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








             PROMOTING BROADBAND INFRASTRUCTURE INVESTMENT

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

                                HEARING

                               BEFORE THE

             SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 22, 2015

                               __________

                           Serial No. 114-68




[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
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                 Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California7
LARRY BUCSHON, Indiana
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)

                                  (ii)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, prepared statement.....................................    87
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................    88
Hon. Robert E. Latta, a Representative in Congress from the State 
  of Ohio, prepared statement....................................    88
Hon. Anna G. Eshoo, a Representative in Congress from the State 
  of California, prepared statement..............................    89
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, prepared statement........................    89
Hon. David Loebsack, a Representative in Congress from the State 
  of Iowa, prepared statement....................................    90
Hon. Ben Ray Lujan, a Representative in Congress from the State 
  of New Mexico, prepared statement..............................    90

                               Witnesses

Jonathan Adelstein, President and Chief Executive Officer, PCIA..     2
    Prepared statement...........................................     5
    Answers to submitted questions...............................   130
Stephen Roe Lewis, Governor, Gila River Indian Community, State 
  of Arizona.....................................................    14
    Prepared statement...........................................    16
    Answers to submitted questions...............................   136
Craig Moffett, Partner and Senior Analyst, MoffettNathanson......    30
    Prepared statement...........................................    33
    Answers to submitted questions...............................   141
Michael Slinger, Director, Google Fiber City Teams...............    36
    Prepared statement...........................................    38
    Answers to submitted questions...............................   144
Deb Socia, Executive Director, Next Century Cities...............    44
    Prepared statement...........................................    46
    Answers to submitted questions...............................   150

                           Submitted Material

Letter of July 17, 2015, from Scott Belcher, Chief Executive 
  Officer, Telecommunications Industry Association, to Mr. Walden 
  and Ms. Eshoo, submitted by Mr. Walden.........................    91
Letter of July 22, 2015, from Chip Pickering, Chief Executive 
  Officer, Comptel, to Mr. Walden, submitted by Mr. Walden.......    97
Letter of July 22, 2015, from Steven K. Berry, President and CEO, 
  Competitive Carriers Association, to Mr. Upton, et al., 
  submitted by Mr. Walden........................................   100
Letter of July 22, 2015, from Berin Szoka, President, Tech 
  Freedom, et al., to Mr. Upton and Mr. Walden, submitted by Mr. 
  Walden.........................................................   103
Articles on broadband deployment, October 15, 2014, to July 28, 
  2015, submitted by Mr. Olson...................................   113
Resolution MSP-15-036 of the National Congress of American 
  Indians, ``Preserve the Universal Service Fund Lifeline & Link 
  Up Programs for All Tribal Lands and All Native Peoples,'' 
  submitted by Mr. Lujan.........................................   124
Resolution MSP-15-024 of the National Congress of American 
  Indians, ``Support for Policy on Universal Service Fund for 
  Voice and Broadband Services on Tribal Lands,'' submitted by 
  Mr. Lujan......................................................   127

 
             PROMOTING BROADBAND INFRASTRUCTURE INVESTMENT

                              ----------                              


                        WEDNESDAY, JULY 22, 2015

                  House of Representatives,
     Subcommittee on Communications and Technology,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 12:30 p.m., in 
room 2322 of the Rayburn House Office Building, Hon. Greg 
Walden (chairman of the subcommittee) presiding.
    Members present: Representatives Walden, Latta, Shimkus, 
Scalise, Lance, Guthrie, Olson, Bilirakis, Johnson, Long, 
Collins, Cramer, Eshoo, Doyle, Loebsack, Matsui, McNerney, 
Lujan, and Pallone (ex officio).
    Staff present: Ray Baum, Senior Policy Advisor, 
Communications and Technology; Leighton Brown, Press Assistant; 
Andy Duberstein, Deputy Press Secretary; Gene Fullano, 
Detailee, Communications and Technology; Kelsey Guyselman, 
Counsel, Communications and Technology; Grace Koh, Counsel, 
Communications and Technology; David Redl, Chief Counsel, 
Communications and Technology; Charlotte Savercool, Legislative 
Clerk; Christine Brennan, Democratic Press Secretary; Jeff 
Carroll, Democratic Staff Director; David Goldman, Democratic 
Chief Counsel, Communications and Technology; Lori Maarbjerg, 
Democratic FCC Detailee; Margaret McCarthy, Democratic Senior 
Professional Staff Member; and Timothy Robinson, Democratic 
Chief Counsel.
    Mr. Walden. If we could go ahead and get started, I am 
going to call to order the Subcommittee on Communications and 
Technology, with apologies up front that with the classified 
briefing that got scheduled at the end of last week for later 
today on the Iranian agreement--that got scheduled about the 
same time this hearing was originally scheduled to start, so we 
moved it up to now so that we could hear from this 
distinguished panel of witnesses.
    And I have asked my colleagues--and I think this is on both 
sides, because we also now have votes scheduled prior to all of 
that--we are going to dispense with our opening statements, 
which anybody who watches Congressional hearings knows is 
unprecedented in the historical annals of Congress, but they 
will all be in the official record.
    So unless there is objection from either side of the aisle, 
I would like to just proceed straight to our panel of witnesses 
for their expert testimony.
    This is an important hearing on promoting broadband 
infrastructure investment. You all are on the front lines of 
that, and we look to you for guidance, suggestions as we go 
forward.
    [Members' prepared statements appear at the conclusion of 
the hearing.]
    So we will start right out with Jonathan Adelstein, 
President and CEO, PCIA, former distinguished Commissioner of 
the Federal Communications Commission.
    Mr. Adelstein, we are delighted to have you here. Please go 
ahead with your testimony.

STATEMENTS OF JONATHAN ADELSTEIN, PRESIDENT AND CHIEF EXECUTIVE 
 OFFICER, PCIA; STEPHEN ROE LEWIS, GOVERNOR, GILA RIVER INDIAN 
COMMUNITY, STATE OF ARIZONA; CRAIG MOFFETT, PARTNER AND SENIOR 
 ANALYST, MOFFETTNATHANSON; MICHAEL SLINGER, DIRECTOR, GOOGLE 
   FIBER CITY TEAMS; AND DEB SOCIA, EXECUTIVE DIRECTOR, NEXT 
                         CENTURY CITIES

                STATEMENT OF JONATHAN ADELSTEIN

    Mr. Adelstein. The committee has shown leadership on this 
issue over many years. We appreciate the opportunity to testify 
at such a critical hearing today.
    As you said, I run PCIA. We represent the companies that 
build, design, own and manage telecommunications facilities 
around the world and in the United States. The members include 
wireless carriers, infrastructure providers, equipment 
manufacturers, and professional services firms. Our mission is 
to expand wireless broadband to everywhere, helping our members 
provide wireless facilities to meet consumers' growing mobile 
data needs any time, any place.
    The wireless infrastructure industry, as you know, plays an 
essential role in meeting that data demand that people are 
asking for so much of. Put simply, infrastructure makes 
wireless work. It enables the delivery of innovative 
applications and life-changing services like telemedicine and 
distance learning. Wireless infrastructure is a catalyst for 
economic growth and job creation. A PCIA study found that 
investments in our industry will generate $1.2 trillion--that 
is trillion with a T--in economic growth and create 1.3 million 
new jobs over 5 years.
    And this committee, as I said, has shown grown leadership, 
Mr. Chairman. You have done so much to try to eliminate 
barriers to infrastructure deployment. I commend you, and our 
industry is thrilled with the leadership of this committee. 
Most notably, section 6409(a) of the Spectrum Act of 2012 has 
had a real impact on the ground in speeding the deployment of 
4G infrastructure. It eliminated major local regulatory 
barriers to upgrading existing wireless infrastructure, and the 
FCC, I might add, has done an outstanding job on a bipartisan 
basis of implementing that law with a clear framework of rules.
    Now, we will face major challenges. Cisco projects that 
demand for wireless data is going to increase by about 700 
percent over the next 5 years, and the question is how we are 
going to meet that exploding demand for data.
    Now, one way is more spectrum, as much as we can get as 
fast as we can get it. And again, this committee has done great 
work on that front. Spectrum, as you know, is expensive, 
scarce, and takes a long time to get into actual use by 
consumer, all the more reason to move quickly.
    Another way to increase data throughput is technological 
advances that foster greater spectral efficiencies like moving 
from 2G to 4G and beyond, and the networks themselves are 
getting smarter, directing capacity where it is needed. These 
advances also take time to develop and to implement.
    A third way to meet the exploding demand for data is 
through the rapid deployment of infrastructure. Wireless 
infrastructure driven by private capital addresses the wireless 
data crunch as soon as it is deployed. Solutions range from 
traditional tall towers that provide wide coverage and capacity 
to small cells and distributed antenna systems that fill gaps 
in capacity and target high-traffic areas, intensifications of 
networks reused as existing scarce spectrum. Deploying more 
antennas closer to end users allows carriers to squeeze more 
out of existing spectrum.
    Now, there is still resistance to siting this equipment 
where it is necessary, and Congress can help even more to 
remove these barriers. One way is by streamlining the process 
of siting wireless infrastructure on Federal lands. Despite the 
law enacted by Congress with the leadership of this committee 
and an Executive Order by the President, significant challenges 
remain on Federal property. Further legislation is needed to 
facilitate access to Federal lands to expand broadband coverage 
and increased deployment in rural areas.
    PCIA supports S. 1618, which was recently introduced in the 
Senate to address this issue, and we look forward to continuing 
to work with this committee on developing legislation as well. 
Additional roadblocks remain despite the assistance this 
committee has provided. For example, some State and local 
entities require proof of need before authorizing 
infrastructure bills. These requirements are both illogical and 
costly. Local communities shouldn't be in the CTO business of 
deciding where services are needed. Our members invest their 
capital where it is needed to serve consumers and local 
governments aren't in a good position to be second-guessing 
these kind of technical questions. Continued efforts to 
harmonize the rates for pole attachments would also help 
promote broadband investment.
    The FCC has taken important steps to provide greater 
access, timing, and fair rates. States that regulate their own 
poles should follow the FCC's lead.
    In sum, wireless infrastructure boosts every sector of the 
economy. Mobile broadband is demonstrating its effectiveness in 
promoting economic growth, job creation, and global 
competitiveness yet challenges remain in reaching its full 
potential. Policymakers from Congress to local governments need 
to eliminate regulatory barriers so our industry can invest 
their capital without resistance and not add costs and delays 
that will slow the rollout of wireless broadband.
    Our member companies are very grateful for the bipartisan 
recognition of the centrality of wireless infrastructure by 
this committee, by Congress, by the administration, and by the 
FCC.
    I would add that we look forward to making continued 
progress together on some of the ideas we have laid out here 
today and other panels will share, and we thank you, and thank 
you, Ranking Member Eshoo, for joining us, and thank you for 
holding this hearing to address these urgent issues.
    [The prepared statement of Mr. Adelstein follows:]
   
   
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    Mr. Walden. Thank you, Mr. Adelstein. We appreciate your 
testimony and look forward to further discussions on these 
matters.
    We will now go to the Honorable Stephen Roe Lewis, 
Governor, Gila River Indian Community in Arizona. Governor, we 
are delighted to have you here. I enjoyed the time I was in 
your community and toured your facilities, and we are glad you 
could be here to share your thoughts on the challenges you 
face.

                 STATEMENT OF STEPHEN ROE LEWIS

    Mr. Lewis. Thank you, Chairman Walden and members of the 
committee. Thank you for the opportunity to testify on behalf 
of the Gila River Indian Community. I also want to again thank 
Chairman Walden and Mr. Lujan for visiting the community, as 
you just heard, to see firsthand the obstacles that tribes face 
in deploying broadband. And I want to thank Ranking Member 
Eshoo and Mr. Lujan for their request to have the Government 
Accounting Office, the GAO, look into the challenges and 
barriers to deployment on tribal lands.
    Our broadband provider is Gila River Telecommunications 
Incorporated, which we refer to as GRTI. It was founded in 1988 
and is wholly owned by our community. Our reservation is 
approximately 372,000 acres. We have more than 20,000 members 
and almost 12,000 community members living on our reservation. 
When we first purchased the exchange from Mountain Bell in 
1988, only 10 percent of our residents had access to basic 
phone service. More, those looking to get connected had to pay 
tens of thousands of dollars before Mountain Bell would install 
a party line connection.
    Today, GRTI offers phone service to 100 percent of our 
residents, and 84 percent of the residents subscribe. We also 
offer broadband service across the reservation. We are very 
proud of GRTI's success.
    GRTI along with the National Tribal Telecommunications 
Association work together to raise awareness about the unique 
challenges for deploying broadband on tribal lands. Tribal 
lands are the least served areas in the country. Approximately 
48 percent of tribal lands in the lower 48 States lack access 
to speeds of 10 down, one up, and 68 percent lack access to 25 
down, 3 up.
    There are a number of obstacles that present challenges to 
broadband deployment on tribal lands, and I have set those out 
with more detail in my written testimony, but I would like to 
summarize them for you here.
    First, population density is an obstacle. The Gila River, 
for example, is at 20 persons per square mile. Maricopa County, 
which is adjacent to the reservation, has approximately 414 
persons per square mile. Rugged terrain, characterized by 
mountains and hard soil, is also typical of tribal lands. Low 
median income and high rates of poverty on most reservations 
present a severe challenge for the delivery of broadband. The 
median income on our reservation is $24,000 to $59,000 in 
Arizona. Approximately 48 percent of the persons living on the 
reservation live below the poverty level compared to 15 percent 
for Arizona. These economic circumstances are not unique to our 
tribal community.
    Failed Federal policies from the past continue to 
negatively impact many tribes. Our community and others like it 
continue to struggle with the failed policy of allotment. 
Because of the allotment policy, obtaining rights-of-way in 
order to deploy broadband is complex and raises costs 
substantially and delays deployment.
    Finally, access to capital is a barrier. Tribal lands 
cannot be leveraged as collateral for securing loans because 
they are held in trust by the United States for the benefit of 
the tribe. Thus, private capital is often not available, 
meaning the only lender available is the Federal Government, 
specifically, the Rural Utilities Service. RUS loans were 
critical to GRTI when it took over its service area and remains 
critical as a Warms Springs tribe in Oregon can attest.
    The combination of these challenges has resulted in GRTI's 
average cost per loop being over $2,873. Because tribal nations 
face many unique challenges, we often need unique solutions. 
Having tribes at the table and engaging in Government-to-
Government consultation is critical. Too often, Federal 
policies have unintended consequences on tribes because we 
weren't properly consulted in the beginning.
    The current effort to reform the Universal Service Fund is 
a good example. USF is, when properly scoped, a critically 
important source of funding that can help make it possible to 
deploy broadband to our reservations.
    Tribes have offered a proposal that will target specific 
support to tribal lands through a Tribal Broadband Factor that 
could be added to proposals for a standalone broadband fund. 
Inclusion of this Tribal Broadband Factor would promote the 
targeted use of Universal Service Funding to advance the policy 
objective of ensuring that broadband is made available to all 
Americans including those living on tribal lands.
    The FCC's Office of Native American Affairs and Policy has 
been a welcome addition to the Commission's outreach efforts to 
ensure that tribes are included in the development of proposals 
to deploy more broadband but sometimes the FCC forgets about 
tribes. That is why we appreciate the letter sent to the FCC 
from a broadband group of members of this committee, reminding 
the commission that tribal leaders need a seat at the table.
    I appreciate the opportunity to speak with you today and 
hope to be an ongoing resource for the committee. Thank you.
    [The prepared statement of Mr. Lewis follows:]
    
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    Mr. Walden. Thank you, Governor. You can count on that. We 
appreciate your testimony and your insights. They are very 
valuable.
    We will go now to Craig Moffett, Senior Research Analyst, 
Moffett Nathanson. Mr. Moffett, we are delighted to have you 
here as well. Please go ahead.

                   STATEMENT OF CRAIG MOFFETT

    Mr. Moffett. Thank you, members of the subcommittee, for 
your kind invitation to participate in today's hearing.
    By way of introduction, I have been a financial analyst 
focusing on the cable and telecommunications industries for the 
past 14 years. Before that, I spent 11 years at the Boston 
Consulting Group advising telecommunications companies, so this 
is now my 25th year in the sector, and I have spent much of 
that career focused on issues of broadband deployment and 
microeconomics.
    With that in mind, I thought I would share some general 
observations today about the economics of broadband, 
particularly focusing on the economics of competitive 
broadband.
    First, I would start by saying the obvious. Infrastructure 
deployment requires the expectation of a healthy return on 
capital. That should be taken as a given but all too often in 
my experience, the issue of return on capital is either ignored 
or misunderstood in policy forums. It is not a matter of 
whether a business is or isn't profitable; it is instead a 
matter of whether a business is sufficiently profitable to 
warrant the high levels of capital investment required for the 
deployment of infrastructure.
    With that in mind, in 2014, the largest companies in the 
cable industry earned a very healthy return. The physical 
assets of Comcast, Time Warner Cable, Charter, and Cablevision, 
the four publicly traded U.S. cable operators during 2014, all 
earned healthy returns in excess of their cost of capital with 
returns ranging from 13 to 33 percent. Those returns are 
unusually high for a capital-intensive industry. On the other 
hand, it should be noted that the cable industry earned returns 
below the cost of capital for decades. Any long-term return on 
network infrastructure has to earn returns well in excess of 
the cost of capital during the maturity of that network to 
offset what were typically years or even decades of losses.
    By contrast, large incumbent telephone companies do not 
earn attractive returns on their wireline businesses. For 
example, a decade after first undertaking their FiOS fiber to 
the home buildout to 18 million homes, Verizon has not yet come 
close to earning a return in excess of their cost of capital. 
In 2014, their aggregate wired infrastructure business earned a 
paltry 1.2 percent return against a cost of capital of 5 
percent. For the nonfinancial types in the room, that is the 
equivalent of borrowing money at 5 percent interest in order to 
earn 1 percent interest. That is a good way to go bankrupt. No 
one would undertake to replicate those disastrous financial 
returns.
    AT&T, which at around the same time began deploying a much 
less robust and therefore less costly fiber to the node network 
has also earned poor returns. Their ROIC, or return on invested 
capital, has been declining for a decade and is like Verizon 
well below the cost of capital. AT&T is committed to the FCC to 
make fiber available to a total of, I know believe it is 12 \1/
2\ million homes as of what was reported last night to their 
footprint in order to make their acquisition of DIRECTV more 
palpable to policymakers, but it is hard to be optimistic that 
they will do much better this time around.
    That said, there have been some changes in the market that 
make deployment of competitive broadband networks less 
unattractive than they have been in the past. Corning has 
developed bendable fiber that has helped lower the labor cost 
of deployment. Google has popularized the concept of demand 
aggregation whereby communities pledge to subscribe to advanced 
network services before the network is built so that Google can 
target areas where the company has the best chance of earning 
an acceptable return, and while some critics would call that 
redlining as it typically means that broadband won't be built 
to the lower-income communities, it has been successful in 
boosting overall project returns, and you can think of it as a 
way of ensuring that all the children in the class really are 
above average.
    Still, the broader takeaway here is that the returns to be 
had from overbuilding, that is, being the second or third 
broadband provider in a given market are generally poor.
    So let that sink in for a moment. Simply stated, it means 
that market forces are unlikely to yield a fully competitive 
broadband market. Neither, by the way, does wireless appear to 
offer the promise of imminent competition for incumbent wired 
broadband providers. Wireless networks simply aren't engineered 
for the kind of sustained throughout required for wired 
broadband replacement services. And wireless networks, by the 
way, also generally earn relatively poor returns on capital. 
Returns for Verizon and AT&T are middling, and for Sprint and 
T-Mobile are very poor as a consequence of aggressive price 
competition in the wireless market. Neither is satellite 
broadband a compelling replacement for wired broadband in any 
but the most rural areas. Costs are high, and it is the nature 
of satellite connection that it has to travel 22,000 miles and 
back such that latency is going to be a problem.
    So the simple economic reality is that overbuilding is 
necessarily going to be somewhat limited, given relatively poor 
financial returns that can be expected, and that alternatives 
are far and few between. That naturally gives rise to the 
impulse among some to regulate incumbent networks that are 
already there. That is, it is a not unreasonable assumption 
that any attempts to foster competition will ultimately be 
unsuccessful and that regulation of incumbents, in this case, 
the cable operators, is therefore required.
    The counterargument, that regulation will only stifle 
investment among incumbent providers and will therefore make 
the problem worse and will in the process generate unwelcome, 
unintended consequences is equally well intentioned and 
unfortunately is equally well supported by the historical 
evidence. That is to say there are no easy answers here.
    I will conclude only by adding a few additional 
observations about the cable industry. As everyone understands, 
the cable video business is facing unprecedented pressure. 
Cord-cutting has been talked about for years but is finally 
starting to show up in a meaningful way in the numbers, and 
soaring programming costs are eating away at video profit 
margins. From a cable operator's perspective, the video 
business and the broadband business are opposite sides of the 
same coin. It is, after all, all one infrastructure. Pressure 
on the video profit pool will therefore naturally trigger a 
pricing response in broadband where cable operators have cable 
leverage. That may sound nefarious but it's not intended to be 
so. It is simply an observation that cable operators have 
historically benefited from the fact that their infrastructure 
can support two separate businesses and each can be delivered 
at a lower cost than if that were not the case. The ACA, or 
American Cable Association, has made this case eloquently in 
arguing that absent reforms to restrain runaway programming 
cost growth, video will be unprofitable and broadband will be 
left to carry the entire burden of incremental deployment. All 
else being equal, that will mean that even new builds of 
broadband will become increasingly economically challenged and 
therefore will become less and less likely, or as I am quick to 
add, this is my own editorial rather than ACA's point, they 
will simply have to sharply raise the price of broadband. As an 
analyst, I would simply observe that the pressures in the video 
business are relatively broad-based and are attributable to 
more than just programming cost inflation and that this may 
therefore be an unavoidable scenario.
    So I will leave my remarks there. If my remarks sound 
excessively gloomy, they are not meant to. The U.S. broadband 
infrastructure is the envy of the world notwithstanding my view 
that there are politicized and cherry-picked statistics that 
would suggest otherwise. It is simply the case that broadband 
is an infrastructure that is very difficult to support two of, 
and in some cases even one of, and I would submit that a clear-
eyed acknowledgement of the microeconomics of the broadband 
business deserves or even demands a seat at the policy table.
    So thank you, Mr. Chairman and subcommittee members, for 
your time and the opportunity to testify today.
    [The prepared statement of Mr. Moffett follows:]
   
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
   
    
    Mr. Walden. Thank you very much, Mr. Moffett. We appreciate 
your analysis.
    We will go now to Michael Slinger, Director, Google Fiber 
Cities. We welcome you. Thank you for being here, and the floor 
is yours.

                  STATEMENT OF MICHAEL SLINGER

    Mr. Slinger. Chairman Walden, Ranking Member Eshoo, and 
members of the committee, thank you for the invitation to 
testify today about investment in broadband infrastructure. We 
believe a successful agenda for bandwidth abundance will 
benefit consumers, small businesses, and the economy.
    My name is Michael Slinger, and I currently serve as the 
Director of Google Fiber City Teams. In this role, I oversee 
the operations, business strategy, and on-the-ground outreach 
to bring gigabit speeds to cities where we deploy Google Fiber 
across the United States.
    We have long believed that the next chapter of the Internet 
would be built on gigabit speeds. A gig delivers enough 
bandwidth for everyone in the home or in a small business for 
all their devices, and we know fast connections unleash 
innovation and entrepreneurship. Think about it in these terms: 
if today we are riding a bike, having a gig means that we could 
be driving a racecar. It is just that much faster.
    That is why we launched Google Fiber, which provides 
download and upload connections of up to 1,000 megabits per 
second. Our goal is to make the Web faster, more affordable, 
more relevant and more useful for everyone.
    We launched the service 5 years ago, and today it is 
available in Kansas City, Kansas; Kansas City, Missouri; 
Austin, Texas; and Provo, Utah. In addition, we are in the 
process of building out our network in six other markets and we 
are exploring bringing it to another four on top of that.
    In rolling out Google Fiber, we physically built a network 
from scratch--one street, one pole, one house at a time. This 
means reviewing infrastructure and working closely with cities 
to make sure we are ready to work together to design and build 
a brand-new network.
    This experience has given us insight into barriers to 
deployment. I will outline some thoughts on policy changes that 
could reduce delays and barriers.
    First, policymakers can ease gaining access to existing 
infrastructure. To construct high-speed networks, broadband 
providers need access to existing utility infrastructure such 
as poles, conduits on a consistent, cost-effective and timely 
basis. While the FCC has taken important steps to improve rules 
related to infrastructure access, our own experience in 
building new broadband networks demonstrates that more work 
needs to be done to reduce delays and barriers.
    Second, policymakers can easy rights-of-way. The expense 
and complexity of obtaining access to public rights-of-way in 
some jurisdictions may increase the cost and slow the pace of 
broadband deployment. Policies that facilitate partnerships 
between different entities and companies that are doing local 
construction can be beneficial. We also see a lot of benefit in 
instituting ``dig once'' policies, which may involve the 
installation of an oversized conduit bank by any new network 
builder within the right-of-way.
    Third, policymakers can help resolve the challenge of high 
rates for access to video programming. This would help smaller 
players in the business negotiate fair terms for access to 
popular broadcasts and cable content and make it easier to 
attract and retain subscribers for broadband networks.
    Finally, I would be remiss if I failed to mention the 
importance of balanced spectrum policies that promote 
innovation in the wireless sector. Federal agencies should 
pursue a balanced approach to spectrum reallocation that allows 
for licensed and unlicensed commercial uses at a variety of 
frequencies.
    I will note, as we think about deploying gigabit-speed 
networks, we need to keep in mind that about 30 percent of 
Americans still don't use the Internet at home. This means they 
are at a disadvantage when it comes to education, job 
opportunities, social and civic engagement, so one of our main 
priorities is building digital inclusion into our deployment 
plans from the beginning. We are guided by a couple of main 
principles: Make the Internet more affordable, make access a 
party of the community, and teach people how to get online.
    Just last week, as part of the Connect Home Initiative 
announced by President Obama and HUD Secretary Castro, we 
committed to bringing our Google Fiber Internet service to 
residents in select affordable housing properties across our 
Fiber cities for zero dollars per month with no installation 
fee. We are also partnering with community organizations on 
computer labs and digital literacy programming. We are grateful 
for the partners we get to work with to get more people 
connected and for your attention to this important topic.
    Thank you again for the invitation to speak at this hearing 
and to share our views on how we can remove barriers, give 
Americans more choices at higher speeds, and help reach the 
goal of nationwide broadband abundance.
    [The prepared statement of Mr. Slinger follows:]
    
    
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    Mr. Walden. Thank you, Mr. Slinger. We appreciate your 
testimony.
    And now we will go to final witness today, Deb Socia, 
Executive Director, Next Century Cities. We are delighted to 
have you here as well. Thank you, and please go ahead with your 
comments.

                     STATEMENT OF DEB SOCIA

    Ms. Socia. Good afternoon. Thank you for holding this 
hearing on such an important topic.
    My name is Deb Socia, and I am the Executive Director of 
Next Century Cities, a bipartisan city-to-city collaborative 
formed just last October. We have already grown to over 100 
member cities, all of whom are dedicated to ensuring access to 
fast, affordable and reliable broadband.
    High-speed access is essential to America's economic 
future. It is as simple as that. What can be complicated is 
making it happen on the ground. Cities face a range of 
technical, economic and political challenges including 
obstacles at the State and Federal levels. More and more, 
providing for this critical need has emerged as a core 
responsibility for local governments. Many cities and towns 
from around the country are taking diverse and creative steps 
to secure their Internet future.
    When it comes to providing access to high-quality Internet, 
everyone has a role to play. It is an issue that spans 
political party, an issue that crosses the urban-rural divide, 
and an issue that relies on many sectors of our society.
    There is no single pathway to next-generation broadband 
network, and several of the most innovative solutions have 
emerged in unexpected places. The small towns of Ammon, Idaho, 
and Mount Vernon, Washington, have each developed a gigabit 
open access network. These local governments are directly 
involved in building the physical infrastructure and then 
leasing access to competing private providers. Just outside of 
Baltimore, Westminster, Maryland, has initiated a public-
private partnership with Ting, a provider of fiber Internet 
service, and with the introduction of Google Fiber in Kansas 
City, residents there can now experience giga-level speeds at 
an affordable rate. Cities like Lafayette, Louisiana, and 
Chattanooga, Tennessee, have built their own networks and now 
have some of the fastest, most globally competitive access 
available.
    Next Century Cities is dedicated to helping all communities 
achieve high-quality access regardless of the path they choose 
to pursue. Our membership represents an inclusive cross-section 
of America from small, rural communities such as Winthrop, 
Minnesota, to large, urban areas like L.A. and Boston.
    What unites these mayors is a commitment to the imperative 
of broadband access for continued growth and an understanding 
that local governments are best situated to understand and 
provide for the needs of their residents. It is an exciting 
time, a time for creative local solutions to usher in a new 
generation of innovation as the Internet continues to transform 
all aspects of society.
    Next Century cities recently developed a policy agenda 
showing how mu stakeholders can help communities develop the 
crucial infrastructure needed today. Consistent with our 
mission, this new resource provides guidance that will be 
useful to communities regardless of how they choose to pursue 
their broadband goals.
    Part of the policy agenda looks at steps local and State 
government can use to ensure high-quality access. Locally, 
governments can institute ``dig-once'' policies that minimize 
disruption as well as take other steps to ensure their cities 
are fiber ready.
    At the State level, the policy agenda addresses changes 
such as modernizing State regulations and making investments in 
the middle mile infrastructure. But we are here on Capitol Hill 
today, and I wanted to emphasize some recommendations we heard 
from mayors about steps the Federal Government could take to 
help empower local communities. First and foremost, Congress 
can encourage competitive local markets through national 
legislation and other avenues. In addition, you have the 
ability to provide a national platform for the issue of 
broadband as necessary infrastructure. Hearings such as this 
help to elevate this discussion and attract national attention 
to this critical issue.
    And finally, the policy agenda discusses how Congress could 
better require information about available Internet access 
including speed of connection, price for consumers, and areas 
of operation for service providers.
    As is clear from everything we have heard so far today, the 
need for fast, affordable and reliable broadband Internet 
access is undeniable. Innovative leaders in communities across 
the country recognize this urgent need and are developing the 
critical broadband infrastructure that will allow their 
residents and their cities to thrive. It is evident by the over 
100 Next Century Cities I am speaking on behalf of today, 
communities that represent over 18 million Americans.
    Thank you for providing this platform for communities to 
share their experiences and develop opportunities for 
collaboration with Federal policymakers. I look forward to 
working with members of this committee and your colleagues to 
ensure that communities across the country have the next-
generation access that all Americans need and deserve.
    Thank you.
    [The prepared statement of Ms. Socia follows:]
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Mr. Walden. Ms. Socia, thank you very much for your 
testimony and your insights.
    I will start off with questions.
    Mr. Adelstein, as you probably know, the Middle Class Tax 
Relief and Job Creation Act directed the GSA--Government 
Service Agency--to develop a master contract to simplify the 
placement of wireless antennas on Federal buildings and other 
property. Last year, the Administrator of the GSA told Congress 
that the master contract was complete and available for use by 
executive landholding agencies. In your opinion, do you believe 
the GSA--General Services Administration--has done everything 
in its power to give life to the siting directives embodied in 
section 6409, which you referenced in your testimony, of the 
Middle Class Tax Relief Act? Have they done everything they 
can?
    Mr. Adelstein. Mr. Chairman, I do not believe they have. As 
a matter of fact, I am the former Administrator myself of a 
Federal agency, and if I had implemented something so poorly 
that Congress instructed me to do, I would be embarrassed, 
frankly. And it is worse than that because the Executive Branch 
as well ordered them. There is an Executive Order by the 
President of the United States directing GSA to move faster to 
try to get these master contracts together, and to date, 
nothing has been done, 3 years after Congress enacted this 
legislation. Progress has been slow. GSA hasn't been proactive. 
The law required standard rates, common forms and applications 
to provide clarity to agencies in the wireless industry, and I 
think our members now are having to negotiate for each and 
every site individually, just as they have in the past. So GSA 
has not implemented the intent of Congress, and we can't wait 3 
more years for what is needed I think today. There is an urgent 
lack of coverage on Federal lands. The administration has made 
a priority of this, this committee has made it a priority, and 
yet GSA I think has been dragging its heels. I think there 
might be need for further legislation.
    Mr. Walden. Or maybe a hearing with one witness. They 
always like those.
    I appreciate that, and for the rest of the panel, if there 
are issues you are running into with Federal siting, let us 
know because this is one we raised because it is important and 
we don't--we concur with what Commissioner Adelstein has said. 
I don't think they have got it right yet.
    Ms. Socia, traditionally network operators were given a 
monopoly exchange for the obligation to serve anyone upon 
reasonable request. In the models we have been discussing, 
carriers only deploy to areas where there is an economic case 
for the build. How do we balance sound network economies with 
the threat of redlining, a practice of refusing service to 
areas that are deemed a poor financial risk? And as I heard 
about the incredible buildout that Google is doing, which I 
applaud, representing a district that is bigger than any State 
east of the Mississippi, getting access out into our tribal 
lands, getting access out into our very remote rural 
communities, whether it is wired or wireless, remains a big 
problem. And so I wonder how we can address that better.
    Ms. Socia. I think that the interesting thing about--when 
you think about profit, I think that is a problem across the 
board with building out to these more rural locations and 
therefore requires an influx of capital. There just isn't a way 
to do this without support. But I think the ways that our 
cities are looking at what is a profit are a little bit 
different than the ways that a company might look at what a 
profit is, right? So it is about education, it is about public 
safety, it is about economic development and transportation and 
all of these opportunities that are presented when you have 
access. And so what is that worth and how do we ensure that our 
tribal lands and our rural communities can benefit in the same 
ways that other communities are able to?
    Mr. Walden. Before I go to Mr. Moffett for his comments, 
this is also an issue just to get wireless phone coverage out 
in areas of Montana, upstate New York. Elise Stefanik has made 
this case to me, our new Member from up there, that just 
getting access, getting connectivity remains a real issue. The 
job is not done.
    And so Mr. Moffett, from your perspective as an analyst, 
what do we do?
    Mr. Moffett. Well, I would certainly agree with Ms. Socia's 
comments that it is simply not realistic to think that those 
projects are going to be entirely self-funding in the more 
rural areas. That said, I think the targeting of the funds that 
are available, the Connect America funds, can be improved such 
that those funds are more carefully directed to new greenfield 
projects that really are bringing broadband to places that 
haven't been served in the past. There is always some 
controversy around whether an area is either partially served 
or sufficiently served.
    Mr. Walden. Right.
    Mr. Moffett. And then secondarily, I think it is also 
important that those Connect America funds be made available to 
all manner of companies so that there can be more competition 
of potential providers of those services.
    Mr. Walden. I want to get a quick answer from Mr. Slinger. 
Does Google have plans to try a model out in sort of rural, 
remote areas of the country to see if you can make that work?
    Mr. Slinger. Well, as you know, Fiber may not be the right 
solution technologically----
    Mr. Walden. Correct.
    Mr. Slinger [continuing]. For rural areas, and we want to 
make sure that there is sufficient spectrum available for 
unlicensed wireless technologies. As well, as you know, we are 
experimenting with balloon technology with Project Lune, and as 
well with fixed-wing aircraft out of New Mexico. So we think 
that in rural areas, it may be new technologies that are going 
to affordably bring Internet to those areas.
    Mr. Walden. I hate to cut you off, but I know we are all 
tight for time, so I will turn to my colleague from California, 
Ms. Eshoo.
    Ms. Eshoo. Thank you, Mr. Chairman, first of all for having 
this hearing and for the high level of cooperation relative to 
witnesses and invitations. We appreciate it.
    Jonathan, it is great to see you, former Commissioner at 
the FCC, and to everyone that accepted our invitation to be 
here today.
    To Mr. Slinger and Ms. Socia, first of all, thank you for 
your important advocacy for the ``dig once'' policy. I wish 
that the Congress had passed it because I think that we would 
have more of that policy actually--excuse the expression--
embedded in our Federal roadways, but how do you think, A, the 
Executive Order is working? I want to get my questions out 
first, OK, because the time is very brief, and if you think 
there are any additional steps that Congress should take to 
incent that deployment of conduit as part of the Federal 
highway projects and that system, which I don't know, right now 
it doesn't seem like the highway project system is going 
anywhere. It looks like it is being driven off the road in 
Congress. But anyway, here maybe we can concentrate on that.
    Mr. Moffett, I listened very carefully to what you said, 
and I think it is really highly pessimistic. It was depressing 
to listen to your description of every last sector of the 
telecommunications marketplace, and my question to you would 
be, where do you see a bright spot?
    To Governor Lewis, thank you for being here. You know, 
there was a report that just came in out of terms of broadband 
penetration in our country. We are 24th in the world. And I 
think that a good part of that number is a representation of 
Native Americans and reservations in our country. It is a 
shameful record. It is a shameful record. And I think if there 
is going to be something that moves up to the top of the list 
here in a bipartisan way is to see that we bring to the parts 
of the country where there are reservations that you get first-
class service for first-class citizenship. You really do. I 
mean, for students to have to be driven by their parents 65 and 
75 miles away to sit in the car in order to get some kind of 
connection to do their homework, I don't think any Member of 
Congress who is a parent here would ever put up with that. We 
shouldn't have that in our country. And I hope that Mr. Slinger 
and Governor Lewis will form a partnership and then come back 
and report to us. I would really like to have you meet and see 
what you can come up with because you both need each other and 
we need both of you.
    To Ms. Socia, does Next Century Cities support having local 
municipal systems?
    Ms. Socia. We support whatever it is our local communities 
need to do in order to get where they are going. So----
    Ms. Eshoo. Well, that doesn't answer my question, though.
    Ms. Socia. OK.
    Ms. Eshoo. It is too broad. Excuse the----
    Ms. Socia. I understand.
    Ms. Eshoo [continuing]. Term.
    Ms. Socia. Many, many of our mayors signed on to a letter 
we sent to the FCC in support of the preemption. The two cities 
that filed petitions, Chattanooga and Wilson, are two of our 
cities, and we have--we believe deeply in the idea that 
competition is important and we believe deeply in the idea that 
local folks should be able to solve their local problems in a 
way that makes sense to them.
    Ms. Eshoo. Well, I come from local government so I agree 
with you, and I think that they should have the opportunity to 
do that as well.
    Jonathan, I regularly hear from constituents who are 
frustrated with the tower siting process. Now, here is one for 
you. Everyone wants great service, the best service in the 
whole wide world, but no one wants a wireless tower in their 
backyard or where they can see it anywhere near where they 
live. So how do you respond to this, you know, the people that 
say that reforms need to be made to take away local 
jurisdiction, say, over the placement of cell towers. It is 
really a--it is like trying to get socks on an octopus. I mean, 
they want it, they don't want it. And yet there are some have-
tos in this. So those are my questions, and you have 13 seconds 
to answer them. Oh, no, you don't have any time because I am 
over time. But you can respond in writing, and that way I will 
get more meat on the bones, I think.
    So thank you for being here, and please, Mr. Slinger and 
Governor Lewis, come together, and if my office, other offices 
can help facilitate, let us know.
    Mr. Walden. The gentlelady's time is expired.
    I will turn to the vice chair of the subcommittee, Mr. 
Latta, for 5 minutes.
    Mr. Latta. Thanks, Mr. Chairman, and thanks very much to 
our panel today. It is always a great discussion that we have 
in subcommittee.
    Mr. Adelstein, if I could go back to some of the questions 
that the chairman was posing and also I think you said about 
the GSA dragging its feet in getting some of these things done, 
especially when we are talking about streamlining the process 
for providers to obtain the necessary permitting and other 
approvals needed to build on Federal lands and protected lands. 
Just out of curiosity, on average, how long does it take for a 
negotiation process with the Federal Government compared to the 
private industry? Any idea?
    Mr. Adelstein. It takes about 4 years with the Federal 
Government, less than half of that with the private sector, and 
sometimes it can drag on much longer with the Federal 
Government for many, many years. And so generally private 
companies will just avoid Federal lands because it takes so 
long. They don't see the return on investment that Craig was 
talking about and so the Federal Government is actually 
deprived of that revenue because it will go right next door if 
there is non-Federal land nearby.
    Mr. Latta. OK. When you say that then, so you are saying 
that on average it is four but can drag out even longer?
    Mr. Adelstein. That is right.
    Mr. Latta. And any ideas or examples of how long some of 
them have taken? Over 4 years?
    Mr. Adelstein. Yes, I have heard from people that it has 
taken 10 years and longer. I have heard sometimes they have 
tried and it never gets done. And there is never even a 
finality to it. There is on decision-making process that is in 
place. That is why this committee in its wisdom said that the 
GSA was supposed to take steps to standardize the process, and 
yet it hasn't been done.
    Mr. Latta. Let me follow up with that. Because of that, you 
know, 4 to 10 or who knows or maybe into infinity and beyond, 
what additional costs are incurred when the Federal Government 
is unable to streamline its process for the broadband 
infrastructure buildout?
    Mr. Adelstein. Well, there is lost revenue. There is huge 
costs trying to go through that process for the individuals who 
are trying to get the site acquisition done. It is a shame. 
Thirty percent of all the land mass in the United States is 
Federal property, especially in rural areas, and a lot of very 
valuable Federal buildings in dense urban which could use a 
facility as well to deal with the capacity demands. So it is a 
shame that these negotiations take so long, that they don't 
lead anywhere. Not only do you lose revenue that you need for 
deficit reduction, companies lose valuable places and the 
consumers lose access to service they need.
    Mr. Latta. Thank you.
    Mr. Slinger, I think in your testimony you were talking 
about the percentage of the population out there that does not 
have access to broadband, and what percentage would that be?
    Mr. Slinger. We are seeing now, the stats that we are 
seeing, is about 60 million Americans. In some of our cities 
that we are working in right now, 25 to 30 percent of people 
have never had an Internet connection at home. They may have 
access through cell phones but they don't have an Internet 
connection at home.
    Mr. Latta. OK. Just two quick follow-ups on that then 
because again, I represent from urban to very, very rural, and 
when you look at the numbers then or the percentages, what 
percentage of that would be urban, suburban, very rural and 
that percentage when you talk about that? Was it 60 million?
    Mr. Slinger. Yes.
    Mr. Latta. And how would that break down, and also, how 
many people would that include that would not want to have 
access to broadband?
    Mr. Slinger. I don't have a breakdown of urban versus rural 
within the numbers but again, in urban areas, I can say in many 
cities that 25 percent, 30 percent of these cities, residents 
don't have anything at home at all, no Internet connection.
    Mr. Latta. Thank you.
    Governor, if I could turn to you, and again, thanks very 
much for being here with us today and for your testimony. 
Because again, you said that you have, you know, a very, very 
rural population, I think you said that you have 20 persons per 
square mile, and you know, it is of great concern in your area 
along with all the rural areas in the country about having that 
essential broadband for our constituents, and you talked about 
the USF and that that would help you, but are there other areas 
besides the USF that you could see that would be of benefit to 
you and your community?
    Mr. Lewis. Thank you for that question, and first of all, I 
would like to recognize that I have two of my council members 
here, Councilman Devin Redbird and Councilwoman Caroline 
Williams, and also from our GRTI, Gila River 
Telecommunications, Belinda Nelson and Pamela Thomas from the 
Gila River Community.
    Mr. Latta. Thank you.
    Mr. Lewis. Thank you. And I would say that one critical 
issue is rights-of-way, and you know, rights-of-way is a 
challenge where it is a complex issue. It has to do with the 
nature of tribal land. It goes back, as I said, to the 
allotment policy that has a devastating effect on tribal lands, 
and so the short answer is that GRTI in regards to rights-of-
way, if they do not get rights-of-ways, we have to build around 
it, and of course, that costs--it is very capital-intensive, 
and so we either have to move to another route or where we can 
in some cases have to build a wireless link to go over the 
right-of-way, and obviously this is pretty costly as compared 
to trenching through an established right-of-way, but sometimes 
this is our only course of action. That is an issue that, you 
know, we really need to look at.
    Another is the ETC designation process, which is overly 
complicated, and so streamlining of that ETC designation 
process would be welcome to many tribes.
    Mr. Latta. Well, thank you very much, and Mr. Chairman, my 
time is expired and I yield back.
    Mr. Walden. Thank you.
    We will now recognize the gentleman from New Jersey, Mr. 
Pallone, for 5 minutes.
    Mr. Pallone. Thank you, Mr. Chairman.
    I want to get one question in to Mr. Adelstein about 
infrastructure during disasters like Hurricane Sandy, but then 
I want to get a question in to Governor Lewis, so I am trying 
to split this up.
    Three years ago, Hurricane Sandy devastated my district. 
The force of the storm knocked out some communication for days. 
Mr. Adelstein, you testified about all the wireless 
infrastructure that is being deployed and upgraded across the 
country, and I support all this deployment, but my constituents 
are also concerned about whether the equipment works in a 
disaster.
    So what is your industry doing to make sure people can call 
for help and reach loved ones in an emergency, and what do you 
think of the FCC's work to improve resiliency?
    Mr. Adelstein. Well, ensuring----
    Mr. Pallone. Two minutes.
    Mr. Adelstein. Ensuring reliable access to 
telecommunications is a real top priority for our industry. We 
want to make sure all of the customers get access when they 
need it most, which is in a disaster. You know, during 
Hurricane Sandy, we saw cooperation, for example, between T-
Mobile and AT&T that agreed to share each other's network in 
the region affected by the storm and share their network 
operations centers. I would say that in terms of the structures 
themselves, not one of them went down during the storm, not 
one. The issue was things that were beyond the control--power 
companies, access to roads, trees that fell. But what makes it 
difficult is that sometimes we can't even get generators sited 
on these things. Going back to the issue of this committee, we 
find from localities that you can't put a generator there 
because it violates a noise statute. It is only going to be 
used in a time of emergency. I don't think anybody in the 
neighborhood would complain about the noise of a generator when 
otherwise their wouldn't work, and yet localities will not 
allow us to put them there and then complain when the system 
doesn't work in a disaster. We need more proactive thinking 
about having backup power and facilitating access to it.
    And one more point to add, which is the best thing you can 
do for reliability is redundancy. The more these facilities are 
up, the more likely you are going to have one that works in a 
time of emergency. So all the work done by this committee to 
promote deployment is promoting redundancy and ensuring that 
there will be adequate facilities in case of emergency and more 
likelihood that they will survive the disaster and be available 
for use of public safety as well as for the citizens in the 
community.
    Mr. Pallone. Do you want to comment on the FCC's work? 
Because Chairman Wheeler committed to me that the FCC would act 
by the end of the year to complete its rulemaking on improving 
wireless network resiliency.
    Mr. Adelstein. We are thrilled with what the FCC is doing. 
We have worked very closely with Chairman Wheeler and the other 
members of the Commission that are looking at a cooperative 
arrangement where we can try to provide incentives for industry 
to deploy this kind of equipment. I think industry is doing a 
lot already, making major investments in things like backup 
power, and we are working together with them in a very 
cooperative fashion. We believe that the goals are shared in 
making sure that these networks are resilient and redundant.
    Mr. Pallone. All right. Thank you.
    Let me go to Governor Lewis, and I should say that I love 
the Gila River Reservation. I haven't been there in a long 
time. It is about time I go back.
    But you know, on the one hand I was thinking that I guess 
relative to many tribes, you might have more ability than even 
some of the, you know, more remote or even poorer tribes, if 
you will, to achieve some of the goals that you mentioned. So I 
just wanted to ask about funding. You mentioned the Universal 
Service Fund. I guess the gentleman from Google talked about 
this Connect Home Initiative. I think the President was 
actually at the Choctaw Reservation last week or so talking 
about that.
    I mean, what are these sources of funding? Is the Universal 
Service Fund useful to you now? What would we have to do to 
improve it? You know, what could the Federal Government do in 
terms of funding for tribal infrastructure, particularly for 
those tribes that might have even more difficulty. I am 
thinking of like the Pueblos in New Mexico or the tribes at the 
Grand Canyon, you know, smaller than Gila River, less funding 
available. How are these funds helpful to you, the ones that we 
do have, these programs that we do have, or are they?
    Mr. Lewis. Thank you, Congressman Pallone, and you are 
always welcome at the Gila River Indian Community.
    And with USF funding, stable funding mechanisms are 
critical to businesses like GRTI and those in Indian Country 
where they have to develop deployment plans and rely on Federal 
funding sources to be there to begin with. Now, our U.S. 
funding is critical as well for providing funding for 
infrastructure buildout, and that is critical to the long-term 
sustainability of these telecommunications providers in Indian 
County.
    Mr. Pallone. Now, are you using funds from Universal 
Service now?
    Mr. Lewis. Yes, we are.
    Mr. Pallone. And how is that working? What does it mean? 
How do you do it?
    Mr. Lewis. That is critical to the overall business plan of 
Gila River Telecommunications. You know, they rely on that 
source of income moving forward. It is critical to the long-
term business outlook. And also in regards to long-term capital 
buildout as well.
    Mr. Pallone. All right. Thank you.
    Thank you, Mr. Chairman.
    Mr. Walden. The gentleman's time is expired.
    The Chair now recognizes the gentleman from Illinois, Mr. 
Shimkus, for 5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman. It is a great panel. 
I appreciate you all being here.
    I want to go to Adelstein, Commissioner, and Governor Lewis 
real quick to highlight the challenges because especially the 
environmental review process, especially on Federal lands, is a 
burden. So have you thought through how local municipalities 
and they do their zoning outside of Federal lands and how we 
could marry that with which goes on there and can you comment 
on that?
    Mr. Adelstein. Yes. You know, some localities are great, 
and what we heard today from Google, from Ms. Socia, is that 
those communities that promote broadband make it easier to get 
access, and that is where the investment goes, and those that 
throw up roadblocks, not to name any specific parts of the 
country represented by folks here but there are some that 
aren't seeing investment they would get if they weren't 
throwing up roadblocks, and to the question of Congresswoman 
Eshoo about, you know, people saying not in my backyard, they 
are not going to have service in their backyard. So we work 
very cooperatively with local communities. I mean, we try to--
every single facility that has been sited has been sited in 
cooperation with local government. But to have it to be dragged 
out, it took the work of this committee to say you don't have 
to get another zoning hearing for something that has already 
been zoned to put a 4G antenna up on a tower that is already 
there. Why should the committee have to do that? Increasingly, 
communities are recognizing this. The smart ones are moving 
ahead. Ten States have enacted laws in the last several years 
since 2013 to streamline deployment in their States, and those 
States are seeing more investment. They are working with local 
partners, the National Association of Counties, the National 
League of Cities and others to get out word about the way the 
FCC is implementing the law that you passed. Commissioner 
Cliburn asked us to go out----
    Mr. Shimkus. Let me get to Governor Lewis on the Federal 
properties because that is another big challenge because they 
have got to get past the Government land issue, and Governor, 
really, the question is, can't we force a zoning issue, get you 
guys the zoning ability like we do municipalities?
    Mr. Adelstein. Yes. You know, there is a bill that was 
introduced in the other body by Senator Rubio that would create 
a standard fee schedule, fee retention for the agency that the 
agency could keep the money they get from that to pay for the 
cost of processing it. There would be common forms and 
contracts, which you have already tried to get enacted, but 
there is a need for more legislation to get them to do what you 
asked them to do already. There is an expectancy of lease 
renewals, so when somebody invest there, they are not going to 
get cut off.
    Mr. Shimkus. Let me get Governor Lewis to respond.
    Mr. Lewis. Federal lands in Indian Country, that has been a 
long issue in regards to, you know, our unique situation as 
Indian tribes and the nature of Indian land in regards to 
highly fractionated land interest that, you know, are just so 
critical and sometimes are one of the major obstacles to 
buildout in regarding to getting right-of-ways. If we can 
somehow streamline that process through the Bureau of Indian 
Affairs, through the Department of Interior, that would greatly 
help out tribal infrastructure buildout in the future.
    Mr. Shimkus. Great. Thank you.
    Mr. Slinger, let me go to you real quick. My largest 
community in my Congressional district is 33,000 people. When 
do you think Google would hit that community on your timeline?
    Mr. Walden. Did you want to name that community?
    Mr. Shimkus. But I am not the chairman of the committee so 
I don't have as much power.
    Mr. Slinger. Well, you know, we published this Fiber 
checklist so that we can, as Mr. Adelstein said, get cities to 
ready by themselves for Fiber deployment, whether it is Google 
Fiber or any other provider, by making sure that they have 
smooth permitting processes that allow for a large volume of 
permits to go through to make it easy for people to get onto 
telephone poles through streamlined make-ready engineering and 
construction.
    Mr. Shimkus. So it is the same type of debate as we are 
talking with the rural or the Federal lands deployment, the 
ease of being able to have access and a timely response.
    And let me finish up with Mr. Moffett. It is all about 
return on investment--I don't care how people want to marry 
it--if you believe in the capital model. So if a rural area 
can't make a go based upon the formula, then you have to be 
able to dip into RUS or other forms of low-interest loans to 
make the business sense. Is that correct?
    Mr. Moffett. That is exactly correct.
    Mr. Shimkus. And also, time is money. So any delay, as what 
we have just talked about here, affects the ability for someone 
to go to the capital markets to make a pitch that they are 
going to get their return on investment that you propose.
    Mr. Moffett. That is correct as well, yes.
    Mr. Shimkus. Thank you, Mr. Chairman. I yield back my time.
    Mr. Walden. The gentleman yields back his time.
    The Chair now goes to the gentleman from Pennsylvania, Mr. 
Doyle, for 5 minutes.
    Mr. Doyle. Thank you, Mr. Chairman. Thank you for this 
excellent hearing and this excellent panel.
    Jonathan, welcome back.
    Mr. Adelstein. Thank you.
    Mr. Doyle. Broadband infrastructure has become a critical 
component to almost every facet of our daily lives from 
students using Blackboard for school or watching Netflix and 
Amazon to stream movies and TV shows, and by all levels of 
Government to communicate with citizens and increasingly 
leverage the network to improve the delivery and efficiency of 
services.
    Pittsburgh in partnership with Carnegie Mellon University 
and Google is deploying a connected platform that will 
integrate road sensors, traffic cameras and information kiosks 
to create a living laboratory at a city scale for the next-
generation technologies. This platform will be used to improve 
traffic patterns in real time, allowing city departments to 
efficiently predict road wear and schedule maintenance and to 
allow people to explore and interact with the city more 
effectively. Fast, available and ubiquitous broadband 
infrastructure provides the basis for these next-generation 
solutions.
    I for one am a big fan of making every tool in the toolbox 
available to local governments to make sure that they have 
access to the best networks and the best platforms in order to 
improve the lives of the people living there.
    Mr. Chairman, I would love to work with you on putting 
together some legislation to address some of these challenges.
    Let me start with Ms. Socia. How can localities leverage 
shared infrastructure to expand access and increase the 
deployment of broadband? As cities like Pittsburgh build this 
infrastructure to address our own municipal needs, how can we 
and other municipalities use what we are building to expand 
access more broadly and what, if anything, stands in the way of 
municipalities leveraging the infrastructure?
    Ms. Socia. Really interesting work has been done all over 
the country, as you suggested. Many of our cities are using 
smart infrastructure to do really interesting work, determine 
particulates in the air and checking asthma rates and using 
streetlights that also have cameras in them for public safety. 
We are seeing a lot more of that happen, and I think there are 
barriers for cities to doing this work as well, and some of 
them are the State regulations that prohibit their building out 
their own infrastructure, and in some case, it is, as was 
mentioned earlier, issues of how densely populated, the 
circumstances of their current financial situation. All of 
those things impact the capacity of a city to actually build 
out their own.
    Mr. Doyle. Thank you.
    Mr. Slinger, I am curious. What dividends has Google Fiber 
found in communities where you have deployed your gigabit 
broadband to? Has it impacted jobs or the local economy or 
education or local government? What are you finding in these 
communities?
    Mr. Slinger. Yes, we are seeing a great economic impact in 
the cities that we are in. There have been reports that Kansas 
City, Missouri, is not working on an economic impact analysis. 
Let me start by saying there are certain categories of 
employees where there is no unemployment, because obviously 
when you build a big network, there is a lot of demand for jobs 
for certain types of labor, and I think last week the Fiber to 
the Home Council released some research that showed that GDP 
growth in cities with a gig network rises and the average cost 
per home or, you know, value of a home goes up 3.1 percent in 
those cities, and that is new data from about a week ago.
    But we also see, and we have heard from Mayor Holland and 
Mayor James in Kansas City that they have seen it as a draw to 
regional economic development. Other companies when deciding 
where to locate in the Midwest will now look at Kansas City and 
say hey, this place has a gig network, let us join.
    Mr. Doyle. I am curious too about the discrepancies that 
exist between price and speed. In Pittsburgh, for instance, I 
can get 500 megabits a second but it will cost me about $400 a 
month. When we look at cities like Chattanooga and Kansas City 
and Austin and other cities, residents can get a gig for less 
than $100. I am curious, maybe Mr. Moffett and Mr. Slinger and 
Ms. Socia, you could comment on why you think these 
discrepancies exist.
    Mr. Moffett. Thank you for the question. My observation 
would be, you are right, there are a very wide range of 
economic models, and it is a challenge because there is no 
near-term variable cost that dictates a cost-plus model and so 
you see a lot of companies experimenting with different prices, 
in part because they are trying to figure out what the quantity 
demanded will be at different prices.
    The challenge--but obviously you tend to have lower prices 
where you have multiple competing networks and then again it 
raises the question of whether the providers are earning a 
sufficient return at the market share and the prices that they 
are charging. In many cases they are not. This is a very 
difficult area to do economic research, however, because you 
will find that there are a lot of the companies who have 
different motives rather than simply profitability of the 
network itself.
    Mr. Doyle. I want to give Mr. Slinger just a--because I 
know our time is up.
    Mr. Walden. Yes, we have go to----
    Mr. Slinger. Well, I would say that if you look at the 
cities in which we are already operating or cities where we 
have announced, we have seen incumbent prices drop immediately 
and speeds go up, so I think there is more room there.
    Mr. Doyle. Thank you. Thank you, Mr. Chairman.
    Mr. Walden. We will now go to the gentleman from Louisiana, 
the Whip of the House, Mr. Scalise, for 5 minutes.
    Mr. Scalise. Thank you, Mr. Chairman. I appreciate you 
having this hearing.
    Mr. Adelstein, I know you talked in your opening statement 
about a lot of the work that has been done to expand spectrum, 
of course, a lot of that within this committee where we have 
come together to make more spectrum available. I know the 
chairman has been a great leader in that effort too.
    One part of that equation absolutely is expanding more 
spectrum, and then of course, the other part of that is your 
members--where you all come to actually build it out and to 
build that infrastructure to take advantage of the new 
spectrum. If you could maybe share with us some of the 
challenges or hurdles that your members face to make the 
investment that they need to make to take advantage of that 
spectrum and hopefully even make more spectrum available in the 
marketplace?
    Mr. Adelstein. Yes. You know, spectrum has been quite a 
hurdle. You saw that $41 billion was spent for a limited amount 
of spectrum recently, basically 65 megabits.
    Mr. Scalise. It is a little bit better than the CBO 
estimate, Mr. Chairman, wasn't it?
    Mr. Walden. Which was zero, and it was $41.9 billion.
    Mr. Scalise. Hopefully the CBO recognizes the value of the 
spectrum that clearly everyone else seems to know about.
    Mr. Adelstein. I think the CBO estimated zero, and it was 
$41.9 billion, so they were off----
    Mr. Scalise. They were off by a little bit there.
    Mr. Adelstein. 41.9, yes. But the fact it, that was for a 
12 percent increase in the available commercial mobile 
spectrum. So you just got a 12 percent increase in the 
throughput and you have 700 percent you need in the next 5 
years. So we are down to 688 percent, a long way to go to build 
out to meet the needs of people, and as I said, local 
communities often are saying no to these facilities. We have--
the business case has to be made in rural areas as we have 
discussed today, and overall investment is very difficult with 
those prices for spectrum. We can't afford to have regulatory 
drag on these investments, slowing them down, making it more 
expensive when there is not enough capital to build out to meet 
these needs already. I like to joke, you know you are in 
trouble when you quick solution is infrastructure, but that is 
kind of where we are at in this country, and as slow as it is, 
it is immediately available when it is built if you take that 
same spectrum and reuse it. So all of these burdens on Federal 
lands, in urban areas, the FCC has done a great job, this 
committee has done a great job of trying to address that, but 
we need to work with our partners and State and local 
governments as well.
    Mr. Scalise. And clearly on Federal lands too, we have been 
grappling with that here trying to remove some of those 
burdens, not just in the spectrum space but in a whole lot of 
other areas, especially as it relates to energy production 
where Federal lands and even in the local areas, some of those 
restrictions make it really hard to experience a lot of the 
economic opportunity we can. Thanks for that answer.
    Mr. Moffett, I want to ask you, in some of your analysis, 
if you could share with us some of the similar challenges 
that--you know, what are some actions maybe that Congress or 
the FCC can take to further expand the opportunities for WiFi, 
for broadband?
    Mr. Moffett. Well, as I said earlier, I think there are 
opportunities in Connect America Funds and making those 
available to a wider range of companies for bringing broadband 
to rural areas, but there is an overarching question here, and 
it relates to the question that Ranking Member Eshoo asked 
earlier about where are the bright spots. If you think about 
this as a larger value chain of microeconomics from everything 
from the content companies and the internet providers to the 
infrastructure providers, where the bright spots are is very 
clearly outside of infrastructure. The apps developers and the 
content companies are actually earning extraordinary returns, 
and there is a very knee-jerk and familiar regulatory impulse 
to say let's try to protect the companies that are making very 
high returns from the ones that are making very low returns. As 
an economist, that is a very odd structure.
    Mr. Scalise. Well, final question as I am running out of 
time, Mr. Slinger. When Google Fiber was being deployed, it has 
been reported you all were able to work with some local 
governments that gave some exemptions, maybe some expedited 
approval processes so that not just your but other new entrants 
were able to move things a lot quicker. If you can talk in 
general about the ability for more local governments to take 
more of that deregulatory approach and how deregulation in a 
sense of helping expedite the expansion of technology has 
helped you and could help others to develop even more 
broadband?
    Mr. Slinger. Sure. And I am going to go back to the Fiber 
checklist which we published in 2014. Some of our major 
barriers obviously are getting access to poles and making it 
easy to do the make-ready construction and get the poles ready. 
One thing that has been suggested, I believe by the Fiber to 
Home Council, was if municipalities took a proactive step in 
doing pole maintenance, and while they are doing pole 
maintenance, if they could do that make ready, get rid of the 
old wires that aren't needed and make slots that would allow 
new entrants, Google Fiber or any other entrant, to get in 
quickly and attach to poles, that is one thing that would 
really help.
    And again, ``dig once'' policies and access to the right-
of-way, there is more we can do with local communities and more 
we could do with Federal highways to make sure that if someone 
is ripping up a road to do construction or repaving, that we 
put in conduit that anyone can use. Those are just smart 
things. They allow new market entrants and ultimately more 
competition and choice at the local level.
    Mr. Scalise. Thanks for your answers. I yield back the 
balance of my time.
    Mr. Walden. The gentleman yields back the balance of his 
time.
    Unfortunately, we are going to have to pull this to a close 
because we are down to about 4 minutes left in the vote.
    This is not the last hearing. We expect to continue this 
work going forward. Your testimony has just gotten us to a 
really good starting place. We have a lot more work to do, some 
follow-up to do.
    I know there are members who didn't get a chance to ask 
questions. We do have information to submit for the record, 
including from TIA, Comptel, CCA, Tech Freedom.
    Mr. Walden. Mr. Olson, I believe you had a document you 
wanted to submit, some articles on broadband deployment.
    [The information appears at the conclusion of the hearing.]
    Mr. Walden. And with that, I am afraid we are going to--
unless, Ms. Matsui, do you want just a minute or two?
    Ms. Matsui. Yes, just a minute or two.
    Mr. Walden. Go ahead.
    Ms. Matsui. I was curious, I wanted to ask Mr. Slinger some 
questions. I find what you are talking about very interesting 
because I look at this, and what you say is all very important 
about deploying broadband infrastructure, and I am from 
Sacramento, so we have wonderful areas that are doing great 
things. I am looking at a particular area in our city that is 
economically deprived, and we have a light-rail station that is 
going to be--a light-rail line that is going to be completed 
there with fiber and transit-oriented development stations. But 
yet we have schools and libraries that are just deprived and 
businesspeople there who just have no access. If we were to do 
something there, and I don't know whether we can have a special 
project, but I'm looking at this being very, very special for 
economic development. Is that something that we can provide the 
access, as you say that you need, is that something that you or 
somebody else can take on as a project working with us? Because 
I am trying very much to help this area that feels very 
deprived, looking at the rest of my district that feel like 
they are on the move and they are not on the move, and I want 
to get them on the move if there is something we could do 
there.
    Mr. Slinger. Yes. There is a lot that we do really early 
stage with all the cities that we look at to make sure that 
they have the right kind of digital inclusion plans in place 
early, to make sure that the cities have a focus on it, and 
again, there is no silver bullet with any one company but we 
want to make sure that all providers and local community groups 
take this on, and as Fiber or any other technology is built out 
in those areas to really make sure people understand the 
relevancy of the Web, and hopefully get more people online.
    Ms. Matsui. OK. Well, thank you very much, and thank you, 
Mr. Chairman.
    Mr. Walden. Thank you.
    We are going to have to call it to a conclusion here. 
Again, we do have votes on the House floor followed by the 
Iranian briefing. So thank you to all of you for your 
testimony, your counsel. We look forward to being back in touch 
with you as we move forward and to others who have ideas for 
the Congress on how we can expand access to affordable 
broadband across the country, on Indian reservations, rural 
communities, urban communities, wherever it is not.
    And we have some tribal letters for the record as well from 
Mr. Lujan, which we are happy to accept.
    [The information appears at the conclusion of the hearing.]
    Mr. Walden. And with that, we will adjourn.
    [Whereupon, at 1:41 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Greg Walden

    Welcome to the Subcommittee on Communications and 
Technology's hearing on Promoting Broadband Infrastructure 
Investment. Broadband Internet access has become the 
communications and commerce tool of our time. Whether it's 
renewing your car registration, streaming the latest episode of 
Silicon Valley, or video chatting with friends and family, 
broadband has fundamentally changed the way approach so many 
things. It has literally changed the old rules for how we live 
our lives. Which begs the question: why are we using old rules 
to regulate new networks?
    The broadband market has changed significantly from its 
early days, and continues to evolve to meet our society's 
needs. Every city now wants to be a ``Gig City,'' to attract 
the best and brightest entrepreneurs and to galvanize their 
economies. And our rural and tribal areas want to ensure that 
they are not left behind their urban counterparts.
    Unsurprisingly, Americans are finding varied ways to meet 
this demand.
    Trillions of dollars--public and private--have been 
invested in American broadband networks since 1996. According 
to one study, the U.S. broadband sector invests twice as much 
per household as its European counterpart. And USTelecom 
estimates that in 2014 alone, broadband providers spent $78 
billion in capital expenditures to continue to grow and upgrade 
the national broadband infrastructure.
    New entrants have also joined the picture. Although Google 
is one of the better-known entrants, other start-ups have 
jumped in to meet demand. US Internet, a wild card small start-
up, is taking on incumbents by stringing 1 Gigabit fiber across 
the poles of Minneapolis. Dan Gilbert is backing Rocket Fiber, 
a startup in Detroit, to trench 1-Gigabit fiber throughout the 
town.
    In other instances, municipalities have built networks or 
crafted private public partnerships to bring 1-Gigabit networks 
to their town. For example, Ting has worked with Westminster, 
Maryland, and Charlottesville, Virginia, to bring high-speed 
broadband to those towns. Others are working to help 
municipalities determine the best course for accelerating 
broadband access. Former FCC official Blair Levin has launched 
Gig U.--an organization dedicated to facilitating buildout of 
high-speed network. And Deb Socia, our guest today, heads Next 
Century Cities, which helps cities and towns collect their 
experiences in attracting private investment, and--when 
necessary--procuring and deploying municipal networks.
    Despite the clear demand for high-speed services, 
investment in network infrastructure is not for the faint of 
heart. A staggering amount of capital is required to deploy 
fiber, antennas, routers, and switches to build a network with 
useful scale. Those who invest often won't see returns for 
years; and the return comes only if the service satisfies 
enough customers to keep them coming back. There are real 
challenges to investing in broadband infrastructure, our laws 
shouldn't be among them.
    With new players and incumbents looking to invest in 
infrastructure and compete for customers on the networks of 
tomorrow, the Federal Government should find ways to encourage 
deployment and eliminate barriers. Despite repeated calls to 
facilitate access to Federal lands and buildings, to simplify 
and expedite access to utility poles, and improve the process 
for tower and cell siting, these still present hurdles to 
efficient investment and deployment. Nor have we solved the 
issues that come with deploying on tribal lands, where the need 
to improve the communications network is very real.
    We hope that today's hearing will start a discussion that 
reinvigorates a national debate on the best policies for 
continuing the model of private network investment that has 
made the United States a world leader in broadband. I'd like to 
thank our witnesses in advance for their testimony. We are 
looking forward to your insights.

                 Prepared statement of Hon. Fred Upton

    Communications and commerce have never been easier, thanks 
to the networks that comprise the Internet. As a world leader 
in broadband, we take for granted what an expensive and 
immensely challenging task it is to build, maintain, and 
upgrade the networks necessary to drive the modern information 
society. There is an incredible infrastructure that makes tasks 
that once took hours and even days as simple and as instant as 
a click or a swipe. In Michigan and across the country, we all 
are reaping the benefits. But if we, as a country, are to 
continue our leadership in the global technology industry, we 
must have policies that promote investment in the 
infrastructure to support it.
    This committee has always encouraged and promoted the 
deployment of communications facilities, and I am glad we have 
witnesses with such different backgrounds providing their 
unique insights today. My hope is that the discussion today 
will shed light on challenges to the economics of broadband 
networks and ideas that will help us replicate conditions that 
have already led to successful broadband deployment.

               Prepared statement of Hon. Robert E. Latta

    Thank you, Mr. Chairman. I appreciate you holding this 
hearing today and I thank our panel of witnesses for testifying 
on this important issue.
    Access to broadband is essential. It is a primary driver of 
economic development and it empowers and connects communities--
especially rural communities like I represent in Ohio. 
Americans are increasingly connected to networked and wireless 
devices forcing broadband networks to grow in both scale and 
scope to keep pace with consumer demands. That is why we need 
to seek opportunities to maximize buildout of broadband 
facilities, such as utilizing Federal lands and buildings as 
access points for broadband deployment of wireless antennas.
    Our Nation's free-market, private-investment approach to 
broadband expansion has been very successful; therefore, I hope 
today we can identify policies that further encourage and 
advance investment in broadband infrastructure. Thank you, Mr. 
Chairman.

                Prepared statement of Hon. Anna G. Eshoo

    In the early 2000s, access to a broadband connection was 
considered a luxury. If you could download a music file in mere 
minutes, you were living the high life. In just a few short 
years, much has changed. Today, broadband access is ubiquitous 
with access to employment opportunities, education, health care 
and commerce. It's used for advanced research among our 
academic elite, and it's a conduit of democracy for a new 
generation of voters.
    Yet 55 million Americans lack access to the broadband 
speeds needed to unlock everything the Internet has to offer. 
Equally alarming is the fact that more than half of U.S. 
households have just one choice for high-speed broadband 
service. Despite an impressive $46 billion investment by the 
top four telecom and cable companies last year, the U.S. still 
ranks 17th globally in Internet speed.
    The fact of the matter is that there won't be another $7 
billion broadband stimulus anytime soon. So ``bold'' and 
``innovative'' should be our operative words when discussing 
broadband deployment policies. This is about our collective 
future. So where should we be bold, and where can we be 
innovative?
    For years I've advocated for a ``dig-once'' policy. Quite 
simply, broadband conduit should be included during the 
construction of Federal highways just as gas and electric lines 
are. Recognizing the enormous benefits of this cost saving 
measure, President Obama included it as part of a 2012 
Executive Order to accelerate broadband infrastructure 
deployment.
    Many new broadband entrants also face challenges in 
accessing utility poles and other rights-of-way. According to 
former FCC Chairman Reed Hundt, the use of existing poles is 
nearly a tenth of the cost of having to dig underground 
trenches through streets and sidewalks. When a provider 
ultimately gains access to these rights-of-way, the terms 
should be fair, reasonable and nondiscriminatory.
    Another barrier to broadband deployment comes from State 
laws, established at the behest of incumbent providers that 
restrict or ban municipal broadband networks. Earlier this 
year, the FCC voted in favor of bolstering 21st century 
broadband infrastructure in local communities by preempting 
State laws in Tennessee and North Carolina. Across the country, 
local communities including Palo Alto and Santa Cruz County in 
my Congressional district have demonstrated their desire to 
bring fast, affordable broadband to their residents.
    Finally, through the power of unlicensed spectrum, Wi-Fi 
can expand broadband coverage in underserved communities, 
including rural and tribal lands. The 600 MHz band and its 
ability to penetrate walls and travel longer distances makes it 
uniquely situated to serve these and other communities on a 
nationwide basis.
    These aren't by any means a cure-all prescription to what 
ails our Nation's broadband system. But they are concrete steps 
I believe Democrats and Republicans can support. More 
importantly, they are steps that will bring greater access to 
broadband for millions of Americans who need it.
    I thank our distinguished witnesses for their commitment to 
promoting broadband infrastructure investment and I look 
forward to your testimony.

             Prepared statement of Hon. Frank Pallone, Jr.

    Thank you, Chairman Walden, for calling today's hearing. 
Thanks also to our witnesses for being here today.
    This subcommittee has become an example of how real 
bipartisan efforts can create real results. Today we continue 
that tradition. Discussions about whether to invest in our 
Nation's infrastructure should not have two sides--whether we 
are talking about roads, bridges, or communications networks. 
The priority in Congress should never be if we should invest in 
infrastructure; it should be only how we invest. To build a 
sound infrastructure, both industry and the Government must 
contribute. Sacrificing either will only lead to failure.
    Our focus today is on our Nation's broadband networks in 
particular. The Internet has become integral to all of our 
lives. And in many ways, our broadband infrastructure is a 
bright spot for our economy. While the Government contributes 
billions of dollars in grants and an updated Universal Service 
program, private investment has been the primary driver behind 
the growth of our networks. Over the past 20 years, the private 
sector invested $1.4 trillion in their networks --a trend I 
expect will continue. So it is no wonder that broadband 
capacity has doubled about every 2 years. And just as 
important, this investment creates real jobs across the 
country.
    But despite this success, our work is not done. We are 
fortunate in New Jersey to be one of the most connected States 
in the country, but rural areas like Vermont or Iowa and Tribal 
lands in New Mexico aren't so lucky. The most recent data 
released by the FCC shows that Americans living in those areas 
disproportionately lack access to broadband--53% of rural 
Americans and 63% of Americans living on Tribal lands and in 
the U.S. territories do not have access to the new benchmark 
definition of broadband. We must continue to look for ways to 
help these communities.
    So I am interested to hear from our witnesses about what 
policies work and which ones need to be updated. I also want to 
hear about how to make sure our communications networks are 
resilient enough to withstand emergencies.
    I hope that ideas generated today will be the inspiration 
for more bipartisan work going forward.

               Prepared statement of Hon. David Loebsack

    Thank you, Mr. Chairman.
    Today's hearing is a crucial part of our national dialogue 
about the importance of rebuilding our infrastructure. Access 
to broadband is no longer an indulgence for the rich-it is an 
indispensable part of all of our lives. That is certainly true 
in urban areas-but it is just as true in the vast rural areas 
we have in Iowa.
    I heard this loud and clear earlier this year during a 
Broadband Access Roundtable Tour that I took across my 
district. This is was not a short trip, either. I sat down to 
visit with my constituents in every one of the 24 counties that 
I represent. I took the time to make this trip because access 
to broadband is vital to survival in today's economy.
    And at every stop--every one--I heard that we need to do 
more to expand the reach of high-speed Internet access. But 
broadband that costs hundreds of dollars is not good enough. 
Because low-income Americans deserve affordable Internet access 
whether they live in a city or on a farm.
    Mr. Adelstein, I appreciate your testimony regarding the 
importance of utilizing spectrum efficiently to expand wireless 
broadband access. I agree that this limited resource needs to 
be optimized. That is why I introduced the Rural Spectrum 
Accessibility Act with Rep. Kinzinger, which will encourage 
spectrum license holders to lease unused spectrum to small 
rural carriers to expand wireless coverage in rural 
communities.
    I'd like to thank the witnesses for being here today, and I 
look forward to hearing their suggestions on how we can move 
forward on this important issue.

                Prepared statement of Hon. Ben Ray Lujan

    Thank you to the chairman and ranking member for scheduling 
this incredibly important hearing on promoting investments in 
broadband infrastructure.
    As we all know, when it comes to broadband, too many 
Americans have been left behind.
    The FCC reports that more than half of rural Americans and 
two-thirds of Americans living on tribal lands lack access to 
advanced broadband. In New Mexico, those numbers are 77 percent 
and 89 percent respectively.
    As I've said before, if we can have Internet access at 
30,000 feet in an airplane, we should be able to have Internet 
access all across rural and tribal America, including New 
Mexico.
    By supporting investments in broadband, we support the 
entrepreneurs and innovators who want to build a brighter 
future for their people. By connecting schools, we can help 
children prepare to succeed in today's competitive economy, 
while investments in telemedicine ensure that seniors receive 
the care they deserve.
    I look forward to hearing from our witnesses today on how 
we can scale this digital divide. And, I look forward to 
working with my colleagues to connect more people in rural 
America and on tribal lands.


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