalizing action on
an order that would address the standalone broadband issue that many in
Congress have written to you about over the past several years and also
adopt some new limits and other measures related to universal service
support for rate of return providers. Do you commit to work quickly and
collaboratively with this committee and with affected stakeholders to
the extent any adverse or unintended consequences arise out of the
reforms?
Answer. Last year, I pledged to you and other Members of this
Committee that we would bring forth a solution for the next phase of
universal service modernization: reforming support for ``rate-of-
return'' carriers. As the result of months of collaborative efforts by
Commissioners Clyburn and O'Rielly and their staffs, we recently
adopted a bipartisan Order to fulfill that promise.
The Order sets forth a package of reforms to address rate-of-return
issues that are fundamentally intertwined--the need to modernize the
program to provide support for stand-alone broadband service; the need
to improve incentives for broadband investment to connect unserved
rural Americans; and the need to strengthen the rate-of-return system
to provide certainty and stability for years to come. The Order will
help to ensure that Federal universal service funds are spent wisely,
and for their intended purpose, and takes concrete steps to bring
broadband to rural Americans who remain unserved today.
This bipartisan effort was aided by the rate-of-return carriers
themselves. Working through their trade associations, they engaged with
Commissioner Clyburn, Commissioner O'Rielly and me in a productive
manner. We are pleased that NTCA and USTA have supported the result. I
look forward to working with you, the Committee staff, and all
stakeholders as we implement these reforms and continue modernizing the
universal service high-cost program--as well as other components of the
Universal Service Fund--to ensure that all Americans have access to
robust voice and broadband services.
Question 3. Ensuring that rural and urban consumers have access to
reasonably comparable services at reasonably comparable rates is a
fundamental statutory principle of universal service. Are you confident
that the standalone broadband solution you are poised to adopt will do
that--specifically, will it allow rural consumers to get standalone
broadband at rates reasonably comparable to their urban counterparts?
If not, what more do you think the FCC will need do to ensure such
comparability?
Answer. In the April 2014 Connect America FNPRM, the Commission
unanimously articulated four general principles for reform to address
the stand alone broadband issue. Specifically, these four principles
were that new rules should (1) provide support within the established
budget for areas served by rate-of-return carriers; (2) distribute
support equitably and efficiently, so that all rate-of-return carriers
have the opportunity to extend broadband service where it is cost-
effective to do so; (3) support broadband-capable networks in a manner
that is forward looking; and (4) ensure no double-recovery of costs. I
believe the package of reforms in the recently adopted Order will
resolve the stand-alone broadband issue and update the rate-of-return
program consistent with those principles.
Question 4. I have heard concerns that the methodology used in the
2014 order to determine the local rate floor for voice service has led
to rates in some rural areas, including parts of South Dakota, that are
not reasonably comparable to those services provided in urban areas.
Given this concern, when do you plan to act on the petition for
reconsideration filed by several rural associations regarding the rate
floor methodology? Do any other Commissioners have thoughts regarding
this matter?
Answer. In the 2011 USF/ICC Transformation Order, the Commission
unanimously adopted reforms to make universal service a fairer system
for all consumers and businesses. The Order includes a phase-out of
excessive subsidies for basic phone service, which allowed some phone
companies to charge their customers as little as $5 a month while
average urban, suburban, and even some other rural consumers, were
paying over three times that amount. The Commission determined it was
inappropriate to use limited Federal high-cost support to subsidize
local rates beyond what is necessary to ensure reasonable comparability
between urban and suburban rates and rural rates, as required by
Congress. The reforms gradually eliminate these excessive subsidies to
level the playing field for all consumers and contain the cost of the
program, which is funded by universal service fees paid by consumers.
Commission staff is currently reviewing the record in response to the
Application for Review you reference.
Question 5. Last July, the FCC released an omnibus declaratory
ruling on the Telephone Consumer Protection Act (TCPA). TCPA litigation
has increased dramatically in the last decade. What considerations did
the Commission give to the impact its ruling would have on businesses,
both large and small, that need to reach their customers for legitimate
business purposes?
Answer. The Commission gave full consideration to the impact its
ruling would have on all petitioners, including businesses of all
sizes. Consistent with our rules, the Commission sought public comment
on all of the petitions addressed in the June 2015 Declaratory Ruling.
Based on this record, the Commission granted relief to some businesses,
including a petitioner who provided time-sensitive healthcare robocall
alerts. Where the Commission was compelled by the statute and its own
precedent to deny relief, the ruling nevertheless provided clarity and
a roadmap for compliance.
Question 6. Many small businesses seek to improve their efficiency
and customer relationships by providing information to their customers
through the use of modern dialing technologies. The FCC's recent
interpretation of the term ``autodialer'' in the TCPA declaratory
ruling, however, could sweep in any number of modern dialing
technologies. Other than using a rotary phone, what other technologies
can small businesses feel comfortable using without exposing themselves
to TCPA litigation risk?
Answer. The Commission's June 2015 Declaratory Ruling provides a
roadmap for small businesses who wish to comply with the TCPA.
The June 2015 Declaratory Ruling did not offer a new interpretation
of the term ``autodialer.'' Instead, the ruling merely applied existing
precedent regarding the TCPA's autodialer definition to address
specific requests for clarification. Moreover, while the Commission was
not asked to address specific types of equipment, the Commission
provided additional clarity regarding relevant factors in determining
what equipment constitutes an autodialer, including the amount of
effort it would take to modify a piece of equipment to have the
capability to dial random or sequential numbers.
Question 7. By establishing liability after a mere one-call
exception, the Commission's ruling creates a perverse incentive for
incorrectly-called parties to allow or even encourage incorrect calls
to continue, rather than notify the calling party of the error. These
continuing incorrect calls thus become potential violations and the
basis for monetary penalties sought through litigation. What will you
do to repair this perverse incentive?
Aswer. The Commission does allow robocallers an opportunity to
remain free of TCPA liability in the event of an incorrectly-called
party. Specifically, the June 2015 Declaratory Ruling affords
robocallers an opportunity to discover a reassignment after one
incorrect call if best practices, including checking reassigned-numbers
databases, do not reveal a reassignment. The Commission's decision on
this point provides callers greater protection from liability than some
Federal courts have held, which is that all robocalls to a consumer
other than the subscriber are subject to TCPA liability under the
statute as written by Congress. Moreover, as the Commission stated in
its declaratory ruling, the TCPA requires that robocallers obtain the
subscriber's consent and places no obligation on consumers who may have
inherited a phone number to notify the robocaller of the reassignment.
Question 8. Has the Commission considered providing a safe harbor
for a calling party that reasonably relies on available customer phone
number records to verify the accuracy of a customer's phone number?
Answer. The Commission recently considered providing such a safe
harbor, but ultimately declined to adopt one. Specifically, the
Commission concluded that, in light of the TCPA's statutory language as
drafted by Congress and relevant Federal case law, robocallers must
obtain the subscriber's consent and a robocaller cannot avoid liability
for calling the wrong consumer by arguing they intended to call someone
else. As the Commission noted in its ruling, several tools exist for
robocallers to detect when a number changes hands. In addition, our
ruling grants robocallers a one-call further opportunity to discover a
reassignment in the event of an incorrectly-called party. The
Commission will continue to encourage further development of best
practices so that businesses trying to reach their customers do not
make unwanted robocalls.
Question 9. The pay TV set-top box NPRM proposes to expand the
scope of the term ``navigation device'' to include ``software or
hardware performing the functions traditionally performed in hardware
navigation devices.'' On what theory does the Commission base this
interpretation and expansion of the statutory term's scope to include
software? Does software that is not integral to the operation of a
navigation device fall within the scope of Section 629?
Answer. The Commission's interpretation of ``navigation device'' is
based upon a number of sound legal theories. As explained in the NPRM,
``[w]e believe that when Congress adopted Section 629, it intended the
term to include software because set-top boxes have run software since
before 1996.'' NPRM at n.65. The NPRM also notes that ``Congress
recognized this in the STELAR, which called for a study of downloadable
software approaches to security issues previously performed in
hardware.'' NPRM at para. 22. Moreover, as I stated in the hearing,
everything in the world is moving toward software, and in a software
world, we cannot consider the kind of equipment that the statute talks
about and not consider software. Finally, we are in the process of
developing a record on this and other issues, and I look forward to the
record that develops in response to this issue.
Question 10. How does the NPRM propose or contemplate preventing
third party devices or applications from adding unapproved or
additional advertising alongside MVPD service content? How does the
NPRM propose to protect and secure interactive MVPD programming and
services when accessed through third party devices or applications? How
does the NPRM propose to enforce such protection and security measures?
Answer. Today, the Commission is not aware that such ads are a
problem on third party devices, such as TiVo, Smart TVs, or when you
access Netflix on a tablet. Nor do we have rules governing the
contracts that advertisers enter into with these parties. Nevertheless,
we seek comment on these issues and any actions we can take to mitigate
such concerns, including through the proposed certification process as
well as the extent to which copyright law may protect against these
concerns.
As for protecting secure interactive programming and services, the
new proposed rules would create a framework for providing device
manufacturers, software developers and others the information they need
to introduce innovative new technologies, while at the same time
maintaining strong security, copyright and consumer protections. Our
NPRM proposes to let MVPDs choose the security system or systems that
they wish to use to protect content. The content protection and
security that the MVPD chooses would be enforced just as they are
today--in the private marketplace consistent with contracts, copyright
law, and the MVPD's power to revoke a compromised device's ability to
receive service. The proposal, which is based on the way that content
protection is administered today, states that to license the content
protection that is necessary to decrypt multichannel video programming
from a MVPD, the third party must certify that it will honor copy
protection limits and prevent theft of service.
______
Response to Written Questions Submitted by Hon. Roger F. Wicker to
Hon. Tom Wheeler
Question 1. Chairman Wheeler, I have heard from some of my
constituents who are competitive carriers that changes in the Universal
Service Fund have harmed the competitive landscape. Can you please
provide me with an update on the implementation of the USF high-cost
program/Connect America Fund?
Answer. In 2011, the Commission voted unanimously to expand rural
broadband access by modernizing the Universal Service Fund. The
Commission took an inefficient program for delivering telephone service
and created the Connect America Fund (CAF) to support expanded
broadband connectivity in rural America. These reforms have already
delivered significant benefits. Over the next five years, CAF is poised
to invest $9 billion and leverage private investment to deliver
broadband to 7.3 million rural Americans. In addition, universal
service reforms have dramatically reduced waste within the program.
Furthermore, last September, I circulated an Order for the
consideration of my fellow Commissioners that would address the
framework for the CAF Phase II competitive bidding process. In
December, I circulated an updated draft Order that addressed concerns
raised by other Commissioners' offices.
Last year, I pledged to the Members of the Committee that we would
bring forth a solution for the next phase of universal service
modernization: reforming support for ``rate-of-return'' carriers. As
the result of months of collaborative efforts by Commissioners Clyburn
and O'Rielly and their staffs, the Commission recently adopted a
bipartisan Order to fulfill that promise. The Order sets forth a
package of reforms to address rate-of-return issues that are
fundamentally intertwined--the need to modernize the program to provide
support for stand-alone broadband service; the need to improve
incentives for broadband investment to connect unserved rural
Americans; and the need to strengthen the rate-of-return system to
provide certainty and stability for years to come. The Order will help
to ensure that Federal universal service funds are spent wisely, for
their intended purpose, and takes concrete steps to bring broadband to
the rural Americans who remain unserved today. In addition, a Further
Notice included with the Order seeks comment on additional reforms that
would further guard against waste.
Notably, underlying all of these reforms to the high-cost program
is the shared principle that we should limit the use of ratepayer funds
to support service in an area that is served by an unsubsidized voice
and broadband provider. Prior to making the Phase II offer of model-
based support to the price cap carriers, the Commission conducted a
robust challenge process to refine the Commission's data on which areas
of the country were already served by voice and broadband, and removed
those areas from eligibility. Similarly, the rate-of-return reform
order adopts a process to determine which rate-of-return areas are
served by an unsubsidized competitor and reduce support for those
areas.
Question 1a. Have you done any studies on the impact of competition
in unserved and underserved areas related to changes in the USF?
Answer. Twice a year, the Commission collects deployment and
subscription data from all broadband providers through its Form 477.
This data informs both our universal service policies as well as our
statutory mandate to regularly determine whether advanced
telecommunications capability is being deployed to all Americans in a
reasonable and timely fashion.
Question 1b. Are there any other proceedings currently at the FCC
which relate to promoting competition in rural areas?
Answer. As mentioned above, I have circulated an Order that would
address the framework for the CAF Phase II competitive bidding process.
As currently drafted, this item would establish a process for companies
to compete for funding to serve high-cost areas that lack broadband.
Simply put, competition between providers means that finite universal
service funding will be used efficiently to deliver the best possible
solutions.
Question 2. In your judgment, is existing wireless coverage at risk
of being stalled or even reduced without continued USF support?
Do you support a Mobility Fund Phase II that provides support for
BOTH preserving existing service where it is not otherwise economically
feasible as well as expanding mobile broadband to areas that are
unserved?
Answer. Wireless providers continue to build-out networks and
expand coverage. However, unserved and underserved communities also
continue to exist across the Nation. USF provides an important role in
expanding wireless networks to those areas of the country.
In 2011, the Commission proposed to provide ongoing financial
support to promote mobile broadband and high quality voice services in
areas where such services cannot be sustained or extended absent
Federal support. In 2014, the Commission sought comment on how
universal service funds should be targeted. This inquiry was in light
of the substantial roll-out of 4G LTE by many of the country's mobile
networks. The Commission proposed to retarget Mobility Fund Phase II
support to preserve mobile service where it only exists today due to
support from the Universal Service Fund and to extend 4G LTE service to
areas where it does not exist.
Commission staff is currently reviewing the record on this inquiry
to consider possible next steps for a Mobility Fund Phase II.
______
Response to Written Question Submitted by Hon. Roy Blunt to
Hon. Tom Wheeler
Question. Thank you for your immediate response following the
hearing regarding my concerns with the timeliness of replies from the
Commission to Members of the Senate, and your commitment to improve
response times.
In addition to timeliness of responses, what steps can you take to
better account for the concerns raised by Members of the Senate
regarding the policies pursued at the Commission?
Answer. I support an open and transparent process at the Commission
and I have encouraged my staff to work cooperatively to address the
concerns of Members of the Senate regarding the FCC's policy decisions.
I recognize that there will always be disagreements concerning the
outcome of Commission votes with regard to various policy-based
decisions. That is one reason why we add all comments from members of
Congress to our hearing records--to ensure that we have adequately
considered this information as we engage in the administrative
rulemaking process.
We also strictly adhere to the Administrative Procedure Act to make
certain that all parties have an equal opportunity to comment as we
engage in rulemakings. I am always available to members of this
committee to personally discuss our work here, and I routinely take
phone calls and answer a broad number of letters related to the
Commission's work. I also have directed the Commission's staff to
provide routine briefings and technical support to members and their
staff.
______
Response to Written Questions Submitted by Hon. Kelly Ayotte to
Hon. Tom Wheeler
Question 1. I am a strong supporter of the upcoming incentive
auction and hope for the successful outcome that we all intended in
passing the Spectrum Act. However, after speaking with broadcasters
from New Hampshire, I have heard concerns that the broadcast relocation
fund could ultimately prove insufficient to reimburse local TV stations
the costs they incur as part of the repacking process.
Do you have a plan in place should the $1.75 billion relocation
fund fall short? Understandably, we will not precisely know the final
numbers until the auction is complete, but how do you foresee the
Commission responding if the funds prove to be insufficient?
Answer. At this point, we have no reason to believe that the $1.75
billion Broadcaster Relocation Fund will be insufficient to cover
broadcasters' relocation costs. In order to ensure the sufficiency of
the fund, we will optimize the final broadcaster channel assignments to
minimize relocation costs. This optimization will: (1) maximize the
number of stations assigned to their pre-auction channels; and (2)
minimize reassignments of stations with high anticipated relocation
costs, based on the most accurate information available. These steps,
taken together, will help to ensure that the $1.75 billion
Reimbursement Fund is sufficient to cover broadcasters' relocation
costs and that the Fund is disbursed as fairly and efficiently as
possible.
Should the $1.75 billion be insufficient, I will notify Congress as
soon as this becomes clear. The amount was set by the Spectrum Act and
Congress would need to take action to change it.
Question 2. While I look forward to the broadcast incentive auction
that begins on March 29, I would like to further explore reimbursement
concerns. I have a constituent who has built a wireless microphone
business from the ground up. His business plays an important role in
the vitality of his local community--whether it is for plays at the
University of New Hampshire, productions at the Rochester Opera House,
or even a speech by the President. This local business has established
itself as a source for dependable wireless microphone equipment for
nearly 20 years and is relied upon for its services in New Hampshire.
My constituent's business was nearly bankrupted during the 2010
auction of the 700 megahertz band, which necessitated replacing half of
its equipment--costing approximately $30,000. After purchasing brand
new equipment, he also has found that he is able to use it well after
its life expectancy. Despite this investment, he faces the same dilemma
again with the forthcoming auction.
Has the Commission considered a solution that fairly reimburses
wireless microphone providers and looks to replace equipment displaced
from the band as an unintended consequence of the 600 megahertz
auction?
What can be done to ensure small businesses, such as those in the
wireless microphone community, do not have to shutter their doors as a
result of the spectrum auction?
Answer. The Commission understands that wireless microphone
operators provide an important service that many consumers rely upon.
While the Spectrum Act does not provide the Commission with authority
or funding to reimburse wireless microphone operators for the cost of
any changes in equipment as a result of the auction, the Commission has
adopted several orders to accommodate both licensed and unlicensed
wireless microphones after the auction. In the 2014 Incentive Auction
Report and Order, the Commission provided additional opportunities for
wireless microphone operations in the spectrum that will continue to be
allocated for broadcast television service after the auction and
promised to explore additional opportunities that would accommodate
wireless microphone operations over the long term. Last summer the
Commission adopted rules to provide wireless microphones with access to
the future 600 MHz guard bands and duplex gap (including exclusive
access to a 4 megahertz portion for licensed use), enable greater use
of the VHF channels, and provide for new opportunities for licensed
wireless microphones to operate on a secondary basis in three
additional bands outside of the TV bands.
The Commission also has provided for a multi-year period, after the
end of the auction, to help smooth the transition as wireless
microphone operators obtain new equipment and move out of the
repurposed 600 MHz band to other spectrum. These operators may continue
to use the 600 MHz Band spectrum on a secondary basis until the end of
the 39-month transition period. Together, these rules and policies
establish clear protections and opportunities for wireless microphone
operators to continue to provide their important service to consumers.
______
Response to Written Question Submitted by Hon. Ted Cruz to
Hon. Tom Wheeler
Question. In the Open Internet Order, the Federal Communications
Commission (FCC) revised the definition of ``public switched network''
to mean ``the network that . . . use[s] the North American Numbering
Plan, or public IP addresses, in connection with the provision of
switched services'' (See para. 391 (emphasis added)). Although the FCC
disclaimed any intent to ``assert'' jurisdiction over the assignment or
management of IP addresses by the Internet Numbers Registry System (see
id. at note 1116), the FCC's decision to equate telephone numbers with
IP addresses nonetheless gives the FCC statutory jurisdiction over IP
addresses as a matter of law. Over 20 years ago the FCC concluded that
Section 201 of the Communications Act gave it plenary jurisdiction over
telephone numbers, because ``telephone numbers are an indispensable
part'' of the duties that section 201 imposes on common carriers (See
Administration of the North American Numbering Plan, Notice of Proposed
Rulemaking, FCC 94-79, 8 (1994)). IP addresses are likewise an
indispensable part of the duties the FCC imposed on ISPs under section
201, including the duty to connect to ``all or substantially all
Internet endpoints.''
How can the FCC uphold the public interest requirements in section
201 of the Act if it refuses to assert its statutory authority over an
indispensable part of the public switched network?
If the FCC believes regulation of IP numbers used to connect end
points on the public switched telephone network is unnecessary, why
hasn't it forborne from the regulation of telephone numbers?
Answer. In the Open Internet Order, the Commission changed its own
definition of the term ``public switched network'' in the context of
Section 332 of the Communications Act, to include IP addresses as well
as telephone numbers. The Commission concluded that ``[r]evising the
definition of public switched network to include networks that use
standardized addressing identifiers other than NANP numbers for routing
of packets recognizes that today's broadband Internet access networks
use their own unique addressing identifier, IP addresses . . .''
(Emphasis added) (See para. 391), but did not suggest that the
Commission asserted authority over IP addresses, either pursuant to
Section 201(a) or pursuant to Section 251(e) (the source of Commission
authority over numbering issues pursuant to the Telecommunications Act
of 1996). In fact, the Commission forebore from Section 251(e)--the
provision that gives the Commission authority over telephone numbers.
IP addressing--in contrast to telephone numbers--is already governed by
IANA, (the Internet Assigned Numbers Authority), a department of ICANN,
that is responsible for the global coordination of IP addressing, among
other coordination functions.
______
Response to Written Questions Submitted by Hon. Jerry Moran to
Hon. Tom Wheeler
Question 1. The FCC's FY17 budget request says an increase in
auction funding is necessary ``to implement the requirements mandated
by Congress in the Spectrum Pipeline Act of 2015.'' However, except for
asking for a single report to Congress three years after enactment, the
Spectrum Pipeline Act does not require any specific action of the FCC
before 2022. Given that senior Commission staff have suggested that the
Broadcast Incentive Auction will be complete by the end of the current
Fiscal Year and you testified before the Committee on March 2 that it
was unlikely that an auction emanating from the Spectrum Frontiers NPRM
could be scheduled in 2017, why is increased FY17 funding necessary for
the Commission's spectrum auction activities?
Answer. Before 2013, our annual auction spending had been capped at
$85 million for nine years. This amount allowed for no inflationary
adjustments, no funds for improving the operational efficiencies or
resiliency of our IT systems, and no money to study new projects to
support auctions programming.
The infusion of additional funds since 2013 has enabled us to raise
over $42 billion for the Treasury in two major auctions, the H Block
auction and the AWS-3 auction. These funds have also supported our
efforts to develop and prepare for the first-ever Incentive Auction,
which is slated to launch this month. The development and
implementation of the Incentive Auction has required highly-skilled and
technologically savvy FTEs and contractors with expertise across
multiple disciplines, including cutting-edge economics and engineering.
It also has involved the development of essential and resilient new IT
systems.
After the completion of the Incentive Auction, however, a
significant post-auction transition process will remain. To ensure
preservation of service for broadcast viewers and timely network
deployment, we have been focused on post-auction planning for over a
year. We have released of the draft relocation reimbursement form and a
reimbursement cost catalog for transitioning broadcast stations, and we
have already begun to pivot and to accelerate our planning for the
post-auction transition. Like the auction, the transition will be a
complex effort spanning several years. Therefore, we will continue to
incur costs associated with the Incentive Auction into the next Fiscal
Year and beyond. The money spent in this effort will be as critical to
the success of the auction as the money spent developing and
implementing the auction itself and will yield important dividends--
financially for the Treasury, and for industry growth supported by
newly available commercial spectrum.
The Bipartisan Budget Act of 2015 not only extended our auction
authority but it mandated that we work with other agencies to identify
and develop resources for a ``spectrum pipeline.'' In addition to the
Incentive Auction and several other auctions on our planning list, we
will be expending resources to support the core goals of the new
legislation. To do so, we need to upgrade our traditional and aging
auction IT systems--the ones that were not upgraded during the pre-2013
years--for use into the next decade, and engage in a broad range of
economic and engineering studies to ensure that the next generation of
auctions are at least as successful as past auctions.
Question 2. Could you please provide the specific plans and details
on how the Commission intends to carry out and manage the repacking of
broadcast television stations that will remain on the air? It is
understood that these plans and details may vary depending on the
amount of spectrum available, please explain how this will be taken
into account and provide any studies or analysis undertaken.
Answer. One of the Commission's primary goals is to allow stations
sufficient time to move to their new channels in order to minimize
disruptions of service to viewers. Commission staff is developing a
transition schedule that will maximize the efficiency of this
transition and minimize service disruptions. We have been working
closely with broadcasters to get important input from the industry on
planning a successful transition. We have also had discussions with
representatives of the wireless industry, who obviously have a stake in
an efficient transition process. We anticipate further interaction with
all affected stakeholders as we develop and refine this transition
plan.
The Commission is also committed to establishing fair and efficient
process for reimbursing broadcasters' relocation costs. As part of that
process, the FCC commissioned the Widelity Report to more fully
understand the types of costs that would be required, and the magnitude
of those costs, to help make efficient use of the Broadcaster
Relocation Fund. The Commission's Media Bureau adopted a catalog of
expenses as guidance, which will serve as a means of facilitating the
process of being reimbursed by setting forth categories of expenses.
The Commission is also planning on engaging a reimbursement
administrator to facilitate the disbursement of funds. It recently
solicited proposals for this position and is currently evaluating those
proposals.
Question 3. At the hearing, you indicated that you want to make
certain that rural stations are not at the end of the line when it
comes to reimbursement or when it comes to trying to find a contractor
to build a tower. Does this mean that the Commission is concerned that
there are not sufficient funds or time available for the repacking
process? What plans and mechanisms does the Commission have in place to
deal with either of those circumstances?
Answer. At this point, we have no reason to believe that the $1.75
billion Broadcaster Relocation Fund will be insufficient to cover
broadcasters' relocation costs. In order to ensure the sufficiency of
the fund, we will optimize the final broadcaster channel assignments to
minimize relocation costs. This optimization will: (1) maximize the
number of stations assigned to their pre-auction channel; and (2)
minimize reassignments of stations with high anticipated relocation
costs, based on the most accurate information available. These steps,
taken together, will help to ensure that the $1.75 billion
Reimbursement Fund is sufficient to cover broadcasters' relocation
costs and that the Fund is disbursed as fairly and efficiently as
possible.
We believe that a 39-month transition period is sufficient for
stations to apply for a construction permit (3 months) and move to
their new channels (during the 36-month construction period), while
also enabling forward auction winners to get access to their newly
acquired spectrum as quickly as possible, thus ensuring a successful
incentive auction. The Commission will, of course, take into account
how many stations actually need to be repacked, and the specific
characteristics of each, in determining the repacking schedule. Staff
is developing a transition schedule that will maximize the efficiency
of this transition and minimize service disruptions.
Question 4. It is my understanding that stations being repacked
will be assigned specific dates by which they have to be operating on
their new channels. How will dates be established? How will such dates
take into account stations in adjacent markets to avoid interference to
viewers that could occur if an adjacent market transitions at a
different time, or the ``daisy chain'' as you referenced in your
testimony?
Answer. The Commission decided that having the flexibility to
consider a variety of actors in establishing construction deadlines is
critical to the success of the transition. We recognize that many
different variables are at play that will impact when an individual
station can successfully transition, including weather and seasonal
issues, daisy chains and interference issues, and availability of
equipment and crews. The Commission has been working closely with
broadcasters to get important input from the industry on planning a
successful transition, taking into account all of those different
variables. We have also had discussions with representatives of the
wireless industry, who obviously have a stake in an efficient
transition process. We anticipate further interaction with all affected
stakeholders as we develop and refine this transition plan.
Question 5. What happens if a station through no fault of its own
is delayed in making the change to its new repacked channel? Will the
Commission delay the transition of stations in adjacent markets that
could be impacted? How will the Commission keep stations informed of
such delays? Will station costs associated with such delays be
compensated?
Answer. The Commission believes that a 39-month transition period
is sufficient for stations to apply for a construction permit and move
to their new channels. While we will, of course, take into account how
many and which stations actually need to be repacked in determining the
repacking schedule, we see no reason now to change or repeal the 39-
month deadline. Adopting a longer transition period would delay access
by forward auction bidders to the spectrum they won in the auction.
That in turn would depress forward-auction participation or the amounts
that forward auction participants are willing to bid for the spectrum.
The auction would clear less spectrum, and the Commission would return
less money to the U.S. Treasury.
The Commission has created a framework that gives stations every
opportunity to remain on the air, even if time runs short due to
unforeseen circumstances. To assist stations, the Commission will
permit six-month extensions for stations that, for reasons beyond their
control, cannot complete the modifications to their facilities during
their construction period. Additionally, special temporary authority
may be granted to operate on a new channel using a temporary facility
while they complete their tower modifications. Eligible broadcasters
can also request special temporary authority to operate on a channel in
the TV band that is available because it was relinquished by a winning
bidder in the auction. Furthermore, the Commission is taking
appropriate measures to disburse funds as fairly an efficiently as
possible to ensure the sufficiency of the Relocation Fund.
Question 6. How will the Commission ensure that antennas,
transmitters, and other equipment be available for those stations with
the earliest conversion dates? If stations have to pay more for such
equipment or for expedited delivery will those costs be covered?
Answer. Commission staff is working with interested parties,
including tower companies, equipment manufacturers, wireless carriers,
and broadcasters to identify resources and encourage early planning by
broadcasters that may be repacked or will voluntarily move to a
different channel.
Congress provided for $1.75 billion dollars in the Spectrum Act. To
help ensure the Broadcaster Relocation Fund is sufficient to cover
broadcasters' relocation costs, the FCC commissioned the Widelity
Report to more fully understand the types of costs that would be
required, and the magnitude of those costs, to help make efficient use
of the Broadcaster Relocation Fund. The Commission's Media Bureau
adopted a catalog of expenses as guidance, which will serve as a means
of facilitating the process of being reimbursed by setting forth
categories of expenses.
______
Response to Written Questions Submitted by Hon. Ron Johnson to
Hon. Tom Wheeler
Question 1. What is the purpose of the cybersecurity ``assurance''
meetings that the FCC plans to conduct with companies?
Answer. Effective cyber risk management procedures are crucial to
maintain the reliability and resiliency of our networks. In 2014,
following issuance of the NIST Cybersecurity Framework for assessing
cyber risk management, the FCC challenged the communications industry
to lead the way in creating a new framework to guide the relationship
between the FCC and industry to best address cybersecurity challenges
for this critical infrastructure sector, with the goal of individual
companies proactively managing cyber risk. In response, a broad-based
group of expert stakeholders, the Communications Security, Reliability
and Interoperability Council (CSRIC), recommended a comprehensive plan
for putting this new approach into action. One of the group's key
recommendations was for individual companies to brief the FCC
periodically on a voluntary and confidential basis about cyber risks
and their approach to managing these risks. The Commission is now
considering a Policy Statement, which, if adopted, would implement the
CSRIC recommendation by outlining a process for holding these meetings.
a. What do you expect to get out of these meetings?
Answer. The voluntary meetings will enable the FCC to work with
industry to identify best practices, especially among smaller companies
that have fewer resources to devote to cyber defenses. These meetings
will also help to identify relevant trends and challenges in this
rapidly evolving environment that can further aid in cyber risk
management.
b. Why aren't these meetings being conducted under the Department
of Homeland Security's Protected Critical Infrastructure Program?
Answer. The Commission works closely with DHS to assess the
preparedness of the telecommunications sector for a wide variety of
contingencies. Under the Policy Statement under consideration, these
meetings would be complementary to the DHS cybersecurity efforts. The
Commission is working with DHS on an administrative arrangement to make
use of the Protected Critical Infrastructure Information (PCII)
program. In the interim, and in light of the importance of
cybersecurity for this critical infrastructure sector of the Nation's
economy, the Policy Statement under consideration describes the
confidentiality and other protections that the Commission would apply
to such meetings while the Commission continues to work with DHS to
make use of the PCII program.
c. Are you planning to conduct in-depth cybersecurity audits of
these companies?
Answer. No. We intend these meetings to be a conversation on
companies' cyber risk management practices; there is no ``correct'' or
``minimum'' standard against which companies will be measured. The
Policy Statement under consideration makes clear that those companies
that elect to participate in such meetings have discretion over what
information they present about their cyber risk management practices
and how they present it.
Question 2. I understand that in January 2014 the FCC budgeted $3
million for telecommunications relay services (TRS) research and
development, and that a portion of that funding was used to support a
MITRE Corporation study on Internet Protocol Caption Telephone Service
(IP CTS).
a. If that study is complete, will you provide a copy?
Answer. The MITRE Corporation (MITRE) has performed studies to
assess the accuracy, latency and associated usability of Internet
Protocol Caption Telephone Service (IP CTS) devices and services, as
well as alternative technologies that could augment IP CTS for people
with hearing loss. In part, these studies are intended to determine the
feasibility and effectiveness of handling calls through automated
means, to reduce the need for third party communication assistants. Our
goal is to develop methods of handling TRS calls that can result in
savings to the TRS Fund while at the same time ensuring that such calls
are functionally equivalent to voice telephone calls, as required by
the Communications Act. Specifically, MITRE has submitted to the FCC
preliminary test results assessing a sample of current and alternative
speech recognition technologies and qualitative and quantitative
measures for device and caption performance. MITRE also has provided
preliminary results from controlled user assessments, and established a
baseline of usability metrics based on MITRE's assessments of IP CTS
devices and services. These activities provide qualitative and
quantitative measures for device and caption performance.
The FCC is evaluating MITRE's results to ascertain the extent to
which new advances in speech recognition technology technologies and
processes can improve IP CTS so that these services become more
functionally equivalent to telephone services used by hearing people
without the need for human intervention during these calls.
b. If it is not complete, when do you expect it to be done?
Answer. Phases 1 and 2 of the study have been substantially
completed and the FCC is reviewing and analyzing the preliminary
results thus far to determine whether additional studies are necessary.
c. Do you plan to put the study out for public comment or review?
Answer. It is the Commission's intention to make MITRE's final
research results publicly available.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Hon. Tom Wheeler
Question 1. For years, I have believed that the way in which rules
are processed at the Commission lacks transparency and is detrimental
to the American public. My FCC Process Reform Act would address these
transparency and accountability issues for the sake of consumers and
the industries supporting innovation and our economy.
For example, the public has no idea the specific language of the
rules the Commission is voting on until after they are passed. We saw
that with the net neutrality rules that were pushed through this time
last year, and we saw it a few weeks ago when the FCC voted on the
proposal related to set-top boxes.
In fact, Chairman Wheeler said during that meeting on set-top
boxes: ``There have been lots of wild assertions about this proposal
before anybody saw it.'' The problem is that the public doesn't know
what to expect from the rule--there is no certainty for those on the
outside.
Do you believe the public has a right to see the specific language
of a rule before it is voted on by the Commission?
Answer. I absolutely believe that the public has the right to see a
proposed rule and comment on it prior to being voted by the Commission.
This concept is at the heart of the Administrative Procedure Act as
well as the Commission's rules. Proposed rules are published well in
advance of any final rulemaking, as part of an NPRM. Following
publication of the NPRM, we maintain an open and transparent comment
period consistent with our rules and the APA. By the time a draft text
of a final rule is circulated to the Commissioners, there have been
multiple opportunities for the public to comment--comments, reply
comments, and generally a significant period for ex parte filings and
meetings.
Question 2. As someone committed to protecting Americans' and
Nevadans' privacy, especially related to personally identifiable
information (PII), I have a questions regarding the recent set-top box
Notice of Proposed Rulemaking.
Currently, pay-TV companies must follow strong privacy protections
to ensure consumers' personal information is not collected, utilized,
or shared for non-service related purposes. How does this NPRM
contemplate applying and enforcing these same privacy to any new
suppliers entering the set-top box market? Does the FCC have the legal
authority to enforce Title 6 privacy standards on third parties?
Answer. Cable providers abide by specific privacy obligations under
Title VI of the Communications Act. In the NPRM, the Commission
tentatively concludes that developers of third-party navigation devices
should certify they are in compliance with the same privacy obligations
in order to receive the three information flows from pay-TV providers
that enable third parties to develop competitive solutions. The
proposal asks a number of questions about how best to enforce such a
requirement, including whether an independent entity should validate
third-party developer's certifications, whether the Commission should
maintain the certifications, and what the appropriate enforcement
mechanism should be if there are any lapses in compliance with any
certification.
Additionally, the NPRM notes that today, competitive navigation
devices must comply with a host of state and Federal privacy
protections that include various remedies for consumers. All of these
protections and remedies would continue to apply under the proposal in
the NPRM.
______
Response to Written Questions Submitted by Hon. Steve Daines to
Hon. Tom Wheeler
Question 1. Chairman Wheeler, businesses recognize the importance
of complying with the TCPA. In fact, some businesses have opted to
ensure their compliance with TCPA by implementing rigorous training,
monitoring, and enforcement programs. These compliance programs, can be
an extremely costly investment, but businesses pursue these because it
is the right thing to do and because these programs work.
Does the FCC support the concept of a business voluntarily choosing
to invest in compliance due diligence and verification programs? Why or
why not?
Unfortunately, the promise of these voluntary compliance programs
has been inhibited by a vague vicarious liability understanding that
causes businesses to shy away from due diligence measures out of
litigation fear--a perverse disincentive for businesses not to do the
right thing. Should businesses be penalized for implementing programs
with the goal on enhancing compliance? Why or why not?
The issue of a compliance measures was not addressed in the FCC's
recent TCPA order. Would the FCC support a legislative proposal seeking
to clarify this uncertainty by amending TCPA to potentially reward, as
oppose to penalize, businesses that choose to the do the right thing by
adopting comprehensive TCPA compliance programs?
Answer. The Commission is committed to the TCPA's goal of
protecting consumers from unwanted calls and texts, one of the largest
categories of complaints that we receive. Compliance with the TCPA by
businesses who make calls is, of course, a key component of ensuring
that consumers do not receive unwanted calls and texts. Programs that
involve training, monitoring, and enforcement regarding the TCPA's
requirements can undoubtedly go a long way toward helping businesses
make only calls that consumers value and avoid calls that they do not
want to receive. We would be interested to learn more about the
concerns that your constituent has raised about compliance programs,
and would be happy to work with your staff to facilitate a meeting to
discuss this subject in more detail.
Question 2. Chairman Wheeler, during your testimony, you said that
copyright laws remain in place under your set-top box proposal. Under
your proposal, would a programmer providing its copyrighted programming
to an MVPD retain its exclusive right to decide whether or not it
wanted to appear in a third-party app developed by a different party?
What in the proposal protects a copyright owner's right to decide
whether, how and on what platforms to disseminate its content?
Answer. The new proposed rules would create a framework for
providing device manufacturers, software developers and others the
information they need to introduce innovative new technologies, while
at the same time maintaining strong security, copyright and consumer
protections. An important part of the proposal is parity, if a content
owner has given the right to an MVPD to display the content on a
different platform, the proposal seeks to allow others to develop
options for that platform. The content protection and security that the
MVPD chooses would be enforced just as they are today--in the private
marketplace consistent with contracts, copyright law, and the MVPD's
power to revoke a compromised device's ability to receive service. The
proposal is clear--we are committed to ensuring the protection of
content creators' copyright and not interfere with the business
relationships or content agreements between MVPDs and their content
providers or between MVPDs and their customers. The proposal, which is
based on the way that content protection is administered today, states
that to license the content protection that is necessary to decrypt
multichannel video programming from a MVPD, the third party must
certify that it will honor copy protection limits and prevent theft of
service.
Question 3. Chairman Wheeler, when you testified before the
Commerce Committee last May, you said that universal access is at the
core of the FCC's mission, including access for individuals living on
tribal lands. Yet, the Commission has not even consistently asked for
funding for tribal consultation, and, by all accounts, has no intention
to move forward with the next phase of the tribal mobility fund. Can
you explain how this is consistent with your claim that access on
tribal lands is at the core of the FCC's mission?
Answer. Universal access to telecommunications services, including
on tribal lands, is a core element of the FCC's mission. The Commission
is currently planning five regional Tribal consultation and training
workshops for 2016. The Commission has also invited USDA to
participate. The first of these workshops will be held in late May or
early June in Montana, with four more to follow in Oklahoma and in the
Great Lakes, Southwest, and Pacific Northwest regions of Indian
Country. The Commission is committed to working with our Tribal
partners and with USDA to ensure that the 2016 Tribal consultation and
training workshops, as well as those in future years, provide as
comprehensive and coordinated an approach as possible.
In addition, the proposal for an ongoing Tribal Mobility Fund
remains under consideration as staff reviews the record regarding
possible next steps for a Mobility Fund Phase II.
Further, the Commission recently adopted an FNPRM that seeks
comment on reforming high-cost universal service support to promote
broadband deployment on Tribal lands, including through a Tribal
Broadband Factor for rate-of-return carriers serving Tribal lands. I
plan to take action on this issue in 2016.
Question 4. Chairman Wheeler, the FCC's exclusivity protections are
a good way to avoid costly and unnecessarily litigation, especially for
small businesses. Have you studied what kind of burden removing those
non-intrusive protections could impose on small broadcasters who would
then have to rely on expensive and time-consuming litigation with
bigger companies to enforce their otherwise straightforward contractual
rights?
Answer. While we did not do a study on the burden that could be
imposed on small broadcasters, I strongly believe that there would be
little, if any, need for broadcasters to resort to litigation.
Specifically, the likelihood of litigation is low because under the
proposal a distant station would have to grant its consent to be
imported into another station's market by an MVPD.
In addition, an elimination of the exclusivity rules is unlikely to
have an immediate effect on programmers, broadcasters, cable companies,
or consumers. This is because current broadcast program contracts and
network affiliation agreements regularly contain their own exclusivity
provisions prohibiting a program from being imported into a market if
it is being shown on a local broadcast station. In these circumstances,
retaining the exclusivity provisions may well be redundant and a
Federal intrusion, without cause, into the marketplace. Faith in the
free market would suggest that government get out of the way, absent an
indication of harm. Since the rules appear redundant to existing
contractual provisions based on the record, their elimination would not
be the trigger for such harm.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Hon. Tom Wheeler
Question 1. Did the FCC rely on the record in the Open Internet
rulemaking proceeding to reach the decision it ultimately adopted? Does
the record in the open Internet rulemaking proceeding include legal
arguments and opinions supporting the Title II approach the FCC
ultimately adopted? If so how many or what percentage of the record
supported a Title II approach? Does the record include a filing from
the Office of President Obama? Does the record in the case show,
contrary to the allegations in Senator Johnson's report ``REGULATING
THE INTERNET: HOW THE WHITE HOUSE BOWLED OVER FCC INDEPENDENCE'', that
the FCC engaged in a robust deliberative process and adopted a decision
supported by the record as required by the Administrative Procedures
Act? If so, please detail how the Commission complied with the APA in
reaching this decision.
Answer. The 2015 Open Internet Order was the product of a rich
rulemaking record and the Commission's extensive deliberations on that
record.
The May 2014 Notice of Proposed Rulemaking (NPRM) was part of an
ongoing public discussion about means by which the Commission could act
to protect an open Internet. An extensive public record on this issue
existed before we initiated the NPRM. In 2010, the Commission issued a
Notice of Inquiry asking, among other things, whether and how to apply
Title II to broadband services. The January 14, 2014, Verizon decision
vacating portions of the 2010 Open Internet Order included a lengthy
discussion of the Commission's Title II ``common carrier'' authority.
One of the key holdings in Verizon was that the Commission could not
impose rules requiring broadband providers not to engage in ``unjust
and unreasonable discrimination'' unless the Commission classified
their services as telecommunications services under Title II. The Open
Internet rulemaking we initiated in May 2014 was a direct response to
this remand.
The NPRM repeatedly sought public comment on the Commission's
authority under Title II and commenters clearly understood that the
Commission's authority under Title II would be considered as part of
the rulemaking process to protect and promote the open Internet as
evinced by the record. The record is replete with commenters supporting
a Title II approach, ranging from industry parties (e.g., Cogent and
COMPTEL) to public interest organizations (e.g., Consumers Union and
the New America Foundation) to edge providers such as Etsy and Mozilla,
to individual consumers. The Obama Administration filed an ex parte in
the Open Internet docket on November 10, 2014, after President Obama
issued a statement calling for the creation of ``a new set of rules
protecting net neutrality.''
The Commission provided notice on multiple occasions of the
approach that we adopted in the final order, in full compliance with
our legal obligations under the Administrative Procedure Act (APA), and
consistent with our practice and precedent.
Question 2. It has come to my attention that the company Zillow,
based in my home state, filed comments with your agency in support of a
declaratory ruling clarifying the regulatory status of mobile messaging
services (WT Docket No. 08-7).
Zillow is a popular real estate and rental platform with
approximately 140 million monthly users that empowers consumers with
data, and information about housing and connects them with local
professionals who can help.
Zillow uses texting to quickly and reliably notify agents of
potential buyers' inquiries so they can provide a quick call or text
message back to connect. To prevent spam listings on the website,
Zillow requires users to validate their identity by receiving a text
message on their cell phone.
In its filing with the FCC, Zillow expressed concerns with the
reliability of message delivery under the carriers' current practices
that block non-spam text messages. The result of this activity is any
of the following poor customer experiences:
Agents don't find out right away that a potential buyer
wants to talk to them.
Potential buyers are frustrated that they don't receive
responses from agents.
Users can't verify their identity, so their listings don't
get posted to our site.
What is the Commission doing to ensure that the critical text
messages such as those that are sent between buyers and brokers using
Zillow are delivered with certainty and reliability?
Answer. Twilio, which provides a platform that allows commercial
entities to send text messages to end users, filed a petition in WT
Docket No. 08-7 on August 28, 2015, asking the Commission to classify
text messaging services as telecommunications services under Title II
of the Communications Act. On October 13, 2015, the Wireless
Telecommunications Bureau released a Public Notice seeking comments on
Twilio's petition and the comment period for the petition closed on
December 21, 2015. The Commission received substantial input in
response to the Public Notice, including comments from Zillow, and
Commission staff are carefully reviewing the technical and policy
considerations raised in the record. The Commission staff also are
currently meeting with stakeholders at their request to better
understand these concerns in light of the developing record.
Question 3. My office has met with Twilio, which powers messaging
for several Washington-based companies, including Zillow, Redfin, Peach
and Nordstrom. Redfin uses text messaging for real estate reminders and
has experienced filtering. Peach is a lunch delivery platform that uses
text messages to facilitate orders and filed in support of Twilio's
petition. Nordstrom uses text messaging through 10-digit numbers to
reach customers, which is cited by customers as a preferred method of
communication.
Twilio asserts that they've made good-faith efforts to resolve the
blocking of wanted, non-SPAM messages with the carriers and CTIA--it's
worth noting that Twilio CEO Jeff Lawson serves on CTIA's board.
Given the lack of progress, shouldn't the FCC intervene to help the
parties come up with a solution?
If SPAM is truly a huge concern as the carriers have argued, does
the FCC agree that only wireless carriers can solve it? I urge the FCC
to look into the extent of the how bad is the SPAM problem: Where is it
coming from? What are wireless carriers doing to solve the spam
problem? From my understanding of the issue, all parties should be
involved in preventing spam, including the edge providers.
The current system of filtering messages in the name of SPAM
prevention is conducted without transparency, unchecked at the carrier
level. Is this the best approach? Should the FCC require more
transparency from the carriers?
Answer. As noted in response to Question 2, the Commission is
currently considering comments filed in response to a petition filed by
Twilio on the regulatory treatment of text message services. The impact
of different approaches for ensuring that consumers receive the text
messages they want while protecting consumers from unwanted messages is
among the issues raised in that proceeding. In the record, carriers
have argued that the current system protects end users from unwanted
text messages, but other parties have submitted comments indicating
that carriers engage in blocking text messages desired by end users and
do so without disclosing that they have blocked an edge provider's
message.
The Commission is in the process of reviewing the record in
response to Twilio's petition. In addition, the Commission is meeting
with stakeholders at their request, and these meetings will continue to
develop the record with regard this issue.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Tom Wheeler
Question 1. One of the best tools the Commission has in overseeing
the Lifeline program is the ability to take aggressive enforcement
against carriers violating the rules of the program, companies that are
abusing both the consumers who use the program as well as the rate
payers that fund it. That's why I applauded a flurry of announced
enforcement activity from September 2013 through February 2014. During
that time the FCC issued Notices of Apparent Liability (NALs) totaling
more than $94 million in proposed fines for 12 companies participating
in the Lifeline program. Some of those notices are more than two-and-a-
half years old yet not a penny of that money has yet been collected.
Will you press the Enforcement Bureau to either issue forfeiture
orders, reach settlements, or dismiss these 12 NALs in an expeditious
manner?
Answer. The Commission's Lifeline enforcement actions referenced in
your question have been referred to the FCC's Office of Inspector
General, which will handle resolution of those matters.
Question 2. To avoid this situation in the future, would you
support a shot clock for resolution of NALs? If so, what do you believe
would be an acceptable amount of time?
Answer. The Enforcement Bureau already operates under tight time
constraints. Section 503(b)(6) of the Communications Act requires the
Commission to bring enforcement actions that seek to impose a monetary
penalty within one year of the violation. This one-year statute of
limitations holds true even if the Commission learns of the violation
one week or one month before the one-year expiration. A ``shot clock''
that would impose an additional set timeline to resolve enforcement
actions would likely limit the ability of the Enforcement Bureau to
fully investigate the facts of cases or to pursue complex cases and
cases involving exigent circumstances.
I should note that the Enforcement Bureau has made a concerted
effort to bring enforcement actions to conclusion as quickly as
possible, including by substantially reducing the time between an NAL
and a Forfeiture Order. In recent years, the Bureau has made great
strides to provide timely conclusions to cases. For example, NALs
issued in 2011 took an average of 19 months to be resolved via
Forfeiture Order, whereas NALs issued in 2014 took an average of eight
months to be resolved via Forfeiture Order--a near 60 percent
improvement in speed. However, these numbers are averages and reflect
the typical case that was brought to resolution. While many enforcement
actions are routine, others are also quite complex and can take
substantial time and resources to resolve. A few examples of the kinds
of issues that complicate the amount of time needed to conclude
forfeiture adjudications are: investigations that involve targets in
foreign countries; investigations that involve coordination with other
government agencies; investigations in which the governing legal
authorities have changed, are in the process of changing, or are
subject to ongoing rulemakings or litigation; and investigations that
uncover substantially new information or evidence subsequent to the
NAL.
In addition, some enforcement actions are resolved through consent
decrees after the NAL. Settlement negotiations take substantial amounts
of time and staff resources. The Enforcement Bureau's settlements
frequently result in consumer protections that are carefully negotiated
to address the specifics of the case. These settlements provide
certainty to the investigation targets as well as reduce litigation
expenses for targets and the Commission, which can be quite substantial
since regulatory appeals and subsequent Federal court litigation can
take many years to conclude.
Question 3. The Bipartisan Budget Act of 2015 included an unwise
and harmful provision to exempt debt collection calls on behalf of the
Federal Government from Telephone Consumer Protection Act (TCPA) rules
that prohibit robocalls to cell phones. Although the provision was
ostensibly aimed at collecting student loan debt, the loophole was
potentially widened even further by adoption of the Fixing America's
Surface Transportation (FAST) Act in December, which requires the
Internal Revenue Service to contract with private debt collectors to
collect unpaid taxes. I have held hearings in this committee's Consumer
Protection Subcommittee and at the Senate Aging Committee on robocalls.
We should be making it harder--not easier--for this number one consumer
complaint to continue, especially when there is no evidence that
robocalls are an effective means of reaching consumers. Until we are
successful in repealing this provision, the FCC is tasked with adopting
rules to implement it.
Would you support rules that require companies collecting debt on
behalf of the Federal Government to register with the FCC in advance of
doing so?
Would you support rules that limit calls from companies collecting
debt on behalf of the Federal Government to no more than one call per
consumer per month?
Answer. I am committed to enforcing the TCPA, which is designed to
protect consumers from unwanted calls and texts. Consumers value their
privacy, regardless of whether unwanted efforts to reach them target
their home landlines or wireless phones. As you note, Section 301 of
the Bipartisan Budget Act of 2015, which amends the codified Telephone
Consumer Protection Act, creates an exception to the TCPA's prior
express consent requirement for automated calls to cellular or
residential telephones for the purpose of collecting debts owed to or
guaranteed by the United States.
Last month I circulated a draft Notice of Proposed Rulemaking
(NPRM) that seeks comment on several of the concerns you raise, and
presents proposals that remain faithful to Congress's mandate while
shielding consumers from unwanted robocalls. The draft NPRM proposes
strong pro-consumer restrictions on the type and number of calls a
Federal creditor may place to recover a delinquent debt. In particular,
the NPRM proposes:
that only calls made after a debtor has become delinquent
are covered by the exception;
to limit the calls to creditors and those calling on their
behalf, including debt servicers;
that these robocalls can only be made to the debtor, so as
to prevent unwanted robocalls to relatives, friends, and other
acquaintances of debtors;
to limit the number of calls to three per month per
delinquency; and
to empower consumers with the right to stop calls from a
Federal creditor at any time and to require callers to inform
debtors of this right.
The draft NPRM also makes clear that the new rules will not open a
door for telemarketing calls. Congress specified that exempted calls
must be ``solely'' to collect a Federal debt, and the new rules will
comply with that strict limitation.
Question 4. What impact do you believe this exemption will have on
the ability of the Commission's Enforcement Bureau to differentiate
between calls that are now exempt from TCPA and those that are not,
particularly when exempt calls and non-exempt calls could be coming
from the same call centers?
Answer. I do not anticipate that the exemption will materially
impair the Commission's ability to differentiate between exempt and
non-exempt calls. When the FCC investigates potential illegal
robocalling campaigns, we issue a subpoena or Letter of Inquiry to the
call center/person/entity responsible for the initiation of the call.
Our subpoenas and inquiries require the target to produce evidence
proving that the calls were made with the recipient's prior express
consent (or prior express written consent, as applicable), or that show
the calls were permissible under the limited exceptions granted in
Section 227 of the Communications Act. Commission precedent has been
very clear that any time a question or doubt arises about whether a
consumer gave his or her prior express consent, the burden is on the
caller to demonstrate that it obtained the proper prior express
consent. The burden will continue to be on the target/caller to produce
evidence that it made the call on behalf of the Federal Government in
order to benefit from the new exemption.
Question 5. The Chairman recently received a letter from Senator
Blunt and me regarding the upcoming reverse auction portion of Connect
America Fund, Phase II (CAF II).
For CAF II in Missouri, there is approximately $400 million
available over the next 10 years to bring broadband to unserved parts
of the state. Can you assure me that the money will be spent in
Missouri and not be reallocated to other areas of the country?
Answer. The data used to calculate the CAF Phase II offer of
support in Missouri and elsewhere in the country are outdated.
Consistent with our overarching principle of not providing support in
areas that are already served by unsubsidized competitors, we are in
the process of updating our list of which areas will be subject to
auction to reflect the current marketplace. We are committed to
developing an auction framework that will ensure that providers in your
state, as well as others, can compete to bring robust, scalable
broadband service to unserved, high-cost areas, subject to the overall
budget established for Phase II.
Question 6. As you consider the framework to govern the reverse
auction to award the remaining dollars available in CAF II, how will
you ensure that funded projects not only meet today's broadband
definition, but are future proof and scalable to keep pace with ever-
changing technology and increasing needs for higher speed broadband?
Answer. The Commission is focused on updating the universal service
high-cost program to ensure that we are delivering the best possible
voice and broadband experiences to rural areas not only for today, but
in the future, all within the confines of the Connect America Fund's
budget. One of the primary policy goals of the competitive bidding
process is to ensure widespread participation from all providers that
can deliver a high-quality service. As we move forward with finalizing
the structure of the CAF Phase II reverse auction, we will be giving
full attention to the best ways to ensure that rural communities,
including those in Missouri, have access to robust and reliable
broadband service both today and in the future.
Question 7. In 1993, through the Omnibus Budget Reconciliation Act
of 1993, Congress directed the FCC to develop regulations governing the
competitive bidding of spectrum. Included in the statutory instructions
from Congress was a requirement that the Commission ``ensure that small
businesses, rural telephone companies, and businesses owned by members
of minority groups and women are given the opportunity to participate
in the provision of spectrum-based services.'' To meet this
congressional mandate the FCC created the Designated Entity (DE)
program. The program's worthy goal of providing a mechanism for
legitimate small businesses to partner with larger ones in spectrum
auctions has undoubtedly helped many small businesses win spectrum
licenses over the past 20+ years. But it has also provided a blueprint
for large, multinational, multi-billion-dollar corporations to game the
system and receive discounts on their bids.
What assurances can you provide that the commission will do a
better job of monitoring potential abuse of the DE program in the
upcoming incentive auction than it did in the recent AWS-3 auction?
Answer. The Commission always carefully reviews all claims of
eligibility for small business bidding credits in the course of its
review of the licensing applications of auction winners. For example,
in August 2015, the Commission denied over $3 billion in credits in the
recent AWS-3 Auction to two entities that it found were controlled by a
large multi-billion dollar corporation and, therefore, ineligible for
bidding credits. The Commission staff will also carefully review
applications filed by winning forward auction bidders in the upcoming
Incentive Auction, which review will be augmented by new rules adopted
in July 2015.
Specifically, in July 2015, the Commission updated its competitive
bidding rules in the Competitive Bidding Report & Order. This Order
adopted new rules to reflect the dramatic changes in the wireless
marketplace since the Commission's competitive bidding rules were last
updated in 2006. Particularly, the new rules better achieve the goals
that Congress intended through its mandate while preventing the type of
abuse you reference. As a result, the designated entity program will
better serve small businesses and eligible rural providers by expanding
their ability to adopt innovative and flexible business plans, and at
the same time incorporate a number of measures to make sure that only
bona fide small businesses and eligible rural service providers benefit
from bidding credits.
Simply put, the new rules will ensure that small businesses are not
able to serve as a stalking horse for another party. The Report & Order
established the first-ever cap on the total amount of bidding credits
to minimize the incentive for major corporations to try to take
advantage of the program. It also limits the amount of spectrum that a
small business or rural service provider may lease to its disclosable,
non-controlling investors during the five-year unjust enrichment
period. The revised rules also clarify that joint bidding agreements
between designated entities (including small businesses and rural
service providers) and nationwide service providers will not be
permitted. Ultimately, the reforms adopted in the Report & Order will
increase the economic opportunity for small and rural businesses, as
well as ensure that the beneficiaries of our competitive bidding rules
are those intended by Congress.
Question 8. When Congress and the FCC were establishing the
framework for spectrum auctions more than 20 years ago it probably made
sense to ensure small businesses were able to compete. But a lot has
changed. The cost of entering the incredibly expensive wireless
infrastructure industry is far greater than it was in the early 1990s.
A company that truly has revenues of $40 million, $15 million, or $3
million--the thresholds set by the commission for the various levels of
bidding credits--would be unlikely to enter the industry today. So is
it time to look at simply eliminating the DE program to prevent future
abuse?
Answer. The DE program is an important program that can help bring
opportunity and competition to the wireless industry. The Commission is
committed to ensuring that bona fide small businesses and eligible
rural service providers have the opportunity to participate in our
spectrum auctions and in the provision of spectrum-based services. For
this reason, the Commission adopted the Competitive Bidding Report &
Order last year. This Order updated our competitive bidding rules to
reflect the dramatic changes in the wireless marketplace since they
were last updated in 2006. In 2006, the top four national carriers
served 82 percent of the market; today the top four national carriers
serve 98 percent of all subscribers. Given these changes, the
Commission acted to provide bona fide small businesses and eligible
rural service providers a better on-ramp into the wireless industry,
and provide small and eligible rural providers with flexibility to make
businesses decisions with the goal creating more wireless choices for
consumers. Under the Commission's new rules, the DE program will
continue to provide small and rural businesses with the flexibility
they need to gain experience in operations and investment.
______
Response to Written Questions Submitted by Hon. Amy Klobuchar to
Hon. Tom Wheeler
Question 1. Mr. Chairman, in our capacity as Chairman and Ranking
Member of the Antitrust Subcommittee, Senator Lee and I sent you and
Attorney General Loretta Lynch a letter on February 17, urging you to
carefully consider how Charter's acquisition of Time Warner Cable and
Bright House Networks will ``hinder or promote the development of new
alternatives for consumers to receive video content.'' We urged you to
consider whether the transaction would increase Charter's incentive and
ability to interfere with over-the-top service providers. Interference
could occur through discriminatory interconnection practices or by
reducing the price Charter pays to include certain content in its cable
package. Is this the type of concern that the FCC would consider in a
merger review?
Answer. Consistent with our rules, the Commission will evaluate
whether these proposed transactions are in the public interest. As I
indicated in my response to your letter, our analysis takes several
factors into account, including the issues you raised in your letter.
With regard to the issues you raise here and all issues relevant to the
transaction, not only do we assess whether we can appropriately remedy
any harms that may arise from the transaction, we also place great
emphasis on the benefits that the transaction will confer on American
consumers. Again, while I am unable to discuss the specific merits of
this particular proceeding, I can assure you that the Commission will
be conducting an open and transparent process as required by FCC rules
and regulations. After developing a full and complete record, we hope
to conclude our review as quickly as possible.
Question 2. In 2012, I worked to include an important policy in the
FAA reauthorization to allow for priority review of construction
permits in cold weather states. International Falls, Minnesota, is
fortunate to be home to the coldest annual average temperature in the
contiguous United States. The KPXM Tower in International Falls also
happens to be the tallest structure in Minnesota. I can't imagine any
of us would want to climb 1,505 feet to the top of it in February.
Chairman Wheeler, will you work with me to ensure that broadcasters
in cold weather states have the resources and flexibility they need to
be able to complete the post-auction repacking process in a timely
manner?
Answer. Yes. We will take into account how many stations actually
need to be repacked, and the specific characteristics of each, in
determining the repacking schedule. The Commission has been working
closely with broadcasters to get important input from the industry on
planning a successful transition. We have also had discussions with
representatives of the wireless industry, who have an interest in an
efficient transition process. We anticipate further interaction with
all affected stakeholders as we develop and refine this transition
plan.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Hon. Tom Wheeler
Question 1. Last year, I filed comments with the FCC urging the
establishment of coordinated enrollment opportunities for low-income
and homeless veterans to the Lifeline Program, which has provided
critical telephone access to low-income Americans for over 30 years. As
Ranking Member of the Senate Committee on Veterans' Affairs, I strongly
believe that greater access to Lifeline benefits will provide support
for veterans in need as they transition from the armed services to
civilian employment and as they transition from homelessness into
housing. What is the FCC doing to ensure that our most vulnerable
populations, ranging from veterans to students, are aware of these
essential programs?
Answer. I share your interest in ensuring that our most vulnerable
populations, including veterans and students, are aware of these
essential programs. As I indicated in my response to your letter last
year on this issue, the Commission sought comment in the 2015 Lifeline
FNPRM on whether to include Federal low-income assistance programs for
veterans to qualify those individuals for Lifeline support. Recently, I
circulated an Order for my colleagues' consideration to modernize the
FCC's Lifeline program to efficiently and effectively meet a critical
21st Century need: making broadband more affordable for low-income
consumers. The Order will be considered at the FCC's March 31 Open
Meeting.
The Order proposes to add Veterans Pension and Survivors Pension
benefit programs to Lifeline's eligibility program. To qualify for the
Veterans Pension benefit program, veterans must have at least 90 days
of active duty, including one day during a wartime period, and meet
other means-tested criteria such as low-income limits and net worth
limitations established by Congress. In addition, any surviving spouse
or dependent of a deceased eligible veteran can qualify for the
Survivors Pensions benefit program. Many commenters supported this
change and have demonstrated an established need for armed forces
veterans to access affordable phone service.
More generally, by supporting broadband, Lifeline will bring
connectivity into the homes of low-income Americans. We must modernize
the Lifeline program to improve affordability and access to broadband--
the critical communications technology of the 21st Century--for all low
income Americans.
Question 2. What can policymakers do to help get more people
connected and also ensure that we can meet the growing demand?
Answer. While it is clear that broadband has become essential in
today's society, affordability remains a major barrier to adoption by
low-income consumers. The proposed Order I recently circulated for my
colleagues' consideration takes a number of steps to address the
broadband affordability gap. For the first time, low income consumers
could apply the $9.25 per month support to stand-alone broadband
service, as well as bundled voice and data service packages. The Order
would free up the Lifeline marketplace to encourage wide participation
in the program by broadband providers, giving consumers competitive
service options. Minimum service standards would ensure that supported
services meet modern needs, and the establishment of a National
Eligibility Verifier will further deter waste, fraud and abuse, while
reducing provider burden. In addition, the Order proposes to set a
budget of $2.25 billion, indexed to inflation, to limit Lifeline's cost
to ratepayers, but sufficient to allow for increased participation
generated by support for broadband service.
Question 3. The FCC issued its Notice of Proposed Rulemaking on
Special Access in 2005. Over a decade has now passed, yet there is
still no final rule. I understand that the FCC needs to collect
information from providers and users of special access services in
order to conduct the necessary market analysis to proceed with this
rulemaking.
Do you now have the data necessary to finalize a rulemaking to
ensure that special access lines are provided at reasonable rates and
on reasonable terms and conditions?
At this point, are there any other factors blocking you from
finalizing a rulemaking?
Answer. The resolution of the business data services (special
access) proceeding is a high priority at the Commission and we are
moving forward with all due diligence to conclude this proceeding as
expeditiously as possible while ensuring full consideration of the
record. We have collected data, and the comment and reply periods on
the business data services rulemaking proceeding closed last month.
Commission staff is reviewing the comments, including substantial
economic analysis of the data by stakeholders' expert consultants. The
analysis of the data, as well as other informed public input filed in
this proceeding, will provide the Commission with the tools necessary
to fully comprehend this marketplace and take action as appropriate.
Question 4. As you know, to address increasing demand for wireless
broadband access, Congress directed the FCC to conduct an incentive
auction, to encourage broadcast licensees to voluntarily relinquish
their spectrum rights in exchange for a share of the proceeds in
auctioning this spectrum to new licensees. In many parts of the
country, contiguous spectrum will be freed up by ``repacking'' the
channels to which remaining television broadcasters are currently
assigned. Do you believe there is enough money in the TV Broadcaster
Relocation Fund to cover repacking-related expenses incurred by
broadcasters?
Answer. At this point, we have no reason to believe that the $1.75
billion Broadcaster Relocation Fund will be insufficient to cover
broadcasters' relocation costs. In order to ensure the sufficiency of
the fund, we will optimize the final broadcaster channel assignments to
minimize relocation costs. This optimization will: (1) maximize the
number of stations assigned to their pre-auction channel; and (2) avoid
reassignments of stations with high anticipated relocation costs, based
on the most accurate information available. These steps, taken
together, will help to ensure that the $1.75 billion Reimbursement Fund
is sufficient to cover broadcasters' relocation costs and that the Fund
is disbursed as fairly and efficiently as possible.
Question 5. If the 39 month repack time-frame and the $1.75 billion
relocation fund are insufficient, does the FCC have the flexibility in
the statute to ensure consumers and communities won't be negatively
affected by signals going off the air?
Answer. The Commission's goal is for consumers to experience
minimal disruption. To help ensure the Broadcaster Relocation Fund is
sufficient to cover broadcasters' relocation costs, the FCC
commissioned the Widelity Report to more fully understand the types of
costs that would be required, and the magnitude of those costs, to help
make efficient use of the Broadcaster Relocation Fund. The Commission's
Media Bureau adopted a catalog of expenses as guidance, which will
serve as a means of facilitating the process of being reimbursed by
setting forth categories of expenses. The Commission is taking
appropriate measures to disburse funds as fairly and efficiently as
possible to ensure the sufficiency of the Reimbursement Fund.
Should the $1.75 billion be insufficient, I will notify Congress as
soon as this becomes clear. The amount was set by the Spectrum Act and
Congress would need to take action to change it.
Question 6. If so, how can the FCC ensure that broadcasters have
sufficient time to move without being forced off the air, if factors
outside their control delay their ability to reconfigure their
facilities?
Answer. We believe that a 39-month transition period is sufficient
for stations to apply for a construction permit (3 months) and move to
their new channels (36-month Construction Period), while also enabling
forward auction winners to get access to their newly acquired spectrum
as quickly as possible, thus ensuring a successful incentive auction. I
would also note that the appeals court unanimously upheld the 39-month
transition period. The Commission has created a framework that gives
stations every opportunity to remain on the air, even if time runs
short due to unforeseen circumstances. To assist stations, the
Commission will permit six-month extensions for stations that, for
reasons beyond their control, cannot complete the modifications to
their facilities during their construction period. Additionally,
special temporary authority may be granted to operate on a new channel
using a temporary facility while they complete their tower
modifications. Eligible broadcasters can also request special temporary
authority to operate on a channel in the TV band that is available
because it was relinquished by a winning bidder in the auction.
Questions 7. Do you agree that no non-participating broadcaster
should be forced off the air, or forced to cover the costs of
transitioning their signal, to accommodate the repack?
Answer. Every broadcaster who is assigned to a new channel in the
repacking process because they choose not to participate in the
auction, or participate but are not selected, will be eligible for
reimbursement of their reasonably incurred costs from the Relocation
Fund. The Commission is taking appropriate measures to disburse funds
as fairly an efficiently as possible to ensure the sufficiency of the
Relocation Fund. Non-participating broadcasters cannot and will not be
forced off the air.
Question 8. More and more often, we see retransmission consent
negotiations are turning into disputes that result in programming
blackouts and it's the consumers that pay the price. The fact is, the
more these blackouts occur, the more pressure mounts in Washington to
change the law to ensure consumers get a more fair shake. As you know,
Section 103(c) of the STELA Reauthorization Act of 2014 (``STELAR'')
directed the FCC to review the totality of the circumstances test for
evaluating whether broadcast stations and MVPDs are negotiating for
retransmission consent in good faith. In September 2015, the Commission
initiated a rulemaking on this question.
Please provide a status update on MB Docket No. 15-216.
Answer. Comments and reply comments were due on December 1, 2015,
and January 14, 2016, respectively. Staff is currently reviewing the
record and preparing recommendations on the next steps for action on
this proceeding.
Question 9. How does the Commission plan to delineate bad faith
negotiation tactics from good faith tactics? When can consumers be
confident there is a cop on the beat policing these negotiations to
ensure bad faith negotiating tactics are not holding hostage the
programming they paid for?
Answer. The Commission has a role pursuant to Section 325 of the
Communications Act to ensure that retransmission negotiations are
conducted in good faith. Rule 76.65 currently lays out the standards
for what constitutes good faith negotiation. We currently have a
pending Notice of Proposed Rule Making (Docket No. 15-216) that seeks
comment on how we can strengthen these rules and help minimize service
disruptions. Commission staff is currently reviewing the record in this
proceeding.
Question 10. Last year, I wrote to the FCC regarding a news story
in the Wall Street Journal that revealed that one in ten antenna sites
around the country may not adhere to FCC guidelines for providing the
appropriate level of awareness and control to occupational workers that
may be exposed to radiofrequency (RF) radiation above the limits for
the general population. This means thousands of innocent tradespeople--
electricians, painters, HVAC technicians, roofers, firefighters, and
others whose jobs require them to work in close proximity to RF-
radiating wireless antennas--may be unknowingly exposed to harmful RF
radiation.
An April 30, 2014, consent decree issued against Verizon for
violating FCC radio frequency exposure limits at a rooftop antenna site
in Hartford, CT, required Verizon to implement a rigorous compliance
plan to protect Verizon Wireless employees and contractors. However, it
was unclear what steps Verizon must take to ensure the safety of third
party workers. Please provide an update on Verizon's compliance with
this consent decree.
Answer. The Verizon consent decree resolved multiple investigations
into the company's compliance with the FCC's rules governing
radiofrequency exposure. The consent decree requires Verizon to check
each of its antenna sites for compliance, and provides detailed
measures for protecting the safety of Verizon workers and third parties
who might be exposed to radiofrequency radiation at Verizon sites. In
addition to training and other protections for Verizon workers and
contractors, the compliance plan also requires Verizon to protect third
parties by restricting access to sites, installing barriers where
necessary, and erecting radiofrequency exposure warning signage.
Pursuant to the agreement, Verizon must report on its compliance with
the consent decree. According to the most recent report, Verizon has
now performed compliance reviews of more than 6,900 antenna locations
and conducted training for all Verizon employees and third party
contractors with access to Verizon's sites. Verizon's final compliance
report is due on October 30, 2016.
It is important to note that the Commission continues to enforce
its rules and has taken action wherever warranted. The vast majority of
sites we have reviewed are in compliance with our rules.
Question 11. The FCC issued a Notice of Proposed Rule Making (NPRM)
in 2013 regarding RF exposure at wireless sites. What is the status of
this NPRM?
Answer. The FCC currently has rules that require compliance with
the Commission's RF Exposure rules for all wireless transmission
facilities and they are enforceable. The NPRM sought to clarify
responsibilities and the process for determining compliance in
situations where multiple transmission facilities are located close
together, such as on a rooftop. The NPRM also sought to clarify the
responsibilities for compliance with the RF exposure rules for today's
wide variety of transmission facilities, including when barriers may be
required to restrict access nearby an antenna, warning signs must be
posted, when compliance with the limits for the general population are
needed, and other issues. The underlying issues and analyses are quite
complex and will require careful consideration and coordination with
other Federal agencies such as the FDA and OSHA. The proceeding
continues to be a priority.
Question 12. It is not clear that the proposed rule would require
wireless service providers to extend the same level of RF radiation
protection they provide to their own employees to third-party workers.
What commitment can you make to address this possible oversight gap?
Answer. The rules the Commission proposed were designed to protect
all workers, as well as the general public. While I cannot prejudge the
outcome of our pending proceeding, I remain committed to this goal.
______
Response to Written Question Submitted by Hon. Edward Markey to
Hon. Tom Wheeler
Question. The rules governing the special access market need to be
reformed so the businesses, competitive carriers, wireless service
providers and others who rely on it can take full advantage of robust
and competitive broadband services. Mr. Chairman, can you update the
Committee on the status of the current proceeding?
Answer. The resolution of business data services (special access)
proceeding is a high priority at the Commission and we are moving
forward with all due diligence to conclude this proceeding as
expeditiously as possible while ensuring full consideration of the
record. We have collected data, and the comment and reply periods on
the business data services rulemaking proceeding closed last month.
Commission staff is reviewing the comments, including substantial
economic analysis of the data by stakeholders' expert consultants. The
analysis of the data, as well as other informed public input filed in
this proceeding, will provide the Commission with the tools necessary
to fully comprehend this marketplace and take action as appropriate.
______
Response to Written Questions Submitted by Hon. Cory Booker to
Hon. Tom Wheeler
Question 1. As you know, commercial demand continues to outpace the
Federal Government's reallocation of available electromagnetic
spectrum. The Wi-Fi Innovation Act (S. 424) aims to address the growing
demand for spectrum by encouraging sharing for unlicensed Wi-Fi use in
the 5 GHz band. This band shows promise in paving the way for further
economic growth and innovation. Since the bill's introduction,
Committee leadership has taken an active role in working to ensure that
testing and coordination move forward at an appropriate pace. What
progress has occurred in testing the 5 GHz band since January 1, 2016?
Answer. The Commission held a meeting with stakeholders in the 5
GHz band on March 23, 2016, as an essential step in moving ahead with
this process. In addition, the Commission continues to work
collaboratively with other government agencies (DOT/NTIA) to ensure
thorough and complete tests in the 5 GHz band to mitigate the risk of
harmful interference with Intelligent Transportation Systems (ITS). We
developed a three-phased testing plan that would involve reviewing
equipment in the Columbia Lab and testing sample/prototypes off-campus
utilizing DOT facilities and procedures. The next steps are to refresh
the record of this proceeding and solicit prototype devices for
testing.
Question 2. What steps remain to be taken, and how will FCC
implement them?
Answer. We have a significant amount of work ahead of us, including
initiating the testing process once appropriate prototypes are
available. The stakeholder meeting was very useful in openly discussing
some of the parameters for this process. We will need to review the
record once comments are submitted, and we expect substantial input
from stakeholders. We also will continue to meet with our agency
counterparts and discuss ongoing work as we move toward reaching a
mutually agreeable solution to this matter.
Question 3. As you know, licensed radio broadcasters in many areas
of the country face recurring harmful interference from ``pirate''
broadcasters illicitly broadcasting on their assigned frequency. What
steps is FCC taking to enforce the prohibition against illicit radio
operations?
Answer. The FCC is committed to enforcement of the licensing
requirements of the Communications Act, which the Commission has
interpreted to prohibit unlicensed radio broadcasting. Last year, 20
percent of the Enforcement Bureau's activities were directed towards
pirate radio. That's more than any other area of enforcement. During FY
2015, the Enforcement Bureau issued 130 enforcement actions for pirate
operations. More than half of those actions were in the New York/New
Jersey area.
In addition to taking formal enforcement actions, the Commission is
also addressing the issue by working more closely with broadcasters and
raising public awareness about pirate radio. Commissioner O'Rielly has
been a leader on this issue. I continue to be grateful for his guidance
in keeping the Commission focused on all the ways that we can combat
pirate radio. For example, earlier this month, the Commission issued an
Enforcement Advisory about pirate radio and all five Commissioners
signed letters addressed to local officials as well as groups that may
provide support, intentionally or unintentionally, to pirate radio
operations. The letters and accompanying Enforcement Advisory explain
the harms caused by pirate radio and seek to enlist the assistance of
local officials, landlords, and advertisers in identifying pirates and
depriving them of financial support. The letters and Enforcement
Advisory may be accessed on the Commission website at: https://
www.fcc.gov/document/enforcement-advisory-unauthorized-radio-
broadcasting
______
Response to Written Questions Submitted by Hon. Tom Udall to
Hon. Tom Wheeler
Question 1. Chairman Wheeler, I have concerns about Windstream's
decision to decline up to $27 million in Connect America Fund Phase II
(CAF II) support to improve broadband service in rural areas of New
Mexico. The U.S. Census Bureau notes that roughly one third of New
Mexicans households do not have Internet access at home. According to
Federal Communications Commission data, only one in four New Mexicans
living in rural areas has access to fast broadband speeds of 25
megabits per second (Mbps). When will the Commission begin its
``reverse auction'' process to direct support to those unserved areas
of New Mexico that are impacted by Windstream's decision?
Answer. I share your interest in bridging the rural digital divide
in our country. The universal service program is one of the most
important tools at our disposal to ensure that consumers and businesses
in rural America have the same opportunities as their urban and
suburban counterparts to be active participants in the 21sl century
economy. The Commission is focused on updating the universal service
high-cost program to ensure that we are delivering the best possible
voice and broadband experiences to rural areas while providing a
climate for increased broadband expansion, all within the confines of
the Connect America Fund's budget.
Last September, I circulated an Order for the consideration of my
fellow Commissioners that would address the framework for the CAF Phase
II competitive bidding process. In December, I circulated an updated
draft Order that addressed concerns raised by other commissioner
offices. I remain committed to completing the CAF Phase II auction
framework as expeditiously as possible, and I will continue to work
with my colleagues to resolve this important matter promptly.
Question 2. How will the Commission ensure there will be acceptable
bids from broadband providers for the most difficult areas to serve?
Answer. One of the primary policy goals for this competitive
bidding process is to ensure widespread participation from all
providers that can deliver a high-quality service. Simply put, more
competition between providers means that finite universal service
funding will be used efficiently to deliver the best possible
solutions. As the Commission moves forward with finalizing the
structure of the CAF Phase II reverse auction, we will take into
consideration the issues and concerns presented by all stakeholders and
give full attention to the best ways to ensure that rural communities
have access to robust and reliable broadband service.
Question 3. According to the Commission's 2016 Broadband Progress
report, 1.6 million people living on Tribal lands lack access to
broadband. Recognizing the challenge of bridging this digital divide,
the Commission previously proposed a ``Tribal coefficient'' in its
quantile regression analysis (QRA) for universal support for high cost
areas. Last year, I sent you a letter asking you to consider a proposal
for a ``Tribal Broadband Factor'' to help accelerate broadband
deployment on tribal lands. Will you commit to completing by the second
quarter of this year the Tribal Broadband Factor proceeding currently
before the FCC?
Answer. The Commission recently adopted an Order to modernize
universal support for rate-of-return carriers. A Further Notice
included with the Order specifically seeks comment on additional
reforms, including the Tribal Broadband Factor proposal referenced in
your letter, to further promote broadband investment and deployment on
unserved and underserved Tribal lands. As you and I have discussed, I
will take action on this important issue before the end of 2016. I
commit to continue working with you to bring technological
opportunities to people living on Tribal lands lacking access to
broadband services.
Question 4. The Commission's Tribal Mobility Fund provided $50
million in wireless support to underserved Tribal areas. Of that total,
over $5 million in support helped bring mobile broadband service to
Picuris Pueblo in Taos County and areas of the Navajo Nation, which
spans New Mexico, Arizona, and Utah. When will the Commission complete
a Tribal Mobility Fund Phase II?
Answer. I am committed to ensuring that underserved Tribal areas
receive access to mobile broadband services that are reasonably
comparable to the services provided in the rest of this country. As you
know, in 2011, the Commission proposed to provide $500 million annually
in ongoing financial support to promote mobile broadband and high
quality voice services in areas where such services cannot be sustained
or extended absent Federal support. Of that $500 million annually, the
Commission proposed providing up to $100 million for Tribal areas. In
the last half of 2014, the Commission received comment on a number of
questions in a Further Notice of Proposed Rulemaking regarding how
universal service funds should be targeted in a Mobility Fund Phase II.
This inquiry was in light of the substantial roll-out of 4G LTE by many
of the country's mobile networks. The Commission proposed to retarget
Mobility Fund Phase II support to preserve mobile service where it only
exists today due to support from the universal service fund and to
extend 4G LTE service to areas where it does not exist. It also sought
further comment on a Tribal Mobility Fund Phase II. The proposal for an
ongoing Tribal Mobility Fund Phase II remains under consideration as
Commission staff reviews the record regarding possible next steps for a
Mobility Fund Phase II.
Question 5. Chairman Wheeler, the Federal agency overseeing
broadband providers and Internet policy should be a flagship agency
when it comes to using the best IT tools available. What are the most
important IT systems at the Commission that need to be modernized?
While I am aware that the FCC is an independent agency, how many of the
FCC's IT investments are cloud-based services (Infrastructure as a
Service, Platform as a Service, Software as a Service, etc.)? What
percentage of the department's overall IT investments are cloud-based
services? How has this changed since 2011?
Answer. Like much of the Federal Government, the FCC has faced
substantial challenges in modernizing legacy IT systems. During the
past three years, flat budgets have limited modernization efforts,
although the FCC has been able to make significant progress after
receiving reprogramming permission from both Senate and House
appropriators. We were saddled with over 200 legacy systems, many of
which were antiquated.
This past September, the FCC undertook and completed the ``server
lift'', moving our legacy servers to a secure, off-site hosting
provider, leading to a cost avoidance of over $10 million. In fact we
were able to reduce O&M spend from 85 percent to <50 percent and lay
the groundwork for a move to a cloud-first approach across the
Commission.
In my recent testimony before the House Appropriations Financial
Services and General Government Subcommittee, I noted that we are
focused in the current Fiscal Year on modernizing systems that support
essential services and public safety, such as the Universal Licensing
System, the Network Outage Reporting Systems and the Disaster Reporting
system. In fact, we are currently transitioning to a cloud platform to
rewrite a backbone system of the FCC's Universal Licensing System,
which contains over 22 separate licensing systems.
In Fiscal Year 2017, we plan to take another step toward completing
our projected IT modernization efforts, shifting additional legacy
applications to a resilient cloud-based platform. With sufficient
resources, we will modernize and upgrade essential systems, including
our Consolidated Database System and Equipment Authorization System,
and continue the modernization of our remaining systems.
Overall, we have been engaged in a multi-year top-to-bottom effort
to modernize our systems. Some success stories include the Consumer
Help Center system, built at one-sixth the initial estimated price and
completed in less than half the estimated time. We also have built a
new FCC.gov website, which has garnered positive feedback. Moreover, we
reduced FISMA findings by over 50 percent through the increased
resiliency of the FCC's ability to respond to cyber issues of concern.
______
Response to Written Question Submitted by Hon. Joe Manchin to
Hon. Tom Wheeler
Question. I commend you and your staff for getting the Connect
America Fund (CAF) II up and running. I also commend your efforts to
resolve the ``stand alone broadband'' issue for small, rural companies.
I understand more than 89,000 locations in West Virginia will receive
broadband as a result of the initial CAF II offer made last year;
however, I remain concerned about the parts of West Virginia--more than
12,000 locations--that will still find themselves on the wrong side of
the digital divide. I understand that the Federal Communications
Commission's (FCC) next step is to conduct a competitive bidding
process for these very high cost locations and move forward on the
Remote Areas Fund. Can you give an update on these next steps for the
very high cost locations and those otherwise not part of the current
CAF II offer?
Answer. I share your interest in bridging the rural digital divide
in our country, particularly in West Virginia. The universal service
program is one of the most important tools at our disposal to ensure
that consumers and businesses in rural America have the same
opportunities as their urban and suburban counterparts to be active
participants in the 21st century economy. The Commission is focused on
updating the universal service high-cost program to ensure that we are
delivering the best possible voice and broadband experiences to rural
areas while providing a climate for increased broadband expansion, all
within the confines of the Connect America Fund's budget.
As you may know, I have circulated an Order to my fellow
Commissioners for their consideration that will address the framework
for the Connect America Fund Phase II competitive bidding process. One
of the primary policy goals for this competitive bidding process is to
ensure widespread participation from all providers that can deliver a
high-quality service. Simply put, more competition between providers
means that limited universal service funding will be used efficiently
to deliver the best possible solutions. At the same time, we also are
actively considering how to implement the Remote Areas Fund so that we
are prepared to act quickly in those areas that remain unserved after
the Phase II competitive bidding process is complete. Our objective is
to bring broadband to these unserved areas across the country as soon
as possible.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Jessica Rosenworcel
Question 1. Following the reclassification of broadband Internet
access service as a Title II public utility, Chairman Wheeler indicated
that the FCC will propose new privacy regulations. The Federal Trade
Commission (FTC) already has extensive experience in protecting
consumer privacy, and consumers and business already have experience in
applying the FTC's privacy rules and precedents; the Commission has
virtually no such experience beyond the very narrow confines of rules
implementing Sec. 222. Why would the Commission create a new, likely
inconsistent set of rules rather than adopting the FTC's privacy
protections? Given that the Commission's rules will only apply to BIAS
providers, isn't there a significant likelihood that functionally
identical activities on a smartphone will be governed by completely
different rules based upon who is providing the service?
Answer. The Commission is the Nation's expert agency with respect
to communications technology. As such, I believe it has the capacity to
develop policies to both protect consumers and provide broadband
providers the certainty they need to develop their businesses without
running afoul of the privacy provisions in the Communications Act--
including Section 222, Section 338, and Section 631.
The Commission also has a long history of working cooperatively
with other Federal agencies, including the Federal Trade Commission. In
fact, the staff of both agencies recently signed a Memorandum of
Understanding to institutionalize their cooperation. So as the
Commission begins a proceeding to update its privacy policies, I am
hopeful that our efforts will complement the work of the Federal Trade
Commission in a meaningful way.
Finally, in the decision reclassifying broadband Internet access
service, the Commission found that this service ``whether provided by
fixed or mobile providers, is a telecommunication service.'' Moreover,
the Commission determined that the ``application and enforcement of
Section 222 to broadband Internet access services is in the public
interest.'' As a result, both fixed and mobile providers of broadband
Internet access service are subject to Section 222. However, because
the agency has not yet adopted a notice to begin a proceeding on this
subject, I cannot speculate about how future rules might apply to
different activities on a smartphone. But as a general matter, I
believe that the Commission should set straightforward and fair rules
that protect consumers and foster competition.
Question 2. I understand that you are close to finalizing action on
an order that would address the standalone broadband issue that many in
Congress have written to you about over the past several years and also
adopt some new limits and other measures related to universal service
support for rate of return providers. Do you commit to work quickly and
collaboratively with this committee and with affected stakeholders to
the extent any adverse or unintended consequences arise out of the
reforms?
Answer. Yes.
Question 3. Ensuring that rural and urban consumers have access to
reasonably comparable services at reasonably comparable rates is a
fundamental statutory principle of universal service. Are you confident
that the standalone broadband solution you are poised to adopt will do
that--specifically, will it allow rural consumers to get standalone
broadband at rates reasonably comparable to their urban counterparts?
If not, what more do you think the FCC will need do to ensure such
comparability?
Answer. I believe that we will need to monitor the impact of any
prospective universal service reforms that enable support for
standalone broadband service. If we find that the reforms are not
working as intended or that they do not comport with the Communications
Act, including the charge contained in section 254(b)(3) that there be
reasonably comparable services at reasonably comparable rates, then the
Commission should be prepared to take additional action.
Question 4. I have heard concerns that the methodology used in the
2014 order to determine the local rate floor for voice service has led
to rates in some rural areas, including parts of South Dakota, that are
not reasonably comparable to those services provided in urban areas.
Given this concern, when do you plan to act on the petition for
reconsideration filed by several rural associations regarding the rate
floor methodology? Do any other Commissioners have thoughts regarding
this matter?
Answer. In the 2014 Connect America Fund Order in which it phased
in the rate floor, the Commission described its reason for doing so as
a matter of ``fairness.'' Specifically, the agency concluded that it is
not equitable for some consumers across the country to subsidize the
cost of service for other consumers that pay local service rates that
are substantially lower than the national average. I believe this
approach is fundamentally correct. However, this is a situation that
the Commission should continue to monitor in light of the petitions
filed with the agency seeking reconsideration of this approach.
Question 5. Last July, the FCC released an omnibus declaratory
ruling on the Telephone Consumer Protection Act (TCPA). TCPA litigation
has increased dramatically in the last decade. What considerations did
the Commission give to the impact its ruling would have on businesses,
both large and small, that need to reach their customers for legitimate
business purposes?
Answer. In the June 2015 Declaratory Ruling and Order, the
Commission acknowledged that ``the number of [Telephone Consumper
Protection Act] private right of action lawsuits is increasing,'' while
also noting that ``[Telephone Consumer Protection Act] complaints as a
whole are the largest category of complaints [the Commission]
receive[s].'' From Dec. 29, 2014 through Mar. 7, 2016, the Commission
received 62,826 complaints regarding robocalls and 139,752 complaints
regarding telemarketing. Additionally, the Federal Trade Commission
reported that ``[b]y the fourth quarter of 2012, robocall complaints
had peaked at more than 200,000 per month.''
In implementing the Telephone Consumer Protection Act, the
Commission seeks to strike a balance in ``affirm[ing] the vital
consumer protections of the [Telephone Consumer Protection Act] while
at the same time encouraging pro-consumer uses of modern calling
technology.'' The Commission does this by ``[p]roviding and reiterating
guidance regarding the [Telephone Consumer Protection Act] and our
rules, empowering callers to mitigate litigation through compliance and
dispose of litigation quickly where they have complied.'' Specifically,
in the June 2015 Declaratory Ruling and Order, the Commission took into
consideration the interests of businesses and other callers by
``[c]larifying that `on demand' text messages sent in response to a
consumer request are not subject to [Telephone Consumer Protection Act]
liability'' and ``[w]aiving [the Commission's] 2012 `prior express
written consent' rule for certain parties for a limited period of time
to allow them to obtain updated consent.''
Question 6. Many small businesses seek to improve their efficiency
and customer relationships by providing information to their customers
through the use of modern dialing technologies. The FCC's recent
interpretation of the term ``autodialer'' in the TCPA declaratory
ruling, however, could sweep in any number of modern dialing
technologies. Other than using a rotary phone, what other technologies
can small businesses feel comfortable using without exposing themselves
to TCPA litigation risk?
Answer. The Telephone Consumer Protection Act defines an
``automatic telephone dialing system'' as ``equipment which has the
capacity--(A) to store or produce telephone numbers to be called, using
a random or sequential number generator; and (B) to dial such
numbers.'' In the June 2015 Declaratory Ruling and Order, the
Commission did not ``address the exact countours of the `autodialer'
definition or seek to determine comprehensively each type of equipment
that falls within that definition that would be administrable industry-
wide.'' Rather, the 2015 Declaratory Ruling and Order maintained the
Commission's conclusion in the 2003 Telephone Consumer Protection Act
Report and Order that to be considered an ``automatic telephone dialing
system'' the ``equipment need only have the `capacity to store or
produce telephone numbers,' '' as the statute dictates.
In any event, businesses are only prohibited from using an
autodialer when a caller is using it to dial wireless numbers without
prior express consent from the called party. In addition, businesses
are permitted to use autodialers to call residential wireline numbers
unless it is a prerecorded or artificial voice telemarketing call which
then would require prior express consent.
I recognize that this is complex and technology has changed
considerably since passage of the Telephone Consumer Protection Act. If
Congress chooses to revisit the Telephone Consumer Protection Act,
updating the definition of autodialer could help provide greater
certainty for businesses and limit related litigation.
Question 7. By establishing liability after a mere one-call
exception, the Commission's ruling creates a perverse incentive for
incorrectly-called parties to allow or even encourage incorrect calls
to continue, rather than notify the calling party of the error. These
continuing incorrect calls thus become potential violations and the
basis for monetary penalties sought through litigation. What will you
do to repair this perverse incentive?
Answer. As you note, the Telephone Consumer Protection Act has
resulted in a system that, in some cases, can feature misaligned
incentives. In particular, some parties may find an incentive to
exploit the operation of the per violation monetary penalty contained
in the law, which states that ``a person or entity, if otherwise
permitted by the laws or rules of court of a State, bring in
appropriate court of that State--(A) an action based on a violation of
this subsection or the regulations prescribed under this subsection to
enjoin such violation, (B) an action to recover for actual monetary
loss from such a violation, or to receive $500 in damages for each such
violation, whichever is greater, or (C) both such actions.''
In recognition of the challenges of learning of reassigned numbers
and to provide callers with ``an opportunity to avoid liability for the
first call to a wireless number following reassignment,'' the June 2015
Declaratory Ruling and Order concluded that ``giving callers an
opportunity to avoid liability for the first call to a wireless number
following reassignment strikes the appropriate balance.''
While the per violation basis for monetary penalties is defined in
the statute, I am committed to exploring additional ways to address
issues associated with discovering reassigned numbers, including the
possibility of industry-led fixes. In addition, this is an area where
the Commission should welcome additional Congressional input.
Question 8. Has the Commission considered providing a safe harbor
for a calling party that reasonably relies on available customer phone
number records to verify the accuracy of a customer's phone number?
Answer. Yes. A number of petitions addressed in the June 2015
Declaratory Ruling and Order proposed some form of a safe harbor for
reassigned numbers. The Commission considered these proposals but
instead found that a ``one-call window provides a reasonable
opportunity for the caller to learn of the reassignment, which is in
effect a revocation of consent to be called at that number, in a number
of ways.'' The Commission stated that ``[o]ne call represents an
appropriate balance between a caller's opportunity to learn of the
reassignment and the privacy interests of the new subscriber to avoid a
potentially large number of calls to which he or she never consented.''
In the June 2015 Declaratory Ruling and Order, the Commission also
identified a number of options that, over time, may permit callers to
learn of reassigned numbers.
First, the Commission recognized that there is at least one
database that can help determine whether a number has been reassigned.
Second, callers can ask consumers to notify them when they switch
from a number for which they have given prior express consent.
Third, the Declaratory Ruling and Order made clear that there is
``[n]othing in the [Telephone Consumer Protection Act] or our rules
[that] prevents parties from creating, through a contract or other
private agreement, an obligation for the person giving consent to
notify the caller when the number has been relinquished.''
Fourth and finally, the record in the proceeding suggests that
callers seeking to find reassignments can ``(1) include an interactive
opt-out mechanism in all artificial or prerecorded-voice calls so that
recipients may easily report a reassigned or wrong number; (2)
implement procedures for recording wrong number reports received by
customer service representatives placing outbound calls; (3) implement
processes for allowing customer service agents to record new phone
numbers when receiving calls from customers; (4) periodically send an
e-mail or mail request to the consumer to update his or her contact
information; (5) utilize an autodialer's and/or live caller's ability
to recognize `triple-tones' that identify and record disconnected
numbers; (6) establish policies for determining whether a number has
been reassigned if there has been no response to a `two-way' call after
a period of attempting to contact a consumer; and (7) enable customers
to update contact information by responding to any text message they
receive, which may increase a customer's likelihood of reporting phone
number changes and reduce the likelihood of a caller dialing a
reassigned number.''
In sum, the Commission concluded that ``the existence of phone
number database tools combined with other best practices, along with
one additional post-reassignment call, together make compliance [with
the Telephone Consumer Protection Act] feasible.''
Question 9. The pay TV set-top box NPRM proposes to expand the
scope of the term ``navigation device'' to include ``software or
hardware performing the functions traditionally performed in hardware
navigation devices.'' On what theory does the Commission base this
interpretation and expansion of the statutory term's scope to include
software? Does software that is not integral to the operation of a
navigation device fall within the scope of Section 629?
Answer. In paragraphs 21-24 of its rulemaking, the Commission
describes its legal authority to implement the proposed rules. In
critical part, it notes that the Communications Act does not define the
terms ``navigation device'' or ``interactive communications equipment,
and other equipment.'' However, it notes that Section 629 covers
equipment used by consumers to access multichannel video programming
and that software features have long been essential elements of such
equipment.
The Commission has invited comment on this interpretation of its
legal authority. I look forward to reviewing the record on this subject
and, in particular, any additional legal analysis on the scope of the
agency's authority.
Question 10. How does the NPRM propose or contemplate preventing
third party devices or applications from adding unapproved or
additional advertising alongside MVPD service content? How does the
NPRM propose to protect and secure interactive MVPD programming and
services when accessed through third party devices or applications? How
does the NPRM propose to enforce such protection and security measures?
Answer. In paragraph 80 of its rulemaking, the Commission notes
that it has not previously seen problems related to advertising,
service presentation, and improper manipulation of content in the
existing CableCARD regime. However, the Commission seeks comment on
whether or not new rules are needed and asks if copyright law
adequately protects against any concerns that may arise. In addition,
in paragraphs 70 and 71 of its rulemaking, the Commission notes that
licensing and certification will play an important role in ensuring
that content is protected as intended. The Commission seeks comment on
the role that licensing and certification can play, as well as comment
on alternative approaches the Commission could take to address content
security and protection.
______
Response to Written Question Submitted by Hon. Roy Blunt to
Hon. Jessica Rosenworcel
Question. The policy choices facing the Commission are complicated,
and require bipartisanship to produce consensus that balance the
various concerns of multiple stakeholders. In the past, analysts have
illustrated that votes at the Commission tended to be unanimous, but
there has been a stark increase in party-line votes under the current
Chairman.\1\
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\1\ https://techpolicyinstitute.org/2016/02/16/the-partisan-fcc/
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Will you commit to working with your fellow commissioners to forge
bipartisan consensus for the remainder of 2016, or should the United
States Senate expect to see continued party-line votes?
Answer. Yes.
______
Response to Written Questions Submitted by Hon. Ted Cruz to
Hon. Jessica Rosenworcel
Question 1. In the Open Internet Order, the Federal Communications
Commission (FCC) revised the definition of ``public switched network''
to mean ``the network that . . . use[s] the North American Numbering
Plan, or public IP addresses, in connection with the provision of
switched services'' (See para. 391 (emphasis added)). Although the FCC
disclaimed any intent to ``assert'' jurisdiction over the assignment or
management of IP addresses by the Internet Numbers Registry System (see
id. at note 1116), the FCC's decision to equate telephone numbers with
IP addresses nonetheless gives the FCC statutory jurisdiction over IP
addresses as a matter of law. Over 20 years ago the FCC concluded that
Section 201 of the Communications Act gave it plenary jurisdiction over
telephone numbers, because ``telephone numbers are an indispensable
part'' of the duties that section 201 imposes on common carriers (See
Administration of the North American Numbering Plan, Notice of Proposed
Rulemaking, FCC 94-79, 8 (1994)). IP addresses are likewise an
indispensable part of the duties the FCC imposed on ISPs under section
201, including the duty to connect to ``all or substantially all
Internet endpoints''.
How can the FCC uphold the public interest requirements in section
201 of the Act if it refuses to assert its statutory authority over an
indispensable part of the public switched network?
Answer. I believe that the Commission's approach is consistent with
the historic execution of its functions under the Communications Act.
As you note, the Commission adjusted its interpretation of the term
``public switched network'' in order to better ``reflect the current
network landscape.'' Specifically, the Commission updated the
definition of public switched network to mean ``the network that
includes any interexchange carriers, and mobile service providers, that
use the North American Numbering Plan, or public IP addresses, in
connection with the provision of switched services.'' This update
reflects the fact that the ``the term `public switched network' should
not be defined in a static way,'' and recognizes ``that the network is
continuously growing and changing because of new technology and
increasing demand.'' Moreover, as the Commission made clear, ``[t]his
definitional change to our regulations in no way asserts Commission
jurisdiction over the assignment and management of IP addresses by the
Internet Numbers Registry System.'' In other words, the Commission
updated its definition of public switched network to include the
widespread use of IP addresses, but did not in any way assert
jurisdiction over IP addresses.
Question 1a. If the FCC believes regulation of IP numbers used to
connect end points on the public switched telephone network is
unnecessary, why hasn't it forborne from the regulation of telephone
numbers?
Answer. The Commission has plenary authority over numbering
pursuant to the Communications Act. Section 251(e)(1) states that
``[t]he Commission shall have exclusive jurisdiction over those
portions of the North American Numbering Plan that pertain to the
United States.'' Among other things, this explicit grant of authority
has been the foundation for Commission policies that ensure that
consumers can keep their existing phone number when switching to a new
phone carrier, that prevent premature exhaust of numbers in an area
code, and that enable providers to have access to numbering resources.
To date, the Commission has not forborne from these policies and rules
because they remain critical to the successful function of the public
switched network.
______
Response to Written Question Submitted by Hon. Deb Fischer to
Hon. Jessica Rosenworcel
Question. Commissioner Rosenworcel, in discussing the FCC's recent
proposal on set-top boxes, nearly everyone has said that they would
like to see the marketplace continue to move away from set-top boxes
and towards more innovative methods of allowing customers to access
video content. New technologies have increased competition in the video
market, and companies like Netflix, Hulu, Roku, as well as a wide
variety of video applications are providing new options to consumers.
Further, many cable and satellite companies are moving away from set
top boxes and towards application-based platforms. How do we continue
to encourage innovation in the video marketplace while avoiding
technology mandates and burdensome regulations?
Answer. Section 629 of the Communications Act directs the
Commission to help develop a competitive market for navigation devices,
or set-top boxes. Despite past efforts, a competitive market for these
devices has not emerged. In fact, today 99 percent of customers rent
their set-top boxes from their pay-television provider. This is a
situation I believe the agency needs to address.
At the same time, I share your concerns about stifling innovation
in the marketplace. There is a new generation of viewers who want
nothing to do with a set-top box and are choosing to cut the cord.
Plus, new service types are emerging fast--faster than any rulemaking
process at the agency. What new video models succeed, what degree of
self-curated viewing they enable, and what prices consumers are willing
to pay are still up for grabs.
As a result, I believe the Commission should be guided by the
statutory charge to develop a competitive market but remain mindful
that the ways we watch are changing.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Hon. Jessica Rosenworcel
Question 1. Commissioner Rosenworcel, in your testimony before the
Senate Commerce Committee, you said ``the unsung hero of the wireless
revolution is infrastructure . . . because no amount of spectrum will
lead to better wireless service without good infrastructure'' and
rightly pointed out that we should ``take a comprehensive look at tower
siting on Federal lands--which make up as much as one-third of our
national real estate.''
As you know, 85 percent of Nevada is Federal lands and many of my
constituents who live, work, and visit those areas lack quality
service. In 2009, the FCC adopted a shot clock for the municipal zoning
process, which was later upheld by the Supreme Court and has
significantly improved the deployment of wireless infrastructure.
Since the FCC has no authority over Federal lands, there is no
similar shot clock and as a result infrastructure requests can take
many months or even years to get a response.
Do you support Congress legislating in this space and adopting a
shot clock for Federal agencies--such as the 270-day limit included in
the MOBILE NOW Act approved by the Committee--to respond to wireless
infrastructure requests?
Answer. Yes.
Question 2. For years, I have believed that the way in which rules
are processed at the Commission lacks transparency and is detrimental
to the American public. My FCC Process Reform Act would address these
transparency and accountability issues for the sake of consumers and
the industries supporting innovation and our economy.
For example, the public has no idea the specific language of the
rules the Commission is voting on until after they are passed. We saw
that with the net neutrality rules that were pushed through this time
last year, and we saw it a few weeks ago when the FCC voted on the
proposal related to set-top boxes.
In fact, Chairman Wheeler said during that meeting on set-top
boxes: ``There have been lots of wild assertions about this proposal
before anybody saw it.'' The problem is that the public doesn't know
what to expect from the rule--there is no certainty for those on the
outside.
Do you believe the public has a right to see the specific language
of a rule before it is voted on by the Commission?
Answer. As a general matter, I believe that the Commission should
make available proposed rule text in any Notice of Proposed Rulemaking
when initiating a proceeding that could lead to significant changes to
agency policy. This affords the public a right to comment in a fulsome
way before action on final rules are taken.
Question 3. As someone committed to protecting Americans' and
Nevadans' privacy, especially related to personally identifiable
information (PII), I have a questions regarding the recent set-top box
Notice of Proposed Rulemaking.
Currently, pay-TV companies must follow strong privacy protections
to ensure consumers' personal information is not collected, utilized,
or shared for non-service related purposes. How does this NPRM
contemplate applying and enforcing these same privacy to any new
suppliers entering the set-top box market? Does the FCC have the legal
authority to enforce Title 6 privacy standards on third parties?
Answer. The Commission's rulemaking proposes that competitive
device manufacturers certify that they will adhere to the same privacy
protections imposed on multichannel video programming distributors. It
also seeks comment on the best way to implement and enforce this
certification process, as well as the scope of its legal authority to
do so. In addition, the rulemaking asks about state privacy laws that
restrict how personally identifiable information may be used and
whether or not such laws provide a level of consumer privacy protection
that is comparable to what is required under the Communications Act.
This is an important issue and I look forward to record that develops
in response to these questions.
______
Response to Written Question Submitted by Hon. Steve Daines to
Hon. Jessica Rosenworcel
Question. Commissioner Rosenworcel, you said during your testimony
that you agreed that small businesses should be exempted from some of
the onerous regulatory burdens. Do you agree that small businesses
should receive a permanent exemption from the Commission's Title II
enhanced transparency rules?
Answer. Yes. I support exempting small providers of broadband
Internet access services from the enhanced transparency rule.
Therefore, I believe that the Commission should adopt a permanent
exemption, or at a minimum, a further extension of the exemption from
the enhanced transparency rule for these providers.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Jessica Rosenworcel
Question 1. One of the best tools the Commission has in overseeing
the Lifeline program is the ability to take aggressive enforcement
against carriers violating the rules of the program, companies that are
abusing both the consumers who use the program as well as the rate
payers that fund it. That's why I applauded a flurry of announced
enforcement activity from September 2013 through February 2014. During
that time the FCC issued Notices of Apparent Liability (NALs) totaling
more than $94 million in proposed fines for 12 companies participating
in the Lifeline program. Some of those notices are more than two-and-a-
half years old yet not a penny of that money has yet been collected.
Will you press the Enforcement Bureau to either issue forfeiture
orders, reach settlements, or dismiss these 12 NALs in an expeditious
manner?
Answer. I agree with you that waste, fraud, and abuse cannot be
tolerated in the Lifeline program. I understand that the matters you
have identified have been referred to the Commission's Office of
Inspector General. In light of the Office of Inspector General's
independent nature, I believe it would be inappropriate for me to
intervene on these matters.
Question 2. To avoid this situation in the future, would you
support a shot clock for resolution of NALs? If so, what do you believe
would be an acceptable amount of time?
Answer. Yes. Timely disposition of matters before the Commission,
including law enforcement cases, is important. The precise time for
resolution of Notices of Apparent Liability would need to both provide
adequate time for law enforcement to investigate any additional facts
and parties that are the subject of investigation to fully exercise
their rights as a matter of due process.
Question 3. The Bipartisan Budget Act of 2015 included an unwise
and harmful provision to exempt debt collection calls on behalf of the
Federal Government from Telephone Consumer Protection Act (TCPA) rules
that prohibit robocalls to cell phones. Although the provision was
ostensibly aimed at collecting student loan debt, the loophole was
potentially widened either further by adoption of the Fixing America's
Surface Transportation (FAST) Act in December, which requires the
Internal Revenue Service to contract with private debt collectors to
collect unpaid taxes. I have held hearings in this committee's Consumer
Protection Subcommittee and at the Senate Aging Committee on robocalls.
We should be making it harder--not easier--for this number one consumer
complaint to continue, especially when there is no evidence that
robocalls are an effective means of reaching consumers. Until we are
successful in repealing this provision, the FCC is tasked with adopting
rules to implement it. Would you support rules that require companies
collecting debt on behalf of the Federal Government to register with
the FCC in advance of doing so?
Answer. While the Budget Act does not require the Commission to
maintain a registry of companies that call to collect a debt on behalf
of the United States, I believe this is an idea that could merit
further exploration. However, before imposing such a requirement, the
Commission will need to explore the free speech implications of such a
requirement, the agency's capacity to maintain an up-to-date registry,
and whether or not there are comparable registries that have been
maintained in other contexts.
Question 4. Would you support rules that limit calls from companies
collecting debt on behalf of the Federal Government to no more than one
call per consumer per month?
Answer. The Budget Act specifically provides that the Commission
``may restrict or limit the number and duration of calls made to a
telephone number assigned to a cellular telephone service to collect a
debt owed to or guaranteed by the United States.'' Accordingly, I
expect that the Commission will seek public comment on how to implement
the law in this regard before adopting final rules.
Question 5. What impact do you believe this exemption will have on
the ability of the commission's Enforcement Bureau to differentiate
between calls that are now exempt from TCPA and those that are not,
particularly when exempt calls and non-exempt calls could be coming
from the same call centers?
Answer. Because we are only beginning to implement the Budget Act,
I believe it is too soon to tell how this exemption might impact the
Commission's enforcement functions or the private right of action under
the Telephone Consumer Protection Act. However, I believe this is a
situation that will require monitoring going forward. At the very
least, it may prove confusing for enforcement and it would be
unfortunate if this situation resulted in more consumers receiving
unwanted robocalls not subject to this exemption.
Question 6. The Chairman recently received a letter from Senator
Blunt and me regarding the upcoming reverse auction portion of Connect
America Fund, Phase II (CAF II).
For CAF II in Missouri, there is approximately $400 million
available over the next 10 years to bring broadband to unserved parts
of the state. Can you assure me that the money will be spent in
Missouri and not be reallocated to other areas of the country?
Answer. I agree that we should put a premium on making sure that
states do not lose out where the price cap carrier turned down its
offer of support. As you know, three of the four price cap carriers in
Missouri accepted Connect America Fund Phase II funding totaling over
$93.7 million annually for broadband services in the state. However,
one price cap carrier serving the state declined its offer of support.
Going forward, I am hopeful that we can find a way to target funds to
states where price cap carriers chose not to accept their offer of
support while at the same time maximizing the overall impact of auction
funding.
Question 7. As you consider the framework to govern the reverse
auction to award the remaining dollars available in CAF II, how will
you ensure that funded projects not only meet today's broadband
definition, but are future proof and scalable to keep pace with ever-
changing technology and increasing needs for higher speed broadband?
Answer. As we consider a framework to evaluate projects in the
forthcoming CAF II auction, we will need to make sure that we provide
consumers with meaningful broadband opportunities both today and in the
future. Our framework should be nimble enough to evaluate capabilities
from different project bid proposals, including how those project bids
stack up today and keep pace with the obligations we set forth over
time.
Question 8. In 1993, through the Omnibus Budget Reconciliation Act
of 1993, Congress directed the FCC to develop regulations governing the
competitive bidding of spectrum. Included in the statutory instructions
from Congress was a requirement that the Commission ``ensure that small
businesses, rural telephone companies, and businesses owned by members
of minority groups and women are given the opportunity to participate
in the provision of spectrum-based services.'' To meet this
congressional mandate the FCC created the Designated Entity (DE)
program. The program's worthy goal of providing a mechanism for
legitimate small businesses to partner with larger ones in spectrum
auctions has undoubtedly helped many small businesses win spectrum
licenses over the past 20+ years. But it has also provided a blueprint
for large, multinational, multi-billion-dollar corporations to game the
system and receive discounts on their bids. What assurances can you
provide that the commission will do a better job of monitoring
potential abuse of the DE program in the upcoming incentive auction
than it did in the recent AWS-3 auction?
Answer. I agree that the Commission needs to do a better job of
monitoring abuse in the designated entity program. In July 2015 the
agency put in place a framework that will help do just that in the
auctions ahead. In particular, the Commission capped the total value of
bidding credits a designated entity can receive, strengthened
attribution rules limiting the amount of spectrum an interest holder in
a designated entity can use, and amended the joint bidding rules by
generally prohibiting agreements involving a shared strategy for
bidding at auction. Taken together these reforms are smart, balanced,
and bound to protect against future abuse. However, I believe the
Commission will need to continue to monitor the designated entity
program to protect against any further misconduct.
Question 9. When Congress and the FCC were establishing the
framework for spectrum auctions more than 20 years ago it probably made
sense to ensure small businesses were able to compete. But a lot has
changed. The cost of entering the incredibly expensive wireless
infrastructure industry is far greater than it was in the early 1990s.
A company that truly has revenues of $40 million, $15 million, or $3
million--the thresholds set by the commission for the various levels of
bidding credits--would be unlikely to enter the industry today. So is
it time to look at simply eliminating the DE program to prevent future
abuse?
Answer. In Section 309 of the Communications Act Congress charges
the Commission with ``promoting economic opportunity and competition''
when developing the bidding methodologies that govern the auctions of
our airwaves. Moreover, it tasks the Commission with ensuring ``that
small businesses, rural telephone companies and businesses owned by
members of minority groups and women are given the opportunity to
participate in the provision of spectrum-based services.'' I believe
that the Commission has a duty to provide policies consistent with
these provisions in the law. Should Congress choose to revise these
provisions, the Commission will need to adjust its policies
accordingly.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Hon. Jessica Rosenworcel
Question 1. As you know, to address increasing demand for wireless
broadband access, Congress directed the FCC to conduct an incentive
auction, to encourage broadcast licensees to voluntarily relinquish
their spectrum rights in exchange for a share of the proceeds in
auctioning this spectrum to new licensees. In many parts of the
country, contiguous spectrum will be freed up by ``repacking'' the
channels to which remaining television broadcasters are currently
assigned. Do you believe there is enough money in the TV Broadcaster
Relocation Fund to cover repacking-related expenses incurred by
broadcasters?
Answer. Yes. At this point in the auction process, I believe that
the $1.75 billion fund established by Congress will be sufficient to
cover the reasonable costs and expenses associated with the relocation
of stations following the incentive auction. I recognize, however, that
there are estimates from the broadcasting community that suggest that
the cost of relocation may be slightly greater than the amount in
existing law. If in the future the current fund proves insufficient,
the Commission should notify Congress and Congress may wish to take
steps to provide additional support.
Question 2. If the 39 month repack time-frame and the $1.75 billion
relocation fund are insufficient, does the FCC have the flexibility in
the statute to ensure consumers and communities won't be negatively
affected by signals going off the air?
Answer. Yes.
Question 3. If so, how can the FCC ensure that broadcasters have
sufficient time to move without being forced off the air, if factors
outside their control delay their ability to reconfigure their
facilities?
Answer. The Commission has already adopted policies designed to
facilitate a smooth transition for broadcasters and their viewers
during the repacking process. For instance, in the Incentive Auction
Report and Order, the Commission determined that stations required to
repack following the auction will receive a construction period
tailored to their specific circumstances. Stations also will have the
opportunity to request a one-time, six-month extension of construction
permits if they experience delays or unexpected challenges. In
addition, the Commission will work with stations to help mitigate any
service disruptions if construction of post-auction facilities is not
completed prior to the 39-month deadline for all stations to cease
operating on their pre-auction channels. I believe these policies will
support an orderly transition during the 39-month period. But I also
recognize that unexpected difficulties may arise, including pressures
on the capacities of tower and transmission companies as well as
regional weather events. I believe that the Commission must work with
Congress to ensure that such difficulties do not jeopardize a smooth
transition or harm viewer access to free, over-the-air television.
Questions 4. Do you agree that no non-participating broadcaster
should be forced off the air, or forced to cover the costs of
transitioning their signal, to accommodate the repack?
Answer. Yes. However, I recognize that our efforts will necessarily
be bound by the law. Specifically, the Middle Class Tax Relief and Job
Creation Act required the Commission to make ``all reasonable efforts
to preserve'' the service areas of full-power and Class A television
stations that do not choose to participate in the auction and set aside
$1.75 billion to cover any necessary transition.
______
Response to Written Question Submitted by Hon. Joe Manchin to
Hon. Jessica Rosenworcel
Question. In your statement voting for adoption of the set-top box
notice of proposed rulemaking (NPRM), you said this rulemaking is
complicated. You also said that the most successful regulatory efforts
are simple ones and more work needs to be done to streamline this
proposal. Could you talk more about that?
Answer. Based on what we know at the start of this proceeding,
there are difficult issues to consider, including copyright, privacy,
and diversity. There are also technical challenges related to
information streams, standards, and security. My hope is that the
record we receive will guide the Commission to better understand the
steps necessary to foster set-top box competition. I firmly believe
that the simpler regulatory proposals are, the more likely they are to
be successful in reaching their goals.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Ajit Pai
Question 1. Following the reclassification of broadband Internet
access service as a Title II public utility, Chairman Wheeler indicated
that the FCC will propose new privacy regulations. The Federal Trade
Commission (FTC) already has extensive experience in protecting
consumer privacy, and consumers and business already have experience in
applying the FTC's privacy rules and precedents; the Commission has
virtually no such experience beyond the very narrow confines of rules
implementing Sec. 222. Why would the Commission create a new, likely
inconsistent set of rules rather than adopting the FTC's privacy
protections? Given that the Commission's rules will only apply to BIAS
providers, isn't there a significant likelihood that functionally
identical activities on a smartphone will be governed by completely
different rules based upon who is providing the service?
Answer. I agree that adopting rules inconsistent with the FTC's
rules would distort the marketplace to favor some service providers
over others. Indeed, I agree with Chairman Wheeler's testimony to the
House Energy and Commerce Committee that ``there should be a uniform
expectation of privacy'' across the online ecosystem. That's why many
are perplexed that the FCC seems reluctant to adopt the same privacy
protections for ISPs that the FTC has long applied to edge providers.
Question 2. I understand that you are close to finalizing action on
an order that would address the standalone broadband issue that many in
Congress have written to you about over the past several years and also
adopt some new limits and other measures related to universal service
support for rate of return providers. Do you commit to work quickly and
collaboratively with this committee and with affected stakeholders to
the extent any adverse or unintended consequences arise out of the
reforms?
Answer. Yes. And to the extent that our efforts are intended to
fulfill our commitment to this Committee, I believe the FCC should make
the reforms public and allow you and the American public to provide
feedback before the Commission votes.
Question 3. Ensuring that rural and urban consumers have access to
reasonably comparable services at reasonably comparable rates is a
fundamental statutory principle of universal service. Are you confident
that the standalone broadband solution you are poised to adopt will do
that--specifically, will it allow rural consumers to get standalone
broadband at rates reasonably comparable to their urban counterparts?
If not, what more do you think the FCC will need do to ensure such
comparability?
Answer. I am still reviewing the draft order to determine whether
it meets our universal service mandate. In the meantime, I have asked
Chairman Wheeler to release it to the public so that all stakeholders
can see the details and let their voices be heard before a vote.
Commissioner O'Rielly has supported my request, but Chairman Wheeler
has not yet responded to it.
Question 4. I have heard concerns that the methodology used in the
2014 order to determine the local rate floor for voice service has led
to rates in some rural areas, including parts of South Dakota, that are
not reasonably comparable to those services provided in urban areas.
Given this concern, when do you plan to act on the petition for
reconsideration filed by several rural associations regarding the rate
floor methodology? Do any other Commissioners have thoughts regarding
this matter?
Answer. I am not surprised that the rate floor will lead to
unreasonable rates for your constituents--the whole purpose of the rule
is to increase rates in rural America without saving the Universal
Service Fund a single dime. That's why I do not support the rural rate
floor and have repeatedly called for its repeal.
Question 5. Last July, the FCC released an omnibus declaratory
ruling on the Telephone Consumer Protection Act (TCPA). TCPA litigation
has increased dramatically in the last decade. What considerations did
the Commission give to the impact its ruling would have on businesses,
both large and small, that need to reach their customers for legitimate
business purposes?
Answer. The Commission minimized, if not ignored altogether, the
Order's impact on legitimate businesses. That's why I said in my
dissent that the Order would make abuse of the TCPA much, much easier
and that the primary beneficiaries would be trial lawyers, not the
American public.
The past is likely to be prologue. In my dissent, for instance, I
highlighted the case of Rubio's, a West Coast restaurateur. Rubio's
sends its quality-assurance team text messages about food safety
issues, such as possible foodborne illnesses, to better ensure the
health and safety of Rubio's customers. When one Rubio's employee lost
his phone, his wireless carrier reassigned his number to someone else.
Unaware of the reassignment, Rubio's kept sending texts to what it
thought was an employee's phone number. The new subscriber never asked
Rubio's to stop texting him--at least not until he sued Rubio's in
court for nearly half a million dollars. The Commission's recent TCPA
action will release the hounds of the trial bar upon many more small
businesses in similar fashion.
Question 6. Many small businesses seek to improve their efficiency
and customer relationships by providing information to their customers
through the use of modern dialing technologies. The FCC's recent
interpretation of the term ``autodialer'' in the TCPA declaratory
ruling, however, could sweep in any number of modern dialing
technologies. Other than using a rotary phone, what other technologies
can small businesses feel comfortable using without exposing themselves
to TCPA litigation risk?
Answer. If I were counsel to a small business, I would advise it to
use only a rotary phone given the business-wrecking expense of a TCPA
class-action suit. That's because the FCC's definition of
``autodialer'' appears to sweep in every other dialing technology
currently in existence.
Question 7. By establishing liability after a mere one-call
exception, the Commission's ruling creates a perverse incentive for
incorrectly-called parties to allow or even encourage incorrect calls
to continue, rather than notify the calling party of the error. These
continuing incorrect calls thus become potential violations and the
basis for monetary penalties sought through litigation. What will you
do to repair this perverse incentive?
Answer. As I stated in my dissent, the Order's strict liability
approach leads to perverse incentives. Most significantly, it creates a
trap for law-abiding companies by giving litigious individuals a reason
not to inform callers about a wrong number. This will certainly help
trial lawyers update their business model for the digital age. This
isn't mere hypothesis, as shown by the case of Rubio's, discussed
above.
I hope that the FCC or the courts will soon reject this reckless
interpretation and replace it with the ``expected-recipient'' approach
to incorrectly-called parties. Under this approach, TCPA liability
would not apply if the calling party dialed a number reasonably
expecting to reach Person A, even if Person B actually answered the
phone.
Question 8. Has the Commission considered providing a safe harbor
for a calling party that reasonably relies on available customer phone
number records to verify the accuracy of a customer's phone number?
Answer. The Commission explicitly rejected that approach by
adopting a strict liability standard. In my view, a safe harbor would
be consistent with the Act. The Commission has long employed safe
harbors for reasonable private conduct in other contexts, and there is
no reason why it couldn't have done so here.
Question 9. The pay TV set-top box NPRM proposes to expand the
scope of the term ``navigation device'' to include ``software or
hardware performing the functions traditionally performed in hardware
navigation devices.'' On what theory does the Commission base this
interpretation and expansion of the statutory term's scope to include
software? Does software that is not integral to the operation of a
navigation device fall within the scope of Section 629?
Answer. I do not believe that such software falls within the scope
of Section 629. I did not vote for the NPRM that proposed to expand the
scope of the rules implementing Section 629 to include software, and I
will leave it to those who supported the NPRM to explain their
reasoning.
Question 10. How does the NPRM propose or contemplate preventing
third party devices or applications from adding unapproved or
additional advertising alongside MVPD service content? How does the
NPRM propose to protect and secure interactive MVPD programming and
services when accessed through third party devices or applications? How
does the NPRM propose to enforce such protection and security measures?
Answer. The NPRM does not propose any rules to prohibit third party
devices or applications from adding unapproved or additional
advertising alongside MVPD service content. Neither does the NPRM
propose any rules to prohibit third party devices or applications from
removing the advertising provided by programmers and replacing it with
their own advertising. In its own words, the NPRM proposes to leave
``the treatment of advertising to marketplace forces.'' This is one of
the principal reasons why I opposed the NPRM. I will leave it to those
who supported the NPRM to explain how it proposes to protect and secure
interactive MVPD programming and enforce such protection and security
measures.
______
Response to Written Questions Submitted by Hon. Ted Cruz to
Hon. Ajit Pai
Question 1. In the Open Internet Order, the Federal Communications
Commission (FCC) revised the definition of ``public switched network''
to mean ``the network that . . . use[s] the North American Numbering
Plan, or public IP addresses, in connection with the provision of
switched services'' (See para. 391 (emphasis added)). Although the FCC
disclaimed any intent to ``assert'' jurisdiction over the assignment or
management of IP addresses by the Internet Numbers Registry System (see
id. at note 1116), the FCC's decision to equate telephone numbers with
IP addresses nonetheless gives the FCC statutory jurisdiction over IP
addresses as a matter of law. Over 20 years ago the FCC concluded that
Section 201 of the Communications Act gave it plenary jurisdiction over
telephone numbers, because ``telephone numbers are an indispensable
part'' of the duties that section 201 imposes on common carriers (See
Administration of the North American Numbering Plan, Notice of Proposed
Rulemaking, FCC 94-79, 8 (1994)). IP addresses are likewise an
indispensable part of the duties the FCC imposed on ISPs under section
201, including the duty to connect to ``all or substantially all
Internet endpoints''.
How can the FCC uphold the public interest requirements in section
201 of the Act if it refuses to assert its statutory authority over an
indispensable part of the public switched network?
Answer. It cannot. I do not believe that Congress has given the FCC
any role with respect to regulating the Internet--instead, Congress
told us to leave the Internet ``unfettered by Federal or State
regulation.'' Communications Act Sec. 230(b)(2). And so under my view,
the FCC has no statutory authority over IP addresses.
Question 1a. If the FCC believes regulation of IP numbers used to
connect end points on the public switched telephone network is
unnecessary, why hasn't it forborne from the regulation of telephone
numbers?
Answer. As I stated in my dissent to the Title II Order, the FCC's
approach to forbearance in this area has been scattershot and
unprecedented. As such, I do not know why the agency did not forbear in
this particular instance.
______
Response to Written Questions Submitted by Hon. Ron Johnson to
Hon. Ajit Pai
Question 1. At the FCC Oversight hearing I asked Chairman Wheeler
why the FCC decided not to release a public notice requesting more
comment on places where the Chairman's office believed the record to be
thin. Chairman Wheeler responded that he hit pause for the purpose of
``enriching the record'' because he knew ``the Big Dogs are going to
sue'' and wanted to make sure ``all the i's were dotted and the t's
crossed.'' Because no public notice was ever issued, it appears that
the FCC chose expediency over process. What effect does that have on
the overall Open Internet Order?
Answer. In rubber-stamping President Obama's plan to regulate the
Internet, the FCC violated the procedural requirements of the
Administrative Procedure Act (APA). The FCC never proposed the rules
being adopted, violating the APA's notice-and-comment requirement. In
the Notice, the FCC proposed rules exclusively under section 706 of the
Telecommunications Act. Every single proposal and every single
tentative conclusion in the Notice was tailored to avoid reclassifying
broadband as a Title II service. Yet that's exactly what the FCC did in
the Title II Order. No one could have anticipated the number or nature
of the hoops the Order would jump through to reclassify broadband. Nor
could anyone have anticipated the Order's 49 separate forbearance
decisions; its decision to subject interconnection to Title II as a
``component'' of broadband Internet access service; its decision to
amend agency rules regarding mobile broadband; or its adoption of an
omnivorous ``Internet conduct'' standard, the scope of which still
remains uncertain.
In short, I agree that the agency chose political expediency over a
public process, and I believe that leaves the Title II Order vulnerable
to judicial review.
Question 2. Please provide examples of how investment has been
hindered based on the FCC's Open Internet Order.
Answer. Last year, many small ISPs declared under penalty of
perjury that they are cutting back on investments because of the FCC's
decision. Here are a few examples.
KWISP Internet serves 475 customers in rural northern
Illinois. As a result of the regulatory uncertainty and costs
created by the FCC's decision, KWISP plans to delay network
upgrades that would have upgraded customers from 3 Mbps to 20
Mbps service, new tower construction that would have brought
service to unserved areas, and capacity upgrades that would
reduce congestion for existing customers--not to mention the
jobs needed to make all of that happen. KWISP worries that even
a frivolous lawsuit brought under the Order could force
ownership to ``close the business.''
Wisper ISP Inc. is an 11-year-old ISP that serves 8,000
customers around St. Louis, Missouri. Wisper estimates that
compliance costs will constitute 10 percent of its operating
revenue. As a result, it has already cut investment, resulting
in ``slower broadband speeds, less dense coverage, and absence
of expansion into new areas.'' For example, prior to the FCC's
decision, Wisper was planning to triple the number of new base
stations it would deploy each month in order to provide
broadband to customers in new areas. But as a result of the
Order, Wisper has put those plans on hold.
SCS Broadband serves 800 customers in rural Virginia. SCS
Broadband has already stopped investing in new rural areas
because of the FCC's decision, and it won't resume until it can
``determine if the additional cost in legal fees warrant such
investments.'' And investors have already told SCS Broadband
that ``projects that were viable investments under the regime
that existed before the Order will no longer provide the
necessary returns to justify the investment.''
Joink LLC serves 2,500 customers in and around Terre Haute,
Indiana. Although Joink was exploring a fiber-to-the-home
project in its community, newfound regulatory uncertainty
``will cause us to slow this investment, or not make it at
all''--and so, consumers ``will be left with slower broadband
speeds.'' Joink also worries that ``those with deeper pockets
can use broadly applied subjective standards to drag entities
such as Joink into litigation or to force us to forego
profitable business practices that can benefit our customers to
avoid potentially crippling litigation expenses.''
Aristotle Inc. serves nearly 800 customers in and around
Little Rock, Arkansas. Aristotle has been committed to serving
the unserved, and 60 percent of its customers wouldn't have any
broadband option at all but for Aristotle's past investments.
Because of the regulatory uncertainty created by the Order,
Aristotle has dialed back its plans to ``triple'' its customer
base and ``expand our service into unserved areas of rural
Arkansas.'' At this time, Aristotle plans to target just
``three smaller communities that abut our existing network.''
Washington Broadband, Inc. serves 1,400 customers in Yakima
County, Washington. Washington Broadband ``has aggressively
constructed new towers that cover small areas based on a return
on investment model of light density return,'' but the Order
has forced Washington Broadband to give up that business model.
Instead, it ``has decided to scale back expansion to new,
unserved or underserved areas and focus on more urban/suburban
areas.''
I have also attached the sworn declarations that these six
companies and two other small companies filed with the FCC on the
impact of the Title II Order.
Question 3. This Commission seems to have difficulty identifying
competition in the wireless market, as it has steadfastly refused to
make a finding of effective competition in recent Wireless Competition
Reports. For instance, in the latest Wireless Competition Report,
released on December 23, 2015, without a vote by the full Commission,
Chairman Wheeler's report states: ``this [Report] does not reach an
overall conclusion or formal finding regarding whether or not the CMRS
marketplace was effectively competitive, but rather it provides an
analysis and description of the CMRS industry's competitive metrics and
trends. . . . This Report instead focuses on presenting the best data
available on various aspects of competition throughout the mobile
wireless ecosystem and highlights several key trends.''
At the same time, the report states that more than 90 percent of
Americans have access to four or more wireless service providers. And,
more than 82 percent of Americans have access to four or more providers
of advanced LTE service. In your view, is the Commission following
Congress's directive to evaluate the competitiveness of the wireless
market? Why does Chairman Wheeler's report not reach any conclusion in
spite of the broad array of choices available to consumers?
Answer. No, the Commission is not following Congress's directive.
The Commsision should be making fact-based decisions that reflect
marketplace realities. But doing so consistently has not been the FCC's
hallmark in recent years. The FCC's Wireless Competition Report is a
salient example. Considering the facts you accurately recount above,
the conclusion was obvious and the decision to make a decision
shouldn't have been hard.
As I stated when the agency released the latest Report, this FCC
will never find that there is effective competition in the wireless
market, regardless of what the facts show. That's because doing so
would undermine the agency's goal of expanding its authority to
manipulate the wireless market--a goal it cannot accomplish if it deems
that market healthy.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Hon. Ajit Pai
Question 1. For years, I have believed that the way in which rules
are processed at the Commission lacks transparency and is detrimental
to the American public. My FCC Process Reform Act would address these
transparency and accountability issues for the sake of consumers and
the industries supporting innovation and our economy.
For example, the public has no idea the specific language of the
rules the Commission is voting on until after they are passed. We saw
that with the net neutrality rules that were pushed through this time
last year, and we saw it a few weeks ago when the FCC voted on the
proposal related to set-top boxes.
In fact, Chairman Wheeler said during that meeting on set-top
boxes: ``There have been lots of wild assertions about this proposal
before anybody saw it.'' The problem is that the public doesn't know
what to expect from the rule--there is no certainty for those on the
outside.
Do you believe the public has a right to see the specific language
of a rule before it is voted on by the Commission?
Answer. Yes. Both as a matter of law and good government, the FCC
should not adopt regulations before allowing the public to see them.
Question 2. As someone committed to protecting Americans' and
Nevadans' privacy, especially related to personally identifiable
information (PII), I have a questions regarding the recent set-top box
Notice of Proposed Rulemaking.
Currently, pay-TV companies must follow strong privacy protections
to ensure consumers' personal information is not collected, utilized,
or shared for non-service related purposes. How does this NPRM
contemplate applying and enforcing these same privacy to any new
suppliers entering the set-top box market? Does the FCC have the legal
authority to enforce Title 6 privacy standards on third parties?
Answer. I do not believe that the FCC has the legal authority to
enforce Title VI privacy standards directly on third parties. To get
around this problem, the NPRM attempts to do so indirectly.
Specifically, it proposes to prohibit MVPDs from providing services to
any navigation device unless the developer of that device certifies
that it meets the privacy requirements set forth in Section 631 of the
Act. However, this raises an obvious dilemma. What happens if a
navigation device developer violates such privacy requirements after
providing the certification contemplated by the NPRM? Who would have
the legal authority to take enforcement action against that developer?
What would be the remedy? I find it troubling that the answers to these
important questions are not contained anywhere in the NPRM.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Ajit Pai
Question 1. One of the best tools the Commission has in overseeing
the Lifeline program is the ability to take aggressive enforcement
against carriers violating the rules of the program, companies that are
abusing both the consumers who use the program as well as the rate
payers that fund it. That's why I applauded a flurry of announced
enforcement activity from September 2013 through February 2014. During
that time the FCC issued Notices of Apparent Liability (NALs) totaling
more than $94 million in proposed fines for 12 companies participating
in the Lifeline program. Some of those notices are more than two-and-a-
half years old yet not a penny of that money has yet been collected.
Will you press the Enforcement Bureau to either issue forfeiture
orders, reach settlements, or dismiss these 12 NALs in an expeditious
manner?
Answer. Yes. Indeed, I called on the Commission to take up-or-down
votes on these forfeitures orders in a speech in the summer of 2014.
See https://apps.fcc.gov/edocs_public/attachmatch/DOC-328469A1.pdf.
Since then, I have continued to press the Enforcement Bureau on the
status of these cases (as well as many others), but the Bureau has
steadfastly refused to disclose its activities to sitting
Commissioners.
Question 2. To avoid this situation in the future, would you
support a shot clock for resolution of NALs? If so, what do you believe
would be an acceptable amount of time?
Answer. Yes, I support a shot clock. This past December, I proposed
that the FCC should speed up its resolution of enforcement cases by
setting a meaningful deadline for final action. Specifically, I
proposed that any forfeiture order be issued within one year of the
issuance of an NAL. If no such forfeiture order is adopted within this
timeframe, that NAL would be automatically nullified.
Question 3. The Bipartisan Budget Act of 2015 included an unwise
and harmful provision to exempt debt collection calls on behalf of the
Federal Government from Telephone Consumer Protection Act (TCPA) rules
that prohibit robocalls to cell phones. Although the provision was
ostensibly aimed at collecting student loan debt, the loophole was
potentially widened either further by adoption of the Fixing America's
Surface Transportation (FAST) Act in December, which requires the
Internal Revenue Service to contract with private debt collectors to
collect unpaid taxes. I have held hearings in this committee's Consumer
Protection Subcommittee and at the Senate Aging Committee on robocalls.
We should be making it harder--not easier--for this number one consumer
complaint to continue, especially when there is no evidence that
robocalls are an effective means of reaching consumers. Until we are
successful in repealing this provision, the FCC is tasked with adopting
rules to implement it. Would you support rules that require companies
collecting debt on behalf of the Federal Government to register with
the FCC in advance of doing so?
Answer. I agree with you that we should be making it harder, not
easier, for companies to bombard consumers with robocalls that they do
not want. As such, I do not support the Administration's push to exempt
federal-government-debt collectors from the TCPA and will push for
rules that constrain that exemption to the full extent the law allows.
Question 4. Would you support rules that limit calls from companies
collecting debt on behalf of the Federal Government to no more than one
call per consumer per month?
Answer. Because I do not support this new exemption to the TCPA, I
will push for rules that limit such calls to the full extent the law
allows.
Question 5. What impact do you believe this exemption will have on
the ability of the commission's Enforcement Bureau to differentiate
between calls that are now exempt from TCPA and those that are not,
particularly when exempt calls and non-exempt calls could be coming
from the same call centers?
Answer. I believe this exemption will make enforcement of the TCPA
more difficult for the Commission's Enforcement Bureau. Unfortunately,
the FCC's record is already poor on this front. From January through
June of last year, for example, the Enforcement Bureau issued only a
single citation to a potential violator of Federal Do-Not-Call rules--
even though complaints about unwanted telemarketing calls make up about
40 percent of consumer complaints to the Commission. The FCC needs to
start taking its charge to protect consumers much more seriously and
step up its enforcement efforts in this area.
Question 6. The chairman recently received a letter from Senator
Blunt and me regarding the upcoming reverse auction portion of Connect
America Fund, Phase II (CAF II).
For CAF II in Missouri, there is approximately $400 million
available over the next 10 years to bring broadband to unserved parts
of the state. Can you assure me that the money will be spent in
Missouri and not be reallocated to other areas of the country?
Answer. The Chairman has proposed a framework for the CAF II
Auction. Unfortunately, the FCC's rules limit my ability to discuss
that proposal while it is still under consideration. But I can say that
I am currently reviewing his proposal and hope to work with my
colleagues to design an auction that will get the most broadband bang
for our universal-service buck for the people of every state.
Question 7. As you consider the framework to govern the reverse
auction to award the remaining dollars available in CAF II, how will
you ensure that funded projects not only meet today's broadband
definition, but are future proof and scalable to keep pace with ever-
changing technology and increasing needs for higher speed broadband?
Answer. Given that the Chairman's proposal is under consideration,
I can only say that I hope to work with my colleagues to design an
auction that will let rural Americans keep pace with their urban
counterparts when it comes to broadband access.
Question 8. In 1993, through the Omnibus Budget Reconciliation Act
of 1993, Congress directed the FCC to develop regulations governing the
competitive bidding of spectrum. Included in the statutory instructions
from Congress was a requirement that the Commission ``ensure that small
businesses, rural telephone companies, and businesses owned by members
of minority groups and women are given the opportunity to participate
in the provision of spectrum-based services.'' To meet this
congressional mandate the FCC created the Designated Entity (DE)
program. The program's worthy goal of providing a mechanism for
legitimate small businesses to partner with larger ones in spectrum
auctions has undoubtedly helped many small businesses win spectrum
licenses over the past 20+ years. But it has also provided a blueprint
for large, multinational, multi-billion-dollar corporations to game the
system and receive discounts on their bids. What assurances can you
provide that the commission will do a better job of monitoring
potential abuse of the DE program in the upcoming incentive auction
than it did in the recent AWS-3 auction?
Answer. Since I am in the minority at the FCC, I cannot provide any
assurances regarding the FCC's monitoring of potential abuse of the DE
program in the upcoming incentive auction. I can assure you, however,
that I take abuse of the DE program very seriously, and I will not
hesitate to speak out if large corporate interests attempt to game the
system again.
Unfortunately, the Commission has made it more difficult to police
abuse of the DE program since the AWS-3 auction. In July 2015, the
Commission decided on a party-line vote to reopen loopholes the agency
closed on a bipartisan basis years ago--loopholes that led to
widespread gamesmanship in past auctions. I fear that the agency's
decision will invite further abuse of the DE program.
Question 9. When Congress and the FCC were establishing the
framework for spectrum auctions more than 20 years ago it probably made
sense to ensure small businesses were able to compete. But a lot has
changed. The cost of entering the incredibly expensive wireless
infrastructure industry is far greater than it was in the early 1990s.
A company that truly has revenues of $40 million, $15 million, or $3
million--the thresholds set by the commission for the various levels of
bidding credits--would be unlikely to enter the industry today. So is
it time to look at simply eliminating the DE program to prevent future
abuse?
Answer. I think it would be appropriate for Congress to undertake a
top-to-bottom review of the DE program. As implemented by the FCC, the
DE program has been plagued by abuse. Large corporate interests
routinely try to game the system at the expense of far smaller
businesses. Congressional oversight is particularly warranted because,
as noted above, the Commission recently voted 3-2 to reopen loopholes
that the agency closed on a bipartisan basis years ago.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Hon. Ajit Pai
Question 1. As you know, to address increasing demand for wireless
broadband access, Congress directed the FCC to conduct an incentive
auction, to encourage broadcast licensees to voluntarily relinquish
their spectrum rights in exchange for a share of the proceeds in
auctioning this spectrum to new licensees. In many parts of the
country, contiguous spectrum will be freed up by ``repacking'' the
channels to which remaining television broadcasters are currently
assigned. Do you believe there is enough money in the TV Broadcaster
Relocation Fund to cover repacking-related expenses incurred by
broadcasters?
Answer. I do not know at this time whether there will be enough
money in the TV Broadcaster Relocation Fund to cover all repacking-
related expenses incurred by broadcasters. Among other things, we do
not yet know how many television stations will need to be repacked.
Question 2. If the 39 month repack time-frame and the $1.75 billion
relocation fund are insufficient, does the FCC have the flexibility in
the statute to ensure consumers and communities won't be negatively
affected by signals going off the air?
Answer. The statute provides the FCC with the flexibility to adjust
the 39-month deadline for completing repacking. However, it does not
provide the FCC with the flexibility to increase the size of the
relocation fund above $1.75 billion.
Question 3. If so, how can the FCC ensure that broadcasters have
sufficient time to move without being forced off the air, if factors
outside their control delay their ability to reconfigure their
facilities?
Answer. If a broadcaster is unable to meet the 39-month repacking
deadline due to factors outside of its control, the FCC could grant it
a waiver of the deadline so that a station would not be forced off the
air.
Questions 4. Do you agree that no non-participating broadcaster
should be forced off the air, or forced to cover the costs of
transitioning their signal, to accommodate the repack?
Answer. Yes, I agree that no non-participating broadcaster should
be forced to cover transition costs. That is why I urged my colleagues
to adopt a repacking budget of $1.75 billion. I also agree that no non-
participating television station should be forced off the air at the
end of the 39-month deadline if it has been unable to move due to
factors outside of its control.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Michael O'Rielly
Question 1. Following the reclassification of broadband Internet
access service as a Title II public utility, Chairman Wheeler indicated
that the FCC will propose new privacy regulations. The Federal Trade
Commission (FTC) already has extensive experience in protecting
consumer privacy, and consumers and business already have experience in
applying the FTC's privacy rules and precedents; the Commission has
virtually no such experience beyond the very narrow confines of rules
implementing Sec. 222. Why would the Commission create a new, likely
inconsistent set of rules rather than adopting the FTC's privacy
protections? Given that the Commission's rules will only apply to BIAS
providers, isn't there a significant likelihood that functionally
identical activities on a smartphone will be governed by completely
different rules based upon who is providing the service?
Answer. As an initial matter, I do not believe the Commission has
authority to regulate broadband privacy practices under section 222 or
any other provision. Since Congress has not assigned this role to the
FCC, the agency should not presume to act, especially in an area where
it has very little experience or expertise. Moreover, there is a
significant risk that any rules adopted by the FCC will supplant or
conflict with well-established FTC privacy precedents that are
currently serving fairly well as a predictable road map for businesses
and consumers alike. As I have said before, the Internet is much too
important to our economy to be saddled with experimental regulations
from any and all interested agencies.
Question 2. I understand that you are close to finalizing action on
an order that would address the standalone broadband issue that many in
Congress have written to you about over the past several years and also
adopt some new limits and other measures related to universal service
support for rate of return providers. Do you commit to work quickly and
collaboratively with this committee and with affected stakeholders to
the extent any adverse or unintended consequences arise out of the
reforms?
Answer. Yes, I commit to do so. I have also made the same
commitment to providers and their associations. While the reforms are
intended to provide much needed stability and certainty to enable
companies to invest in broadband and deliver service to consumers, we
also want to continue to work collaboratively to ensure that any
legitimate issues that arise are quickly and appropriately addressed.
Question 3. Ensuring that rural and urban consumers have access to
reasonably comparable services at reasonably comparable rates is a
fundamental statutory principle of universal service. Are you confident
that the standalone broadband solution you are poised to adopt will do
that--specifically, will it allow rural consumers to get standalone
broadband at rates reasonably comparable to their urban counterparts?
If not, what more do you think the FCC will need do to ensure such
comparability?
Answer. Yes, our intent is to ensure that rates in rural America
are reasonably comparable to those in urban areas, as required by the
statute. Here again, if the reforms do not operate as envisioned, we
would want to work with the providers and their associations to make
any necessary adjustments.
Question 4. I have heard concerns that the methodology used in the
2014 order to determine the local rate floor for voice service has led
to rates in some rural areas, including parts of South Dakota, that are
not reasonably comparable to those services provided in urban areas.
Given this concern, when do you plan to act on the petition for
reconsideration filed by several rural associations regarding the rate
floor methodology? Do any other Commissioners have thoughts regarding
this matter?
Answer. I do not have any information on the timing of this
particular petition. As I have said in other contexts, however, the
Commission should act as promptly as possible on outstanding petitions.
Too many times, petitions remain pending for multiple years and parties
receive no indication as to when they might receive an answer, positive
or negative.
Question 5. Last July, the FCC released an omnibus declaratory
ruling on the Telephone Consumer Protection Act (TCPA). TCPA litigation
has increased dramatically in the last decade. What considerations did
the Commission give to the impact its ruling would have on businesses,
both large and small, that need to reach their customers for legitimate
business purposes?
Answer. Unfortunately, the FCC gave very little consideration to
legitimate companies acting in good faith to reach customers who
expressed interest in being contacted. As I said at the time, the order
painted nearly all businesses as bad actors and abused the statute in
multiple ways, making it nearly impossible for companies to use modern
technology to reach consumers without incurring substantial legal risk.
In my statement on the ruling, I provided many examples of the wide
range of businesses and communications that would be negatively
impacted by the order. In some cases, companies are left to choose
between adhering to the ruling and compliance with regulations from
other Federal and state agencies that require businesses to call
consumers, sometimes multiple times. The FCC ignored all of these
examples and arguments in reaching its decision and, therefore, it is
not surprising that a number of companies have challenged the decision
in court.
Question 6. Many small businesses seek to improve their efficiency
and customer relationships by providing information to their customers
through the use of modern dialing technologies. The FCC's recent
interpretation of the term ``autodialer'' in the TCPA declaratory
ruling, however, could sweep in any number of modern dialing
technologies. Other than using a rotary phone, what other technologies
can small businesses feel comfortable using without exposing themselves
to TCPA litigation risk?
Answer. There is no good answer for businesses. The FCC's
appallingly incorrect reading of the statutory definition of an
automatic telephone dialing system (ATDS or autodialer) sweeps in any
equipment that could be used or modified to function as an autodialer
at some point in the future. According to the FCC, it does not matter
how the equipment was configured or used at the time a call was
actually made. As a result, companies cannot even rely on manual
dialing as a last resort to reach consumers because even the equipment
used to manually dial the calls could potentially be changed to
function as an autodialer in the future.
Question 7. By establishing liability after a mere one-call
exception, the Commission's ruling creates a perverse incentive for
incorrectly-called parties to allow or even encourage incorrect calls
to continue, rather than notify the calling party of the error. These
continuing incorrect calls thus become potential violations and the
basis for monetary penalties sought through litigation. What will you
do to repair this perverse incentive?
Answer. I highlighted this concern when the FCC adopted the
exception. The ruling sets a trap for legitimate businesses and places
absolutely no responsibility on the consumer to notify a company that
they reached the wrong person. This was already happening before the
ruling, as I noted in my statement on the ruling, and the FCC's
decision will only make a bad situation worse.
The FCC is currently defending this decision in court, so it is
unlikely that the FCC will change the exception before the court rules
on it.
Question 8. Has the Commission considered providing a safe harbor
for a calling party that reasonably relies on available customer phone
number records to verify the accuracy of a customer's phone number?
Answer. The FCC considered and rejected reasonable proposals by
outside parties to establish a safe harbor for legitimate companies
that follow a long list of best practices to avoid stray calls to the
wrong people. I, too, argued that a safe harbor was warranted because
there is no comprehensive way to confirm whether a number has been
reassigned. These concerns were ignored.
Question 9. The pay TV set-top box NPRM proposes to expand the
scope of the term ``navigation device'' to include ``software or
hardware performing the functions traditionally performed in hardware
navigation devices.'' On what theory does the Commission base this
interpretation and expansion of the statutory term's scope to include
software? Does software that is not integral to the operation of a
navigation device fall within the scope of Section 629?
Answer. I voted against the Commission's recent ``Commercial
Availability of Navigation Devices Notice of Proposed Rulemaking and
Memorandum Opinion and Order'' (commonly referred to as the set-top box
item) because, in part, I strongly disagreed with the majority's
interpretation of section 629 to apply to such software, including
applications or apps. I hope that if the Commission attempts to
conclude this item, this proposal never sees the light of day as it
violates the specific wording of the law and the spirit of this
provision.
Question 10. How does the NPRM propose or contemplate preventing
third party devices or applications from adding unapproved or
additional advertising alongside MVPD service content? How does the
NPRM propose to protect and secure interactive MVPD programming and
services when accessed through third party devices or applications? How
does the NPRM propose to enforce such protection and security measures?
Answer. As you can see from the text of the item, the majority does
not see any particular problem needing Commission attention regarding
the possible replacement of such advertising. Instead, the item states
that market forces will address any issue but fails to explain how this
would work in practice. Being one that generally supports market
forces, I do not know how this would be applied in this instance. In
terms of protection and security of content, this question may be
better suited to those Commissioners that support the item as I
disagreed with the logic and the specific proposals designed to rely on
third party contracts as a mechanism to enforce and maintain important
policies.
______
Response to Written Question Submitted by Hon. Ted Cruz to
Hon. Michael O'Rielly
Question. In the Open Internet Order, the Federal Communications
Commission (FCC) revised the definition of ``public switched network''
to mean ``the network that . . . use[s] the North American Numbering
Plan, or public IP addresses, in connection with the provision of
switched services'' (See para. 391 (emphasis added)). Although the FCC
disclaimed any intent to ``assert'' jurisdiction over the assignment or
management of IP addresses by the Internet Numbers Registry System (see
id. at note 1116), the FCC's decision to equate telephone numbers with
IP addresses nonetheless gives the FCC statutory jurisdiction over IP
addresses as a matter of law. Over 20 years ago the FCC concluded that
Section 201 of the Communications Act gave it plenary jurisdiction over
telephone numbers, because ``telephone numbers are an indispensable
part'' of the duties that section 201 imposes on common carriers (See
Administration of the North American Numbering Plan, Notice of Proposed
Rulemaking, FCC 94-79, 8 (1994)). IP addresses are likewise an
indispensable part of the duties the FCC imposed on ISPs under section
201, including the duty to connect to ``all or substantially all
Internet endpoints.''
How can the FCC uphold the public interest requirements in section
201 of the Act if it refuses to assert its statutory authority over an
indispensable part of the public switched network?
If the FCC believes regulation of IP numbers used to connect end
points on the public switched telephone network is unnecessary, why
hasn't it forborne from the regulation of telephone numbers?
Answer. In the Open Internet Order, the majority used an ends-
justifies-the-means approach to change a long-standing definition so
that mobile broadband could miraculously be redefined as a Title II
service. Inconsistencies, such as those raised above, are one of the
many unintended consequences of regulatory overreach and using outdated
rules on modern technology. Hopefully, this change of definition, which
was implemented without opportunity for public comment and is
inconsistent with prior Commission precedent, will be struck down by
the D.C. Circuit. As for why the Commission has not taken action to
forbear from the regulation of telephone numbers, I leave it to the
Chairman to respond.
______
Response to Written Questions Submitted by Hon. Deb Fischer to
Hon. Michael O'Rielly
Question 1. Commissioner O'Rielly, as the FCC moves forward with
reforms of the Lifeline program, I continue to have concerns about the
potential for waste, fraud, and abuse. In Nebraska, there is little to
no waste, fraud, or abuse mainly due to the diligence of the state's
Public Service Commission in overseeing the program. The PSC thoroughly
vets all companies before designating them as Eligible
Telecommunications Carriers, and they have leverage through this
process to police the quality of the services provided. We also have a
system of verifying the eligibility of consumers applying to the
program. I understand that some of the changes that you are considering
would eliminate the important role that states like Nebraska play in
overseeing and policing the Lifeline program. How would the FCC be able
to replicate the work that states do to prevent waste, fraud, and abuse
in the Lifeline program?
Answer. A draft item just circulated on March 8, so I am limited by
FCC rules in what I can say about the contents of the item. However, I
have made clear on multiple occasions that I am concerned about waste,
fraud, and abuse in the program. I will carefully consider the points
you raise in reviewing whether any of the reforms would magnify this
ongoing problem.
Question 2. Commissioner O'Rielly, in discussing the FCC's recent
proposal on set-top boxes, nearly everyone has said, yourself included,
that they would like to see the marketplace continue to move away from
set-top boxes and towards more innovative methods of allowing customers
to access video content. New technologies have increased competition in
the video market, and companies like Netflix, Hulu, Roku, as well as a
wide variety of video applications are providing new options to
consumers. Further, many cable and satellite companies are moving away
from set top boxes and towards application-based platforms. How do we
continue to encourage innovation in the video marketplace while
avoiding technology mandates and burdensome regulations?
Answer. Thankfully, the marketplace--driven by consumer demand--is
heading in that direction without assistance or mandates by the
Commisison, as many video distributors are already moving to an app-
centric world and away from the hardware limitations of a set-top box
environment. Consumers are able to experience wide choices of digital
video content that will only increase over time, absent unnecessary
interference from the Commission. While I leave it to Congress'
purview, I will suggest that there may be great benefits from removing
unnecessary burdens contained in Title VI of the Communications Act.
Additionally, it is important that new video offerings, such as over-
the-top video, not be vacuumed into the existing video regulatory
regime.
______
Response to Written Questions Submitted by Hon. Ron Johnson to
Hon. Michael O'Rielly
Question 1. Commissioner O'Rielly, am I correct that you were not
offered an opportunity to cast a vote on the latest Wireless
Competition Report? When did you learn of the Report's release? Do you
believe the process used to adopt the Report is consistent with
Congress' statutory direction, and if not, what are your thoughts
regarding congressional action to repeal or modify this annual
requirement?
Answer. You are correct that I was not provided an opportunity to
vote on the Wireless Competition Report, despite requests from
Commissioner Pai and me to have it formally circulated to and voted by
the entire Commission. The timeline of notification and release is as
follows:
Dec. 21, 2015, 6:12 pm: Provided 48 hours notice that the report
was to be released on delegated authority.
Dec. 22, 2015, 10:42 am: My office requested that the report be
circulated to and voted on by the
Commission.
Dec. 23, 2015, 2:23 pm: Informed that the Chairman would move
forward with the release of the report on
delegated authority.
Dec. 23, 2015, approx. Report released.
6:00 pm:
Generally, the data contained in this report is used by the
Commission as a foundation for regulatory decisions and, therefore,
should contain input from and be approved by the Commissioners. More
specifically, releasing the report on delegated authority fails to
comply with the statute, which states that the Commission, not the
Bureau, must report annually about the state of the mobile industry.
Further, the report must contain an analysis of ``whether or not there
is effective competition.'' Even though more than 90 percent of
Americans have a choice of four or more wireless providers, the report
does not conclude, as directed by Congress, whether this industry is
competitive. I leave it to Congress to decide the best course of action
to rectify this situation and whether the annual report remains useful.
But it may be helpful for Congress to reiterate, at a minimum, that any
such report must be released by the Commission, as opposed to on
delegated authority, and must conclude whether or not the wireless
industry is competitive.
Question 2. Commissioner O'Rielly, in your testimony, you provided
an example of an FCC enforcement action against First National Bank.
Specifically, you said, ``Before First National was ever notified about
the citation, the Commission had already tried the case through the
press, harming the company's reputation. Interestingly, the citation
was dismissed two month later without similar fanfare.'' What, if
anything, can Congress do to help address this issue?
Answer. I have suggested that the Commission change its procedures
so that citations are not publicized until after the target has had the
opportunity to respond to the claimed violations, which occurs within
30 days of the issuance of the citation. I made clear that this change
would not detract from the Enforcement Bureau's ability to pursue an
investigation, or a fine if warranted. The company would still receive
the citation and could face further enforcement action. Nor would it
detract from the Commission's ability to use a citation as a deterrent
for other companies because the citation (unless rescinded after
discussions with the target) would still become public.
I can report that the Commission has not changed its procedures to
date. I would welcome any action by Congress to address this issue.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Hon. Michael O'Rielly
Question 1. For years, I have believed that the way in which rules
are processed at the Commission lacks transparency and is detrimental
to the American public. My FCC Process Reform Act would address these
transparency and accountability issues for the sake of consumers and
the industries supporting innovation and our economy.
For example, the public has no idea the specific language of the
rules the Commission is voting on until after they are passed. We saw
that with the net neutrality rules that were pushed through this time
last year, and we saw it a few weeks ago when the FCC voted on the
proposal related to set-top boxes.
In fact, Chairman Wheeler said during that meeting on set-top
boxes: ``There have been lots of wild assertions about this proposal
before anybody saw it.'' The problem is that the public doesn't know
what to expect from the rule--there is no certainty for those on the
outside.
Do you believe the public has a right to see the specific language
of a rule before it is voted on by the Commission?
Answer. This simple but powerful fix would benefit the American
people, the functionality of the Commission and the transparency of our
government. I appreciate all of your hard work to push this effort
forward and am hopeful that it will become reality, either through
changes made by the Commission itself or Congressional action.
Question 2. As someone committed to protecting Americans' and
Nevadans' privacy, especially related to personally identifiable
information (PII), I have a question regarding the recent set-top box
Notice of Proposed Rulemaking.
Currently, pay-TV companies must follow strong privacy protections
to ensure consumers' personal information is not collected, utilized,
or shared for non-service related purposes. How does this NPRM
contemplate applying and enforcing these same privacy to any new
suppliers entering the set-top box market? Does the FCC have the legal
authority to enforce Title 6 privacy standards on third parties?
Answer. You raise an important issue regarding the Commission's
recent set top box item, from which I dissented. The item proposes to
rely on the imposition of mandates on video distrubutors to include
privacy requirements in any contract with a third party when sharing
the so-called data streams. I do not see how Title VI can be read to
provide the Commission with authority to govern the privacy of third
party providers' use of this valuable information via the private
contractual requirements of video distributors.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Michael O'Rielly
Question 1. One of the best tools the Commission has in overseeing
the Lifeline program is the ability to take aggressive enforcement
against carriers violating the rules of the program, companies that are
abusing both the consumers who use the program as well as the rate
payers that fund it. That's why I applauded a flurry of announced
enforcement activity from September 2013 through February 2014. During
that time the FCC issued Notices of Apparent Liability (NALs) totaling
more than $94 million in proposed fines for 12 companies participating
in the Lifeline program. Some of those notices are more than two-and-a-
half years old yet not a penny of that money has yet been collected.
Will you press the Enforcement Bureau to either issue forfeiture
orders, reach settlements, or dismiss these 12 NALs in an expeditious
manner?
Answer. While I don't have any involvement in setting the agenda of
the Enforcement Bureau, I support the concept of it making timely
decisions, especially as it relates to incidents of fraud, waste and
abuse of the Lifeline program.
Question 2. To avoid this situation in the future, would you
support a shot clock for resolution of NALs? If so, what do you believe
would be an acceptable amount of time?
Answer. I have favored shot clocks in other settings and the use of
one here may prove beneficial as well. Too many enforcement matters sit
in holding patterns for too long, making the enforcement of our rules
more difficult than is necessary. I would be open to seeking public
comment on an appropriate time table for such a shot clock.
Question 3. The Bipartisan Budget Act of 2015 included an unwise
and harmful provision to exempt debt collection calls on behalf of the
Federal Government from Telephone Consumer Protection Act (TCPA) rules
that prohibit robocalls to cell phones. Although the provision was
ostensibly aimed at collecting student loan debt, the loophole was
potentially widened either further by adoption of the Fixing America's
Surface Transportation (FAST) Act in December, which requires the
Internal Revenue Service to contract with private debt collectors to
collect unpaid taxes. I have held hearings in this committee's Consumer
Protection Subcommittee and at the Senate Aging Committee on robocalls.
We should be making it harder--not easier--for this number one consumer
complaint to continue, especially when there is no evidence that
robocalls are an effective means of reaching consumers. Until we are
successful in repealing this provision, the FCC is tasked with adopting
rules to implement it. Would you support rules that require companies
collecting debt on behalf of the Federal Government to register with
the FCC in advance of doing so?
Answer. I am hesitant to comment too extensively on this matter
given the Commission currently has a related matter before it. However,
my first reaction is that this may be outside the statutory authority
provided to the Commission. Substantively, I am not sure the Commission
has any expertise in conducting or operating such a registration, or
whether it would be effective. I will, of course, implement any changes
enacted by Congress.
Question 4. Would you support rules that limit calls from companies
collecting debt on behalf of the Federal Government to no more than one
call per consumer per month?
Answer. Again, this is a matter presently before the Commission.
While the FCC does have authority under the statute to set limits on
the number and duration of such calls, this proposed limitation may run
counter to other Federal agency call attempt requirements on those
servicing or trying to collect a debt owed to or guaranteed by the
United States.
Question 5. What impact do you believe this exemption will have on
the ability of the commission's Enforcement Bureau to differentiate
between calls that are now exempt from TCPA and those that are not,
particularly when exempt calls and non-exempt calls could be coming
from the same call centers?
Answer. I have generally refrained from critiquing changes in law
approved by Congress and the Administration. In practice,
implementation and enforcement of this change may not prove too
difficult as it will hinge on whether the function of the call meets
the statutory exemption, which should be a fact-based analysis.
Question 6. The chairman recently received a letter from Senator
Blunt and me regarding the upcoming reverse auction portion of Connect
America Fund, Phase II (CAF II).
For CAF II in Missouri, there is approximately $400 million
available over the next 10 years to bring broadband to unserved parts
of the state. Can you assure me that the money will be spent in
Missouri and not be reallocated to other areas of the country?
Answer. The election by the incumbent price cap carriers in
Missouri to turn down CAF Phase II funding means that these areas will
be designated for participation in the post right-of-first-refusal
reverse auction. A draft proposal to implement the reverse auction is
currently before the Commission. Until such an item is adopted and
executed, it is premature to predict its effects on the overall
spending level for Missouri. For instance, it may be that the non-
selected price cap areas can be sufficiently served at a reduced cost
generated by the reverse auction process.
Question 7. As you consider the framework to govern the reverse
auction to award the remaining dollars available in CAF II, how will
you ensure that funded projects not only meet today's broadband
definition, but are future proof and scalable to keep pace with ever-
changing technology and increasing needs for higher speed broadband?
Answer. The Commission is currently considering the components for
the reverse auction. I do support a structure that recognizes
differences in service offerings while not favoring one technology over
another so that the Commission can incentivize the private sector to
provide broadband in these areas within the established budget.
Question 8. In 1993, through the Omnibus Budget Reconciliation Act
of 1993, Congress directed the FCC to develop regulations governing the
competitive bidding of spectrum. Included in the statutory instructions
from Congress was a requirement that the Commission ``ensure that small
businesses, rural telephone companies, and businesses owned by members
of minority groups and women are given the opportunity to participate
in the provision of spectrum-based services.'' To meet this
congressional mandate the FCC created the Designated Entity (DE)
program. The program's worthy goal of providing a mechanism for
legitimate small businesses to partner with larger ones in spectrum
auctions has undoubtedly helped many small businesses win spectrum
licenses over the past 20+ years. But it has also provided a blueprint
for large, multinational, multi-billion-dollar corporations to game the
system and receive discounts on their bids. What assurances can you
provide that the commission will do a better job of monitoring
potential abuse of the DE program in the upcoming incentive auction
than it did in the recent AWS-3 auction?
Answer. Unfortunately, I am not confident that such abuse will not
occur in the future, and it's why I dissented on the item adopting
recent changes to the Commission's DE rules. In particular, I am not
confident that the rule changes properly protect consumers from
companies using the DE program as a mechanism to obtain and then sell
wireless licenses for excessive profits at the expense of the American
people.
Question 9. When Congress and the FCC were establishing the
framework for spectrum auctions more than 20 years ago it probably made
sense to ensure small businesses were able to compete. But a lot has
changed. The cost of entering the incredibly expensive wireless
infrastructure industry is far greater than it was in the early 1990s.
A company that truly has revenues of $40 million, $15 million, or $3
million--the thresholds set by the commission for the various levels of
bidding credits--would be unlikely to enter the industry today. So is
it time to look at simply eliminating the DE program to prevent future
abuse?
Answer. There are legitimate concerns whether the Commission can
operate an effective and abuse-free DE program while properly
compensating the American people for use of spectrum. If it cannot be
done, then the program should be immediately and indefinitely suspended
and Congress notified of such.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Hon. Michael O'Rielly
Question 1. As you know, to address increasing demand for wireless
broadband access, Congress directed the FCC to conduct an incentive
auction, to encourage broadcast licensees to voluntarily relinquish
their spectrum rights in exchange for a share of the proceeds in
auctioning this spectrum to new licensees. In many parts of the
country, contiguous spectrum will be freed up by ``repacking'' the
channels to which remaining television broadcasters are currently
assigned. Do you believe there is enough money in the TV Broadcaster
Relocation Fund to cover repacking-related expenses incurred by
broadcasters?
Answer. I believe that it is premature to know whether the funding
level established by Congress is sufficient. The broadcast incentive
auction structure has many moving components that could alter the
overall repacking costs. For instance, until the band plan is adopted
by the marketplace via the reverse and forward auctions, it is unclear
to know how many stations will need to be repacked. While I am
sympathetic to the concerns of the broadcasting community, it seems
prudent to examine this issue after the auction concludes.
Question 2. If the 39 month repack time-frame and the $1.75 billion
relocation fund are insufficient, does the FCC have the flexibility in
the statute to ensure consumers and communities won't be negatively
affected by signals going off the air?
Answer. If necessary, the Commission could extend the repacking
timeframe, but it must balance this against the interests of those
winning licenses in the forward auction, assuming the incentive auction
is able to close successfully. Once we have a clearer picture of how
many stations will be repacked, it will be easier to determine whether
the 39-month repack time-frame is achievable and the best way to
proceed. It is also possible that individual waivers, rather than a
blanket extension, may be the best course of action but it is unclear
at the current time whether this will be necessary. At the same time,
the Commission doesn't not have authority to increase the repacking
budget of $1.75 billion; only Congress can do that.
Question 3. If so, how can the FCC ensure that broadcasters have
sufficient time to move without being forced off the air, if factors
outside their control delay their ability to reconfigure their
facilities?
Answer. The Commission should properly and closely monitoring the
repacking process to ensure that any delays are the result of
legitimate problems faced by broadcasters and not avoidable
circumstances. Based on this information, the Commission could issue
individual waivers of the repacking deadline or extend the deadline
altogether, if necessary.
Questions 4. Do you agree that no non-participating broadcaster
should be forced off the air, or forced to cover the costs of
transitioning their signal, to accommodate the repack?
Answer. To the extent that any delays in repacking are the result
of legitimate problems and not avoidable circumstances and its
repacking costs fully meet the standards set by the Commission, then
yes.
______
Response to Written Questions Submitted by Hon. John Thune to
Hon. Mignon L. Clyburn
Question 1. Following the reclassification of broadband Internet
access service as a Title II public utility, Chairman Wheeler indicated
that the FCC will propose new privacy regulations. The Federal Trade
Commission (FTC) already has extensive experience in protecting
consumer privacy, and consumers and business already have experience in
applying the FTC's privacy rules and precedents; the Commission has
virtually no such experience beyond the very narrow confines of rules
implementing Sec. 222. Why would the Commission create a new, likely
inconsistent set of rules rather than adopting the FTC's privacy
protections? Given that the Commission's rules will only apply to BIAS
providers, isn't there a significant likelihood that functionally
identical activities on a smartphone will be governed by completely
different rules based upon who is providing the service?
Answer. Thank you for the question. Both the Federal Trade
Commission (FTC) and the Federal Communications Commission (FCC) share
a long and valuable history of collaboration on issues when it comes to
protecting American consumers and I am pleased to say that I do not see
that spirit of cooperation ever changing. But Senator, I must
respectfully disagree with the premise of the question that the FCC has
virtually no experience in protecting consumer privacy. As you
mentioned, Section 222 is an explicit grant of authority from Congress
regarding privacy for telecommunications networks and carriers. In
fact, the actual title of Section 222 is ``Privacy of Consumer
Information'' and there outlined are the duties of carriers to protect
confidentiality and proprietary information. Well before the Open
Internet Order, the FCC has been the only agency with jurisdiction to
ensure telecommunications carriers protect consumer privacy.
The Chairman just circulated a Notice of Proposed Rulemaking on
Section 222 and privacy for broadband Internet access service (BIAS)
providers and I am currently reviewing the item. As I review the draft
and meet with interested parties, I am open to all proposals and
options on how best to protect consumers' privacy consistent with the
directives of Section 222. I believe we are all better suited when we
have a robust record that will help determine how best to proceed.
Question 2. I understand that you are close to finalizing action on
an order that would address the standalone broadband issue that many in
Congress have written to you about over the past several years and also
adopt some new limits and other measures related to universal service
support for rate of return providers. Do you commit to work quickly and
collaboratively with this committee and with affected stakeholders to
the extent any adverse or unintended consequences arise out of the
reforms?
Answer. Yes. I commit to work quickly and collaboratively with the
Commission to address any adverse or unintended consequences.
Question 3. Ensuring that rural and urban consumers have access to
reasonably comparable services at reasonably comparable rates is a
fundamental statutory principle of universal service. Are you confident
that the standalone broadband solution you are poised to adopt will do
that--specifically, will it allow rural consumers to get standalone
broadband at rates reasonably comparable to their urban counterparts?
If not, what more do you think the FCC will need do to ensure such
comparability?
Answer. I agree that the FCC has a duty to ensure that, consistent
with the objectives of the statute, rates in rural and high cost areas
are reasonably comparable to urban counterparts just as we have a duty
to ensure that low income consumers have access to services reasonably
comparable to services available urban areas. The FCC conducts an urban
rate survey every year to help assess what rates consumers are paying
in those areas. This survey will enable us to compare the urban survey
reults to rates in rural and high cost areas and, if necessary, take
action to ensure rates remain reasonably comparable.
In addition, the FCC's high cost universal service fund is not
designed to ensure that rates are affordable. Rather, the FCC's
Lifeline program is the only means-tested program established to
provide support to ensure that services are affordable for low-income
consumers who need connectivity the most. Reforming the Lifeline
program to ensure that those who qualify can apply for a Lifeline
discount to broadband rather than just voice, is another pivotal
measure to ensure that rates for advanced telecommunications services
in rural and urban areas are ubiquitous and affordable.
Question 4. I have heard concerns that the methodology used in the
2014 order to determine the local rate floor for voice service has led
to rates in some rural areas, including parts of South Dakota, that are
not reasonably comparable to those services provided in urban areas.
Given this concern, when do you plan to act on the petition for
reconsideration filed by several rural associations regarding the rate
floor methodology? Do any other Commissioners have thoughts regarding
this matter?
Answer. In 2011, the FCC adopted the local rate floor to ensure
that finite universal service resources are being used as efficiently
as possible and not spent on subsidizing local rates that are
artificially low. We need to ensure that support is sufficient but we
should never provide any more support than is necessary. The rate floor
reductions apply only to carriers that receive High Cost Loop Support
or HCLS, which subidizes intrastate costs and reduces support only to
the extent rates are below the rate floor. Thus, carriers that do not
receive HCLS are not impacted and interstate common line support or
ICLS is not impacted.
In 2014, the FCC revised the implementation of the rate floor as
follows:
Between January 2, 2015, and June 30, 2016, support is
reduced only to the extent rates are below $16;
Between July 1, 2016, and June 30, 2017, support is reduced
only for lines with rates under $18 or the rate floor
established by the 2016 rate survey, whichever is lower; and
Between July 1, 2017, and June 30, 2018, support is limited
only for lines with rates under $20 or the 2017 rate floor,
whichever is lower. Thus, the impact of this rule was phased in
over a four-year period and Lifeline customers were excluded
from these limitations.
In 2015, the FCC found, based on a survey of urban rates, that the
2015 rate floor for voice services is $21.22, and the reasonable
comparability benchmark for voice services is $47.48. It is my
understanding that last year, of the 116,000 lines served by rate of
return carriers in South Dakota, only 41 lines, or 0.0003 percent, were
below the $16 rate floor. Thus, only carriers serving these 41 lines
would see a reduction in HCLS support and only to the extent they are
below $16. Based on this data, coupled with the phased in reductions
outlined above, the rate floor reductions are still well below average
rates paid for by urban consumers. And, even after the phase-in, the
rate floor will be based on urban rates which should ensure that rates
in rural and high cost areas are reasonably comparable to urban areas.
In addition, rates for low-income consumers receiving Lifeline that
are below the rate floor are not impacted and no support is reduced for
these lines. Even so, I am happy to meet with you and your staff to
better understand your concern and determine if there are ways for the
FCC to take action to address it.
Question 5. Last July, the FCC released an omnibus declaratory
ruling on the Telephone Consumer Protection Act (TCPA). TCPA litigation
has increased dramatically in the last decade. What considerations did
the Commission give to the impact its ruling would have on businesses,
both large and small, that need to reach their customers for legitimate
business purposes?
Answer. As I noted when the Commission adopted the declaratory
ruling, the agency struck a difficult, but necessary balance with the
item, maintaining the consumer protections that the TCPA intended,
while taking into account the needs of businesses. I also noted that we
would remain vigilant, monitoring consumer complaints not only when it
comes to unwanted calls but also whether access to important and
desired information is unintentionally lost.
Question 6. Many small businesses seek to improve their efficiency
and customer relationships by providing information to their customers
through the use of modern dialing technologies. The FCC's recent
interpretation of the term ``autodialer'' in the TCPA declaratory
ruling, however, could sweep in any number of modern dialing
technologies. Other than using a rotary phone, what other technologies
can small businesses feel comfortable using without exposing themselves
to TCPA litigation risk?
Answer. As communications technologies change, so must our rules.
The Commission's declaratory ruling took several steps to provide small
businesses protection from TCPA litigation. First and foremost, any
company can protect themselves by obtaining prior consent for their
communication. Second, we provided some buffer for companies acting in
good faith, by allowing them one call, post reassignment, in order to
affirm any number reassignment.
Question 7. By establishing liability after a mere one-call
exception, the Commission's ruling creates a perverse incentive for
incorrectly-called parties to allow or even encourage incorrect calls
to continue, rather than notify the calling party of the error. These
continuing incorrect calls thus become potential violations and the
basis for monetary penalties sought through litigation. What will you
do to repair this perverse incentive?
Answer. The Commission receives overwhelming numbers of complaints
from consumers about the robocalls and texts they receive. I voted for
our declaratory ruling last year, including the one-call exception,
because I believe we did what we could to provide clarity for good
business actors in this space while protecting consumers from unwanted
communications. I have also encouraged voluntary participation by all
providers in some type of comprehensive database for reassigned
numbers. This idea still has merit. But I look forward to reviewing any
ideas to improve our implementation of the TCPA that the Chairman's
Office proposes.
Question 8. Has the Commission considered providing a safe harbor
for a calling party that reasonably relies on available customer phone
number records to verify the accuracy of a customer's phone number?
Answer. As noted above, the Commission receives overwhelming
numbers of complaints from consumers about the robocalls and texts they
receive, and the declaratory ruling struck a difficult, but necessary
balance between maintaining the consumer protections that the TCPA
intended, while also taking into account the needs of businesses. The
declaratory ruling did not adopt a safe harbor, but I am open to
reviewing any ideas to improve our implementation of the TCPA that the
Chairman's Office proposes.
Question 9. The pay TV set-top box NPRM proposes to expand the
scope of the term ``navigation device'' to include ``software or
hardware performing the functions traditionally performed in hardware
navigation devices.'' On what theory does the Commission base this
interpretation and expansion of the statutory term's scope to include
software? Does software that is not integral to the operation of a
navigation device fall within the scope of Section 629?
Answer. As noted in the NPRM, the Communications Act does not
define the term ``navigation device,'' but we interpreted the term to
be broader than hardware alone, as Section 629 is plainly written to
cover any equipment used by consumers to access multichannel video
programming and other services. Software features have long been
essential elements of such equipment, including before adoption of
Section 629.
Question 10. How does the NPRM propose or contemplate preventing
third party devices or applications from adding unapproved or
additional advertising alongside MVPD service content? How does the
NPRM propose to protect and secure interactive MVPD programming and
services when accessed through third party devices or applications? How
does the NPRM propose to enforce such protection and security measures?
Answer. We are committed to defending copyright protections
afforded to content creators, and the proposal does not interfere with
the agreements between the content companies and MVPDs. In fact, in
order to be certified, a navigation device maker will need to show that
they are in compliance with security measures in order to receive
information from MVPDs.
Navigation device makers will be required to pass through all
content, including advertisements. As for inserting additional
advertisements, the marketplace may actually help discourage such a
practice, as most consumers are not looking for a product that provides
additional advertisements. But I look forward to continuing to engage
on this issue, and I hope that the record of this proceeding will help
inform this issue.
______
Response to Written Question Submitted by Hon. Ted Cruz to
Hon. Mignon L. Clyburn
Question. In the Open Internet Order, the Federal Communications
Commission (FCC) revised the definition of ``public switched network''
to mean ``the network that . . . use[s] the North American Numbering
Plan, or public IP addresses, in connection with the provision of
switched services'' (See para. 391 (emphasis added)). Although the FCC
disclaimed any intent to ``assert'' jurisdiction over the assignment or
management of IP addresses by the Internet Numbers Registry System (see
id. at note 1116), the FCC's decision to equate telephone numbers with
IP addresses nonetheless gives the FCC statutory jurisdiction over IP
addresses as a matter of law. Over 20 years ago the FCC concluded that
Section 201 of the Communications Act gave it plenary jurisdiction over
telephone numbers, because ``telephone numbers are an indispensable
part'' of the duties that section 201 imposes on common carriers (See
Administration of the North American Numbering Plan, Notice of Proposed
Rulemaking, FCC 94-79, 8 (1994)). IP addresses are likewise an
indispensable part of the duties the FCC imposed on ISPs under section
201, including the duty to connect to ``all or substantially all
Internet endpoints''.
How can the FCC uphold the public interest requirements in section
201 of the Act if it refuses to assert its statutory authority over an
indispensable part of the public switched network?
If the FCC believes regulation of IP numbers used to connect end
points on the public switched telephone network is unnecessary, why
hasn't it forborne from the regulation of telephone numbers?
Answer. Thank you for the question. Nothing in the Open Internet
Order suggests that the Commission asserted authority over the
assignment or management of IP addresses, either pursuant to Section
201(a) or pursuant to Section 251(e) (the source of Commission
authority over numbering issues pursuant to the Telecommunications Act
of 1996). In fact, the Commission forebore from Section 251(e)--the
provision that gives the Commission authority over telecommunications
numbering.
IP addressing is governed by IANA, (the Internet Assigned Numbers
Authority), a department of ICANN that is responsible for the global
coordination of IP addressing, among other coordination functions.
ARIN--the American Registry of Internet Numbers--is the regional
administrator responsible for administering Internet numbers is the
U.S. and certain nearby countries. The NTIA is the U.S. Government
agency that contracts with ICANN to perform the IANA functions.
______
Response to Written Question Submitted by Hon. Deb Fischer to
Hon. Mignon L. Clyburn
Question. Commissioner Clyburn, as the FCC moves forward with
reforms of the Lifeline program, I continue to have concerns about the
potential for waste, fraud, and abuse. In Nebraska, there is little to
no waste, fraud, or abuse mainly due to the diligence of the state's
Public Service Commission in overseeing the program. The PSC thoroughly
vets all companies before designating them as Eligible
Telecommunications Carriers, and they have leverage through this
process to police the quality of the services provided. We also have a
system of verifying the eligibility of consumers applying to the
program. I understand that some of the changes that you are considering
would eliminate the important role that states like Nebraska play in
overseeing and policing the Lifeline program. How would the FCC be able
to replicate the work that states do to prevent waste, fraud, and abuse
in the Lifeline program?
Answer. Thank you for the question. As a former state commissioner,
I respect and appreciate the significant role many states play and am
always mindful of this in my capacity as an FCC Commissioner. As we
reform Lifeline, my goal is to create a dignified program that creates
more choice for consumers and eliminates the incentives for fraud. I
have heard the current Lifeline program, including eligibility
determination and participation, may deter some providers from
participating, and I am open to ways to reduce barriers and increase
choice for consumers. The Chairman just circulated an Order to achieve
these goals and, if you have concerns, I am happy to meet with you to
better understand how we can achieve our shared goals.
______
Response to Written Questions Submitted by Hon. Dean Heller to
Hon. Mignon L. Clyburn
Question 1. For years, I have believed that the way in which rules
are processed at the Commission lacks transparency and is detrimental
to the American public. My FCC Process Reform Act would address these
transparency and accountability issues for the sake of consumers and
the industries supporting innovation and our economy.
For example, the public has no idea the specific language of the
rules the Commission is voting on until after they are passed. We saw
that with the net neutrality rules that were pushed through this time
last year, and we saw it a few weeks ago when the FCC voted on the
proposal related to set-top boxes.
In fact, Chairman Wheeler said during that meeting on set-top
boxes: ``There have been lots of wild assertions about this proposal
before anybody saw it.'' The problem is that the public doesn't know
what to expect from the rule--there is no certainty for those on the
outside.
Do you believe the public has a right to see the specific language
of a rule before it is voted on by the Commission?
Answer. Thank you for the question. In my opinion, the
Administrative Procedures Act, which governs all Federal agencies, has
sufficient notice and comment requirements to give the public,
including FCC licensees, adequate information about rules the
Commission might adopt and sufficient opportunity to comment on any
such proposed rules. To comply with the APA, the Commission typically
discusses rule proposals in a Notice of Proposed Rulemaking. In some
cases, it might be difficult to specify every detail of such proposed
rules. Therefore, Commission should have flexibility, when those few
instances present themselves, to not specify every detail of every
proposed rule.
Question 2. As someone committed to protecting Americans' and
Nevadans' privacy, especially related to personally identifiable
information (PII), I have a questions regarding the recent set-top box
Notice of Proposed Rulemaking.
Currently, pay-TV companies must follow strong privacy protections
to ensure consumers' personal information is not collected, utilized,
or shared for non-service related purposes. How does this NPRM
contemplate applying and enforcing these same privacy to any new
suppliers entering the set-top box market? Does the FCC have the legal
authority to enforce Title 6 privacy standards on third parties?
Answer. Thank you for the question. I share your concern about
protecting consumer privacy. While device manufacturers are not subject
to Title VI as cable providers are, the NPRM proposes that in order to
be certified, a navigation device maker will need to show that they are
in compliance with privacy obligations in order to receive information
from MVPDs.
In reality, this could mean that navigation device makers will
comply with the more stringent European Union privacy regulations, in
order to be able to market their products globally.
______
Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Mignon L. Clyburn
Question 1. One of the best tools the Commission has in overseeing
the Lifeline program is the ability to take aggressive enforcement
against carriers violating the rules of the program, companies that are
abusing both the consumers who use the program as well as the rate
payers that fund it. That's why I applauded a flurry of announced
enforcement activity from September 2013 through February 2014. During
that time the FCC issued Notices of Apparent Liability (NALs) totaling
more than $94 million in proposed fines for 12 companies participating
in the Lifeline program. Some of those notices are more than two-and-a-
half years old yet not a penny of that money has yet been collected.
Will you press the Enforcement Bureau to either issue forfeiture
orders, reach settlements, or dismiss these 12 NALs in an expeditious
manner?
Answer. Thank you for your questions. Yes, I agree it is
appropriate to resolve all Notices of Apparent Liability in a timely
manner. I also do not have any reason to believe that the Enforcement
the Bureau is not actively working on pending matters in a manner that
upholds, respects and balances the rights and responsibilities of both
the consumer and the carrier.
Question 2. To avoid this situation in the future, would you
support a shot clock for resolution of NALs? If so, what do you believe
would be an acceptable amount of time?
Answer. While a shot clock could be useful to ensure that the
agency remains on track when it comes to resolving outstanding issues,
each situation is different. As a result, while generally supportive of
a strict timeframe, I would need to learn more about the current
Enforcement Bureau process and timelines when it comes to particular
violation categories in order to provide a specific recommendation.
Question 3. The Bipartisan Budget Act of 2015 included an unwise
and harmful provision to exempt debt collection calls on behalf of the
Federal Government from Telephone Consumer Protection Act (TCPA) rules
that prohibit robocalls to cell phones. Although the provision was
ostensibly aimed at collecting student loan debt, the loophole was
potentially widened either further by adoption of the Fixing America's
Surface Transportation (FAST) Act in December, which requires the
Internal Revenue Service to contract with private debt collectors to
collect unpaid taxes. I have held hearings in this committee's Consumer
Protection Subcommittee and at the Senate Aging Committee on robocalls.
We should be making it harder--not easier--for this number one consumer
complaint to continue, especially when there is no evidence that
robocalls are an effective means of reaching consumers. Until we are
successful in repealing this provision, the FCC is tasked with adopting
rules to implement it. Would you support rules that require companies
collecting debt on behalf of the Federal Government to register with
the FCC in advance of doing so?
Answer. The Commission is currently considering a Notice of
Proposed Rulemaking that implements the Bipartisan Budget Act of 2015.
I am carefully weighing the proposal in order to ensure that we
maintain the consumer protections that the TCPA intended, and will take
this proposal into consideration.
Question 4. Would you support rules that limit calls from companies
collecting debt on behalf of the Federal Government to no more than one
call per consumer per month?
Answer. The Commission is currently considering a Notice of
Proposed Rulemaking that implements the Bipartisan Budget Act of 2015.
I am carefully weighing the proposal in order to ensure that we
maintain the consumer protections that the TCPA intended, and agree
that there should be a limit on the number of calls per month, as well
as opt-out accommodations.
Question 5. What impact do you believe this exemption will have on
the ability of the commission's Enforcement Bureau to differentiate
between calls that are now exempt from TCPA and those that are not,
particularly when exempt calls and non-exempt calls could be coming
from the same call centers?
Answer. The Commission is currently considering a Notice of
Proposed Rulemaking that implements the Bipartisan Budget Act of 2015.
I am carefully weighing the proposal in order to ensure that we
maintain the consumer protections that the TCPA intended. Like all of
our rulemakings, I agree that we need to take enforceability into
account as we evaluate the item.
Question 6. The Chairman recently received a letter from Senator
Blunt and me regarding the upcoming reverse auction portion of Connect
America Fund, Phase II (CAF II).
For CAF II in Missouri, there is approximately $400 million
available over the next 10 years to bring broadband to unserved parts
of the state. Can you assure me that the money will be spent in
Missouri and not be reallocated to other areas of the country?
Answer. The Order adopting rules for the Connect America Fund Phase
II auction is on circulation. I am still reviewing the proposed Order
and evaluating the implications of various proposals, including how
funding would be distributed. While I cannot reveal the substance of
the item on circulation, I am happy to meet with you and your staff to
hear how you would propose to ensure that funding would remain within a
given state.
Question 7. As you consider the framework to govern the reverse
auction to award the remaining dollars available in CAF II, how will
you ensure that funded projects not only meet today's broadband
definition, but are future proof and scalable to keep pace with ever-
changing technology and increasing needs for higher speed broadband?
Answer. As noted above, the Order adopting rules for the Connect
America Fund Phase II auction is on circulation. I am still reviewing
the proposed Order but certainly share the goal that we want to ensure
we fund projects that are future-proof. At the same time, universal
service support is limited so I want to ensure we have a framework to
ensure that we enable all consumers to have access to broadband and
voice services. If you have ideas on how best to achieve these goals, I
would be interested in hearing them and would be happy to meet with you
and your staff.
Question 8. In 1993, through the Omnibus Budget Reconciliation Act
of 1993, Congress directed the FCC to develop regulations governing the
competitive bidding of spectrum. Included in the statutory instructions
from Congress was a requirement that the Commission ``ensure that small
businesses, rural telephone companies, and businesses owned by members
of minority groups and women are given the opportunity to participate
in the provision of spectrum-based services.'' To meet this
congressional mandate the FCC created the Designated Entity (DE)
program. The program's worthy goal of providing a mechanism for
legitimate small businesses to partner with larger ones in spectrum
auctions has undoubtedly helped many small businesses win spectrum
licenses over the past 20+ years. But it has also provided a blueprint
for large, multinational, multi-billion-dollar corporations to game the
system and receive discounts on their bids. What assurances can you
provide that the Commission will do a better job of monitoring
potential abuse of the DE program in the upcoming incentive auction
than it did in the recent AWS-3 auction?
Answer. In the 2015 Competitive Bidding Order, the Commission
adopted a number of reforms to prevent abuse of the DE program. First,
we prohibited joint bidding agreements that involve a shared strategy
for bidding at auction. Second, we retained the existing five-year
unjust enrichment period and graduated repayment schedule. But, we made
clear that we are limiting the amount of spectrum that non-controlling
disclosable interest holders of a designated entity--such as
investors--can use during the unjust enrichment period. Third, when
evaluating designated entity applications, we adopted a totality-of-
the-circumstances approach when examining whether an agreement or
relationship between an entity and an alleged non-controlling entity
would warrant attributing the non-controlling interest's revenue to the
designated entities. We issued guidance that some management, loan, and
organizational documents--such as limited liability company agreements
and other types of operational agreements--could raise concerns that
warrant particular scrutiny as part of our application review.
Question 9. When Congress and the FCC were establishing the
framework for spectrum auctions more than 20 years ago it probably made
sense to ensure small businesses were able to compete. But a lot has
changed. The cost of entering the incredibly expensive wireless
infrastructure industry is far greater than it was in the early 1990s.
A company that truly has revenues of $40 million, $15 million, or $3
million--the thresholds set by the commission for the various levels of
bidding credits--would be unlikely to enter the industry today. So is
it time to look at simply eliminating the DE program to prevent future
abuse?
Answer. I do not think we need to eliminate the Designated Entity
(DE) program in order to prevent future abuse. More than 20 years ago,
Congress realized that advanced telecommunications service and wireless
technologies had the potential to create tremendous opportunities for
all communities in our Nation. Though it may not have predicted
smartphones, tablets, millions of mobile broadband apps, and the
Internet of Things, Congress knew that in order for all communities to
benefit from technological innovation, this Commission's obligation to
allocate spectrum in the public interest should be guided by a few
enduring principles. The ones most relevant here are: all consumers
should have access to affordable service; entrepreneurs and small
businesses should have a reasonable opportunity to own and provide
communications services; and vigorous competition can promote both of
those policy goals. When Congress amended the Communications Act in the
1990s to give the Commission authority to conduct spectrum auctions, it
mandated that we design them to ``promot[e] economic opportunity and
competition,'' ensur[e] that new and innovative technologies are
readily accessible to the American people,'' ``avoid[] excessive
concentration of licenses . . . and disseminat[e] licenses among a wide
variety of applicants, including small businesses.'' We are not seeing
widespread abuse that would warrant complete elimination of the
program. Furthermore, as my prior response indicated, last year, the
Commission adopted a number of reforms to ensure that only bona fide
small businesses benefit from our DE program.
______
Response to Written Questions Submitted by Hon. Richard Blumenthal to
Hon. Mignon L. Clyburn
Question 1. As you know, to address increasing demand for wireless
broadband access, Congress directed the FCC to conduct an incentive
auction, to encourage broadcast licensees to voluntarily relinquish
their spectrum rights in exchange for a share of the proceeds in
auctioning this spectrum to new licensees. In many parts of the
country, contiguous spectrum will be freed up by ``repacking'' the
channels to which remaining television broadcasters are currently
assigned. Do you believe there is enough money in the TV Broadcaster
Relocation Fund to cover repacking-related expenses incurred by
broadcasters?
Answer. I am aware of studies that conclude that the Relocation
Fund will be sufficient, and others that say it will not. As the
scheduled start of the Incentive Auction is mere weeks away, we should
have a more definitive answer soon on whether or not the Fund will be
sufficient.
Question 2. If the 39 month repack time-frame and the $1.75 billion
relocation fund are insufficient, does the FCC have the flexibility in
the statute to ensure consumers and communities won't be negatively
affected by signals going off the air?
Answer. The Relocation Fund is based upon the statutory language,
and the 39 month repack period derives from the amount of time that
Congress gave the Commission to disburse the Relocation Fund. Once we
know more about the number of stations that will need to be repacked--
and that will be soon--I look forward to working with my colleagues,
the industry and Congress to ensure the transition is as smooth as
possible. I am confident that we will collectively work to minimize
disruption to consumers.
Question 3. If so, how can the FCC ensure that broadcasters have
sufficient time to move without being forced off the air, if factors
outside their control delay their ability to reconfigure their
facilities?
Answer. I look forward to collaborating with my colleagues, the
industry and Congress to ensure a transition that is as smooth as
possible. Once we know more about the number of stations that will need
to be repacked, we will have a better idea about the scope of the task
in front of us. The Chairman has announced that the Incentive Auction
Task Force will remain in place to oversee the transition, working to
ensure that we minimize disruption to consumers.
Questions 4. Do you agree that no non-participating broadcaster
should be forced off the air, or forced to cover the costs of
transitioning their signal, to accommodate the repack?
Answer. I agree that no non-participating broadcaster should be
forced off the air, and that the Relocation Fund should cover all valid
transition costs. I will be steadfast in my commitment to ensure a
smooth transition for the viewing public.
______
Response to Written Questions Submitted by Hon. Cory Booker to
Hon. Mignon L. Clyburn
Question 1. Your leadership was essential in achieving reform of
the pricing rates for phone calls made from within State and Federal
prison systems. I applaud the FCC's actions to ensure that incarcerated
persons can stay connected to their families and ultimately
rehabilitate into society.
It appears that similar abuses are occurring in new communications
technologies such as video conference calling. I am concerned about a
trend whereby in-person visits to incarcerated family members may be
replaced by video conference calls in some prisons. Furthermore, these
video conference calls are often subject to high pricing rates,
potentially transforming these precious family interactions into a
source of profit for prisons. What jurisdiction does the FCC have with
regard to video visitation calls?
Answer. The FCC sought comment on our jurisdiction to address video
visitation in the Further Notice of Proposed Rulemaking adopted last
October. Section 276 of the Act, which gives the FCC authority over
inmate calling services, is technology neutral and the FCC's
reclassification of broadband Internet access services as a Title II
service also applies to inmate calling services. While I am confident
that the FCC has authority over video visitation calls, providers have
disputed that the FCC has jurisdiction. If Congress were to act, it
could remove any lingering doubt regarding our jurisdiction.
Question 2. What steps should the FCC take to ensure that families
are able to stay connected with incarcerated individuals?
Answer. I believe that the FCC, as well as states, should take all
actions within our power to enable families to stay connected with
incarcerated individuals, and this means ensuring that inmate calling
rates are affordable. The FCC's Order adopting rate caps has been
challenged in court and the providers were successful in their quest
for a stay of the proposed rate caps. Even so, there is good news: caps
on those tremendously high ancillary fees will go into effect for
prisons on March 17, 2016, and the previous interim rate caps continue
to apply to all inmate calling services calls. I look forward to
defending the action in court, I trust that the stay is temporary and
permanent relief is within view.
In addition, if the FCC's rate caps are the ceiling and the states
enact further reforms and refine rates and reduce fees for jails and
prisons within their borders, then it is clear that affordably staying
connected with friends and family while incarcerated will finally be
possible. This most ideal scenario would be a win-win for society and
could help make a real difference in criminal justice reform, since
numerous studies clearly show that there is a direct correlation
between regular contact with family and friends during incarceration
and lower recidivism rates. We should all do everything in our power to
promote such connectivity through affordable rates.
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