[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]





         #CommActUpdate: PERSPECTIVES FROM FORMER FCC CHAIRMEN

=======================================================================

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 15, 2014

                               __________

                           Serial No. 113-112



      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov


                                    ______

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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

RALPH M. HALL, Texas                 HENRY A. WAXMAN, California
JOE BARTON, Texas                      Ranking Member
  Chairman Emeritus                  JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky               FRANK PALLONE, Jr., New Jersey
JOHN SHIMKUS, Illinois               BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania        ANNA G. ESHOO, California
GREG WALDEN, Oregon                  ELIOT L. ENGEL, New York
LEE TERRY, Nebraska                  GENE GREEN, Texas
MIKE ROGERS, Michigan                DIANA DeGETTE, Colorado
TIM MURPHY, Pennsylvania             LOIS CAPPS, California
MICHAEL C. BURGESS, Texas            MICHAEL F. DOYLE, Pennsylvania
MARSHA BLACKBURN, Tennessee          JANICE D. SCHAKOWSKY, Illinois
  Vice Chairman                      JIM MATHESON, Utah
PHIL GINGREY, Georgia                G.K. BUTTERFIELD, North Carolina
STEVE SCALISE, Louisiana             JOHN BARROW, Georgia
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   DONNA M. CHRISTENSEN, Virgin 
GREGG HARPER, Mississippi            Islands
LEONARD LANCE, New Jersey            KATHY CASTOR, Florida
BILL CASSIDY, Louisiana              JOHN P. SARBANES, Maryland
BRETT GUTHRIE, Kentucky              JERRY McNERNEY, California
PETE OLSON, Texas                    BRUCE L. BRALEY, Iowa
DAVID B. McKINLEY, West Virginia     PETER WELCH, Vermont
CORY GARDNER, Colorado               BEN RAY LUJAN, New Mexico
MIKE POMPEO, Kansas                  PAUL TONKO, New York
ADAM KINZINGER, Illinois             JOHN A. YARMUTH, Kentucky
H. MORGAN GRIFFITH, Virginia
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Ohio
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina

                                 7_____

             Subcommittee on Communications and Technology

                          GREG WALDEN, Oregon
                                 Chairman
ROBERT E. LATTA, Ohio                ANNA G. ESHOO, California
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               MICHAEL F. DOYLE, Pennsylvania
LEE TERRY, Nebraska                  DORIS O. MATSUI, California
MIKE ROGERS, Michigan                BRUCE L. BRALEY, Iowa
MARSHA BLACKBURN, Tennessee          PETER WELCH, Vermont
STEVE SCALISE, Louisiana             BEN RAY LUJAN, New Mexico
LEONARD LANCE, New Jersey            JOHN D. DINGELL, Michigan
BRETT GUTHRIE, Kentucky              FRANK PALLONE, Jr., New Jersey
CORY GARDNER, Colorado               BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas                  DIANA DeGETTE, Colorado
ADAM KINZINGER, Illinois             JIM MATHESON, Utah
BILLY LONG, Missouri                 G.K. BUTTERFIELD, North Carolina
RENEE L. ELLMERS, North Carolina     HENRY A. WAXMAN, California (ex 
JOE BARTON, Texas                        officio)
FRED UPTON, Michigan (ex officio)

                                  (ii)
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     1
    Prepared statement...........................................     3
Hon. Robert E. Latta, a Representative in Congress from the State 
  of Ohio, opening statement.....................................     4
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     4
Hon. Doris O. Matsui, a Representative in Congress from the State 
  of California, opening statement...............................     5
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     6
    Prepared statement...........................................     6
Hon. Marsha Blackburn, a Representative in Congress from the 
  State of Tennessee, opening statement..........................     7
Hon. Joe Barton, a Representative in Congress from the State of 
  Texas, opening statement.......................................     7
Hon. Henry A. Waxman, a Representative in Congress from the State 
  of California, opening statement...............................     8
Hon. Michael F. Doyle, a Representative in Congress from the 
  Commonwealth of Pennsylvania, opening statement................     9

                               Witnesses

Richard E. Wiley, Chairman, Wiley Rein LLP.......................     9
    Prepared statement...........................................    12
    Answers to submitted questions...............................    77
Reed E. Hundt, Principal, REH Advisors...........................    16
    Prepared statement...........................................    18
Michael K. Powell, President and Chief Executive Officer, 
  National Cable and Telecommunications Association..............    30
    Prepared statement...........................................    33
Michael J. Copps, Special Advisor, Media and Democracy Reform 
  Initiative, Common Cause.......................................    43
    Prepared statement...........................................    47

 
         #CommActUpdate: PERSPECTIVES FROM FORMER FCC CHAIRMEN

                              ----------                              


                      WEDNESDAY, JANUARY 15, 2014

                  House of Representatives,
     Subcommittee on Communications and Technology,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:03 a.m., in 
room 2123 of the Rayburn House Office Building, Hon. Greg 
Walden (chairman of the subcommittee) presiding.
    Members present: Representatives Walden, Latta, Shimkus, 
Terry, Rogers, Blackburn, Scalise, Lance, Guthrie, Gardner, 
Pompeo, Kinzinger, Long, Barton, Upton (ex officio), Eshoo, 
Doyle, Matsui, Braley, Lujan, Dingell, Pallone, Matheson, and 
Waxman (ex officio).
    Staff present: Gary Andres, Staff Director; Ray Baum, 
Senior Policy Advisor/Director of Coalitions; Sean Bonyun, 
Communications Director; Matt Bravo, Professional Staff Member; 
Andy Duberstein, Deputy Press Secretary; Gene Fullano, FCC 
Detailee; Kelsey Guyselman, Counsel, Communications and 
Technology; Sean Hayes, Counsel, Oversight and Investigations; 
Grace Koh, Counsel, Communications and Technology; Gib Mullan, 
Chief Counsel, Communications and Technology; David Redl, 
Counsel, Communications and Technology; Charlotte Savercool, 
Legislative Coordinator; Tom Wilbur, Digital Media Advisor; 
Jessica Wilkerson, Staff Assistant; Shawn Chang, Chief Counsel, 
Communications and Technology; Margaret McCarthy, Professional 
Staff Member; Kara van Stralen, Policy Analyst; and Patrick 
Donovan, FCC Detailee.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. I will call to order the Subcommittee on 
Communications and Technology and thank our witnesses for being 
here for this first of what will be many hearings as we look to 
update the Communications Act. Few sectors of our economy are 
equal to the communications and technology sector when it comes 
to innovation, investment in the American economy, and job 
creation. In these tough economic times, we as policy makers 
should be committed to fostering this critical sector of the 
economy. Yet, the laws that regulate the industry are outdated 
at best, and some are affirmatively damaging. This is why 
Chairman Upton and I, along with members of this subcommittee, 
have decided to undertake the difficult task of updating the 
Communications Act of 1934. In the eight decades since its 
passage, Congress' have come and gone. Some have even made 
substantial though targeted changes to the law. But none have 
undertaken to rethink the act for the environment of 
convergence and innovation in which we live today. It is time 
for our laws to reflect our modern technological landscape, one 
grounded in the networks and services of our past and driven by 
our IP and mobile future.
    Just yesterday, the DC Circuit issued its decision in the 
net neutrality case, striking down the rules ordered by the 
Federal Communications Commission. I for one was pleased to see 
the Court remove the Government from the business of making 
management judgments and give providers the freedom to make 
decisions that are pro-competitive and pro-consumer. While this 
decision benefits consumers and providers alike by keeping the 
Internet free from Government interference, the rationale 
highlights the ongoing confusion regarding regulation of 
different services. This is yet another example of why it is 
vital that we take a hard look at the laws in this space and 
reconcile them with the realities of technology. The answer is 
not to subject new technology to outdated regulations, but 
rather to craft laws appropriate to innovative services and 
platforms.
    As we embark on this effort, it should come as no surprise 
that I am focused on ensuring that we engage in a transparent 
and collaborative process, not just with our colleagues here in 
the Congress but also with the many stakeholders outside of 
these halls. All we want is a dialogue.
    Last week, the committee released the first of what will be 
a series of white papers seeking input from the public. And I 
hope that interested parties will take the opportunity to make 
their voices heard to us.
    Today's witnesses provide a unique and valuable perspective 
on the Communications Act. As Chairmen of the agency tasked 
with carrying out Congress' will in implementing the act, the 
four witnesses today have had a front row seat to witness the 
act in the real world to see where it works and where it 
doesn't. These Chairmen have varied experiences and viewpoints 
that in many ways represent the evolution of modern 
communications.
    When Chairman Wiley led the agency, telephone service was a 
Government-regulated monopoly. Consumers got their news from 
broadcast television and print newspapers, and the Internet was 
still years away. Sixteen years later, when Reed Hundt took the 
reins, the Internet was coming into full force and mobility was 
beginning to take off. Chairman Powell's tenure saw the 
convergence of services towards the bundled offerings we see 
today, as well as the deployment of broadband to Americans. And 
in the 4 years since Michael Copps served as Acting Chairman, 
there have been dramatic changes to the way we communicate and 
the technology that powers our lives. For example, the title of 
today's hearing contains a hashtag. Twitter, then with no 
vowels in its name, had yet to be ``discovered'' by--at South 
by Southwest.
    Neither we nor the august panel before us can predict the 
future and what technological changes it will bring. But by 
learning the lessons of the past, we can do our best to create 
a legal and regulatory environment that will foster innovation 
and competition, encourage consumer choice and optimum 
services.
    So again, I want to thank you for--to our witnesses for 
this impressive panel. We look forward to hearing your 
testimony. And we appreciate your public service.
    [The prepared statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    Few sectors of our economy are equal to the communications 
and technology sector when it comes to innovation, investment 
in the American economy, and job creation. In these tough 
economic times, we as policymakers should be committed to 
fostering this critical sector of the economy. Yet the laws 
that regulate this industry are outdated at best and some are 
affirmatively damaging. This is why Chairman Upton and I, along 
with the members of this subcommittee, have decided to 
undertake the difficult task of updating the Communications Act 
of 1934. In the eight decades since its passage, Congresses 
have come and gone. Some have even made substantial, though 
targeted, changes to the law. But none have undertaken to 
rethink the act for the environment of convergence and 
innovation we live in today. It's time for our laws to reflect 
our modern technological landscape--one grounded in the 
networks and services of our past and driven by our IP and 
mobile future.
    Just yesterday, the DC Circuit issued its decision in the 
net neutrality case, striking down the rules ordered by the 
FCC. I was pleased to see the court remove the Government from 
the business of making management judgments, and give providers 
the freedom to make decisions that are pro-competitive and pro-
consumer.
    While this decision benefits consumers and providers alike 
by keeping the Internet free from Government interference, the 
rationale highlights the ongoing confusion regarding regulation 
of different services. This is yet another example of why it is 
vital that we take a hard look at the laws in this space and 
reconcile them with the realities of technology. The answer is 
not to subject new technology to outdated regulations, but 
rather to craft laws appropriate to innovative services and 
platforms
    As we embark on this effort, it should come as no surprise 
that I am focused on ensuring that we engage in a transparent 
and collaborative process, not just with our colleagues here in 
Congress, but also with the many stakeholders outside these 
halls. What we want is a dialogue. Last week, the committee 
released the first of a series of white papers seeking input 
from the public, and I hope that interested parties will take 
the opportunity to make their voices heard.
    Today's witnesses provide a unique and valuable perspective 
on the Communications Act. As Chairmen of the agency tasked 
with carrying out Congress's will and implementing the act, the 
four witnesses today have had a front row seat to witness the 
act in the real world; to see where it works and where it 
doesn't. These Chairmen have varied experiences that in many 
ways represent the evolution of modern communications. When 
Chairman Wiley led the agency, telephone service was a 
Government-regulated monopoly, consumers got their news from 
broadcast television and print newspapers, and the Internet was 
still years away. Sixteen years later, when Reed Hundt took the 
reins, the Internet was coming into full force, and mobility 
was beginning to take off. Chairman Powell's tenure saw the 
convergence of services towards the bundled offerings we see 
today, as well as the deployment of broadband to Americans. And 
in the 4 years since Michael Copps served as Acting Chairman, 
there have been drastic changes to the way we communicate and 
the technology that powers our lives. For example, the title of 
today's hearing contains a hashtag. Twitter, then with no 
vowels in its name, had yet to be ``discovered'' at South by 
Southwest.
    Neither we nor the august panel before us can predict the 
future and what technological changes it will bring. But by 
learning the lessons of the past, we can do our best to create 
a legal and regulatory environment that will foster innovation 
and competition, encourage consumer choice, and optimum 
services. Again, thank you to our impressive panel of witnesses 
today--we look forward to hearing your testimony and we 
appreciate your public service.

    Mr. Walden. With that, I would yield to the vice chair of 
the subcommittee, Mr. Latta, for any opening comments he may 
have.

OPENING STATEMENT OF HON. ROBERT E. LATTA, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF OHIO

    Mr. Latta. Well, thank you very much, Mr. Chairman, and 
thank you very much to our panel of distinguished witnesses for 
testifying before us today. I appreciate you all being here.
    Since 1996, we have witnessed an unprecedented 
technological evolution in the communications industry. The 
rapid emergence of new and innovative technologies has fostered 
increased investment throughout the industry and the 
development of a vibrant, competitive communications 
marketplace. As we move into the future, it is important to 
examine the Communications Act to ensure that our public policy 
continues to encourage this kind of growth and innovation that 
is essential to fueling our economy. Reforms to current law 
should reflect the technology we enjoy today and be able to 
adapt to the technology of tomorrow without further Government 
intervention. Our efforts should be dedicated to ensure that 
the laws governing the communications marketplace do not stifle 
current and future investment, innovation, economic growth and 
consumer choice in this dynamic and converging digital age of 
communications.
    I look forward to the testimony from our witnesses today. 
And again, Mr. Chairman, I thank you very much for holding this 
hearing.
    Mr. Walden. I thank the gentleman for his comments. Now, I 
turn to the gentlelady from California, Ms. Eshoo, the ranking 
member of the subcommittee, for her opening comments. Good 
morning.

 OPENING STATEMENT OF HON. ANNA G. ESHOO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Eshoo. Thank you, Mr. Chairman, and good morning to 
you, to all of the members and the warmest welcome to each of 
the witnesses that are at the table. Your combined public 
service is--really stands as a hallmark of devoted service to 
our country, but also to move the country forward in one of its 
most important economic sectors. So welcome to you. It is 
wonderful to see all of you at the same time at the table.
    With news of the Court's net neutrality decision, today's 
hearing I think is a timely opportunity to hear from each one 
of you who have led the expert agency, the FCC. And combined, 
it represents over 4 decades of services. That is nothing short 
of extraordinary. And each of you have had a hand in really I 
think changing our Nation's communications and technology 
landscape. So not only kudos to you, thank you to you, but a 
recognition of what each one of you accomplished.
    When Congress passed the Telecommunications Act of 1996, it 
was my second term in Congress, my first term on the committee. 
And there were just 11 references to the Internet--the word 
Internet, and only one mention of broadband across a 128 page 
bill. Many proponents of updating the act have cited this as 
evidence that the act is outdated and unable to keep up with 
changes in technology.
    But as Chairman Wheeler affirmed last week, the 
Communications Act continues to provide the FCC with ample 
authority to exercise its role in this new environment. The 
Court's decision yesterday I believe furthers this argument by 
upholding the FCC's existing authority to oversee broadband 
services. And I think that is very important for consumers 
across the country.
    I make these points not to discourage the subcommittee's 
review of the act. I join with the chairman to review this. I 
think that it is a worthy exercise. But rather, we need to 
ensure that we know what problems we are trying to fix before 
undertaking a multi-year examination that include hearings, 
stakeholder meetings, white papers, and such.
    Since the '96 act was enacted, hundreds of new entrants of 
emerged, and more than $1.2 trillion has been invested by U.S. 
telecommunications companies. I want this success story to be 
an unending one. And I think that is the goal of everyone on 
this wonderful subcommittee.
    So to that end, my goal throughout the subcommittee's 
review will be to see more competition, greater consumer choice 
and more innovation. I am so proud, as the Chairman was making 
his opening remarks, that so much of this has been born in my 
congressional district. And so, innovation, innovation, 
innovation. And these goals were imbedded in the '96 Act, and 
they remain just as important today.
    At the same time, our process of examining the 
Communications Act should not derail, in my view, a more 
immediate update of our video laws, a view shared by a majority 
of the witnesses at a September subcommittee hearing. Recurring 
TV blackouts, coupled with the rising cost of broadcast 
television programming with limited choice has left consumers 
frustrated and looking to Congress and the FCC for answers. I 
believe that working together on a bipartisan basis, we can 
make this happen in 2014.
    So, Chairman Walden, thank you for holding today's hearing 
on the Communications Act. I welcome the review, and I look 
forward to hearing the unique insights from the top experts 
from our country who have given so much in terms of their 
leadership in leading the expert agency. And with that, I have 
34 seconds to yield to Congresswoman Matsui.

OPENING STATEMENT OF HON. DORIS O. MATSUI, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Ms. Matsui. Thank you, Ranking Member. And I want to 
welcome all the former Chairmen. We welcome you here for your 
ideas and experience that provide a basis for discussions 
moving forward.
    As technology evolves, I believe it is important that we 
consider appropriate updates to the Communications Act that 
with goals that promote competition and innovation in the 
marketplace. To that point, I am pleased that yesterday, the DC 
Circuit affirmed the FCC's authority to oversee broadband 
services. In my opinion, that was the crux of the debate, and 
the FCC's argument prevailed on the question of authority over 
broadband. The FCC will need to exert its authority to ensure 
now that all Americans have access to a free and open Internet. 
A competitive marketplace with checks and balances will fare 
well for all Americans.
    I look forward to the hearing today, and I yield back the 
balance of my time.
    Mr. Walden. The gentlelady yields back the balance of her 
time. The Chair now recognizes the distinguished member from 
Michigan, the chairman of the full committee, Mr. Upton, for 
opening comments.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Upton. Thank you, Mr. Chairman.
    Last month, you and I announced our plans for a 
comprehensive update to the Communications Act of 1934. And the 
changes in technology since the last update in '96 have been 
dramatic, and existing laws have failed to keep pace with the 
vibrant and dynamic telecommunication industry.
    Communications and technology sectors have consistently 
been areas of American leadership, innovated--innovation and 
job creation, certainly. But the Communications Act is showing 
its age, and our continued international leadership is indeed 
at stake.
    Yesterday's net neutrality decision, while a victory for 
consumers in the economy, illustrates the uncertainty flowing 
from the current statutory scheme and the need for this action. 
It is time to revamp these laws to reflect the new competitive 
landscape and changing consumer expectations. And as we begin 
the open process leading to a Comm Act Update, we are looking 
for input--yes, we are--from all of the stakeholders in the 
communications and technology world. Where better to start than 
with our distinguished panel of former leaders of the FCC? 
These leaders served during diverse times in the evolution of 
the communications sector, and they have seen the market 
operate under the strong hand of the U.S. Government and the 
challenges with them divorcing the Government from its heavy 
regulation of the communications sector from times before. They 
have seen cable grow from its stages of struggling startup. 
They have seen satellite services succeed in bringing 
competition to the video market, and failed to find success as 
a competitor to mobile phone service. And they have seen the 
Internet grow from a DOD project to a tool for research 
universities, and now as the commercial economic force that we 
know today.
    Throughout the many nuanced iterations of Communications 
Act, today's witnesses have firsthand seen the act at its 
finest, and also when its inability to keep pace with 
technological innovation has impacted those vital economic 
issues. So I want to thank the witnesses for taking their time 
to share their experiences with us. We value indeed their 
expertise and welcome their thoughts on how we can ensure the 
Communications Act fosters our communications and technology 
sectors well into this century.

    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    In December, Chairman Walden and I announced our plans for 
a comprehensive update to the Communications Act of 1934. The 
changes in technology since the last update in 1996 have been 
dramatic and existing laws have failed to keep pace with the 
vibrant and dynamic telecommunications industry. The 
communications and technology sectors have consistently been 
areas of American leadership, innovation, and job creation, but 
the Communications Act is showing its age and our continued 
international leadership is at stake. Yesterday's net 
neutrality decision, while a victory for consumers and the 
economy, illustrates the uncertainty flowing from the current 
statutory scheme and the need for this action. It's time to 
revamp these laws to reflect the new competitive landscape and 
changing consumer expectations.
    As we begin the open process leading to a #CommActUpdate, 
we are looking for input from all of the stakeholders in the 
communications and technology world. Where better to start than 
with our distinguished panel of former leaders of the Federal 
Communications Commission. These leaders served during diverse 
times in the evolution of the communications sector. They've 
seen the market operate under the strong hand of the U.S. 
Government and the challenges with then divorcing the 
Government from its heavy regulation of the communications 
sector. They've seen cable grow from its days as a struggling 
startup. They've seen satellite services succeed in bringing 
competition to the video market--and fail to find success as a 
competitor to mobile phone service. And, they've seen the 
Internet grow from a DoD project, to a tool for research 
universities, and now as the commercial economic force that we 
know today. Throughout the many nuanced iterations of the 
Communications Act, today's witnesses have seen firsthand the 
act at its finest and also when its inability to keep pace with 
technological innovation has impacted these vital economic 
sectors.
    I thank the witnesses for taking time to share their 
experiences with us. We value their expertise and welcome their 
thoughts on how we can ensure that the Communications Act 
fosters our communications and technology sectors well into the 
21st century.

    Mr. Upton. And I yield the balance of my time to the vice 
chair.

OPENING STATEMENT OF HON. MARSHA BLACKBURN, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF TENNESSEE

    Mrs. Blackburn. And thank you, Mr. Chairman. And if I had 
my iPhone in my hand, I would hit re-tweet for everything that 
he has just said.
    We do appreciate that you all are here. We do want to take 
advantage of the perspective that you have had. Think about 
what has happened in the past 17 years since '96 and the 
changes that we have seen, not only in how we communicate but 
the rapidity of those communications and entertainment and how 
we access that, how we take it with us, how we consume it. So 
we know that the pace of change means that we have to be very 
judicious and careful as we look at a rewrite. We know that 
there are issues that are going to come on the plate that we 
are going to have to discuss also as we look at not only the 
telecom rewrite but at the use of the virtual space, privacy, 
data security, the way the virtual marketplace is used and the 
way our constituents want to have a toolbox to protect, as I 
call it, their virtual you online.
    So we appreciate your time, your willingness to be with us 
this morning. And I yield back to the chairman of the 
committee.
    Mr. Upton. Yield back.
    Mr. Walden. The gentleman from Texas, Mr. Barton, will use 
some of that time.

   OPENING STATEMENT OF HON. JOE BARTON, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF TEXAS

    Mr. Barton. Thank you. Thank you, Mr. Chairman. I have 
served on this committee since 1986. I have served with three 
of the four former Chairmen. Mr. Wiley preceded me. We have had 
some agreements. We have had some disagreements. So it is good 
to have all four of you gentlemen here today.
    When I was chairman of the full committee back in 1996, my 
committee introduced a bill we call the COPE Bill, the 
Communication Opportunity Promotion Enhancement Act of 2006. It 
dealt with national franchising, net neutrality, public 
educational and governmental access, E911 and what we now call 
VOIP. It passed this committee 42 to 12, and passed the House 
321 to 101. But it didn't come up for a vote in the Senate. I 
voted for the Telecommunications Act of '96 and the Cable Act 
of '92. And I hope this year to get to vote for another major 
bill that comes from the leadership of Mr. Upton, Mr. Walden, 
Mr. Waxman and Ms. Eshoo. This is a good thing to be doing. And 
we are going to get some good information from you gentleman. 
And we appreciate you being here.
    Mr. Walden. The gentleman's time has expired. I appreciate 
his comments. We will now go to the former chairman of the 
committee, Mr. Waxman, for opening comments.

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    Mr. Waxman. Thank you very much, Mr. Chairman. I appreciate 
your convening this morning's hearing and launching the 
subcommittee's examination of potential updates to the 
Communications Act. And I want to thank our distinguished panel 
for being here to help us think through these ideas. And I 
think I have been in Congress during the time that all of you 
have been the heads of the FCC.
    Technology has changed at a blistering pace since the 
enactment of the 1996 Telecommunications Act, 18 years ago. The 
communications and technology industries are a thriving sector 
of our economy. As broadband plays an increasingly central role 
in the daily life of our Nation, having a strong Federal 
Communications Commission to oversee its successful growth is 
more critical than ever.
    Yesterday, the DC Court affirmed what never should have 
been in question. The FCC is the expert agency charged by 
Congress to oversee broadband networks. In doing so, the Court 
reaffirmed that the FCC has broad, flexible authority to 
regulate in the broadband and digital age. However, while the 
Court recognized the FCC's jurisdiction, it also overturned the 
specific rules the Commission had adopted in the open Internet 
order. I believe the FCC now has an opportunity, as well as a 
duty, to exercise the authority the Court recognized yesterday 
and reinstate the no-blocking and nondiscrimination rules. An 
open Internet is critical to the continuing growth of this 
economic sector.
    The Internet is a vibrant platform for commerce, innovation 
and free speech. Having enforceable, open Internet rules of the 
road means that consumers are in control of their experience 
online. I am pleased that Chairman Wheeler has stated his 
intention to expeditiously adopt a new set of rules following 
the Court's guidance. And I look forward to working with the 
chairman and my colleagues in Congress to make sure these pro-
consumer, pro-competition policies will continue to guide the 
expansion of broadband services.
    This subcommittee is now embarking on a journey to update 
the Communications Act. And regardless of the advancements in 
network architecture or transmission protocol, the principles 
of competition and consumer protection remain as sound today as 
they were in 1934. I know Chairman Wheeler recognizes the 
importance of these values and the action of the FCC that plans 
to take later this month to initiate technology transitions 
trials reflects that.
    I look forward to hearing from our witnesses about what 
Congress can do to help the FCC meet the challenges of the 
broadband and digital age.
    Thank you, Mr. Chairman. I want to yield the balance of my 
time to Mr. Doyle.

OPENING STATEMENT OF HON. MICHAEL F. DOYLE, A REPRESENTATIVE IN 
         CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA

    Mr. Doyle. Thank you, Mr. Waxman. Mr. Chairman, thank you 
for holding this hearing. And thank you to this distinguished 
panel. It is good to see all of you here in front of the 
committee.
    I just want to briefly concur with Mr. Waxman in light of 
yesterday's decision by the DC Circuit that I want to encourage 
Chairman Wheeler to work quickly to ensure that the Internet 
remains an open platform for innovation, competition and 
economic growth, which the FCC now clearly has the authority to 
do. I look forward to working with the Commission and the 
stakeholders to put in place a robust framework that sustains 
an open Internet.
    Mr. Waxman, I thank you for your courtesy. And I would 
yield back to you if someone else needs some more time.
    Mr. Waxman. Would--like a minute? If not, I yield it back, 
Mr. Chairman.
    Mr. Walden. The gentleman yields back the balance of his 
time. We will proceed now to our distinguished panel of 
witnesses and begin with Chairman Richard Wiley who was 
nominated by President Nixon and served as Chairman of the 
Federal Communications Commission from 1970 to 1977. As 
Chairman for most of the '70s, Chairman Wiley's tenure at the 
Commission predates many of the major changes in the 
communications sector. Chairman, we are glad to have you here 
today. Pull that microphone up close, and then we are good to 
go. Thank you for being here. You need to push the button on 
the microphone there one time.

STATEMENTS OF RICHARD E. WILEY, CHAIRMAN, WILEY REIN LLP; REED 
E. HUNDT, PRINCIPAL, REH ADVISORS; MICHAEL K. POWELL, PRESIDENT 
        AND CHIEF EXECUTIVE OFFICER, NATIONAL CABLE AND 
 TELECOMMUNICATIONS ASSOCIATION; AND MICHAEL J. COPPS, SPECIAL 
  ADVISOR, MEDIA AND DEMOCRACY REFORM INITIATIVE, COMMON CAUSE

                 STATEMENT OF RICHARD E. WILEY

    Mr. Wiley. Thank you very much, Chairman Walden, Ranking 
Member Eshoo and other subcommittee members. Thank you for the 
invitation to testify today.
    While I know it is not going to be self-evident due to my 
youthful appearance, I have been involved for nearly 45 years 
in Federal telecommunications policy. And from my own 
standpoint, what has occurred during that period is simply 
amazing. When I was at the FCC in the 1970s, the average 
American enjoyed just three broadcast television stations, and 
one local and long distance telephone provider. And the 
Department of Defense had just begun to explore a revolutionary 
computer project known as ARPANET. But today, our citizens have 
access to hundreds of video channels delivered by countless 
providers and transmission technologies, dozens of voice and 
tech services, numerous wire line and wireless companies. And, 
of course, ARPANET has morphed into the Internet, which has 
become a universal medium of communications.
    Interestingly, the bulk of this stunning technological 
metamorphosis has emerged since the 1996 Telecommunications Act 
was passed. That legislation significantly altered the rules 
governing virtually every aspect of communications. The act's 
purpose was as simple in theory as it was complex in 
implementation. That is to provide for a pro-competitive, 
deregulatory national policy framework designed to accelerate 
the deployment of advanced services and open all telecom 
markets to competition.
    To this end, the statute sought to eliminate cross-platform 
barriers and to encourage competition among service suppliers, 
previously treated as monopolies or oligopolies. Now to the 
credit of the drafters, the 1996 act helped to bring about the 
vibrant competition that consumers enjoy today in a variety of 
communication sectors, be it voice, data or video. Whether 
delivered by twisted pair coaxial cable, optical fiber or the 
electromagnetic spectrum, myriad providers today are offering 
their customers suites of advanced services in a marketplace 
that really could not have been imagined 18 years ago.
    In my view, where the statute and indeed FCC implementation 
has succeeded is when a lighter regulatory touch has been 
applied to markets such as mobile and information services. The 
result has been that these sectors have thrived. For example, 
in the robustly competitive wireless marketplace, there are now 
more wireless subscriber connections than the population of the 
United States. Just think of that. And mobile broadband has 
spawned an entirely new industry. Mobile apps, one that is 
estimated to employ more than 500,000 developers and related 
jobs, and contributes billions to the economy.
    A similar success story is unfolding in the delivery of 
digital content where seemingly unlimited video streaming Web 
sites have developed to compete against traditional MVPDs 
offering an eagerly waiting public new ways to consume video. 
This marketplace, I would suggest, is emerging because of 
innovation and competition and not because of Government 
regulation.
    Conversely, where the Government has been less effective in 
maintaining is in maintaining highly restrictive regulations on 
traditional industries like, for example, wire line telephony 
and broadcasting. The end result has been to disadvantage these 
sectors, even though they may be providing services that are 
often equivalent to those offered by their less regulated 
competitors. In the developing IP centric world, all types of 
providers should be able to market all kinds of services, 
employing the same computer oriented language that defines 
digital communications.
    And yet, the 1996 act continues to regulate communications 
markets differently based on the conduit used to reach the 
customer, as well as the geographic location where traffic 
originates and terminates. Now, the underlying problem is not a 
failure of Congressional or FCC vision. Instead, the reality is 
that the Government has great difficulty in writing laws or 
promulgating regulations that can keep pace with advancing 
technology, and especially so in a dynamic and ever changing 
industry like communications.
    Thus, I would suggest that the objective of a statutory 
rewrite should not be to legislate premised on the current 
state of the marketplace, or even on predictions of what it may 
look like in the future. Instead, Congress may want to consider 
a flexible and technologically neutral framework that will be 
capable of adapting to technical invention and innovation, 
whatever that may prove to be.
    In this regard, let me close by setting forth a few 
principles that might guide the drafting of a new statue. 
First, the industry's silos embedded in the 1996 act should be 
abolished. And, instead, functionally equivalent services 
should be treated in the same manner, regardless of who 
provides them or how they are delivered to consumers. Second, 
the traditional dichotomy between interstate and intrastate 
services should be eliminated, because regulatory 
classifications based on geographical end points no longer 
makes sense in an IP environment. Third, legislation should be 
focused on maintaining consumer protection and public safety 
regulations. Conversely, economic regulations should be 
considered in the case of noncompetitive markets or in the 
event of demonstrated market failure. And, fourth, new 
regulations should be instituted with a lighter touch, as I 
said, accompanied by sunset provisions so that the rational for 
continued Government intervention can be reviewed on a regular 
basis.
    Thank you once again for the opportunity to testify.
    [The prepared statement of Mr. Wiley follows:]
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Walden. Chairman Wiley, thank you very much for your 
learned comments. We appreciate your counsel. We go now to 
Chairman Reed Hundt who was nominated by President Clinton and 
served as Chairman of the FCC from 1993 to 1997. Chairman 
Hundt's tenure at the Commission saw the passage of the Omnibus 
Budget Reconciliation of '93, which granted the Commission the 
authority to auction spectrum licenses, and the 
Telecommunications Act of '96. So, Chairman Hundt, thanks for 
joining us today. We look forward to your comments as well.

                   STATEMENT OF REED E. HUNDT

    Mr. Hundt. Thank you, Chairman Walden. Thank you for 
inviting me. Good morning to Ranking Member Eshoo and to all 
the other members of this distinguished committee. I am very 
proud that many of you have become lifelong friends. And it is 
a pleasure to be here with you.
    I also want to thank the DC Circuit for giving me a 
flashback to law school so that I was late last night 
scrambling to read the key case right before this class. I have 
a feeling I am not the only person here who did that, but I 
also want to note I didn't have any staff or classmates. So I 
apologize if I haven't read it correctly, but I thought that I 
would throw away my remarks and, for whatever it is worth, 
offer you my reading of the case.
    In my view, the DC Circuit has written, first, a very, very 
well-reasoned and very important case. There is no question 
that this reflects that Circuit's experience in these topic 
areas, and that they have brought that experience to bear in a 
bipartisan way to express a view about how the United States 
looked to grant the authority to create the legal culture that 
governs broadband.
    What have they said? I believe the Court has vindicated the 
wisdom of Congress in the 1996 act. Specifically, the Court has 
said that when Congress, in that act in Section 706 conveyed to 
its expert agency the ``authority to enact measures encouraging 
the deployment of broadband infrastructure.'' In doing that, 
according to the DC Circuit, Congress said the FCC, you will be 
our instrument for creating a flexible and a supple legal 
culture that will change over time as the market changes and as 
technology changes, but that can always be used to protect 
competition, to protect consumers and, fundamentally, to make 
sure that absolutely everybody in America is participating in 
the common medium of the Internet, and that absolutely 
everybody in America is able to use it to publish their views 
and to review all the views of everyone else. Not all those 
words are in this decision, but almost all those words are 
actually in this decision.
    Section 1706, of course, is just one part of the 1996 act. 
But I know I don't have to remind many of the Members here. 
Maybe I don't have to remind any of the Members here. That was 
passed by a very large bipartisan vote in the Senate and in the 
House. We all were--those of us who were in public service then 
remember being in the Library of Congress when President 
Clinton, the Democratic President, passed this law that was 
passed by a Senate controlled by the Republicans and a House 
controlled by the Republicans. And all came together and said 
we have a common vision. And that is that there will be 
networks. We did not know technically speaking what they would 
all exactly look like, but that there would be networks that 
would connect all of us to each other and to all of the 
resources of information that in fact would be utilized for 
entrepreneurship, for innovation and for learning. And I have 
to say, this is what has happened.
    Now, no one here thinks the Government built these 
networks. No one thinks the FCC built these networks. But 
everyone should know that the legal culture that was created by 
Congress and its expert agency, through the terms of Republican 
and Democratic Chairs, the legal culture is the legal culture 
that is regarded all around the world as the absolute best 
legal culture for governing the Internet. Any one of us knows 
12 things that we think should be done differently, or maybe 
two dozen. But we ought to recognize, just for a little while, 
that we as a country should pat our country on the back and 
say, for the last 20 years, the legal culture that has been 
created that has governed the Internet has really created the 
best possible environment for innovation, for entrepreneurship 
for consumers. That is what has actually happened. And this 
Court has said and that law still exists. This Court has said, 
already, Congress has enacted the law that gives the FCC the 
authority to protect competition and consumers. And that 
authority, according to this Court, lies in Section 1706. And 
the Court also said that Congress can--that the FCC can, if it 
choose, classify broadband as a common carrier. It could use 
either of these methods. It could use one of these methods. But 
it can accomplish the goals that are stated in the act and that 
have repeatedly been restated by this Congress.
    The only thing the Court said is if you are going to pass 
rules that look like common carrier rules, and you are going to 
classify broadband as an information service, then you are 
going to be creating a contradiction that we won't permit. You 
can't call it an information service and then pass rules that 
look like common carrier rules, because if it quacks like a 
duck, it is a duck. So that is why it was sent back.
    I read a lot of articles that said that this was a victory 
for Verizon. This is a victory for Congress. If it was a 
victory for Verizon, it was a Pyrrhic victory. It was the most 
perfect example of a Pyrrhic victory since Pyrrhus. So I just 
want to compliment this Congress on passing a supple law that 
has worked well, and this Court has just said still will permit 
you to achieve your goals through the expert agency. Thank you.
    [The prepared statement of Mr. Hundt follows:]
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Voice. Thank you.
    Mr. Walden. Thank you, Chairman Hundt. We appreciate your 
comments and your staying up all night to cram for our hearing. 
We will now turn to Chairman Michael Powell who was nominated 
by George W. Bush and served as Chairman of the FCC from 2001 
to 2005. During Mr. Powell's Chairmanship, they saw a 
significant increase in the deployment of broadband to American 
homes, as well as convergence of services toward the bundles of 
services that are common today, among many other things. 
Chairman Powell, thank you for joining us today. And please, go 
ahead.

                 STATEMENT OF MICHAEL K. POWELL

    Mr. Powell. Thank you, Mr. Chairman. And as a former 
Chairman, I am happy to be sitting around with a bunch of these 
other Chairmen offering, as best we can, our historic 
perspectives on how to prudently go about rewriting the act, 
should that be your intention. And I am pleased to be with 
Ranking Member Eshoo again and all the distinguished members of 
the committee.
    I think it goes without saying, and all of us will say it 
in different ways that the world has changed quite radically 
from 20 years ago in terms of markets and services. But don't 
ask us, ask your kids. Ask them to name three broadcast 
networks, if you will. Ask them to do without the Internet for 
a week. And for God sakes, ask them to put their phone down at 
dinner and see what reaction you get. I think you will be 
convinced.
    That transformation has taken place largely because of an 
enormous revolution in network architecture in the form of the 
Internet, which has unleashed a form of intermodal competition 
that heretofore wasn't really possible. And it has really 
introduced an exciting world. And we should remember, gave 
birth to a host of companies and opportunities that never were 
envisioned before, the companies that aren't here--Google, 
Facebook, Amazon, eBay, Twitter, Instagram, you name it--all 
able to be born and flourish because of this transformation.
    I would say that any consideration of the act should start 
with not only cataloging its ills but cataloging its success, 
as much as Reed was alluding to. I think it is really important 
to note that over this period, we have seen the most stunning 
amount of investment in infrastructure and architecture that we 
have ever seen. We have reached 90 percent of Americans faster 
than any other technology in world history. Innovation and 
growth have continued at exponential rates with broadband 
increasing over 19 times just in the last decade, doubling 
basically, increasing about 50 percent annually. That is a 
stunning achievement and something we should make sure we keep 
going. So I think, you know, being guided by the old maxim of 
do no harm is an important cautionary tale.
    As I thought about how you might think about architecting a 
new regime, I am guided by the idea of the Internet itself, 
which is the fundamental principle of simplicity as a design 
principle. It has been a very, very powerful one in the 
Internet. And I think it offers some guidance in this space as 
well.
    So I would like to, toward that end, offer--I am going to 
see Mr. Wiley's four principles and do them three better and 
offer you seven as briefly as I can. The first is we have heard 
a lot about innovation. I do think the principle goal of the 
Government should be to nurture that innovation. This is the 
kind of formenting change we have never been able to harness as 
fully as we are today. Innovation has allowed us to bring 
completely new products and services and network changes to the 
market. It has created a form of creative destruction that 
keeps the market energetic and keeps a monopoly in check. And I 
think it has created new kinds of transparency for the American 
consumer through crowdsourcing and visibility. And we should 
study the conditions that go into innovation and make sure we 
harness them. I think three are critical. Innovations really do 
require freer markets. And a market that moves at Moore's Law 
speed, the pace of adaptation, transformation and change are 
incredibly fast. And there needs to be a constant and intense 
dialogue between producers and consumers. And we should be 
careful to protect that.
    Innovation requires risk taking. And ask we know, most new 
adventures fail. There has to be room in Government policy for 
failure. There has to be room in Government policy for 
encouraging taking those risks. And innovation requires 
stability. Investing more than a trillion dollars, as 
Congressman Eshoo was talking about earlier, since 1996 is 
stunning. But it requires a stable regulatory environment to 
provide that uncertainty. Because if investment slows, 
innovation will slow with it.
    The second rule of simplicity I think is once you have 
created a lighter regulatory environment by trying to pursue 
the maxim of less is more, organize it better. We certainly 
have heard about the challenges of silos and buckets. Clearly, 
that had its place in another time when these technologies, 
applications and type of companies were deeply intertwined, 
were not able to provide alternative services in other spaces. 
That day has moved on, and we certainly crave a more unified, 
integrated kind of legal regime that doesn't make those sorts 
of distinctions. In fact, as I have heard mentioned today, I 
think yesterday's court decision in the multi-year debate on 
net neutrality that illustrates the almost torturous 
challenges, sometimes, of addressing a modern circumstance in 
using provisions of last century's rules. I think there is 
certainly widespread agreement on core principles around an 
open Internet. After somewhat kludge past we have had to follow 
in an effort to implement them has made the matter, I believe, 
infinitely more complex and controversial than necessary. And 
the threat of radically upending the longstanding light 
regulatory foundation of broadband on which massive investment 
and growth have been built with good effect, to implement one 
set of rules seems distressing. Any shift of that magnitude, I 
do think would require Congress'--the people's representatives 
to weigh in on.
    A third principle, give regulators the ability and 
obligation to address changing markets. As we have said, the 
markets move drastically. And the FCC often has limited ability 
to make those migrations. Yes, in places they have. There are 
other instances in which they have not been able to, even when 
they concede that the fundamental circumstances are changed.
    Fourth, the law should ensure competitive parity and 
technical neutrality. There is a hodgepodge of applications of 
statutes I could point out in which certain rules apply to one 
sector of a service and not to other sectors. This has just 
really been an outgrowth of the passage of years and the 
changing nature of companies. But there are many rules that 
apply to cable, for example, that don't apply to DBS for no 
discernible reason. One very valuable thing for the committee 
to do is prune through the statute to try to harmonize those 
differentiated treatments as best as possible.
    Fifth, the FCC should police markets, not create them. I 
think this is genuinely well understood. But there is a role 
for a cop on the beat. What I don't think there should be is a 
master chef who believes it is the Commission's objective to 
make markets or create the conditions and circumstances for 
them.
    And, finally, the last two, timeliness. If you are working 
in Moore's Law, you need timely and prompt decisions from the 
Government.
    Lastly and most importantly, the law still needs to 
preserve important societal values and protect consumers from 
harm. And the FCC and the Government will always have a sacred 
responsibility in that regard.
    Thank you for your time.
    [The prepared statement of Mr. Powell follows:]
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Walden. Chairman, thank you. Speaking of cops on the 
beat----
    Mr. Copps. Here I am.
    Mr. Walden. We will now go to Michael Copps, served as 
Acting Chairman of the Federal Communications Commission from 
January to June of 2009, and served as Commissioner from 2001 
to 2011. Prior to joining the Commission, Commissioner Copps 
worked right here on Capitol Hill and the U.S. Department of 
Commerce. Commissioner Copps, Chairman Copps, thank you for 
being with us. And we look forward to your comments to round 
out our panel.

                 STATEMENT OF MICHAEL J. COPPS

    Mr. Copps. Thank you, Chairman Walden, Chairman Upton, Ms. 
Eshoo, Mr. Waxman, vice chairmen, former chairmen, and all the 
members of the committee. I am delighted to be here.
    We are here today to review whether the Communications Act 
needs to be updated or otherwise reformed. I have heard some 
say that simply because the act is old, it must be obsolete, 
that no matter how well it has served us, an act written 18 
years ago cannot have relevance in today's altered world. Now, 
as someone only a little younger than the original act of 1934, 
I would raise a caution flag or two. The Declaration of 
Independence and the Constitution were written long ago, too. 
Yet, we still find them critically relevant in our lives. While 
it is praiseworthy to ponder changes to the law, I would 
suggest firstly that the framework of the current statute 
remains in many ways strong, and secondly that the current 
act's provisions can still do much to improve our 
communications landscape to enlarge economic and social 
opportunity for all of us and nourish the kind of civic 
dialogue upon which successful self-government inevitably 
rests.
    In an ideal world, most of us would welcome an up-to-the-
minute rewrite of the law to reflect how we believe it could be 
improved. The last such revision in 1996 was born of a unique 
political moment that aligned a sufficient and sundry number of 
stakeholders across sectors and constituencies who were able to 
negotiate a compromised statute that, while far from perfect, 
at least envisioned delivering to every American, no matter who 
they are, where they live or the particular circumstances of 
their individual lives, the most advanced communications, 
technologies and services feasible at reasonable and comparable 
prices, replete with consumer protections, rights of privacy, 
assurances of public safety and utilizing competition to help 
achieve these goals. Putting the statute to work to deliver 
these benefits was my mission at the FCC, working with some of 
the most amazing public servants anywhere. Nowadays, I carry 
out my public interest mission in the nonprofit sector at 
Common Cause.
    In the immediate wake of the new law's passage, the 
Commission indeed made important strides to carry out these 
congressional mandates. But, alas, things changed. Some of the 
very interests who helped negotiate the new Communications Act 
spend more time undermining the statute than implementing it. 
Such efforts continue to this day, as we saw in yesterday's 
court decision that, left unaddressed, will seriously 
jeopardize the future of the open Internet.
    I appeared in front of this panel many times over the years 
to voice my dissent on Commission decisions involving the 
reclassification of communication services, industry 
consolidation across both our telecom and media sectors, the 
elimination of policies that had long safeguarded the public 
interest, and the heavy toll thereby exacted on consumer 
choices, consumer prices, and slowing the deployment of 
competitive, low-cost, high-speed broadband--this century's 
most important infrastructure.
    We can I know debate for hours, but a record of these 
hearings needs to show that many people do not share the easy 
optimism that others express about the state of America's 
communications readiness. As you consider legislation in the 
coming months, some will tell you that America is a veritable 
broadband wonderland, a triumph of free market entrepreneurship 
that puts us at the front of high-tech nations. But there are 
stubborn facts we must never avoid. The United States, 
originator of so much of the technology behind the Internet, 
has fallen from leader to laggard in broadband penetration. 
According to the OACD, our country is 16th in wired broadband 
connections for 100 residents. Worse, comparative research 
shows that Americans are paying more and getting less than 
wired broadband consumers in competitor countries. The 
Department of Justice has noted that the local wireless 
marketplace offers consumers little in the way of choice, even 
as mobile data plans are saddled with data caps that harm 
consumption and innovation alike. And once again, for the third 
time, the FCC found itself unable to certify that we enjoy a 
competitive wireless marketplace. Surely, the time is now for 
proactive and pro-consumer measures to make quality broadband 
universally affordable once and for all.
    While we are not gathered here this morning to rehash those 
decisions, I do think it is important to understand that many 
of the faults attributed to the current statute are more the 
result of powerful industry efforts to undermine it and of 
Commission decisions that too often aid and abet the effort. So 
while we open discussions on revising communications law, let 
us recognize that our present statute has been interpreted and 
implemented in ways not originally intended, and that many of 
its constituent parts are still relevant, workable and 
consumer-friendly. There is a statute to enforce, and putting 
that job on hold while we consider changing it is not a good 
option.
    Additionally, I think most of us here this morning 
understand that finding a new correlation of interest that can 
come together to forge the Communications Act of 2015 or 2020 
would be even more challenging than the jockeying that gave 
birth to the current law.
    As the world races ahead, we have a duty to make the best 
possible use of the laws we have in order to achieve the 
ongoing goals that Congress laid out. These remain powerful 
interests. A statute that invokes the public interest over 100 
times, that highlights the universality of service, 
competition, and consumer protection, and that underlines the 
necessity for media that informs communities and engages 
citizens cannot be all bad. Would I have some preferences for a 
reworked statute? Of course, although a good part of it would 
be making sure the Commission and the industry follow through 
on what is already on the books, to foster competition and 
consumer protection, to deliver on public safety, to preserve 
privacy in this age of massive intrusion, to avoid never-ending 
industry consolidation, to put the brakes in gatekeeping in our 
media, both traditional and new, and to provide the FCC with 
the resources it needs to discharge its responsibilities.
    My greatest disappointment at the Commission is that we 
didn't do enough to encourage media that truly reflects the 
diversity of our people. Can you believe that today there is no 
African-American-owned full-power commercial television station 
anywhere in the land? America is diversity. And if our media 
fails to represent diversity--diversity of providers and 
content and viewpoint and ownership--it fails us. The sad 
plight of communications across our native lands needs to be 
addressed with renewed urgency and additional resources. 
Imagine that there are still areas where the majority of first 
Americans cannot access even plain old telephone service, let 
alone the kind of high-speed broadband that is the most 
powerful tool they could have to create opportunity where there 
is so little opportunity now.
    I would hope we could find ways to stimulate basic 
communications research by private-public partnerships. I am 
not talking about the next glitzy app, but the basic 
fundamental research that will determine who wins and loses in 
the global sweepstakes.
    I am for making the Commission more efficient, like doing 
away with the closed-meeting rule that prevents more than two 
Commissioners from even talking to one another. And I hope that 
reform needs to go forward, whether or not it is accompanied by 
more far-reaching revisions. And I believe that when three 
Commissioners have something they want to do at the FCC, that 
item should go on the agenda.
    My list could go on, and I welcome the opportunity to 
discuss such things today. But I always come back to democracy, 
because that is what concerns me most. Our country is in 
trouble, reminiscent in many ways of the severity of the 
economic, global, and social crises it faced in the 1930s, and 
there are no guaranteed happy outcomes. I just do not see how 
citizens can be expected to navigate through all these issues 
and come out with smart decisions for our Nation's future when 
the telecommunications tools we need are not available to all 
and in a media environment where community outlets have been 
short-circuited, investigative journalism hangs by a thread, 
and wherein we expect some invisible hand to produce those 
things that the market itself no longer produces and which in 
fact the market alone has never produced.
    Communications are vital to our economy, but they are the 
lifeblood--the lifeblood of our democracy. They must be 
available to all, open to all, never the exclusive province of 
the affluent or the few, always alive to the common good. We 
shouldn't see our communications world as part telecom, part 
media or part traditional media, part new media. We have one 
communications ecosystem. And our job is to make it work for 
everyone. And I know of no greater challenge that confronts the 
Congress, the Commission or the country.
    Thank you for holding this hearing today and for inviting 
me to be a part of it, and I look forward to our discussion.
    [The prepared statement of Mr. Copps follows:]
    
    [GRAPHIC] [TIFF OMITTED] 
    
    Mr. Walden. Chairman Copps, thank you for your thoughtful 
presentation. We appreciate it. And as you know, our 
subcommittee has moved forward on some of these initiatives, 
and we welcome encouragement over on the other side of the 
building on Sunshine Act and a few other things.
    So I would like to open up the questioning process now with 
the questioning of Chairman Powell. Since you have presided 
over the Federal Communications proceedings that classified 
cable and telco-delivered broadband services as information 
services, do you think we would have seen the same level of 
broadband investment during the past decade had the FCC 
classified these services as common carrier communication 
services?
    Mr. Powell. I think in short, my judgment is no. I think 
the Internet at the time that that classification decision was 
made was more unknown than known. I think it was a period of 
rampant experimentation. I think the capital required to drive 
and produce the broadband networks that were not in place 
needed conditions that allowed them the flexibility to make 
those choices without the risk that they would be put back into 
kind of the monopoly era regulatory model. So I think it was an 
important component, disbursing that investment.
    Mr. Walden. Chairman Wiley, does the Federal Communications 
Commission need to continue to have broad discretion over 
mergers and acquisitions, or should the Department of Justice 
anti-trust review be enough?
    Mr. Wiley. Well, I think there has been duplication from 
time to time. Although I would point out that the Justice 
Department is looking at anti-trust aspects, and the FCC has 
got a broader public interest standpoint. I think the two 
agencies need to work together, and I think they have worked 
together through the years. So I think the process is 
appropriately developing. But I do worry sometime that we see 
great delays in the handling of these consolidations and 
mergers, which I think is contrary to the best interest of the 
companies involved, and also contrary I think to the public 
interest and consumers.
    Mr. Walden. And to both Chairman Powell and Chairman Wiley, 
can the FCC ever really future proof regulations given how 
rapidly technology is changing? And are elements of the 
Communications Act holding the Commission back from flexibly 
addressing new technologies?
    Mr. Powell. No, I don't think any agency can future proof 
the regular environment, no more than Congress could write a 
statute that wouldn't overtime fray in its relevancy in a 
market that is driven by technological change. I do believe 
though that there are tools to give greater flexibility and not 
more prescriptive constraints that we have seen in some 
regulatory vehicles. So no, they can't future predict. And I 
thought--I think the other guidance is I think asking the 
Commission to engage in anything that requires predictive 
judgment about future outcomes should be avoided where 
possible.
    Mr. Wiley. Yes, and that is why I suggested in my prepared 
testimony that we ought to have an opportunity to have a light 
touch here and have the Government--in your statute, have a 
very flexible technology-neutral type of approach to this, 
because it is very hard to predict. And the 1996 drafters did 
not really foresee the development of the Internet to become a 
universal medium. And I don't think they predicted broadband to 
be what it is today. So I think you have to step back a little 
bit and I think allow the technology to develop and to allow 
innovation--invention to occur without stifling it.
    Mr. Walden. OK. I am going to start with Chairman Powell, 
and then each of you can take this one in the minute and a half 
I have left. Should the Internet be regulated as a common 
carrier under Title II?
    Mr. Powell. Well, for me, that is easy. No. I think one of 
the things I would like to say about that though is that people 
should fully understand what that means. Even if that were able 
to give you a better basis for recovering these two components 
of the rules, it would be the instant application of thousands 
of pages of decades old regulations instantly to the Internet 
where they heretofore have not been, both through--on a 
bipartisan basis, we have had a much more regulatory 
environment. The shatter to investment backed expectations that 
would result I think would be exceedingly damaging and more 
than most people realize.
    Mr. Walden. Chairman Hundt, do you care to comment on that?
    Mr. Hundt. Just two points. The 1996 act was shorter than 
the rules for Little League Baseball, meaning Congress does not 
necessarily have to write thousands of pages. And in its 
wisdom, it did not do so in 1996. And that act now has given 
the FCC the ability to achieve the fundamental goals. As I 
mentioned earlier, it can choose to use the specific methods 
that are dictated by the Common Carrier Treatment. But it 
absolutely does not have to use very many of these methods to 
accomplish its goals. In fact, the Court on page 61 outlined 
its view of what the FCC should do----
    Mr. Walden. Right.
    Mr. Hundt [continuing]. And said you can treat it as common 
carrier and have about 30 words that establish the principles. 
I am not saying they should do that. I am saying they can do 
that.
    Mr. Walden. Do you think they should?
    Mr. Hundt. I think what they should do--and I hesitate to 
say to the current Chairman what he ought to do, but since you 
asked, I think they ought to take a fresh look at all the facts 
and law as exist right now, and they also ought to be down here 
listening to you all and having a robust discussion. But the 
key point is they have the authority.
    Mr. Walden. Got it. Real quickly, the two remaining, 
because I have gone over my time--violated the rule. Conclude.
    Mr. Wiley. I think--OK.
    Mr. Walden. No, go ahead.
    Mr. Wiley. All right. I think it would be a big mistake to 
turn away from the information service pathway that we have 
started and go back to common carrier regulation however that 
might be defined. I think we want to provide an environment 
where there is I think opportunities for investment, 
encouraging innovation, allowing businessmen to try to 
experiment and try to find ways to serve the customer. And I 
think to go back to a 1934 style common carrier regulation, 
which was really based on regulating the railroads, I think 
doesn't make any sense at all.
    Mr. Walden. All right. Mr. Copps, real quick?
    Mr. Copps. My answer is yes, I do. The Court says we have 
the authority to do that. Whatever we do, we need to do it 
quickly, promptly and provide some certainty in the 
marketplace.
    Mr. Walden. OK.
    Mr. Copps. I have always stressed the importance of that 
reclassification. People talk about Section 706. I have always 
said that there is authority there to do a lot of things. But 
what--we don't need now to get into months of third ways and 
fourth ways and fifth ways to thread this needle. We need some 
clarity. Business needs clarity.
    Mr. Walden. Right.
    Mr. Copps. Consumers need clarity.
    Mr. Walden. Yes----
    Mr. Copps. The Commission needs clarity, too. And we have 
to make sure whatever we do that things like interconnection 
and those things, consumer protections, are provided.
    Mr. Walden. Appreciate that. I thank the indulgence of the 
committee. I turn now to the Ranking Member, Ms. Eshoo, for 5 
minutes.
    Ms. Eshoo. Thank you, Mr. Chairman, and to each one of our 
distinguished witnesses. What a rich, rich hearing with your 
testimony. Thank you very, very much. To Chairman Hundt, thank 
you for your eloquent summation, without any staff or other 
counsel to assist you late last night.
    In your testimony, you discussed the importance of the 
decision that this country made to allow Internet service 
providers full use of the existing telephone network without 
paying the owners anything. It was a very, very--I mean one of 
the essential platforms in the success of the Internet. So, 
essentially, we said the incumbents could not be gate keepers 
that charge a toll for getting online. In your view, does 
yesterday's circuit decision reverse that longstanding policy?
    Mr. Hundt. No, it doesn't. And I think, Congresswoman, that 
you have put your finger on the central issue, if I may say. 
Yes, Internet service providers are gate keepers. And they also 
are two-sided networks--or two-sided gate keepers, like any 
gate keepers.
    Ms. Eshoo. Um-hum.
    Mr. Hundt. There is somebody on one side and somebody on 
the other side.
    Ms. Eshoo. On the other--um-hum.
    Mr. Hundt. And so the situation then is very similar to the 
credit card industry. So we all have credit cards. And then 
there is the credit card company. And then on the other side of 
that, there is the restaurant. And it is very useful for 
restaurants that we all have credit cards. And it is useful for 
us that all the restaurants will take them. But it is not so 
useful if the gate keeper says now, some of these restaurants, 
we are not going to allow them to participate in the system.
    Ms. Eshoo. Um-hum.
    Mr. Hundt. Translating that to the present, if the Internet 
service provider were to say, you know, not all the people that 
are putting the content on their computers, we don't want all 
of them to be able to have access to all of the users.
    Ms. Eshoo. Um-hum.
    Mr. Hundt. That is a problem if the gate keeper behaves 
that way.
    Ms. Eshoo. Um-hum. Thank you very much.
    Mr. Hundt. That is the central issue.
    Ms. Eshoo. Yes, thank you very much. To Chairman Powell, it 
is wonderful to see you again. As you know, under current law, 
cable subscribers are required to buy the so called broadcast 
basic tier as a condition of getting access to any other cable 
programming. As we transmission consent fees continue to rise 
and are inevitably being passed on to consumers in the form of 
below the line fees--I mean, I don't think it is a sustainable 
business model, most frankly. I just don't think that it can 
continue to work this way. Do you think that the so called must 
buy requirement makes any sense? Shouldn't consumers have the 
ability to lower their bills by electing to receive broadcast 
channels over the air?
    Mr. Powell. I don't. I think it should be an extraordinary 
circumstance in which the Government tells the consumer you 
have to buy a television package as a prerequisite of buying 
more of what you want, which is essentially what the rule does.
    Ms. Eshoo. Um-hum.
    Mr. Powell. The other grounds on which I think it is 
fatally flawed is only cable subscribers have that obligation. 
DISH and direct satellite subscribers do not have that 
obligation. And they are the second and third largest MVPDs in 
the United States. Yet, a consumer who subscribes to DirecTV 
does not have to, under a must-buy rule, purchase those 
programming. But if they switch to Comcast or Time Warner 
Cable, they do. That is the parity point that I was making, and 
I think is a perfect place for harmonization.
    Ms. Eshoo. Um-hum. Thank you very much. Chairman Copps, 
thank you for being here today, the man with real wisdom, the 
man that we always count on to put--place Democracy front and 
center of everything.
    Mr. Copps. Thank you.
    Ms. Eshoo. You know so well that since Citizens United, the 
last two election cycles that have set records for money spent, 
including hundreds of millions of dollars from undisclosed 
sources, the bulk of this so called dark money spending by 
outside groups that hide their donors go toward negative TV 
ads. We all know that. Would you recommend changes to the 
Communications Act to ensure that voters are informed about who 
exactly is behind these anonymous TV ads, and is there anything 
in your view that the FCC can do on its own without 
Congressional intervention?
    Mr. Copps. I would recommend enforcing the statute that we 
already have. And if you take a close look at Section 317, 
which has to do with sponsorship identification, and which goes 
back even before the Telecommunications Act of 1934 was 
written. It goes back to 1927--ensuring that listeners and 
viewers, more recently, know by whom they are trying to be 
persuaded, whether it is a commercial product or a political 
product. Those rules were last revisited in a meaningful way by 
the FCC in the 1960s, which repeated that people have a right 
to know by whom they are being persuaded. Since then, we have 
all these new avenues of dark money and super PACs and all of 
the rest. But we also have the authority, recently reemphasized 
by the Government Accountability Office, the recommendation 
that the Commission update those rules and get on with the job. 
So we can have this kind of information available to consumers 
so that when you see that negative ad, and it says brought to 
you by citizens for Purple Mountain Majesties and Amber Waves 
of Grain, and it is really a chemical company dumping sludge 
into the Chesapeake Bay, potential voters--citizens have a 
right to know that and will know that. That is basic 
information that you need to have if you are going to have a 
viable civic dialogue. So this is something the FCC can do. It 
doesn't await a President to making a proposal to do this. It 
doesn't involve Congress having to pass a law. It involves the 
Federal Communications Commission doing its job. And it could 
do this within 90 to 120 days and update the rules to take mind 
of the new dark money avenues that I was talking about earlier. 
So this would be a real way to shine a little bit of sunlight 
on the dark world of TV political advertising.
    Ms. Eshoo. Thank you very much. And, Mr. Wiley, thank you 
for your wonderful distinguished public service. I will submit 
my questions to you in writing. All right?
    Mr. Wiley. All right. Thank you.
    Ms. Eshoo. Thank you. Thank you, Mr. Chairman.
    Mr. Walden. Thank you. We will now turn to the vice chair 
of the full committee, the gentlelady from Tennessee, Mrs. 
Blackburn, for 5 minutes.
    Mrs. Blackburn. Thank you, Mr. Chairman. And thank you all 
for the time this morning. I want to pick up where the 
subcommittee chairman left off talking about the responsibility 
of the FCC and what it would look like going forward. I think 
that it is fair to say--and, Mr. Powell, I will address this to 
you, because I have heard you say, you know, AOL was on top at 
one point when you were on top of the game. And where are they 
now I think was the comment. But anyway, looking at what the 
FCC would be, and as we look at the Telecom Act, should be 
begin to think in terms of the FCC being more as enforcement 
rather than regulatory in its scope? Mr. Powell, and then Mr. 
Wiley, I would like to hear from you.
    Mr. Powell. I think some aspects of that deserves a fresh 
examination. You know, the FCC, which I am a huge supporter of. 
I have served there with great people, and I think it does an 
enormously great public service and that we functions that are 
critical to it in spectrum management and many other things. 
But it is one of the last of the New Deal era agencies that 
actually has affirmative economic regulatory power, that is the 
ability to set the prices, terms and conditions of market 
activity as opposed to having a more significant enforcement, 
policing or consumer protection role. Not to say that some of 
that may or may not still be warranted, but I do think that is 
a kind of holdover from judgments of different administrative 
eras. And I would recommend, you should look at the dichotomy 
and the balance of that role.
    Mrs. Blackburn. Look at the balance?
    Mr. Powell. I do think good leaders, and many of the 
sitting at this table have migrated more toward that more 
defensible role. But many of those provisions still remain. And 
I think they are worthy of second consideration.
    Mrs. Blackburn. OK. Mr. Wiley?
    Mr. Wiley. Yes. I would agree with--largely with what 
Chairman Powell has suggested. I think the Commission does have 
strong enforcement efforts today. And some would say almost too 
strong in some instances. But I think frankly a lighter touch 
is the way to go in this area.
    Mrs. Blackburn. OK. Let me ask you this, privacy data 
security, it is front-page news right now. It is going to be. 
Do you think that now is the time for the FCC to focus on its 
core competencies, or should it move over and look at privacy 
data security, or leave that to the FTC, Mr. Wiley?
    Mr. Wiley. I didn't hear that one. I didn't hear it. I am 
sorry.
    Mrs. Blackburn. Oh, privacy data security, leave it to the 
FTC and the FCC focus on its core mission, or what is your 
thought on that?
    Mr. Wiley. I think so.
    Ms. Blackburn. You think so.
    Mr. Wiley. I would agree with that.
    Mrs. Blackburn. OK. Mr. Powell, coming back to you, 706, we 
are hearing a lot about that today. And you may have had others 
who think that, you know, the FCC--that 706 is an invitation to 
come in and regulate Internet services. So as you look at 706, 
do you agree that the provision was intended to give the FCC 
the ability to forebear from regulations that would stifle 
broadband investment and innovation?
    Mr. Powell. I agree that the decision certainly gives them 
the power to forebear. And for many years, many people 
interpreted 706 as principally deregulatory. It speaks of 
removing barriers and removing obstacles, less so than 
introducing them. I certainly was serving at a time where the 
Commissions had held that that was not a separate basis of 
authority. And in fairness to the facts, every Commission had 
so held until recently. So that was the position of the law 
when I was there at least. I will say though that I think if 
the Commission is going to have a role in broadband, I highly 
would prefer that be under the construct of the light 
regulatory information services definitions that reside around 
with 706 than to make a radical transformation to Title II as a 
regulatory framework for those questions.
    Mrs. Blackburn. OK. Thank you very much. Mr. Chairman, I 
will yield back the balance of my time.
    Mr. Walden. The gentlelady yields back, and the Chair now 
recognizes the gentleman from California, the ranking member of 
the committee on the Democrat side, Mr. Waxman.
    Mr. Waxman. Thank you very much, Mr. Chairman. My 
colleague, Ms. Blackburn, suggested the FCC needs to act more 
like the Federal Trade Commission. The FTC does important 
consumer protection work, but I believe we need an agency like 
the FCC that can write forward-looking rules of the road for 
industry and consumers. Chairmen Hundt and Copps, do you agree 
with that?
    Mr. Hundt. Absolutely, Mr. Waxman. Forward looking is--here 
is the best example of a useful forward looking law. It is in 
the incentive auction legislation that you passed where this 
Congress said we want the FCC to establish, before the auction, 
a generally applicable rule about how much spectrum anybody can 
buy. That has to be forward looking. You don't want to go into 
the auction with your money and not know whether or not you are 
going to be permitted to win in the--keep the license that you 
thought you were the high bidder on. That has to be forward 
looking. So that is a great example of you all asking for a 
forward looking rule and really deserving a forward looking 
rule.
    Mr. Waxman. Um-hum. And, Mr. Copps?
    Mr. Copps. Absolutely. I concur. We all talk about how 
rapidly the telecommunications, technology and services are 
changing. The Commission has to be aware of that, have the 
flexibility to react to that, and certainly to fulfill its 
responsibilities to look into the future and try to determine 
how best to fulfill its mission, which includes consumer 
protection, includes privacy and includes ubiquity of services.
    Mr. Waxman. Um-hum. Mr. Powell, in light of yesterday's 
decision, the DC Court circuit recognized the authority granted 
by Congress to the FCC in the '96 act. Do you believe that the 
Agency can properly oversee the growth of broadband 
infrastructure services?
    Mr. Powell. I do. For a matter of record, as Chairman of 
the FCC and the Commission that classified broadband the way 
that it is today, we quite pointedly recognized that the 
importance of that continuing role to a degree. And we believe 
that the authority existed within that Title I framework to 
take care of those circumstances. Whether you agree or 
disagree, the Court certainly validated yesterday, from a 
judicial standpoint, that Title I and 706 do provide that 
flexible authority.
    Mr. Waxman. Um-hum. And, Mr. Wiley----
    Mr. Wiley. Yes.
    Mr. Waxman [continuing]. If you agree the FCC has the 
authority, do you think it ought to use it?
    Mr. Wiley. Well, the Court said that the Commission could 
have authority in this area. I would strongly advise, in my own 
view, the Commission to let the marketplace develop and if 
problems do exist, then to step in. There are avenues--if we 
find blocking, if we find discrimination, there are avenues 
that can be taken. I think the problem is sometimes we are in 
search of a problem here that may not exist. I think if you 
look at all the suggestions of the carriers that have come out 
of the decision from yesterday, all want to keep the 
marketplace open, all want to give consumers access to various 
kind of content. And I take them at their word. I think that is 
going to develop.
    Mr. Waxman. Um-hum. Mr. Hundt, if we want to keep the 
marketplace open, isn't it reasonable to anticipate that some 
of the players will not want it to be so open if it is to their 
financial advantage? Shouldn't the FCC play a role to make sure 
prospectively that we have an open, competitive market with the 
consumers being in charge?
    Mr. Hundt. I completely agree. And if I might, I think it 
is important--well, let me say this. I have the view that the 
case and the statute have the following meaning. Section 1706 
gives the FCC the authority to accomplish the goals you just 
stated, without also requiring the FCC to make a classification 
decision.
    Mr. Waxman. Um-hum.
    Mr. Hundt. That is to say it can make a classification 
decision and act with the authority that would come from that, 
but it doesn't need to do that in order to pass rules that are 
authorized under Section 1706. Meaning 1706 and the common 
carrier provision are two independent bases for FCC action. 
That is why the FCC can choose both or either in order to have 
a--making that would accomplish the goals you described.
    Mr. Waxman. Didn't the Court say that the FCC made the 
wrong choice and they have two titles they can rely on? You are 
saying they don't need either title, they can just go ahead and 
think about regulation?
    Mr. Hundt. Yes, I think what the Court said is if you do 
choose the information services classification, then you are 
bound by the restrictions in that.
    Mr. Waxman. Um-hum.
    Mr. Hundt. But you don't need to make that choice in order 
to accomplish the goals that you are desiring, which the Court 
has said that it approves of the goals.
    Mr. Waxman. Um-hum. And you don't need to be a--regulate as 
a common carrier either?
    Mr. Hundt. Beg your pardon?
    Mr. Waxman. You don't have to regulate it as a common 
carrier either?
    Mr. Hundt. The Court has said you can choose that, or you 
can choose 706 or you could choose both. The only thing you 
can't do is choose information services classification and pass 
common carrier like rules.
    Mr. Waxman. Um-hum. I see. Thank you. That is very helpful. 
Thank you, Mr. Chairman. Yield back my time.
    Mr. Walden. The gentleman yields back. And the Chair now 
recognizes for 5 minutes the former chairman of the full 
committee, the gentleman from Texas, Mr. Barton.
    Mr. Barton. Thank you, Mr. Chairman. I have listened to our 
testimony and our questions so far. I am going to make a brief 
statement before I ask a question.
    I was here in 1996. And that act was a philosophical change 
from where the committee had been and, to some extent, where 
the country had been in terms of telecommunications policy. You 
had a Republican Congress, House and Senate for the first time 
in over 50 years, maybe 60 years. You had a Democratic 
President, Mr. Clinton, who came from a kind of conservative 
pro-business background down in Arkansas. And the former 
chairman of the committee, Mr. Dingell, and Mr. Waxman and Mr. 
Markey and some of those folks, had a very regulatory approach, 
although not totally so, and the Telco Act of '96, Mr. Bliley 
and Mr. Fields, we went--we decided to go with a market 
approach. And, Mr. Copps, as he has pointed out, markets don't 
always work. But, generically, if they are open and 
transparent, unless there is a natural monopoly, they do give a 
lot more choice to people. And that is what the Telco Act of 
'96 did. It rejected the philosophy that the Government knows 
best, that the regulatory knows best, that people can't--if 
they have access to appropriate information, can't make choices 
that are good choices. And we see reflected today in some of 
the questions that Mr. Waxman especially just asked, you know, 
that some of my friends on the Democrat side just don't like a 
market approach. You know, how dare it be possible that under 
Title I, Informational Services, you can have an open, 
transparent Internet, and you don't need the FCC to tell you 
what to do? My God, that is scary. We better get that FCC back 
on the job. They just maybe--you know, if they can't do it 
under Title II as a common carrier, well, they are just going 
to have to figure out how to regulate under Title I.
    Well, you know, if you look at the explosion and what has 
happened, I mean, I had a young person, a very young person 
about 9 years old, come into my office down in Texas and 
apparently did not know there was such a thing as a hard line 
telephone--did not know what that was on my desk. This young 
lady thought a phone was just something you carried around with 
you. And her parents were very young, and they didn't have hard 
line phones in their home. And they worked out of his truck 
doing contracting and stuff. She didn't know what it was.
    So, you know, this thing that Mr. Upton and Mr. Walden are 
starting to take a real comprehensive review, and working with 
Mr. Waxman and Ms. Eshoo, it is a good thing. But 
philosophically, I don't want to go back to where I have to 
depend on the intelligence of Mr. Copps or Mr. Powell or Mr. 
Hundt or Mr. Wiley and the three or four other wise people at 
the FCC to know what is best for me in telecommunications 
policy. You know, I think if we set the ground rules--and I 
agree that you have to have a traffic cop. But I don't agree 
that you got to be so prescriptive that the market just flat 
gets strangled before it even has a chance to get underway.
    So my question, and I throw it open to the panel: Is there 
still a need for a Title II in the telecommunication 
marketplace today, could we deregulate the telephone companies 
in totality because, you know, there really is no such thing as 
a natural monopoly anymore?
    Mr. Copps. If we can find a way to assure that some of the 
qualities that people fought for long and hard in terms of 
privacy and public safety and consumer protection do not 
accompany the new tools of broadband and the Internet as the 
accompanied telephone, then I think we are in trouble. I like 
the market approach, too. And it was decided long ago that the 
telecommunications industry, the media industries would operate 
on the capitalistic system. And you don't blame business for 
trying to seize market control or capture the market, or even 
to have gate keeping. But we have always, since very early in 
the last century, had protections against untrammeled building 
toward monopoly and duopoloy.
    I read the '96 act, and I wasn't as intimately involved 
with it as you were. But I followed it with some degree of 
interest. As being somewhat more proactive, I read that act as 
instructing the Federal Communications Commission to do what it 
needs to do to encourage bringing the most advanced 
telecommunications feasible to all of our citizens, no matter 
where they live at reasonably comparable prices, reasonably 
comparable services, allowing them to access media that serves 
communities and provides information that are necessary to 
exercise a citizen's responsibilities in a Democratic society. 
So I think yes, a light touch where possible. But, you know, we 
set here and talk about well, we have to do away with these 
stove pipes and all. And I agree to that with some extent. But 
we have--in trying that--I mean, if we are going to say we are 
going to treat a telephone call you make in the Internet 
entirely different than we make a telephone call somewhere 
else, that is not functional equivalent. That is not treating 
technologies alike. So I think----
    Mr. Barton. I know my time is way over. But it is something 
to think about, because we have got a real chance in the rest 
of this Congress and the next Congress to build on what we 
started in '96.
    Mr. Wiley. I would just like to say that I agree with much 
of what you say. I think in a competitive marketplace that we 
see today with the kind of IP centric world, I think economic 
regulation has to be considered with some skepticism. Because 
if the markets are competitive, if you don't have market 
failure, then the question is why should the Government be 
stepping in? Consumer protection, E911, you know, those kinds 
of things, that is a different story.
    Mr. Barton. Right.
    Mr. Wiley. But we are talking about economic regulation 
here. And I think it is more questionable. And I certainly 
wouldn't be thinking about going back to common carrier world 
in an information services environment. I don't think that 
makes sense.
    Mr. Walden. Well, thank you. The gentleman's time has 
expired. And the Chair recognizes for 5 minutes the gentleman 
from Pennsylvania, Mr. Doyle.
    Mr. Doyle. Thank you, Mr. Chairman. Once again, thank you 
to our witnesses for your testimony today. We have talked a lot 
about net neutrality in the court decision. So I would like to 
maybe go to a couple different topics and ask Chairman Hundt 
and Chairman Copps about special access. How can the FCC 
enhance competition in the special access marketplace? And is 
new statutory authority necessary, or do you think the 
Commission has the sufficient authority to ensure that the 
markets are competitive?
    Mr. Copps. On a special access, I think what needs to 
happen, yes, I think the Commission has the authorities for the 
FCC to make up its mind. I was before this committee, and I 
think you were here too. And perhaps it was Mr. Markey or 
somebody who asked us all back in 2007 to sign a letter saying 
we would have this problem resolved by September. And we all 
said whoopee, let us do that. And it hasn't been done yet. All 
these 7 years have gone by. Enormous amounts of money are at 
stake here. The ability of competitors to enter the business 
and to compete is at stake here. I am pleased to--at some signs 
now that the FCC is beginning to move. And I want to especially 
commend you, because I know you were a big proponent of getting 
this data collection process going. And that is the 
prerequisite of doing something final on this. The Commission 
also has to look at allegations of anti-competitive practices 
in special access, such things as loyalty mandates and 
excessive early termination and shortfall penalties. But 
getting this right is important. And each year that goes on is 
billions of dollars going to maybe where they should go or 
maybe where they shouldn't be going.
    Mr. Doyle. Thank you. Commissioner Hundt?
    Mr. Hundt. I echo Commissioner Copps' remarks and would 
just add this is another example of a very useful forward 
looking rule. Or to put it another way, we could all use a 
forward looking rule on this topic.
    Mr. Doyle. Thank you. Yes. And, Commissioner Copps, we have 
been waiting years and years and years. And I hope before my 
tenure in Congress is over that we will see the FCC do 
something on special access.
    Mr. Copps. Yes.
    Mr. Doyle. And I intend to be here a little bit longer. 
Commissioner Copps, the FCC recently closed a very successful 
low power FM application process, and is currently considering 
thousands of LPFM applications. And I want to personally thank 
you for your efforts in that regards, and ask you what other 
opportunities you see for the FCC to further empower 
communities in innovative ways?
    Mr. Copps. Well, first of all, I want to thank you, because 
without you and the leadership of your colleagues here, this 
would not have happened. We wouldn't have had that window, the 
first one opened since 2000. And it is a window of enormous 
potential. So number one, we want that to move forward with all 
dispatch and maybe go from 800 low power stations to maybe 
thousands of them.
    Going beyond that though, we just have to look at whatever 
kind of options we can think of to encourage community radio, 
to revivify the peg channels and make sure that they are not 
just cast aside as some of the big companies seem to want to 
do, look at new models for noncommercial media, nonprofit 
media. And that applies not just to media companies but to 
telecom companies, newspapers and so many other things. And 
there is a lot of potential here in a market that doesn't seem 
to be able to provide all the tools that we need for media and 
for news for nonprofit media to step in. But they are also 
dragging its feet on making a lot of these determinations that 
it should be making. So low power, yes, looking at channels 
five and six are all sorts of options out there, put some 
special emphasis on using community radio and diversity in 
communities and native lands. It is just a field that is rife 
with potential if we can just step up to the plate and realize 
our responsibility to do it.
    Mr. Doyle. Thank you. Gentlemen, thank you for your insight 
today. We appreciate it here on the committee. And I will yield 
back, Mr. Chairman.
    Mr. Latta [presiding]. Thank you very much. The gentleman 
yields back the balance of his time. And the Chair now 
recognizes himself for 5 minutes.
    And, Mr. Powell, thanks again for you being here today. And 
if I could just start with some questions to you?
    Mr. Powell. Yes, sir.
    Mr. Latta. Yes, it is kind of interesting, because I am 
reviewing your testimony and also Mr. Wiley's. You both used 
very similar language in spots. And in your opening statement, 
you said that this market requires a greater degree of business 
flexibility, fewer prescriptive rules and an assurance that any 
Government involvement is applied on a technology-neutral basis 
and creates a better investment climate. And I also saw that 
Mr. Wiley said in his testimony that the Government can't keep 
up, and there is a need for flexibility and a technology-
neutral framework in his testimony, as well. So, very similar 
language.
    But in your testimony, when you go through it--and I found 
it interesting, because when you are going through your seven 
points--and for simplicity--one of the things that you bring 
out--because you were also talking about flexibility and having 
a better business climate--you state in your testimony that 
since 1996, we have seen a trillion dollars invested in an 
Internet infrastructure. And then you also laid out that the 
simplicity has to be there. But in that simplicity, you said 
that practicing simplicity can be scary.
    Mr. Powell. Yes.
    Mr. Latta. And it takes courage to discourage--discard old 
ideas and rules that are no longer needed. Could you give a 
couple examples of those?
    Mr. Powell. Yes. It is a great, challenging question. I 
think I might actually go back to some of what Mr. Barton was 
talking about. If you think about one of the wisest things that 
was done in the 1996 act, it has nothing to do with the 
individual rules. It was the fundamental judgment that the 
Government rejected the natural monopoly thesis and believed 
instead that competition was the more fruitful approach. But 
common carriage law inherently is about a Government-sanctioned 
monopoly. It is essentially the queen of the realm who grants 
an exclusive license to a ferry boat captain to go across the 
river and in exchange for all the privileges of that monopoly, 
they agree to be bound to serve all the citizens in a 
nondiscriminatory way and other things that the sovereign 
wishes to have as part of that exclusive benefit--mutual in 
some regards: The monopolist gets the exclusive profits, and 
the realm gets the benefits of serving all the citizens.
    In some ways, in 1996, the Government sued for divorce from 
companies through, you know, the notion of an exclusive 
monopoly and instead said, ``Go compete, raise your own 
capital, no guaranteed return on investment, no guaranteed 
success.'' But yet, the lingering notions of common carriage, 
which are still in the statute and, by the way, still being 
raised in the context of the net neutrality debate, still hover 
around our regulatory questions. To me, whether the country 
comes to some committed conclusion that even with its 
challenges and the need for oversight that we are really about 
competition and are really ready to let go of common carriage 
is a great example, a fundamental one, of how to make that 
decision.
    Mr. Latta. Thank you. And let me follow up with another 
question. When you are looking at assessing the competition in 
the communications industry, do you think updating the 
Communications Act should modify how the FCC currently conducts 
its competitive analysis?
    Mr. Powell. I think so, only because I think there is some 
ambiguity there that when managed in responsible hands works 
fine. At times, it doesn't. I am worried about the FCC merger 
review process in part because it professes to do a competitive 
analysis following essentially anti-trust guidelines 
administered by other departments. But under the public 
interest standard, which I do think is valuable, it turns into 
a competition of conditions. And as an anti-trust lawyer, I 
used to believe that the FCC, if they are doing something bad, 
shoot them. If they are not, don't let them cure harm by how 
many good jelly beans you can put on the scale and to make the 
thing go away. And then by doing it in a way that it extracts 
these concessions as a voluntary proffer, you make sure that 
the case can't be appealed to the courts, because you no longer 
have standing. I think insulating the review process from 
judicial review through the conditioning mechanism, and 
allowing the commissioning mechanism to be a vehicle by which 
the Commission can legislate beyond its authority can get 
companies to do things in the context of that proceeding it 
couldn't pass laws about, borders on kind of administrative 
improbability. So does that happen every time? No. Do I think 
it happens sometimes? Yes. And I think Congress should at least 
examine the review process and see if whether better controls 
could be in place.
    Mr. Latta. Thank you very much. And I see my time has 
expired. And the Chair now recognizes for 5 minutes the 
gentlelady from California, Ms. Matsui.
    Ms. Matsui. Thank you, Mr. Chairman. And I want to thank 
all of the former Chairmen for being here. This has been really 
an interesting and formative discussion.
    Under Section 254, carriers have certain obligations to 
provide universal access. In the DC Circuit's decision 
yesterday, the Court made clear the FCC has a similar charge 
under 706 to ensure that all Americans have access to broadband 
and that the FCC has authority over broadband providers to meet 
that mandate from Congress. I have two questions for all of the 
Chairmen relating to the Court's decision yesterday.
    The first, do you agree the FCC should and must promote 
universal access to broadband for all Americans, Mr. Wiley?
    Mr. Wiley. Yes, I would agree with that.
    Ms. Matsui. Sir?
    Mr. Hundt. Yes.
    Ms. Matsui. Mr. Powell?
    Mr. Powell. Yes.
    Mr. Copps. Absolutely. There is no way you can be a 
functioning member of society without access to this 
technology.
    Ms. Matsui. OK. Then does the Court's decision yesterday 
affirm the FCC's authority to transition the universal service 
fund to broadband, Chairman Wiley?
    Mr. Wiley. Yes, I think the FCC has done a good job in 
looking at that. I am concerned somewhat with the size and the 
growth of the universal service fund, and I think the 
Commission has got to look at the competency, the pay and the 
covering that and some issue that has got to be looked at, I 
think.
    Ms. Matsui. But it is generally yes. Chairman Hundt?
    Mr. Hundt. Yes.
    Mr. Powell. Yes, I would commend Chairman Genachowski for 
migrating the fund toward broadband, and he did it on a theory 
of 706. So in that extent, I think seven--the ruling yesterday 
only strengthens the Commission moving in that direction.
    Ms. Matsui. Good.
    Mr. Copps. Yes.
    Ms. Matsui. Chairman Copps? That is great. I appreciate 
your views, because I believe that it is one of the potentially 
biggest unintended consequences avoided by the Court's 
decision, because transitioning a USF to broadband is really a 
critical step toward achieving universal access and adoption in 
this country.
    Chairman Hundt, you said that yesterday's circuit decision 
is a victory for Congress and the smart flexible approach of 
the 1996 Telecom Act. How can we continue that success? Are 
there any unintended consequences we should watch out for as 
this committee starts the process of updating the 
Communications Act?
    Mr. Hundt. Well, I think as a number of you have mentioned, 
of course the FCC on remand needs to commence a new proceeding, 
which I believe Chairman Wheeler has already said that he 
intends to do.
    Ms. Matsui. Um-hum.
    Mr. Hundt. And, naturally, that should be and will be an 
open proceeding. I am sure this committee will have an ample 
opportunity to express its views. I don't myself have the 
ability to forecast where that will come out or should come 
out, because I think it is really, really important to examine 
all the new facts about emerging network architectures and 
about competition problems on both sides of the two-sided 
network. I would just say that is why it is so useful that the 
Court has said that the FCC's authority is broad and powerful, 
because the technologies in the network architectures and the 
competition problems are constantly changing. And the FCC, in 
rulemaking, has the ability to adapt to those changes, 
sometimes eliminating rules, sometimes writing new rules. So 
this is a very, very workable process that we have here. And, 
as I said before, congratulations to this committee for the 
1996 act, which did create this legal culture.
    Ms. Matsui. Um-hum. Chairman Powell, would you like to 
comment?
    Mr. Powell. I am sorry. Can you refresh the question?
    Ms. Matsui. Well, I really----
    Mr. Powell. Sorry.
    Ms. Matsui. You know, we--as Chairman Hundt commenting that 
the Court decision he felt was a victory for Congress and for 
the smart flexible approach of the '96 act, are there any 
unintended consequences that we should watch out for as we 
reexamine and update the Communications Act moving forward?
    Mr. Powell. Yes. Yes, I more or less would agree with 
Chairman Hundt.
    Ms. Matsui. Oh.
    Mr. Powell. I mean, I think to the degree that, you know, 
in some ways I saw a quote the other day that I thought summed 
it up great, which is it is not a victory for any side, but it 
might have been a victory for the debate. And that is that the 
Commission continues to have a meaningful role in the oversight 
and protection of broadband without crossing the line into the 
more dangerous concerns around common carriage. And if that is 
ultimately the outcome, maybe that is workable. Unintended 
consequences, I do think the Court even struggled with them 
itself, which is 706 is an extraordinarily broad, unconstrained 
provision. How it is interpreted, and how responsibly it is 
interpreted and applied, I think is important, because I think, 
you know, Congress hasn't spoken with much specificity about 
broadband regulation. And to take a provision as open-ended as 
vague as 706 and see that as the foundation for everything 
broadband going forward has potential risks and dangers, but I 
think that will be worked out over time through the--through 
its application and through dialogue with Congress.
    Ms. Matsui. Thank you very much. Chairman Copps?
    Mr. Copps. While I am pleased that the Court recognized the 
authority of the Commission, I don't know that I am ready to 
declare victory yet. If it is a victory for the debate, that is 
not necessarily a good thing, because we have had so many years 
of debate while the evolution of the Internet continues and 
gate keeping shows the rise of its ugly head. So it is a 
victory if the Commission reacts and reacts promptly and 
provides some certainty and some guarantees. But we have lost a 
couple of years looking for third ways and other ways, and I 
don't want to lose a couple more years going down that road.
    Ms. Matsui. Well, I think it is an opportunity here.
    Mr. Wiley. Well, I was just going to say----
    Ms. Matsui. Yes?
    Mr. Wiley [continuing]. I think if it is a victory, I think 
it is a victory for technical innovation, a victory for 
investment, and ultimately a victory for the consumer. And I 
think that we ought to see how the marketplace develops in this 
area, and see where the problems, as I said earlier, really 
come about as some people predict.
    Ms. Matsui. Well, I think this is an interesting moment in 
time. And we have to provide a thoughtful way as we move 
forward. And I appreciate all your comments. Thank you very 
much, and I yield back.
    Mr. Walden [presiding]. The gentlelady yields back. The 
chairman now recognizes the gentleman from Illinois, Mr. 
Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman. Welcome you all. It 
is good to have you. And I think it would be safe to say that 
no one envisioned this world in which we live in 
technologically, no one envisioned in '96. So really, the basic 
first question is, in a rewrite for public policy elected 
officials, or even folks in a Commission to envision what the 
world will be like 10 years after a rewrite, that is going to 
be--that is impossible to do, is that--most people view that as 
correct? No one knew what '96 would come. So that talks about 
what these basic premises that I enjoy, Democracy, freedom, 
marketplace, capitalism. The one thing that hasn't really been 
addressed is consumer choice, and how that really does drive 
innovation and drives--and it is that marketplace that--and I 
remember going to the consumer electronics show, and the MP3 
was being unveiled. And I just was amazed at how much capital 
flowed for just music in this space, in the technology space. 
And that is the same thing now with Internet, broadband, 
downloads, Pandora, you name it. It has all migrated to that. 
So we don't ever want to lose the aspect of the power of the 
individual consumer in this debate, you know, versus what some 
people would say would be the power of a governmental 
regulatory arena or agency. And, Mr. Copps, I think that is 
true for these segments of society that feel they don't have 
access. I think that you can pull together, based upon 
technology, ability to get the word out through broadband 
information, newsletters and the like. I mean, the technology 
has allowed us to really--there is really no excuse for people 
not to have access to information flow today, even if they go 
through a universal service fund or they go to the library, 
they get on broadband through what we have been able to do 
through the E-Rates and all that other stuff, which we talked 
about a lot in your day, Mr. Hundt. So here is the basic 
question I have, because I--and a couple of you, in your 
opening statements, talk about silos. You were all members of 
the Commission, and you all were Chairmen, which is a different 
position than just being a standard Commissioner, because you 
had the responsibility for the whole body of workers within the 
FCC. So we have got consumer--we have got the bureaus and other 
things other than the bureaus. I only talk about bureaus. But 
you go on the Web site, you see all these other little offices 
and stuff, consumer and government affairs, enforcement, 
international media, public safety, wireless and wire line. So 
in a rewrite of the '96 act, should there not be some 
discussion on how we reform the Commission itself based upon 
what current technology is today? And I think, Mr. Wiley, you 
kind of talked about this a little bit. And just a guess at 
where it might head in the future? I mean, there is a future 
look, right, Mr. Copps? There is a future. But how do we reform 
the FCC itself and start tearing down some of these silos, 
which some of you have addressed are a problem? And if we can 
go from left to right? Mr. Wiley, if you want to go first? And 
that will be the end of my questions.
    Mr. Wiley. Yes. I think what has changed in the Internet 
world is that you find different parties doing the same kinds 
of services, providing the same kind of activities that you 
wouldn't have thought of before.
    Mr. Shimkus. Right.
    Mr. Wiley. You wouldn't have thought of broadcasters being 
in the technology end, or cable being in the wire line field. 
But this is happening now. And I think therefore the Commission 
probably does have to change its internal structure. In a 
digital world, if you have functionally equivalent services 
being provided by different parties, I think they should be 
regulated in a functionally equivalent way. And that is not the 
way the Commission has done it through the years. It is not the 
way they are organized. It is going to take some change. I----
    Mr. Shimkus. Thank you. Mr. Hundt?
    Mr. Hundt. You know, the French say well, that works in 
practice, but, you know, maybe it doesn't really work in 
theory. And I think it is really, really important to focus on 
practice. The current structure allows the FCC Chair, in what I 
will definitely describe as an open process, to reorganize the 
FCC to meet the objectives that are set by any particular 
Congress in any particular situation. And that is a good thing. 
So when this Congress had the wisdom to ask the FCC to auction 
spectrum in 1993, I was allowed--thanks to you--but not because 
of a statutory mandate, but because of flexibility, I was 
allowed to create a wireless bureau which previously did not 
exist. At any given moment, it is hard to say exactly what the 
administrative structure ought to be. And I think the current 
system, which tells the Chair, ``Figure it out, tell us what it 
is, you are held accountable.'' That is a good system.
    Mr. Powell. I do think form follows function. And I think 
certainly when I was Chairman, we merged few bureaus. Cable was 
a separate bureau from broadcasting. Today, it is the media 
bureau now with changes we made to try to reflect. I think a 
common principle is organize around the way it is seen through 
the eyes and the ears of consumers. And, you know, to me, at 
the time, television was television to most Americans. And 
making sure you had cross- pollenization of the bureaucrats, 
professionals who--the bureaucracy and the professionals who 
manage that I thought was important so that they saw their 
functions through the same eyes of our constituents. And I 
think that is one principle you can follow. I do agree with 
Reed. I think the Chairman is also CEO. The statute assigns 
them that responsibility. I don't think we talk enough about 
the CEO role and the management of that operation. But I think 
there is plenty of flexibility to respond to that, if it is 
clear what it is we are trying to execute.
    Mr. Copps. I don't think there is any magic formula. 
Certainly, there have been times when the stove pipe approach 
has been too much in presence. I think Michael tried to work 
against that and go towards a little more holistic type of 
view. So did Chairman Genachowski. That being said though, you 
need the experts in these specific bureaus. There is a specific 
telecom expertise in the wire line and the wireless and all the 
details of that, and special access and everything else we are 
talking about. So I think you still have to have those bureaus. 
But if you can have--I think Chairman Genachowski established a 
consumer taskforce whose job it was to go across those agencies 
and look at whatever--or those bureaus--at whatever those 
bureaus were doing to assess the impact on consumer wellbeing. 
So I think that is a good approach. But it is a management thin 
and something that I think is the product of good leadership at 
the Commission and good oversight by the committee.
    Voice. Mr.----
    Mr. Walden. We need to move on to Mr. Dingell, I think, for 
the next 5 minutes. Mr. Chairman?
    Mr. Dingell. I want to commend you for this hearing. I 
think this has been an important hearing. In the events of this 
week, you tell us that it is time that the committee is going 
to have to start looking at what we are going to do about 
bringing the '96 act up to date. I have enjoyed the comments 
that my dear friend, Mr. Barton, made in announcing my position 
as being strongly regulatory. Sometimes I have a hard time 
recognizing my position when it is set forth by other members. 
In any event, that is not important. But I would just like to 
remind everybody that this business of the '96 act started when 
we began to try and get Judge Greene out of the business of 
regulating the telecommunications industry. It also started 
when we started trying to get the amount of spectrum that was 
held out of use by industry and business and government, and 
get that available to people, and to see to it that we had a 
fair program for dealing with our legislation and a fair 
program for dealing with these matters. I would like to welcome 
our friends, the Chairmen here for their appearance and for 
their assistance to us, and for what it is that they have done 
with us over the years.
    If there is an attempt made to update the Communications 
Act, I will offer my support. Yesterday's court decision 
vacating the anti-discrimination and anti-blocking rules of the 
Federal Communications Commission open Internet order is proof 
that the Congress needs to bring our communication laws into 
the 21st century. Only clear direction from Congress will 
strengthen consumer protections, promote competition and give 
industry the regulatory certainty it needs to innovate in the 
future.
    Now, as we go about this important work, I caution that we 
do so with great care, and on the benefit of a carefully 
collected and substantial body of evidence. This is going to 
require a rigorous oversight by the committee and considerable 
work to get the information that we have need of so that we can 
legislate properly. And I hope that the undertaking will be 
bipartisan in order so that any final product that we complete 
here moves through the Senate and to the President's desk for 
signature.
    We have to resolve a number of very important high line and 
hard questions to inform our work as we move forward. I 
respectfully suggest that these questions included--or rather 
include but are not limited to the following. First, how do we 
improve and protect American's access to content, while also 
preserving the ability of private companies to monetize their 
investments for future growth? Likewise, how do we best foster 
the ongoing development of future technologies that will ensure 
American leadership in the fields of technology and 
communications? And then we have to decide how we are to 
promote the more efficient and fair use of value and 
increasingly scarce commodities like spectrum, which we have 
not administered too well of late, and if administered at off 
times on the basis of perhaps the amount that we could get for 
it in money rather than how it would serve the Nation to 
allocate this spectrum? Lastly, we are going to have to decide 
how we will ensure that the Federal Communications Commission, 
the National Telecommunications and Information Administration, 
and other related bodies function smoothly, protect consumers 
and promote growth rather than hindering it. Regardless of 
these answers, and the answers to these questions and others, I 
submit that our work should proceed from the conviction that 
the public interest is still and always going to remain the 
central concern that we have with regard to the Communications 
Act.
    I have had the good fortune to be one of the authors of 
almost every major piece of telecommunications legislation 
passed by the Congress in the past three decades. And the 
public interest is in the heart of each, going back to the '33 
and '34 act. I see no reason why that should be any different 
this time around. The only issue here worth exploring is what 
that standard has meant in years past, and whether there is any 
reason to give the Commission different guidance for the future 
in interpreting it as we address the other questions I have 
just outlined.
    Mr. Chairman, I wish you Godspeed in this endeavor. And I 
offer you my support. And I am delighted that the Chairmen of 
the Commission who have been here this morning to assist us in 
beginning this process, which I hope will go forward with 
reasonable speed, with great care and again, with great 
attention to the public interest. I thank you all for listening 
to me.
    Mr. Walden. Chairman Dingell, thank you for your kind 
comments and your always generous words and willingness to work 
to improve our communication and other laws. We look forward to 
working with you. My only disappointment is you did not have a 
list of yes-or-no questions for this panel.
    Voice. Yes.
    Mr. Walden. Now, with that, we will turn to Mr. Terry from 
Nebraska. And we look forward to your comments and questions, 
sir.
    Mr. Terry. Yes, you do. Thank you. And I just, for our 
esteemed guests here today, I want to follow-up on what my 
friend from California, Ms. Matsui, began. And that is with 
high cost areas. But I want to take it from a little bit 
different angle and get your input.
    As kind of mentioned here, we have seen a convergence of 
technologies and services that are all kind of being wrapped 
into one anymore. And the same as--we talked about it in my 
early days on this committee in voice, and Barton brought that 
up. Well, now, it is in video. And so when we talk about a 
rural telecom and the Internet as a basis of delivering video 
today, it is kind of making--well, it is altering the way that 
rural telecoms used to work. And so we have a current legal 
structure with this QRA, and a mindset of--on treating rural 
telecoms like old copper wires, which a lot of them still are 
using. So I just want to ask your opinions about in Reform 4--
or within the FCC, should rural and high cost areas--so, Mr. 
Copps, it even comes back to inner-city where you have low-take 
by high-cost. How do we think about this differently in making 
sure that if you live in rural America, or you are setting up a 
wind farm where you want to continuously oversee but remotely, 
thereby requiring broad broadband for all of that data? Do we 
need to think about things differently than high-cost, rural 
high-cost, inner city? Mr. Wiley, why don't we start with you?
    Mr. Wiley. Well, I am not an expert in the rural telephone 
area. But I still think there is a concern that is different 
than in the big cities. And I think, therefore, high-cost funds 
still are something that have to be part of the full equation, 
in my opinion. And you know that better than anybody in 
Nebraska.
    Mr. Terry. Yes.
    Mr. Wiley. So I don't have any huge input to you today as 
to how to change the system.
    Mr. Terry. Yes. And later, I guess to clarify, since video 
and Internet are becoming the same, and your telecom is really 
maybe your sole provider of that, it is all meshed together. 
Does that change anything, Mr. Hundt?
    Mr. Hundt. I think that many people have said we really 
want broadband to be the network for everyone in the country. 
In rural areas, as I am sure you know, Congressman, there are 
many places where the cable broadband penetration is as low as 
15 and 20 percent, not anything nearly as high as it is in 
Washington DC or in the suburbs. Now, that is a problem that 
the FCC really does need to think about in conjunction with the 
industry that Michael represents so ably. And in particular, 
not to touch too many other buttons, the recent increases in 
the prices of the content have a disproportionate impact in 
rural America. Because when those content price increases are 
passed on by the cable industry, they are taking a lot of money 
out of the wallets of the people in those areas, and those are 
the same areas where broadband is expensive. And so as people 
are paying more for the broadcast content and the cable channel 
content, they have less available to purchase broadband. This 
is a problem that is real and existing right now. And this also 
gives me a chance to pass the solution over to Chairman Powell.
    Mr. Powell. Congressman, I think you make a couple of 
important points that we should just put top of mind, which is 
the challenge of reaching that last five to seven percent is 
because under traditional market fundamentals, they are 
uneconomic. And if they are uneconomic, the only way to cure 
something is you have to change the economic equation. This is 
why I have always had no problem understanding and respecting 
the Government has a meaningful and significant role in terms 
of our ubiquity objectives in universal service, of 
universality and affordability, to play a role through either 
the universal service program or any other properly constructed 
program to try to change the economic equation that attracts 
the infrastructure that those communities deserve.
    I think it is a more optimistic scenario in the modern 
world than it was before. Because in the old world, we had a 
single technology that tried to string twisted copper wire 
between two farms 300 miles apart, and that was enormously and 
hideously expensive. One of the things I think really opens up 
an opportunity today is because of a common IP platform, we can 
essentially deliver almost any kind of service over almost any 
kind of network. So that means that wireless and probably its 
companion of satellite available services have real hope and 
promise for rural America. That is they have very dynamically 
different cost characteristics. A satellite at 28,000 feet sees 
rural Nebraska no differently than it sees Manhattan. Wireless 
has a much lower cost infrastructure for some of those areas. 
So I think that isn't a complete answer. But putting a lot of 
energy and investment into how those services will solve those 
problems is useful. And I think as the Chairman of the FCC is 
moving toward and IP network common regulatory proceeding, that 
convergence you are talking about also can get harmonized and 
the universal service program get harmonized along with it.
    Mr. Terry. Thank you. Agree.
    Mr. Copps. I have a little different answer. Reasonably 
comparable services at reasonably comparable prices is the 
injunction and the charge of the Telecommunications Act. 
Reforming USF, which the Commission is in the process of doing 
with lots of wrinkles and problems to work out, no question 
about that, is certainly an important part of the equation. But 
anybody who thinks that the universal service fund alone is 
going to bring this country the kind of high speed low-cost 
broadband that we need to have to be competitive in the world 
arena in the 21st century, I think is not looking at the 
situation as it is. This has to be an infrastructure mission. 
Our country has had infrastructure missions before when we came 
together to build highways and railroads and rural electricity, 
and so on and so forth. And that is what we need now. We are 
not going to be competitive. We are not going to get out of the 
holes that we are in unless every citizen in this country has 
that access. And, yes, it is reaching that last five to seven 
percent. That is extremely important. But way more than half of 
our homes don't have the kind of high speed, low-cost 
broadband, fiber broadband, that we are going to really need to 
be competitive. So we need to look at that, not just as an FCC 
problem but as a problem confronting our Government and our 
society, and act upon it and figure out whether we are really 
serious of being competitive in the global sweepstakes.
    Mr. Terry. Thank you.
    Mr. Walden. The gentleman yields back. I look to the 
gentleman from New Mexico, Mr. Lujan, for 5----
    Mr. Lujan. Mr. Chairman, thank you very much. And I must 
say, I was concerned with some of the approach that was being 
taken in the line of questioning leading up to those last 
responses to my colleague where for the first time I heard the 
importance of rural America. Coming from a western State, a 
congressional district that represents 17 of New Mexico's 22 
tribes and the sprawling nature associated with what the west 
brings us, many parts of rural America where our food is grown, 
where energy is generated, critically important to be able to 
get coverage to these areas. And as I joked with Chairman 
Wheeler when we had him in front of us a couple of weeks ago, I 
explained to him that, you know, these last flights home, it 
has been great to see the TSA debating whether we can make 
phone calls at 30,000 feet. I know that I have streaming video 
content at 30,000 feet. I can communicate with my office and 
anyone else that I so choose to. So if I can communicate with 
constituents and get the video content that I want at 30,000 
feet, why can't I do it on the ground in rural America? The 
technology is here. And there is no reason that we can't push 
it out. To the three responses, I just can't say thanks enough 
for that.
    Chairman Copps, with the response associated with the very 
aggressive push to infrastructure investment in America, it is 
absolutely needed. And we shouldn't forget, especially as we 
talk about different ideals and philosophies that we have on 
this committee, and even in this Congress and across the 
country, that it was in many conservative and rural parts of 
America that benefited from Government investment with rural 
electrification, with major water projects that provide us 
power now that could be in question because of water flows--a 
whole other topic of conversation, but nonetheless that we need 
to make sure that we are addressing.
    So, Chairman Powell, you talked about twisted pairs and 
what that brought us, decisions that were made as a result of 
the '96 act. And looking at Section 706(a), I am not certain 
what we are arguing about with concerns in that particular 
area. It is encouraging deployment of reasonable and timely 
basis on advanced telecom, especially for educational purposes. 
There may be some concerns with some of my colleagues on a 
price cap regulation. But regulatory for bands, measures that 
promote competition in local markets. This could be read by any 
member on this committee, encouraging ideals that I think that 
we all share.
    But one thing that hasn't been talked about very much--and 
even given the fact that there was a huge data breach with 
Target, 70 million customers that were impacted, is the 
security of this network. I would hope that--and I would like 
to get your opinion if 706(a) provides us the necessary 
standards to be able to bring safeguards, or if you think that 
that is something that needs to be addressed? And I would like 
to invite comments from each of you. Mr. Hundt?
    Mr. Hundt. As Chairman Powell said, Section 1706 is very 
broad. And I think that it is an opportunity and a duty for the 
FCC to dig into it and to create an appropriate framework, with 
the help of this committee and its counterpart in the Senate. 
If I might continue your point--your theme of rural America, 
there are a number of other provisions as well in the '96 act 
that the FCC can use to try to achieve the goal of completely 
widespread broadband, even in rural and high cost areas. And 
one that I would identify is the current proceeding to re-
imagine the E-Rate.
    The E-Rate, if we went--I just recently met with the chief 
librarian in Pima County, Arizona, which isn't very far away 
from you. And you know the geography is not dissimilar. They 
have a fantastic system of broadband for not just the central 
library in Tucson, but all the branch libraries. All over this 
very, very sparsely populated geography, the library is the 
number one public Internet access point in southern Arizona. 
Therefore, it is the proper focus of extra E-Rate support, and 
the proper focus of the combination of network architectures 
that might well resemble what Chairman Powell was talking 
about. We shouldn't decide that part. But we should decide that 
is a very flexible tool, also, that can be used to deliver the 
right participation in the American community to rural America.
    Mr. Lujan. Chairman Powell?
    Mr. Powell. Congressman, I really would like to put a 
punctuation on what you raise. Because I think it goes to the 
committee's desire, I hope, to try to harmonize and see the 
communication landscape as a single ecosystem. All the 
wonderful benefits we are bragging and celebrating are 
continuously and daily at risk. I think cyber threat, data 
retention, breach are all issues that are the Achilles Heel of 
all the promise of the network that we are celebrating. But 
they require very complex solutions that look through an entire 
ecosystem. 706 is no more--is not particularly up to that job. 
Why? Even for no other reason that you can't have a discussion 
without software involved. The cyber security question on a 
global--ecosystem basis means a conversation with every element 
of that massive connective chain. And that is the web 
companies, the infrastructure companies, wireless companies, 
content companies, there is just no way, in my opinion, even 
with its breadth that one could look hopefully to that as the 
single point of authority to make the most meaningful impact on 
this issue, mostly because 50 percent of that ecosystem aren't 
even implicated by that provision.
    Mr. Lujan. Chairman?
    Mr. Copps. I hope 706 is up to the job. I think it does 
confer a lot of authority. But I don't want this to become just 
a solution de jure and we talk about 706 for the next 2 years. 
And then another court somewhere strikes that down or whatever. 
I do want to highlight one thing that you mentioned in terms of 
getting broadband out. And I commend you for your interest and 
your work with native lands and Native Americans. And one area 
where I think maybe a rewrite would help would be to more 
formally institutionalize--put some flesh on the bones of the 
trust relationship and the consulted--consultative mechanisms 
that we have between the Commission and Native Americans. It is 
not--it is working better than it has. I think there has been 
more emphasis in recent years. Obviously, back in Chairman 
Kennard's time, who is not here today, there was an interest in 
moving us forward and getting us into a new trust relationship. 
But that is 13 or 14 years ago. And the situation, as you point 
out, is so dire when one member of a tribe can't call somebody 
else, but you can make the call from 30,000 feet. That is 
something wrong there. But that might be a concrete area where 
the Commission can--or where the Congress can actually lend a 
hand.
    Mr. Lujan. Appreciate that.
    Mr. Walden. Appreciate that. The gentleman's time has 
expired. We will now go to the gentleman from New Jersey, Mr. 
Lance, for 5 minutes.
    Mr. Lance. Thank you, Mr. Chairman. And to the 
distinguished panel, this is among the most interesting 
hearings in which I have ever participated. And it is my honor 
to be able to meet all of you.
    I gather there is a consensus from the distinguished panel 
that the 1996 legislation needs, to some extent, statutory 
update and revision, is that accurate, from the panel?
    Voice. I would agree.
    Mr. Hundt. I don't agree.
    Mr. Lance. And, Chairman Hundt, if you would indicate why 
you do not agree there needs to be statutory update?
    Mr. Hundt. I think that the DC Circuit has made it very 
clear that the '96 act has given the authority to the FCC to 
address all the economic and social problems that this 
committee, in recent years and in past years, has asked the FCC 
to address.
    Mr. Lance. Other distinguished members----
    Mr. Copps. I basically concur and agree with what Chairman 
Hundt has said.
    Mr. Lance. Um-hum.
    Mr. Copps. Sure, it is always nice to have some additional 
clarity. But time is of the essence here. We have a statute 
that I think can deliver on a lot of the things that need to be 
delivered, and we should be about that job. I just--it is so 
difficult to see the correlation of forces coming together to 
give birth to an act after what we went through in 1996. And I 
don't think it is going to be any easier in 2014 to do that 
than it was 18 years ago.
    Mr. Lance. Chairman Powell?
    Mr. Powell. I think, by any measure, a deliberative process 
in the legislature would take a meaningful number of years, as 
the chairman--as Chairman Walden himself has recognized in 
setting out a multi-year process. I do think there are 
sufficient conditions to justify the institution of that kind 
of examination over that period of time, because I think the 
market is radically different and the relevancy of law as 
applied to reality should be a core principle of governance.
    Mr. Lance. Thank you.
    Mr. Wiley. I think the very fact that you didn't have the 
Internet really developed, you didn't have broadband, you 
didn't have all the technological changes that have occurred 
since 1996, really gives I think substance to taking another 
look. And I think that gives Congress an opportunity I think to 
perhaps make some suggestions to the regulatory body that I 
think would be very helpful.
    Mr. Lance. Thank you, Chairman Wiley. Am I accurate--I have 
not read the decision. I have reviewed its consequences, but I 
have not read it. And I certainly will read yesterday's 
decision. Am I accurate that the FCC decided in 2004 that 
Internet access services would not be classified as 
telecommunications services? Is that true, Chairman Powell?
    Mr. Powell. Yes, sir. That is correct.
    Mr. Lance. And if that decision were to be revisited, that 
could be revisited by the administrative agency, is that 
accurate as to how it could proceed?
    Mr. Powell. It is accurate. It could.
    Mr. Lance. And if there were to be a revisiting of the 2004 
decision that this is not classified as telecommunications 
services, then there would have to be an extensive period of 
review, and there would have to be some sort of high level 
determination as to why a different decision were to be made. 
Is that the way it would work?
    Mr. Powell. Yes. Under administrative law, even with 
deference, the Agency has to provide a reasoned explanation for 
its change in policy. It would require a notice and comment 
proceeding, which is open.
    Mr. Lance. Yes.
    Mr. Powell. And I wouldn't--you know, the suggestion has 
been made that somehow that would lead to instant clarity. It 
would lead to another 3-to-4-year period of conflict and 
litigation----
    Mr. Lance. And litigation. And, Chairman Copps?
    Mr. Copps. But I would just say I don't think it would take 
forever to compile that record. I and a lot of other people I 
know would be happy to contribute to the rational for that sort 
of action. So it is not really starting at--on the tabula rasa. 
I think a lot of that information is out there. It was just a 
route not taken. And now we need to go back and look at it.
    Mr. Lance. And the FCC's reclassification would be 
considered arbitrary and capricious unless there were a period 
of comment and refreshing the record, and some sort of 
heightened standard, is that accurate legally?
    Mr. Powell. Yes, sir. They have to follow the 
Administrative Procedure Act obligations.
    Voice. And I am certain they would.
    Mr. Lance. I would presume that would be the case. And, 
finally, the decision that yesterday possibly could be appealed 
to the Supreme Court, but it is not clear whether or not either 
side is likely to do that.
    Voice. That is correct.
    Mr. Lance. Thank you very much. My time has expired, Mr. 
Chairman.
    Mr. Walden. I thank the gentleman. Now, I turn to Mr. Long 
from Missouri. I think our last member to ask questions. Please 
go ahead.
    Mr. Long. Thank you, Chairman. And, Chairman Hundt, last 
night you said that you spent quite a bit of time trying to go 
through the court ruling of yesterday. And most of the 
congressmen were home trying to read through a 1,562 page bill 
that we are going to be voting on this afternoon. So I have 
ordered my staff to bring a copy of that to you. And if you 
could peruse that over your lunch hour and kind of decipher it 
for me, I would appreciate it.
    Earlier in your testimony, Chairman Hundt, you said that--
and I didn't get--understand your point, I don't think, 
concerning the auction. You said, if I remember right, that we 
need a cap so people know what they are buying. Can you kind of 
tell me what you were--in full disclosure, I come from a 30-
year career as an auctioneer before I came to Congress a few 
years ago. So I have got a lot of interest in how an auction 
operates and try and make it operate the best it can for the 
public and the taxpayers.
    Mr. Hundt. I remember very well that in our first auction, 
we had Senator Burns who had a----
    Mr. Long. Conrad Burns, you are right.
    Mr. Hundt [continuing]. Come and conduct the very first 
auction.
    Mr. Long. He is from Missouri. Now, he served from Montana, 
but he is originally from Missouri. So that is two of us.
    Mr. Hundt. He did claim that particular heritage. And he 
did a great job. And I would recommend to Chairman Wheeler that 
he should come and ask you to conduct the next auction.
    Mr. Long. I am not worried about conducting as much as I am 
the--you know, how it is put together. And that is what I have 
been trying to drill down on.
    Mr. Hundt. Well----
    Mr. Long. But what was your comment? I didn't understand 
you said that we need a cap so people know what they are 
buying. What exactly did you mean?
    Mr. Hundt. So in any auction, when folks come in, you want 
the high bidder to be able to walk away with whatever was 
auctioned. And the way to do that I believe is to make sure 
that everybody bidding in that auction knows the following, 
what are the rules about how much you can buy. It doesn't have 
to be a cap. It could be--some people think it should be an 
aggregation level. There is many different ways to define it. 
But people ought to know as they are about to take the money 
out of the wallet, as they are about to raise the hand and say 
that they are putting in the high bid, they ought to know that 
they can walk away with whatever they can buy, instead of 
having to have another proceeding where they ask the FCC or the 
Department of Justice later, am I permitted to walk away with 
this, because I don't know whether or not I have violated any 
of your aggregation rules. So this Congress, in the Incentive 
Auction Rule, did say that the FCC should create a generally 
applicable aggregation rule. And I think that was a very wise 
thing to do, that way everybody going into the auction can 
estimate in advance whether or not what they buy is what they--
what they bid on and win on is what they can walk away with.
    Mr. Long. OK. Talking to the interested parties that are 
interested in buying this spectrum, they have told me--and this 
is probably a topic for another day. But they said if they can 
buy A, B and C spectrum, then maybe they want to buy L, M, N, 
O, P later in the auction. Or if they can't buy A, B and C, L, 
M, N, O, P doesn't--if they can't but that too, then the first 
three things that they bought--so it is a very confusing 
situation. So do you any of you have any staff--anybody you 
want to get with my staff that we can talk about to kind of 
sort that out, I would appreciate it.
    I want to move to Chairman Wiley for a minute. If you turn 
on the TV at night, the only reason it is not 100 percent phone 
company ads and the cellular companies and things is because it 
is interspersed with auto insurance ads. So there would be 
more--so it seems like there is quite a bit of competition out 
there now. And as far as the auction that I was talking about 
with Chairman Hundt, the wireless market I think appears to be 
extremely competitive. And you do have larger companies, AT&T, 
Verizon, T-Mobile, Sprint. And given that, doesn't it make 
sense that the FCC--why will they--should they not--they 
shouldn't handicap bidders, should they, to get the most money 
for the taxpayers and have the best auction they can where 
either some people are wanting to limit who can buy what? Can 
you kind of walk me through that?
    Mr. Wiley. Well, my view is that the auction ought to be 
available, open to all. I think if Congress really wants to see 
the maximum amount of revenue derived in order to support the 
public safety network we are going to have to pay the 
broadcasters, it is a very complex process. And I do--I am 
concerned about the fact that we start to begin to limit people 
in this that you are going to find you are going to have less 
revenue than might be otherwise anticipated. I think a free 
auction ought to be open to all.
    Mr. Long. All right. When people would attend my auction, I 
was always interested in having the most people there and 
having them spend the most money that they could. And if they 
didn't want to bid, I would bid for them. I would tell them 
just to hold their hand up in the air. And when they paid 
enough, I would tell them to take it down. So with that, Mr. 
Chairman, I yield back.
    Voice. That is quite an auction.
    Mr. Walden. I want to thank our distinguished panel of 
witnessed, both for your prior Government service and your 
continuing involvement and interest in public policy to assist 
us in our mission and goals in updating the Communications Act. 
I draw attention to those who are observing our hearing. They 
can go to our hashtag at CommsActUpdate. I think it is right in 
front here--and give us your information. A lot of people have 
been doing that during the hearing. We appreciate that. Another 
reflection of how technology is changing the world, and we need 
to keep up with it. So thank you for your participation. Our 
subcommittee stands adjourned.

    [Whereupon, at 12:25 p.m., the subcommittee was adjourned.]
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