[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]



 
                   RURAL CALL QUALITY AND RELIABILITY

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

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 8, 2016

                               __________

                           Serial No. 114-166
                           
                           
                           
                           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                          
                           
                           


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                    COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman
JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
JOHN SHIMKUS, Illinois               BOBBY L. RUSH, Illinois
JOSEPH R. PITTS, Pennsylvania        ANNA G. ESHOO, California
GREG WALDEN, Oregon                  ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania             GENE GREEN, Texas
MICHAEL C. BURGESS, Texas            DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee          LOIS CAPPS, California
  Vice Chairman                      MICHAEL F. DOYLE, Pennsylvania
STEVE SCALISE, Louisiana             JANICE D. SCHAKOWSKY, Illinois
ROBERT E. LATTA, Ohio                G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington   DORIS O. MATSUI, California
GREGG HARPER, Mississippi            KATHY CASTOR, Florida
LEONARD LANCE, New Jersey            JOHN P. SARBANES, Maryland
BRETT GUTHRIE, Kentucky              JERRY McNERNEY, California
PETE OLSON, Texas                    PETER WELCH, Vermont
DAVID B. McKINLEY, West Virginia     BEN RAY LUJAN, New Mexico
MIKE POMPEO, Kansas                  PAUL TONKO, New York
ADAM KINZINGER, Illinois             JOHN A. YARMUTH, Kentucky
H. MORGAN GRIFFITH, Virginia         YVETTE D. CLARKE, New York
GUS M. BILIRAKIS, Florida            DAVID LOEBSACK, Iowa
BILL JOHNSON, Missouri               KURT SCHRADER, Oregon
BILLY LONG, Missouri                 JOSEPH P. KENNEDY, III, 
RENEE L. ELLMERS, North Carolina         Massachusetts
LARRY BUCSHON, Indiana               TONY CARDENAS, California
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota

             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
MARSHA BLACKBURN, Tennessee          PETER WELCH, Vermont
STEVE SCALISE, Louisiana             JOHN A. YARMUTH, Kentucky
LEONARD LANCE, New Jersey            YVETTE D. CLARKE, New York
BRETT GUTHRIE, Kentucky              DAVID LOEBSACK, Iowa
PETE OLSON, Texas                    BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas                  DIANA DeGETTE, Colorado
ADAM KINZINGER, Illinois             G.K. BUTTERFIELD, North Carolina
GUS M. BILIRAKIS, Florida            DORIS O. MATSUI, California
BILL JOHNSON, Missouri               JERRY McNERNEY, California
BILLY LONG, Missouri                 BEN RAY LUJAN, New Mexico
RENEE L. ELLMERS, North Carolina     FRANK PALLONE, Jr., New Jersey (ex 
CHRIS COLLINS, New York                  officio)
KEVIN CRAMER, North Dakota
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)
  
                             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. Anna G. Eshoo, a Representative in Congress from the State 
  of California, opening statement...............................     4
Hon. John Shimkus, a Representative in Congress from the State of 
  Illinois, opening statement....................................     5
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................    35

                               Witnesses

Eric Lebeau, General Manager, Dakin Farm.........................     9
    Prepared statement...........................................    11
Lance Miller, President, McClure Telephone Company...............    16
    Prepared statement...........................................    18

                           Submitted Material

Statement of Eagle Telephone System, Inc., submitted by Mr. 
  Walden.........................................................    36
Statement of Representative David Young, submitted by Mr. Walden.    38
Statement of Hamilton County Telephone Co-op, submitted by Mr. 
  Shimkus........................................................    39
Statement of CounterTop Creations, Inc., submitted by Mr. Shimkus    42


                   RURAL CALL QUALITY AND RELIABILITY

                              ----------                              


                      THURSDAY, SEPTEMBER 8, 2016

                  House of Representatives,
     Subcommittee on Communications and Technology,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:35 p.m., in 
room 2322, Rayburn House Office Building, Hon. Greg Walden 
(chairman of the subcommittee) presiding.
    Present: Representatives Walden, Latta, Barton, Shimkus, 
Blackburn, Lance, Guthrie, Olson, Kinzinger, Bilirakis, 
Johnson, Long, Collins, Cramer, Eshoo, Welch, Loebsack, and 
McNerney.
    Staff Present: Elena Brennan, Staff Assistant; Blair Ellis, 
Press Secretary and Digital Coordinator; Gene Fullano, Detailee 
Telecom; Kelsey Guyselman, Counsel, Telecom; Grace Koh, 
Counsel, Telecom; David Redl, Chief Counsel, Telecom; Charlotte 
Severcool, Professional Staff, Communications and Technology; 
Dan Schneider, Press Secretary; Gregory Watson, Legislative 
Clerk, Communications and Technology; David Goldman, Minority 
Chief Counsel, Communications and Technology; Jerry Leverich, 
Minority Counsel; Lori Maarbjerg, Minority FCC Detailee; and 
Ryan Skukowski, Minority Senior Policy Analyst.

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

    Mr. Walden. We will call to order the subcommittee on 
Communications and Technology. And certainly welcome our 
witnesses here and welcome our members back for our first 
subcommittee hearing after the district work period in August.
    This subcommittee has spent a great deal of time over the 
years looking at technology and its future in America, and all 
the great and innovative things it will bring, all the ways it 
will change our lives.
    Now, while these new and exciting offerings are an 
important piece of the future, we cannot ignore the very real 
technological problems that exist today as we talk about 5G 
service and the Internet of Everything. Let's not forget that 
for some people the big technological advancement they are 
hoping for is to actually receive all of their voice calls. 
What a concept.
    Most of us take for granted that when someone dials our 
phone number, that the call will reach us. Unfortunately, for 
millions of rural telephone customers, that is not the case. 
Somewhere in the handoff and the delivery of traffic, calls to 
rural customers are being dropped or degraded. The caller 
continues to hear a ringing on their end, but the call never 
makes it to the intended recipient.
    This isn't merely an inconvenience. It can mean lost sales 
for small businesses, we will hear about that; missing out on 
important and timely information from banks, or maybe it is 
your doctor; or even if you have that failure in a life-and-
death situation, think what that means.
    Why is this happening? Well, to put it simply, long 
distance and voice traffic starts with one provider who then 
hands the call off to a third-party router who will ultimately 
deliver it to the end provider serving the person who is being 
called. This process is typically seamless, it is usually high 
quality, and is transparent to American consumers.
    However, in rural and hard-to-serve areas, it can be 
expensive to move traffic to remote customers. So the provider 
who originates the call will look for the least-expensive 
option for delivering that call, and in some cases these least-
cost routers simply cut corners to offer the lowest prices, 
which means that calls can be low quality or, the worst 
situation, not connected at all.
    So I have heard from people in my district about this 
issue. I know many other members on this subcommittee have 
raised this issue with Ms. Eshoo and I. Subcommittee Vice Chair 
Latta and the Rural Telecom Working Group have looked at this 
problem in depth, and I thank you for your work on that. 
Letters have been written, resolutions introduced. The FCC has 
also tried to mitigate the problem by requiring more extensive 
data collection, reporting, and sanctioning those who are 
responsible for call completion issues.
    Yet the problem remains, which is why it is time for us to 
act. Today, as we consider legislation authored by my colleague 
from Iowa, Mr. Young, we will hear from witnesses who are on 
the front lines providing services in rural areas and facing 
these problems head on.
    Mr. Miller operates a telephone company that serves rural 
customers in Ohio, and Mr. Latta will be formally introducing 
him in just a minute. And as he will tell you, he has lost 
customers over the call completion issues.
    When your customers are not receiving their calls, guess 
what? They are not happy and they take it out on the provider, 
even though that provider typically does not have any control 
over the path that the call must take to get to its network. So 
when Mr. Miller's customers miss a call, who do they contact? 
Not the least-cost router who abandoned the call traffic 
somewhere along the line. They call Mr. Miller, or they find a 
new provider.
    I believe Mr. Young's bill, as amended by the text we are 
considering today, will be a significant step forward in the 
fight to ensure that rural customers get high-quality voice 
service. By requiring the network providers in the middle to 
adhere to service standards, we greatly improve the likelihood 
that calls are delivered to where they are supposed to go.
    As we continue our efforts to promote America's 
technological leadership in so many spaces, we cannot ignore 
the day-to-day issues that continue to plague consumers. This 
bipartisan, commonsense legislation ensures that rural 
customers are not left behind.
    With that, I would yield to the gentleman from Ohio, Mr. 
Latta.
    [The prepared statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    This subcommittee has spent a great deal of time over the 
past 5 years looking to the future of technology--all the great 
and innovative things it will bring, all of the ways it will 
change lives. While these new and exciting offerings are an 
important piece of the future, we cannot ignore the very real 
technological problems that exist today. As we talk about 5G 
service and the Internet of Everything, let's not forget that 
for some folks, the big technological advancement they are 
hoping for is to actually receive all of their voice calls.
    Most of us take for granted that when someone dials our 
phone number that the call will reach us. Unfortunately, for 
millions of rural telephone customers, that isn't the case. 
Somewhere in the handoff and delivery of traffic, calls to 
rural customers are being dropped or degraded. The caller 
continues to hear ringing on their end, but the call never 
makes it to the intended recipient. This isn't merely an 
inconvenience; it can mean lost sales for small businesses, 
missing out on important and timely information from banks or 
doctors, or even the failure of life or death emergency calls.
    Why is this happening? To put it simply, long distance and 
voice traffic starts with one provider, who then hands the call 
off to a third party ``router'' who will ultimately deliver it 
to the end provider serving the person who is being called. 
This process is typically seamless, high quality, and is 
transparent to American consumers. However, in rural and hard-
to-serve areas, it can be expensive to move traffic to remote 
customers, so the provider who originates the call will look 
for the least expensive option for delivering the call. In some 
cases, these ``least-cost routers'' simply cut corners to offer 
the lowest prices, which means that calls can be low-quality or 
not connected at all.
    I've heard from my constituents about this issue, and I 
know many of the other members of the subcommittee have as 
well. Subcommittee Vice Chairman Latta and the Rural Telecom 
Working Group have looked at the problem, letters have been 
written, resolutions introduced. The FCC has also tried to 
mitigate the problem by requiring more extensive data 
collection and reporting and sanctioning those who are 
responsible for the call completion issues. Yet the problem 
persists, which is why it is time for Congress to act.
    Today, as we consider legislation authored by my colleague 
from Iowa, Mr. Young, we will hear from witnesses who are on 
the front lines, providing services in rural areas and facing 
these problems head-on. Mr. Miller operates a telephone company 
that serves rural customers in Ohio, and as he will tell you, 
has lost customers over the call completion issues. When your 
customers aren't receiving their calls, they get angry with 
their provider--even though that provider typically doesn't 
have any control over the path that the call must take to get 
to its network. So when Mr. Miller's customers miss a call, who 
do they contact? Not the least-cost router who abandoned the 
call traffic somewhere along the line. They call Mr. Miller, or 
they find a new provider.
    I believe that Mr. Young's bill, as amended by the text we 
are considering today, will be a significant step forward in 
the fight to ensure that rural customers get high-quality voice 
service.
    By requiring the network providers in the middle to adhere 
to service standards, we greatly improve the likelihood that 
calls are delivered to where they are supposed to go.
    As we continue our efforts to promote America's 
technological leadership in so many spaces, we can't ignore the 
day-to-day issues that continue to plague consumers. This 
bipartisan, common-sense legislation ensures that rural 
consumers are not left behind.

    Mr. Latta. Well, thank you, Mr. Chairman, and thanks for 
holding today's hearing.
    And thanks to our witnesses for being here. Appreciate it.
    Over the past 5 years, as the chairman said, we have been 
hearing complaints from our local telephone providers and 
constituents who have experienced call-quality and call-
completion issues. And again, as the chairman pointed out, 
there are a lot of issues out there that folks are having. But 
one thing that also happens in our area is if you can't get a 
call through, like to an older adult, you might call the county 
sheriff's office and say: Hey, can you go out and check to see 
if someone is still OK?
    And so I know that our two witnesses here are on the front 
line, and I appreciate all they are doing. I also appreciate 
working with my colleague from Vermont on these issues.
    And with that, Mr. Chairman, I would like to yield the 
balance of my time to the gentlelady from Tennessee.
    Mrs. Blackburn. Thank you. I appreciate that. And I want to 
join in welcoming our witnesses and raise how important this is 
to those of us who have rural areas.
    Mr. Miller, I am just really impressed with your RUS loan 
program and what you have done with your advanced fiber network 
to bring to rural areas. I have a physician, a pharmacist from 
my district in the room who is in one of those rural areas, and 
he knows the importance for health care and for being able to 
process the needs of his customers how important having a 
reliable network is.
    With that, I yield back the balance of my time.
    Mr. Walden. And I believe all time has expired for me.
    I do want to enter into the record a letter from Eagle 
Telephone System and Snake River PCS, who are small rural 
providers from Oregon's Second District, which describes some 
of the call-completion issues they have had in the past and how 
it has affected their customers; and a statement from our 
colleague, Representative David Young of Iowa, who alongside 
our subcommittee member Representative Welch, who has been 
terrific on this, introduced H.R. 2566. Mr. Young's letter 
stresses the importance of this piece of legislation and thanks 
our subcommittee for taking this action.
    And without objection, those will be entered into the 
record.
    [The information appears at the conclusion of the hearing.]
    Mr. Walden. I am now delighted to recognize my friend and 
colleague from California, Ms. Eshoo, for opening comments.

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

    Ms. Eshoo. Thank you, Mr. Chairman. It is good to be back 
with everyone. And I think that the hearing today is a great 
way to start the rest of what we have before we leave here.
    I couldn't help but think when you were reading your 
comments that maybe our staffs got together, because I have 
just about the same thing to say, which shows actually the 
commonality that we share relative to this issue. Because our 
Nation's telecommunications system is really grounded in the 
principal of universal service. And yet today, second decade of 
the 21st century, we still have Americans that are really 
dropped and left out of the loop, so to speak. And it is a 
problem that has existed for a long time.
    And I really want to salute my colleagues, both Mr. Welch 
for leading on this, Mr. Loebsack, who has partnered, and it 
obviously and should be a bipartisan effort, and it is.
    So I think that we are kind of coming out of the chute in 
the right way here, because this is important to individuals, 
as has been stated, it is important to businesses, it is 
important to everyone. And when this doesn't work, when calls 
are either dropped, if you can't reach someone, this subtracts 
from not only the quality of life, but in emergency situations, 
fill in that one, and imagine where it goes when you can't get 
through.
    And we have such a high expectation. I mean, we really, the 
rest of us, are spoiled that when we dial, even though we may 
not reach someone, that the phone is going to ring and that we 
can leave a message. But there are people, as I said, that are 
not enjoying what the rest of us have. And as the chairman 
said, the FCC has been engaged on the issue. They have taken a 
number of steps to try and correct it.
    But I think there is one underlying cause of the problem, 
and that is the higher rates that are incurred by completing 
calls to rural areas. That will eventually be solved by the 
transition to bill and keep that the FCC adopted in 2011. But 
for many rural customers, this transition is not going to take 
full effect and be in place for them for more than a few years. 
And that is not good enough. You add up the minutes and the 
days and the hours and have to put up with that. Not good.
    So in the meantime, the FCC has adopted some data-
collection rules and they have brought some enforcement actions 
against providers. But the problem still persists and exists.
    So I am glad that we are here today with our witnesses. I 
think that we need to crack down on these problems. I think the 
bill before us that requires intermediate providers to register 
with the FCC, requiring the FCC to develop service quality 
standards that would be required to be adhered to, make a lot 
of sense to me.
    We are also looking, as I understand it, at a substitute 
amendment that would bring it in line with changes that have 
been made in the Senate. And wouldn't it be great if our bills 
are the same, that we get this thing done, wouldn't that be a 
gift to all the people that live in rural America?
    So thank you again to Congressman Welch and the entire 
bipartisan team for their work for reliable phone service 
everywhere, and to our witnesses that are here to help us 
hammer this out and make sure it is perfection and that we get 
it through.
    I yield back.
    Mr. Walden. The gentlelady yields back.
    The chairman recognizes the gentleman from Illinois, Mr. 
Shimkus, for opening comments.

  OPENING STATEMENT OF HON. JOHN SHIMKUS, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Shimkus. Thank you, Mr. Chairman. And it is great to 
the finally have a hearing on this issue.
    I think if you are from rural America, which I am, I 
represent 33 counties in southern Illinois, if you are from 
rural America, everyone has a Mr. Miller. And I do. And it is 
Mr. Pyle. So when people call Mr. Miller and complain, Mr. 
Miller probably calls his Congressman, and Mr. Pyle calls me.
    So I think Members are on the front line to this. And it is 
sad. So I want to submit for the record the letter I received--
actually it was a letter back to a customer from Mr. Pyle--for 
the record, Chairman.
    Mr. Walden. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Shimkus. And I also want to submit a letter for the 
record from a business. Imagine a small business in America 
today in rural small-town America and they are doing stuff over 
the phone, faxing quotes, doing stuff, and they have dropped 
calls, delayed calls, it rings and no one is there, it rings 
and the caller ID does not match the original call, customers 
in another town can't get a fax to go through to my machine. 
This is a chronic issue that is detrimental to my business. 
Customers report calling my number and getting an automated 
error message in Spanish, then try again and it goes through 
just fine.
    And this is from Steven Dodson, who is the president of 
Countertop Creations, and if we could submit this in the 
record.
    Mr. Walden. Without objection.
    [The information appears at the conclusion of the hearing.]
    Mr. Shimkus. And I can't say it any better than my 
colleagues have. We apologize. We are sorry. Everyone should 
have universal service. And this has to be fixed. I think a lot 
of our frustration is, although I think the FCC has noted, that 
they have tried to address this issue, I think the community 
would say they haven't and I think the community would say that 
the continued delay continues to create dysfunction, 
uncertainty, anger, frustration, lack of business, you name it. 
It is palpable. There are times when I don't want to go see Mr. 
Pyle anymore because it is just brutal. It is just brutal.
    So we all have our different views on the Federal 
Communications Commission and what they are doing, what they 
are not doing, and how fast they are doing it. We all know they 
have got this big plate out there of things. But can't we get 
them to do this? And it is unfortunate that we have to have 
legislation to force them to fix something that they should be 
able to fix.
    And I think a lot of us are just tired and we are glad we 
are finally having this hearing. Again, we apologize for rural 
America being left out. If we are representing rural America, 
if you are being left out, we are not doing our jobs. So I 
actually want to congratulate my colleague Mr. Welch from 
Vermont and of course my colleague from Iowa for drafting and 
starting the process so that we can really get some completion.
    Mr. Chairman, thank you for having the hearing. And I yield 
back my time.
    Mr. Walden. The gentleman yields the balance of his time.
    Spot on. I have introduced in the record this letter from 
Eagle Telephone. They talk about 3-minute latency from the time 
somebody dials until the call, if it ever goes through, goes 
through, then echoes. And then at one point they were having a 
problem with entire other conversations held on the same line 
in a foreign language would come in on top of the caller, so 
they would have to hang up and dial again. I mean, these are 
the things our constituents are facing, you all are going to 
tell us more about.
    With that I would yield to my friend, the gentleman from 
Vermont, who has worked so hard on this issue. We appreciate 
your leadership. You saw this firsthand probably in the public 
utility commission days in Vermont.
    Mr. Welch. Well, thank you very much. And I really am 
delighted that we have got Eric LeBeau from Vermont who is 
going to be speaking about this.
    But I want to thank Mr. Latta and all of my colleagues for 
the focus on the challenges that we have in rural America. And 
rural America is most of America. It is good people who live 
there. It is most of this committee. A lot of our focus has 
been on getting broadband high speed Internet out to rural 
America, and that is a challenge because of the economics of 
it, but it is a commitment that we are making.
    But this is about basic telephones. And it is pretty 
astonishing when you think about it that you can't have 
confidence as a business or as an individual that your call is 
going to go through. And it is pretty bizarre when it happens 
because you will call and you are talking to somebody and you 
can hear them but they can't hear you. Or they can hear you, 
but you can't hear them. Or you are in the middle of the call 
and it gets dropped.
    And it is all about these least-cost routers, finding the 
cheapest way to do it, and whether it means that it is 
overlapped calls or dropped calls, they don't care. And then it 
is very difficult for the FCC to follow up. Because that is 
illegal but it is not really enforceable, and this legislation 
is going to help that.
    And what is important for it is that it is an indication 
that this committee is sincerely committed to making certain 
that the tools of the modern economy, let alone the telephone, 
are available to folks in rural America. And that is red 
States, blue States, it is all of us.
    And it came to my attention talking to folks like day Dakin 
Mills where Mr. LeBeau is from. They have this extraordinary 
business where they have up to 175 employees that come on 
between Thanksgiving and Christmas. That is 70 percent of their 
business. And they sell the best bacon, the best maple syrup, 
and the best cheese in the world.
    Mr. Walden. Now, we are going to have a problem on the best 
cheese.
    Mr. Welch. You might want to get Mr. LeBeau's number.
    Mr. Walden. You want us to move this bill?
    Mr. Welch. But if you get his number, I want your call to 
him to be completed, and that is why we have got to get this 
legislation passed.
    But it is a big deal. It is 70 percent of your business. 
Just think about it, that that short window of time, it depends 
on the phone system working, and it doesn't work right now.
    So we have got and you have got great people like Mr. 
Miller, like Mr. LeBeau, we all have it in our districts, and 
we have got to give them some confidence that the tools that 
are basic for them to be successful are there for them to 
succeed. And I am really proud to have a Vermonter, Mr. LeBeau, 
here. He grew up in Vergennes, Vermont. He is back there. He 
went away to Indiana and got a degree, came back to Vermont. 
Raising his family, and he has been the general manager of this 
company, Dakin Mills, that we are very proud of in Vermont. And 
he will be able to give you some practical explanations about 
this.
    At this point I would like to yield the balance of my time 
to my friend and fellow traveler on this, Mr. Loebsack.
    Mr. Loebsack.
    Mr. Loebsack. Thank you, Mr. Welch, for yielding. We won't 
talk about who has the best bacon. I just appreciate the fact 
that you did yield time to me.
    I am pleased that we are discussing this very, very 
important legislation today. It is kind of interesting that in 
the 21st century, when we are talking about smart cities and 
self-driving cars and all kinds of mind-blowing technologies 
that are changing our daily lives, that the fact is that many 
rural Americans are still living with a distinctly 20th century 
problem.
    When I travel around my 24 counties--I only have 24, not 
33, and it is not as big as Congressman Walden's district, but 
nonetheless pretty good size--and I talk about the work that 
this committee does, one of the things I often hear is that 
calls to rural areas sometimes just don't go through, and they 
are wondering why are we not dealing with this. I have heard 
time and time again of folks who call a parent but the phone 
never rings on the other end or about calls that do go through 
but the quality is so bad that you just never hear the person 
who called you.
    It is really about seniors missing calls with test results 
from their doctors. It is about businesses losing customers, as 
we heard. It is about people not being able to reach first 
responders in an emergency. And as our technology moves 
forward, we simply can't afford to race past these folks that 
still cannot get the most basic communication services.
    And I thank Mr. Welch. I thank my colleague from Iowa, Mr. 
Young, for working on this. I want to thank the leaders of this 
subcommittee for bringing this bill forward today. And I think 
this thing is going to move right along, and I am looking 
forward to hearing from our witnesses.
    Thanks again, Mr. Welch, for yielding. Thank you.
    Mr. Walden. Does the gentleman yield back?
    Mr. Loebsack. I yield back, sir.
    Mr. Walden. The gentlemen yields back the time.
    So now we go to our panel. Thank you both for being here. 
We are delighted to hear firsthand from people who have been 
directly involved in this situation, have worked with us to 
help fix it. So your testimony today is going to be very, very 
important for our subcommittee.
    And first off we have Mr. Eric LeBeau, who is the general 
manager of Dakin Farm. We are delighted you are here. We have 
hard all about the quality of your products. We are going to 
dispute in some measure because we represent firms in our 
districts. But for this topic you are fully in charge.
    So please go ahead. Pull that mike pretty close. And the 
lights there will indicate whether you have run out of time or 
not. When it gets to red, that means you are done. But we will 
let you go a little bit if need be. And push that button and 
you are on.

  STATEMENTS OF ERIC LEBEAU, GENERAL MANAGER, DAKIN FARM; AND 
       LANCE MILLER, PRESIDENT, MCCLURE TELEPHONE COMPANY

                    STATEMENT OF ERIC LEBEAU

    Mr. LeBeau. Chairman Walden and distinguished members of 
the subcommittee, thank you for the invitation to speak at 
today's hearing. My name is Eric LeBeau and I am the general 
manager of Dakin Farm in Ferrisburgh, Vermont. I am honored to 
be here today to discuss rural call quality and reliability, 
and to answer any questions you may have.
    Dakin Farm is a family-owned business. It has been a staple 
of the Vermont landscape for over 50 years. We do have two 
retail locations in Vermont, a robust catalog, and a state-of-
the-art Web site. Our customers are from all over the country, 
and in some cases, all over the world. In 2015 we shipped 
around 44,000 packages during the holiday season and around 
67,000 packages for the year. We are a very seasonal business. 
Our annual sales are over $7 million, and 70 percent of that 
takes place from Thanksgiving until Christmas.
    As you might guess, we do rely heavily on our 
telecommunication infrastructure to allow customers to reach 
us, both to ask questions and hopefully to place orders. Our 
Internet and phone connections are a key component to a 
successful holiday season. In the off-season we may take 600 
calls in a month. During the holiday season there are days 
where we will take over 1,000 calls in a day.
    It is no mystery that we do use the rural Vermont quality 
in our marketing, but all the while in the background we are 
using state-of-the-art infrastructure to take the order, 
process the order, and get the orders to our customer's 
doorstep.
    This problem first arose in 2010 for us. At that time it 
was a few dropped calls. Some calls were connected and the 
quality was poor. It wasn't anything large. It was actually 
more of a nuisance than a problem. I would contact our long-
distance service provider, BCN. They would do some testing and 
most likely they would begin a call reroute.
    During the 2011 off-season we never noticed any issues. 
Obviously we don't take as many calls so you just don't see the 
issues. I am sure we had a dropped call here and there, but we 
never put two and two together. Late September and early 
October of 2011, the problem became more apparent. I knew we 
had an issue.
    We were experiencing two types of issues, as you folks have 
addressed already. One was our customers would call and their 
phone would ring but we would never receive the call at Dakin 
Farm. We had no idea they were calling. Luckily, most of our 
customers were loyal. They would keep calling until they got 
through, which was good for two reasons. One, we would still 
get the order, and two, they would inform us of the situation.
    The second issue was a call would be completed, but the 
quality was so poor that we couldn't continue the conversation; 
or, when we would answer the call, there would be nobody there.
    At this point I began speaking to our local service 
provider, Waitsfield and Champlain Valley Telecom. They had 
seen this issue at several other of their client sites, and 
they recommended that I continue to work with BCN and demand 
that they resolve this issue. I would call BCN several times a 
week during that holiday season, and in most instances they 
would do some testing and eventually would reroute. They 
continued to deny that this was a least-cost routing issue and 
said it was due to our increased call volume and the 
destination point. Basically they were putting the blame back 
on my local service provider.
    We dealt with it all holiday season the same way we deal 
with any customer service issue. We apologized to our 
customers, offered potential refunds, discounts, and other 
savings. There really is no way for me to prove that we lost 
customers, but my educated guess would be that we did.
    In 2012, during the off-season, again the situation seemed 
to calm down. I did continue to discuss the situation with BCN, 
my long-distance provider, and they assured me that the issue 
had been resolved, and they continued to deny that it was 
least-cost routing. Luckily, Waitsfield and Champlain Valley 
Telecom disagreed and they were working on a contingency plan.
    Again in 2012, late September, early October, when we 
started to ramp up for the holiday season once again, these 
issues reappeared and this time, much, much worse. BCN 
continued to deny that it was a least-cost routing issue. I 
have a phone bill from October of 2012, that shows a customer 
in San Antonio, Texas, that had to call us eight times before 
the call was completed.
    Like I said, Waitsfield was working on a contingency plan. 
Their recommendation was we switch providers, and that is what 
we did. The situation was so bad that I was willing to take 
that chance and make the move.
    The issue has caused harm to our business a few years ago 
and subsequently was a negative impact on our community. We 
need to ensure rural Vermont and rural Vermont businesses and 
other communities can connect to the rest of the world in the 
same that urban and suburban communities can.
    I thank you for this opportunity to address the 
subcommittee and look forward to the resolution. Thank you.
    [The prepared statement of Mr. LeBeau follows:]
    
    
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    Mr. Walden. Mr. LeBeau, thank you for your story, and it 
will certainly be a greater impetus to us to act.
    We will now turn to Mr. Lance Miller, president, McClure 
Telephone Company.
    Mr. Miller, delighted to have you here. Give us your 
perspective on this matter.

                   STATEMENT OF LANCE MILLER

    Mr. Miller. Chairman Walden, Ranking Member Eshoo, and Vice 
Chairman Latta, and members of the subcommittee, thank you for 
giving me this opportunity to testify in front of you today.
    My name is Lance Miller. I am president of the McClure 
Telephone Company in McClure, Ohio. My remarks today are on 
behalf of McClure and NTCA, a rural broadband company.
    McClure Telephone is a small family-owned carrier serving 
hundreds of customers in rural northwest Ohio. We have been 
there since 1910. We offer several services, including phone, 
high-speed Internet, and video. McClure strives to ensure that 
our rural customers have the same services as those who live in 
urban areas.
    For several years our company and our customers have been 
hit very hard with the call-completion problems. These issues 
have led to lost revenues, lost customers, and lost time of 
trying to figure out where these issues are and explaining 
them, and they are not even in our network.
    Here are some examples of some of the issues we have run 
into. A lot of our customer base is an older population. With 
many of the younger people moving away to urban areas, our 
customers' kids will try to call home to check on their 
parents. When they get the dead air or the continuous ringing, 
they will try to get their parents several, several times, and 
the kids will start getting worried. They will start then make 
a call to our local sheriff's department to do a welfare check.
    These failures are inconvenient and a worry to the family. 
They also place strain on our local law enforcement and the 
burden on the taxpayers.
    Our company has also just recently lost one of our major 
business customers because of call failures. This business 
customer could no longer miss the phone calls or have the 
frustrated customers calling into them having to get a clear 
line multiple times. It is very difficult for me to go to that 
customer and tell him that I don't know where the problem is 
and I don't know how to fix that problem. And as a business 
owner, they don't really care who is at fault. They want it 
fixed. They want what they are paying for.
    Other reported examples of the call completion include 
doctors unable to reach patients, hospitals unable to reach on-
call surgeons, schools unable to send alerts to students, and 
in one case a public responder unable to make an emergency call 
back to a person who dialed 911.
    Why aren't these calls being completed? One of the problems 
is the use of intermediate providers, also known as least-cost 
routers. They are employed by long-distance carriers to 
terminate calls. These routers offer to carry and complete 
calls at low cost. This can be helpful if done correctly, but 
it can be a big problem if it is done wrong.
    No one knows who these least-cost routers are and they have 
no accountability. A least-cost router may drop calls because 
it won't make enough money to terminate the call in our area. 
Even if the call does connect, the call quality will be very 
poor and almost un-understandable.
    When these problems arise it can be difficult, if not 
impossible to determine who the least-cost router is and where 
the call fell apart. The FCC has taken much-appreciated actions 
to address call-completion problems, such as issuing orders, 
undertaking enforcement actions, and holding industry meetings. 
However, despite these actions the calls still continue to 
fail.
    H.R. 2566 takes three important steps to help address the 
problem. First, it would bring the least-cost routers out of 
the shadows and have them register with the FCC. We would know 
who they are and how to contact them when problems do arise. 
Secondly, the bill would direct least-cost routers to abide by 
minimum standards and they actually have to complete the calls. 
Third, it would ensure that the originating providers, such as 
ourselves, would use only registered least-cost routers.
    The targeted measures of H.R. 2566 can help to overcome the 
call-completion problems that continue to threaten the quality 
of life, economic development, and the safety of rural America.
    Thank you, Mr. Chairman, Ranking Member Eshoo, Congressman 
Latta, and the entire subcommittee. I will be happy to answer 
any questions that I can possibly answer.
    [The prepared statement of Mr. Miller follows:]
    
    
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    Mr. Walden. We appreciate your eagerness to help us solve 
this problem, and clearly it is a problem. So thank you both 
for being here. I am sorry for what you are dealing with. It is 
our job to try and fix it, and we hope this bipartisan 
legislation will accomplish that.
    Mr. Miller, you obviously are familiar with the 
legislation. We appreciate that. And we appreciate your 
comments that you believe the bill will be effective.
    I assume, Mr. LeBeau, you believe the same, that what we 
are trying to do here will help make a difference.
    Mr. LeBeau. Yes, sir, I do.
    Mr. Walden. So, Mr. Miller, let me just move on to another. 
Just for our colleagues as well, they anticipate votes around 
3:30 to 3:45. So I am going to keep my questions just to one 
and make sure everybody has a chance here.
    Mr. Miller, you touch on this in your testimony, but what 
do you think will be the impact of the FCC's intercarrier 
compensation reforms, particularly the access charge reforms? 
And do you think that changes the economic incentives around 
the issue of routing?
    Mr. Miller. No, I don't believe it will change anything. We 
have been dealing with this reform for about I believe 4 years 
now with access reduction. And soon, as you mentioned, it would 
go down to bill and keep.
    There is more than just money involved that is an incentive 
for these least-cost routers. They don't have the networks that 
we have paid for. They don't have the maintenance that we have 
paid for. They absolutely have no standards to have to abide 
by. So if they are not doing it now, and they didn't do it 6 
years ago, I don't see them doing it 4 years from now when the 
ICC goes away.
    Mr. Walden. All right. Thank you.
    With that, I will turn to my friend from California, Ms. 
Eshoo.
    Ms. Eshoo. Thank you, gentlemen, for your testimony.
    Do you think that the bill before us takes care of 
everything that needs to be taken care of so that what you 
testified about is erased and the problems that you have been 
enduring will become part of the past? Is it enough?
    Mr. Miller. It is a great start.
    Ms. Eshoo. What else would you add to it?
    Mr. Miller. No, I believe firmly in the bill.
    Ms. Eshoo. I don't have any problems with it, but you know 
the problems you are experiencing better than I do.
    Mr. Miller. Right. I guess I am a believer as a seer. Let's 
take care of this. I believe firmly in this bill.
    Ms. Eshoo. What would the standards be that you think--I 
think the bill directs the FCC to require service quality 
standards--what would you be looking for? What do you think 
they need to do, include?
    Mr. Miller. Not enough calls to rural and urban areas to be 
completed. That is pretty simple.
    Ms. Eshoo. It kind of strikes right at the heart of the 
issue there, right?
    Mr. Miller. Yes, the FCC is the professionals at this.
    Ms. Eshoo. How many of these outfits are there that are 
doing this, what you described?
    Mr. Miller. I don't have a number for that.
    Ms. Eshoo. What would you estimate it to be?
    Mr. Miller. Hundreds, if not thousands.
    Ms. Eshoo. Geez.
    Mr. Miller. I think with a lot of knowledge, a little bit 
of money, probably I could set one up in my basement and run 
one.
    Ms. Eshoo. Wow.
    Mr. Miller. With fiber optics going a lot of places, I 
think the information highway could be sitting down in my 
basement and I could start one up, if I had the know-how. I 
don't have the know-how.
    Ms. Eshoo. No, I don't think you would do it either. You 
are too decent. But the ease with which you describe is 
disturbing.
    Well, I think that you have touched on this, how easy it is 
for someone that is unscrupulous to set up at least a cost-
routing service.
    Do you want to add anything to that, Mr. LeBeau?
    Mr. LeBeau. For me it was so frustrating that there is no, 
I think it has been said, but there is no way to, at my time in 
2012, there was no real way to prove it. I mean, it was 
Waitsfield felt like that was the issue and we switched service 
providers and the issue went away for us.
    Ms. Eshoo. So you are not experiencing any of this anymore?
    Mr. LeBeau. No, we left BCN in the 2012 and we moved to 
long-distance provider ACC.
    Ms. Eshoo. I see.
    But, Mr. Miller, you don't have that option, what was just 
described?
    Mr. Miller. We are their service providers.
    Ms. Eshoo. Oh, that is right. That is right.
    Mr. Miller. Yes, we would be his telephone company.
    Ms. Eshoo. I wish you were.
    Mr. Miller. I wish I was too.
    Ms. Eshoo. Yes, I wish you could reach him.
    Mr. Miller. I have heard good things about his products.
    Ms. Eshoo. I wish you could call him and he could get the 
call, right, and then resolve the rest of it.
    Thank you. In the interest of time I will just submit my 
questions, if I have any more, directly to you.
    Mr. Walden. Thank you. We will now turn to the gentlelady 
from Tennessee, Mrs. Blackburn.
    Mrs. Blackburn. Thank you. I appreciate that.
    And I think we all as, you can hear, have a heart for what 
is going on in rural America. And in our rural counties, I have 
got a total of 19 counties in my district, and the lack of 
reliability in the phone service, the lack of availability of 
broadband, is something that comes back in nearly every 
townhall meeting that I have. People want to know when is 
something going to be done about this. So I am appreciative for 
you all being here and for the legislation to help spur 
attention on this issue.
    Mr. Miller, I want to come to you. We are short on time 
today. But you, in order to upgrade your network, give out 600 
customers, right?
    Mr. Miller. Correct. Just under 600.
    Mrs. Blackburn. You function as an ILEC, correct?
    Mr. Miller. Correct.
    Mrs. Blackburn. And you went through USDA's RUS program and 
secured a $3.5 million loan, correct?
    Mr. Miller. Correct.
    Mrs. Blackburn. And that was used to provide fiber optics 
for your footprint, correct?
    Mr. Miller. That is correct.
    Mrs. Blackburn. OK. And let me say one more thing. You 
charged to up-charge fee to any of your customers do this, 
correct?
    Mr. Miller. Correct.
    Mrs. Blackburn. OK. And they didn't have to put down any 
kind of assessment in order to get this.
    Mr. Miller. No, ma'am.
    Mrs. Blackburn. All right. That is admirable, and I commend 
you for it.
    I want you to talk for just a minute or so about that 
process and why you did this, how you worked with RUS to do 
this, and the success you have had with that program.
    Mr. Miller. OK. Yes, absolutely. In 2005 McClure Telephone 
Company was approved for a USDA RUS loan. We got approval for 
just around $5 million. And that was to build fiber optics to 
the home throughout our exchange of McClure. It is a 35-square-
mile exchange. We average about 5.2 households per mile.
    So we secured that, and with the help of the USDA RUS, we 
made agreements that our payback would be, because of the USF, 
be used exactly what it was designed for is to maintain, 
upgrade, and provide services to our customers, access, and a 
couple other minute payback opportunities.
    With the agreement of the way that we were going to pay 
this loan back, the USDA did give us our loan, which meant that 
we charged nothing to our customers. Their phone bills which 
they had at that time or their DSL bills did not go up 
whatsoever. We built out. Our finished build was the early part 
of 2009, and we have an 85 percent take rate from all our 
customers moving to fiber optics.
    With the fiber optics, that meant we can get them a gig 
Internet speed if they wanted it. And in is at Mom and John's 
farm, the very last house of our exchange.
    I hope that answers your question.
    Mrs. Blackburn. Yes, it does. And has that improved quality 
and service throughout your entire portfolio?
    Mr. Miller. It has improved the Internet service and video 
service. It hasn't done much for the telephone.
    Mrs. Blackburn. OK. Very good. I yield back.
    Mr. Walden. The gentlelady yields back.
    The chair now recognizes Mr. Welch.
    Mr. Welch. Mr. LeBeau, go through just a couple of 
examples, you have done it a bit, of the practical challenge 
that your callers faced to do their job in that high season 
when calls were getting dropped.
    Mr. LeBeau. Well, like the customer from San Antonio, 
Texas, that was just one example. I mean, I have a phone bill 
from October of 2012 that is much, much thicker than a normal 
phone bill because I would say without hesitation that over 50 
percent of our calls, the customer had to place several calls 
to reach us, two, three and up to eight times. The frustration 
level on the end when they would get through was obvious. And 
most people put it back on us, to be honest with you. I mean, 
we don't have time to explain the situation and we take the 
blame.
    Mr. Welch. You are getting calls from people who live in 
cities where they don't have experience with these dropped 
calls. So they just don't get it.
    Mr. LeBeau. Correct. And another small issue that it is 
kind of like a side thing is that I am extremely seasonal. So I 
hire all of these temporary phone reps who aren't normal 
employees or who understand, and that puts stress back on them. 
I mean, they are trying to help us in the short 6-week window, 
and they are getting I don't want to say attacked, but dumped 
on by our customers for this call issue. I mean, it is probably 
the least, but when you are involved in this, it just adds to 
the intense nature of the situation.
    Mr. Welch. Right. And you have heard about situations with 
some of our rural schools where when there is a snow day and 
parents are calling in, even there we are getting dropped 
calls, and the parents are showing up and driving through snow 
that they shouldn't be driving through to get kids to a school 
that is closed.
    Mr. LeBeau. Yes, sir. It happened in our school district. 
They do an automated call system to alert you, and they were 
thinking the calls were going through and nobody was getting 
the message.
    Mr. Welch. Well, I just want to thank you and Mr. Miller, 
and all of the Mr. LeBeaus and Mr. Millers out there in all of 
these other districts.
    Do you want to add anything, Mr. Miller?
    Mr. Miller. No, I think you summed it up very good. And I 
thank you.
    Mr. Welch. Yes. Thank you.
    I yield back, Mr. Chair.
    Mr. Walden. Thank you, Mr. Welch.
    We will now go to the gentleman from--oh, Mr. Barton has 
arrived. We will defer to the former chairman.
    Mr. Barton. No, Mr. Chairman, I just got here, and I will 
defer to the people who have been patiently waiting their turn.
    Mr. Walden. Thank you, sir. Then we will go back to Mr. 
Latta.
    Mr. Latta. Well, again, Mr. Chairman, thanks very much for 
having and holding today's hearing. It is very important for 
this committee to know what is happening out in the rural parts 
of our country.
    And to our witnesses, Mr. LeBeau and also Mr. Miller, I 
want to thank you again for taking the time to be here today.
    And I think, Mr. Miller, if we can talk a little bit, 
because your company is about 15 miles from my house, in 
Bowling Green which is about 30,000 people. But McClure is a 
much smaller area, but it is also very important that they have 
phone service out there. And it is so important because in my 
district we have a lot of rural telephone companies, and it was 
just a couple years ago that you helped host Commissioner Pai 
from the FCC in McClure to discuss these issues.
    But could you maybe, just to start off with, could you just 
describe who your average typical customer is, maybe their 
ages, and why it is important that you have those folks have 
the service that you provide to them.
    Mr. Miller. Yes, absolutely. A lot of our customers are 
older base, and I am going to put myself in that generation. We 
are mainly going to be 40 and up. We have a lot of typical 60- 
to 80-year-olds living in McClure. Unfortunately, a lot of the 
younger ones are leaving the rural areas to go to school and 
they come back and take over the family farm or the family 
business that is there. But I would put us in the majority 
probably about 40 to 60 category.
    Mr. Latta. And also how far out do you provide service.
    Mr. Miller. We are 35 square miles we provide it and in two 
counties. And it is a very small footprint considering a lot of 
the large ones. Thirty-five square miles is just a percentage 
of theirs.
    Mr. Latta. And I notice in your testimony you stated that 
you lost a major account because of the call failures. How many 
businesses do you represent pretty much with McClure?
    Mr. Miller. We have 16 actual businesses in McClure that we 
have service with. Those don't include the home businesses. But 
16 total.
    Mr. Latta. So when people contact you and say that they are 
having a problem with call completion, how long does it take 
you to try to get the issue resolved?
    Mr. Miller. We have an average response time of 2 hours for 
any time of the day. Every customer of ours is an important 
customer, that is why we are there, is because of them. So 
typically if this business customer that they held on for 5 
years dealing with this call completion, I kept promising that 
I was going to do everything I could to get this completed, and 
a couple weeks ago I just couldn't do enough to keep him as a 
customer.
    So a typical complaint would come into myself directly, and 
they would tell us that they have had several customers trying 
to get ahold of us, they can't get ahold of us. So we would do 
our checks. We would make sure our network is operating fine. 
Make sure, number one, they have dial tone, the basics first.
    And then we would start asking them, ``How do you know this 
customer was getting ahold of you, can you get where they were 
calling from, who is their long-distance customer, the time?'' 
so we can do traces on our end. After we started doing the 
traces, it never reached our network. The call never came into 
our network. We had no opportunity to even put it into our 
computer system to get it out to that customer.
    Mr. Latta. Let me ask you this one last question. I have 
been to your company and talked with you and your employees. 
How many, besides you, folks do you have in your company?
    Mr. Miller. We have six full-time employees total. That is 
including myself.
    Mr. Latta. Well, thank you very much, Mr. Chairman. I yield 
back the balance of my time.
    Mr. Walden. Mr. Latta, thank you for your questions and 
your good work on this as well.
    We turn now to the gentleman from California, Mr. McNerney. 
Thank you for being here.
    Mr. McNerney. Well, I thank the chairman and the ranking 
member, Mr. Latta, and Mr. Welch for a bipartisan effort here. 
It is important. And 90 percent of our districts, I would say, 
have rural areas in them. So this affects almost every 
congressional district.
    Mr. Miller, the FCC has issued rules and has introduced 
several consent decrees. Why do you think we need legislation 
at this point?
    Mr. Miller. I can't speak for the FCC, but I think we need 
legislation because when this problem first came up, I want to 
say it was about 7 years ago, we have done everything in the 
process that we can. And we are still dealing with it, we are 
still reaping loss of customers, loss of revenue.
    Mr. McNerney. So FCC actions haven't been effective in 
fixing the problem?
    Mr. Miller. Correct. Yes. We would love that Congress would 
have the opportunity to say, ``This is what we need. This is 
important to our constituents, our customers. You need to do 
your job.''
    Mr. McNerney. It might be good politics too, right?
    Mr. Miller. I am sorry.
    Mr. McNerney. It might be good politics too.
    Mr. Miller. Yes, sir.
    Mr. McNerney. So the call-completion issues that result 
from least-cost routing affect both incoming calls or do they 
affect outgoing calls as well?
    Mr. Miller. They could affect both.
    Mr. McNerney. Both. So you can't tell the difference.
    Mr. Miller. Correct. No, we can't tell the difference 
because it is the way the code is called, coded, and who their 
long-distance provider is.
    Mr. McNerney. Now, I have a rural town in my district. It 
is Linden, California. Could you walk me through what happens 
to a routed phone call from the Rayburn Building here to my 
district, just as a hypothetical?
    Mr. Miller. Sure. When you pick up your phone to make that 
phone call, as soon as you dial the 1, there is a code attached 
to that number. It is not like the old switchboard days. I 
don't know if anybody ever would remember those where you would 
just call the operator and connect a line to line. Right now 
you have a code. And as soon as you would make that phone call, 
it would go to your phone company.
    Their computer would recognize that code and send it off to 
whoever is long-distance provider that you chose. And then it 
will hit multiple different basic computers that would say, 
``Nope, that number is not mine,'' send it on, send it on, and 
send it on. And as soon as it gets to the number that the 
computer says that is my number, I got my destination, and that 
is how it happens. And all that will happen in milliseconds.
    Mr. McNerney. Does each packet have to go through that?
    Mr. Miller. Yes.
    Mr. McNerney. So I can see where that would be problematic.
    Mr. Miller. Yes.
    Mr. McNerney. One quick question. Does this affect voice 
over Internet or does it just affect legacy equipment?
    Mr. Miller. No, I believe it affects everything. Anything 
associated with a telephone number will affected by this.
    Mr. McNerney. All right.
    Well, thank you, Mr. Chairman. I will yield back.
    Mr. Walden. The gentleman yields back.
    The chair now recognizes the gentleman from Illinois, Mr. 
Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman.
    I said a lot in my opening statement. But I also want to 
make the point that in some parts of rural America you don't 
have universal cell service still. So if you don't have 
universal land line service, you don't have universal service. 
So we appreciate you being here.
    I want to talk, Mr. Miller, a little bit more about this 
low-cost server or low-cost switcher which you said someone 
could do that. Don't you think the FCC should able to identify 
who these folks are? Should the FCC be tasked with finding out 
who these folks are as part of this legislative process?
    Mr. Miller. I do believe they do. They need to be 
identified.
    Mr. Shimkus. And we don't know who they are right now.
    Mr. Miller. I am sorry.
    Mr. Shimkus. We don't know who they are.
    Mr. Miller. I don't know who they are.
    Mr. Shimkus. We can't find them. FCC can't find them.
    Mr. Miller. There would be no record coming into my office, 
my switch, that would indicate who anything is.
    Mr. Shimkus. And I hope my colleagues, the authors of the 
bill, would listen, because I think that is an important 
aspect. I mean, if there is someone intervening in the 
communication system and there is a willing buyer and willing 
seller and an intermediary who is not playing by the rules, 
unfortunately. That is kind of why you have some Federal 
agencies, to make sure that people are playing by the rules. Is 
that fair to characterize?
    Mr. Miller. Yes. The orders that the FCC has came out, it 
is by the covered carriers. It does affect them. It does 
nothing to the intermediate providers or the least-cost 
routers.
    Mr. Shimkus. And I would look at the more specifics of the 
legislation. But I do think we need to figure out who these 
folks are, because they are causing a disruption in the process 
and affecting it. And I think part of the testimony is there 
really could be some situations in which human life could be at 
risk if someone is calling and you can't connect.
    Mr. Miller. Quite possibly.
    Mr. Shimkus. And I appreciate that. Mr. Chairman, I will 
also yield back my time.
    Mr. Walden. The gentleman yields back.
    The chair how recognizes Mr. Guthrie.
    Mr. Guthrie. Thank you.
    Thanks for being here on an important issues. I have some 
cities, but pretty rural district as well.
    So, Mr. Miller, in your experience, who do the consumers 
blame for these call-completion problems? I am guessing it 
isn't the low-cost router.
    Mr. Miller. They are blaming me. Not just me. I mean, my 
customers are blaming ourselves. We stereotypically get we are 
the small company, we must have the lowest-cost equipment to 
transmit that call. And plus, they can call up and talk to me. 
I think that is a great thing for them. But it is typically our 
fault, and I can't explain to them why it is not our fault.
    Mr. Guthrie. OK. Thanks.
    And then, Mr. LeBeau, in your testimony, you indicated that 
problems you experienced weren't attributable to your local 
phone company. However, as you point out, it took a while to 
realize what the problem was. Did this delay in finding the 
problem harm your business?
    Mr. LeBeau. Again, I have no proof that it harmed. My 
educated guess is that I lost customers because of it.
    Mr. Guthrie. You don't know the calls you didn't get, is 
what your point is.
    Mr. LeBeau. Exactly. And to the previous question, I would 
say that for us, the customer, they blamed us. They looked to 
us as the reason. And, I mean, they would use the excuse that 
we were rural. I mean, the phone is ringing on their end. 
Everything seems fine to them. So the problem has got to be 
with me.
    Mr. Guthrie. OK.
    Mr. LeBeau. It was difficult.
    Mr. Guthrie. Well, thanks. I just wanted to get a chance to 
expand on that.
    And I yield back my time.
    Mr. Walden. The gentleman yields back.
    The chair now recognizes the acting chairman of the Energy 
Subcommittee, the gentleman from Texas, Mr. Olson.
    Mr. Olson. I thank the chair.
    And welcome, Mr. LeBeau and Mr. Miller.
    In the interest of full disclosure, Texas 22 does not have 
the same telephone challenges as Mr. LeBeau does with the Dakin 
Family Farm in Ferrisburgh, Vermont. I know that for a fact 
because my parents retired to Waitsfield, Vermont, about 10 
years ago. Live off Common Road on Scrag Mountain. I have seen 
rural Vermont. I get your challenges. I have seen them 
firsthand. And I suspect, Mr. Miller, your challenges are 
pretty much the same as Mr. LeBeau's.
    The largest county back home in Texas 22 is my home county, 
Fort Bend County. It is mostly growing suburbs, a population 
right now of about 800,000, expected to be one million by 2020. 
But the southwest portion is still strong rural county. They 
farm cotton, sorghum, milo, a little corn. Ranches with cattle 
and horses.
    Part of that part of the county is Needville, Texas, 
population 2,823. Locals say that name is misleading. It should 
be Neednothingville, because they need nothing from the big 
city of Houston, Texas. Just keep away from us, let us see our 
stars. But they do depend on quality telephones to make sure 
that business works and get access to markets outside of Fort 
Bend County.
    My home State of Texas also has the smallest county in 
America, Loving County, population 82. The entire city, the 
whole county could sit in this room with seats to spare. I 
suspect their telephone quality isn't that good either. Eighty-
two people is not a good market.
    So my only question is real simple. We have to fix this 
problem. Who is best to fix this, FCC or Congress?
    Mr. LeBeau, first to you, my friend.
    Mr. LeBeau. I am not as well versed on this as Mr. Miller, 
but I would vote for Congress to fix this.
    Mr. Olson. Mr. Miller?
    Mr. Miller. Congress needs to step in.
    Mr. Olson. Two votes for Congress, 100 percent approval. 
Good news. I yield back.
    Mr. Walden. With that, I think we go to Ohio, Mr. Johnson. 
He is from there.
    Mr. Johnson. Thank you, Mr. Chairman. Thank you very much.
    I live in a very rural part of the Nation and represent a 
district that is very rural over in eastern and southeastern 
Ohio, so we have a lot of connectivity issues with telephones. 
So this is a really important issue for me.
    So, Mr. Miller, is there any way for your customers to know 
when they drop a call or why they have poor quality, what has 
actually happened when a call fails? And is there any way for 
you to know, after the call has failed, is there any way for 
you to know?
    Mr. Miller. Not really. The call records, once again, they 
are just not there. Sometimes they will get a poor quality 
phone call, and then they will say: Well, what is going on? 
They will blame the other person being on their cell phone or 
whatnot, and then they will both hang up and they will connect 
again at a later time and it will go through OK.
    The problem that I am running into is that our customers 
just attribute it, since it has been so long that this problem 
has gone on, they are just becoming accustomed to shoddy 
service, if I may use shoddy. I apologize.
    Mr. Johnson. No. That is a good term.
    Mr. Miller. OK. I apologize if it is not.
    Mr. Johnson. You should hear some of the terms I use when I 
drive through my district.
    Mr. Miller. And I don't ever mean to say that our service 
is shoddy, but that is what it has become because of this. I 
cannot guarantee that if I make a call right now from my hotel 
room to my office, that my phone will ring in my office. I 
think that is a direct contributor. And they became accustomed 
to it, so they stopped complaining. And that is my biggest 
fear, either they are not having the problem anymore, which I 
don't believe for a second, or if they stopped complaining.
    Mr. Johnson. OK. When you do receive complaints or if you 
receive a complaint from a customer about poor call quality due 
to a routing issue, how do you handle that?
    Mr. Miller. We look at everything that we can have. If they 
can have the person that was trying to call them call their 
long-distance company and put in a formal trouble ticket, we 
will have them do that. Out of multiple, multiple times that we 
have had this, we have only been successful one time to work 
with a larger carrier, and we were able to find the problem, 
and that problem was corrected for a matter of about 7 days, 
and then the problem started creeping back in.
    Mr. Johnson. All right. Why do you think least-cost routers 
drop calls to rural customers at such a high rate relative to 
other customers? Does this problem happen all over the country? 
Is it prevalent everywhere?
    Mr. Miller. It is a problem nationwide that they are 
dropping calls. Why do I believe? I believe because it is 
costing them 1 to 2 cents more to terminate to my area than it 
is to the closest urban area around me. So as of right now, the 
money was an incentive, and it has just gone downhill from 
there.
    Mr. Johnson. OK. All right.
    Well, Mr. Chairman, I yield back the balance of my time.
    Mr. Walden. Great. We will now go to the gentleman from 
North Dakota, Mr. Cramer.
    Mr. Cramer. Thank you, Mr. Chairman.
    Thanks to both of you for both your expertise and your 
patience with us.
    I was struck by sort of a passing question, Mr. Miller, 
that I think Mr. McNerney asked just as he was wrapping up his 
questioning about, I think it was Voice over Internet Protocol. 
I think what he was asking you was what about that, and you 
said that too.
    Could you elaborate a little bit on that, because I 
remember, I am a former regulator, and I recall one of our 
early VoIP interconnection cases, it might have even been an 
ILEC case as I recall. And of course then it was sort of new 
and exciting, and now it is becoming more prominent. And yet I 
am wondering how the technology of VoIP networks and technology 
interacts and whether that is helpful or if you see additional 
problems as it relates to this problem.
    Mr. Miller. Yes. I believe it is going to happen across the 
board. It doesn't matter if it is traditional copper telephone 
service, Voice over IP, cell phones, or anything like that. It 
is all related to a number. In some cases Voice over IP, it is 
related to an IP address. It is how that stuff is coded.
    Nothing is for free. So everything is going to get coded, 
and once it either hits the computer system that I have that is 
going to recognize only telephone numbers or the computer 
system that sits next to it that recognizes IP addresses, it is 
still going to flag the same way to go to this Xcarrier's trunk 
line so it can complete this call. And on that trunk line it is 
a matter of where they had the routers set that one of those 
could fail.
    Mr. Cramer. Thanks both of you for your testimony and your 
guidance. It is good to be part of a solution in the making, 
right, so let's hope we can help solve it. But you would be 
good in Congress because we are used to being blamed for things 
that are beyond our control as well.
    Mr. Miller. I am sweating through my suit, so I don't think 
I could handle it.
    Mr. Cramer. I yield back. Thanks.
    Mr. Walden. You have done very well. Both of you have.
    And, Mr. Cramer, thanks for being one of the cosponsors of 
this important legislation and for your contribution to it.
    We will now, I think, wrap things up with Mr. Barton, our 
former chairman of the committee.
    Mr. Barton. So just one brief statement. I missed your 
opening statements. I did glance at them. I have been briefed 
by my staff, though, and my understanding is that there is some 
concern that there are incentives by certain carriers to drop 
rural calls because they get reimbursed when they try to have 
to route the call again. Am I correct in that assumption or 
not?
    Mr. Miller. I can't answer that because I play by the 
rules.
    Mr. Barton. I am not accusing you.
    Mr. Miller. No. I don't know. I have never ventured down 
that area. My opinion, my assumption would be you are very 
correct, but I truly just don't know that.
    Mr. Barton. Mr. LeBeau.
    Mr. LeBeau. I can tell you I don't know if there are 
incentives, but for every call, when my customer dials my 800 
number, it is my long-distance perception that the call is 
being completed. So when I get my phone bill I am charged for 
that call whether or not it is.
    So when I was having the issues, as I mentioned earlier, my 
October phone bill, there are hundreds and thousands of calls 
from the same number that lasted 1 second, 2 seconds. So I was 
charged 6 cents, 5 cents for all those calls that in reality I 
never received.
    Mr. Barton. If that is a business practice that 
unscrupulous companies use, why wouldn't a solution be to 
change the law and they get one payment regardless of how many 
times the call has to be attempted to be corrected? There would 
be no incentive if they got paid one time, not three, four, 
five, or whatever. In your case, you get charged one time. 
Wouldn't that solve the problem, if there is a problem? It 
seems to me to be a pretty simple solution.
    Mr. Miller. Yes. I would have to ask you, respectfully, I 
don't know how to answer that question. It seems I would have 
to agree, but there are a lot of logistics in that that I don't 
know if that would be feasible.
    Mr. Welch. Will the gentleman yield?
    Mr. Barton. Sure.
    Mr. Welch. I think that would solve the overcharging but 
not the customer frustration.
    Mr. Barton. Right. I am just trying to take any incentive 
out. I am just a poor Aggie engineer from Texas. I don't 
understand these sophisticated hearings that we have. I know 
how to come up with a solution, and to my Aggie engineering 
mind, that is a solution. You get paid one time or you get 
charged one time regardless of how many times this high-tech 
stuff drops or adds or whatever. That is all.
    With that, Mr. Chairman, I yield back.
    Mr. Walden. I think you understate your capabilities and 
capacities. We are going to shut this down before it goes off 
the wheels, go off the track.
    I want to thank our witnesses. You have been most helpful 
in our deliberations. Sorry for what you are going through. We 
hope to move this legislation in fairly rapid form. I know we 
have a counterpart in the Senate that is taking action. And we 
are going to solve this problem one way another, and we are 
going to hold people accountable that don't follow the rules of 
the law.
    So with that, I would yield to my colleague from 
California.
    Ms. Eshoo. I appreciate it, Mr. Chairman.
    I think we need to do everything we can to make sure that 
the bills match between the Senate and the House, because this 
is not a complex bill with 103 sections to it, and get it on 
the suspension calendar and really get this thing moving so 
that it is done. I think people in all of these areas have 
waited long enough, and I think we have the capacity to do what 
I just described.
    Mr. Walden. You will be pleased to know the manager's 
amendment does that. So we are in great shape.
    Ms. Eshoo. Good. Great. Thank you.
    Mr. Walden. With that, without any comments, we will 
adjourn the subcommittee. Again, thank you for your 
participation, and see you at the next hearing.
    [Whereupon, at 3:41 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    I'm pleased to be here today to discuss a topic that is 
important to folks back in Southwest Michigan, and all over 
rural America: call quality and reliability. It has never been 
easier to pick up the phone and dial a number to be in touch 
with friends and loved ones, no matter where they are in the 
country. But for those living in rural areas, this connection 
isn't always guaranteed and folks back home are rightly 
frustrated.
    Many of us have probably experienced the very issue at hand 
today. You make a call to someone and it rings over and over 
again, but no one, not even the voicemail, picks up. Or maybe 
you place a call only to hear a pre-recorded message telling 
you that the number you dialed is not in service, leaving you 
to wonder if you dialed the wrong number or if the person you 
were calling has been disconnected from their service. And even 
in cases where you are able to connect, the sound might be 
distorted or delayed. Unfortunately, for many of my 
constituents and people living in rural areas across the 
country, this is a common occurrence.
    Unreliable service is much more than just an inconvenience 
for consumers, it's a threat to public safety and harmful to 
the rural economy. People rely on these networks to receive 
messages from their kids' schools and rural businesses depend 
on the networks to receive calls from all over the country. 
Rural consumers expect to receive dependable service, but the 
truth is that they are disproportionately plagued with failed 
calls and poor call quality. Whether it's a local business 
trying to run their day to day operations, or one family member 
trying to reach another, the result should be the same: clear 
and reliable voice service.
    I know that the FCC has made attempts to help resolve this 
issue and I commend them for their efforts. We are here today 
to continue the discussion and explore additional ways to 
resolve this problem once and for all. Poor call quality and 
reliability in rural areas is a real problem; but fortunately, 
there appear to be real solutions. It's time we set higher 
standards for the integrity of our networks, but more 
importantly, for the benefit of our constituents. Folks deserve 
to have the peace of mind that when they pick up the phone, 
their call will go though.
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