[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
LEGISLATING TO SAFEGUARD THE FREE AND OPEN INTERNET
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMUNICATIONS AND TECHNOLOGY
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
MARCH 12, 2019
__________
Serial No. 116-15
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
govinfo.gov/committee/house-energy
energycommerce.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
37-312 PDF WASHINGTON : 2020
--------------------------------------------------------------------------------------
COMMITTEE ON ENERGY AND COMMERCE
FRANK PALLONE, Jr., New Jersey
Chairman
BOBBY L. RUSH, Illinois GREG WALDEN, Oregon
ANNA G. ESHOO, California Ranking Member
ELIOT L. ENGEL, New York FRED UPTON, Michigan
DIANA DeGETTE, Colorado JOHN SHIMKUS, Illinois
MIKE DOYLE, Pennsylvania MICHAEL C. BURGESS, Texas
JAN 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 BRETT GUTHRIE, Kentucky
JOHN P. SARBANES, Maryland PETE OLSON, Texas
JERRY McNERNEY, California DAVID B. McKINLEY, West Virginia
PETER WELCH, Vermont ADAM KINZINGER, Illinois
BEN RAY LUJAN, New Mexico H. MORGAN GRIFFITH, Virginia
PAUL TONKO, New York GUS M. BILIRAKIS, Florida
YVETTE D. CLARKE, New York, Vice BILL JOHNSON, Ohio
Chair BILLY LONG, Missouri
DAVID LOEBSACK, Iowa LARRY BUCSHON, Indiana
KURT SCHRADER, Oregon BILL FLORES, Texas
JOSEPH P. KENNEDY III, SUSAN W. BROOKS, Indiana
Massachusetts MARKWAYNE MULLIN, Oklahoma
TONY CARDENAS, California RICHARD HUDSON, North Carolina
RAUL RUIZ, California TIM WALBERG, Michigan
SCOTT H. PETERS, California EARL L. ``BUDDY'' CARTER, Georgia
DEBBIE DINGELL, Michigan JEFF DUNCAN, South Carolina
MARC A. VEASEY, Texas GREG GIANFORTE, Montana
ANN M. KUSTER, New Hampshire
ROBIN L. KELLY, Illinois
NANETTE DIAZ BARRAGAN, California
A. DONALD McEACHIN, Virginia
LISA BLUNT ROCHESTER, Delaware
DARREN SOTO, Florida
TOM O'HALLERAN, Arizona
------
Professional Staff
JEFFREY C. CARROLL, Staff Director
TIFFANY GUARASCIO, Deputy Staff Director
MIKE BLOOMQUIST, Minority Staff Director
Subcommittee on Communications and Technology
MIKE DOYLE, Pennsylvania
Chairman
JERRY McNERNEY, California ROBERT E. LATTA, Ohio
YVETTE D. CLARKE, New York Ranking Member
DAVID LOEBSACK, Iowa JOHN SHIMKUS, Illinois
MARC A. VEASEY, Texas STEVE SCALISE, Louisiana
A. DONALD McEACHIN, Virginia PETE OLSON, Texas
DARREN SOTO, Florida ADAM KINZINGER, Illinois
TOM O'HALLERAN, Arizona GUS M. BILIRAKIS, Florida
ANNA G. ESHOO, California BILL JOHNSON, Ohio
DIANA DeGETTE, Colorado BILLY LONG, Missouri
G. K. BUTTERFIELD, North Carolina BILL FLORES, Texas
DORIS O. MATSUI, California, Vice SUSAN W. BROOKS, Indiana
Chair TIM WALBERG, Michigan
PETER WELCH, Vermont GREG GIANFORTE, Montana
BEN RAY LUJAN, New Mexico GREG WALDEN, Oregon (ex officio)
KURT SCHRADER, Oregon
TONY CARDENAS, California
DEBBIE DINGELL, Michigan
FRANK PALLONE, Jr., New Jersey (ex
officio)
C O N T E N T S
----------
Page
Hon. Mike Doyle, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 3
Hon. Robert E. Latta, a Representative in Congress from the State
of Ohio, prepared statement.................................... 4
Prepared statement........................................... 5
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 6
Prepared statement........................................... 7
Hon. Greg Walden, a Representative in Congress from the State of
Oregon, opening statement...................................... 8
Prepared statement........................................... 10
Witnesses
Francella Ochillo, Vice President of Policy and General Counsel,
National Hispanic Media Coalition.............................. 13
Prepared statement........................................... 15
Gregory Green, Cofounder and Chief Executive Officer, Fatbeam.... 22
Prepared statement........................................... 24
Answers to submitted questions............................... 219
Robert M. McDowell, Senior Fellow, Hudson Institute, Partner,
Cooley LLP..................................................... 29
Prepared statement........................................... 31
Answers to submitted questions............................... 221
Matthew F. Wood, Vice President of Policy and General Counsel,
Free Press Action Fund......................................... 42
Prepared statement........................................... 44
Answers to submitted questions............................... 225
Submitted Material
Letter of May 5, 2010, from Robert M. McDowell, Commissioner,
Federal Communications Commission, to Hon. Henry A. Waxman,
Chairman, House Committee on Energy and Commerce, submitted by
Mr. Latta...................................................... 121
Dissenting statement of 2008 and 2010, from Robert M. McDowell,
Commissioner, Federal Communications Commission, submitted by
Mr. McNerney................................................... 125
Article of December 14, 2017, ``Net Neutrality, for and
Against,'' The Wall Street Journal, submitted by Mr. McNerney.. 165
Letter of March 11, 2019, from Joseph Franell, Chief Executive
Officer, Eastern Oregon Telecom, to Mr. Walden, submitted by
Mr. Walden..................................................... 168
Letter of February 8, 2019, from Dr. J. Michel Guite, Chairman,
Vermont Telephone Co., to Mr. Welch, submitted by Mr. Flores... 170
Tweets from Washington State Delegation Members, submitted by
Mrs. Rodgers................................................... 173
Editorial of March 11, 2019, ``Restore net neutrality? Congress
has an opportunity,'' Houston Chronicle, submitted by Mr. Doyle 175
Article of February 27, 2019, ``A(nother) chance for Congress on
net neutrality,'' by Ev Ehrlich, The Hill, submitted by Mr.
Doyle.......................................................... 177
Article of March 6, 2019, ``The Democrats' net neutrality bill is
political virtue signaling at it worst,'' by Jon Healey, Los
Angeles Times, submitted by Mr. Doyle.......................... 179
Letter of March 5, 2019, from Rosa Mendoza, President and Chief
Executive Officer, ALLvanza, to Mr. Pallone, et al., submitted
by Mr. Doyle................................................... 182
Statement of Rosa Mendoza, President and Chief Executive Officer,
ALLvanza, submitted by Mr. Doyle............................... 185
Statement of Meredith Attwell Baker, President and Chief
Executive Officer, Cellular Telecommunications Industry
Association, March 6, 2019, submitted by Mr. Doyle............. 187
Statement of NCTA, March 6, 2019, submitted by Mr. Doyle......... 189
Statement of Jonathan Spalter, President and Chief Executive
Officer, USTelecom--The Broadband Association, March 6, 2019,
submitted by Mr. Doyle......................................... 190
Tweet of March 6, 2019, by Former Republican Rick Boucher,
submitted by Mr. Doyle......................................... 193
Article of March 6, 2019, ``Pelosi, Schumer Unveil Democratic Net
Neutrality Bill (1),'' by Jon Reid, Bloomberg Law, submitted by
Mr. Doyle...................................................... 194
Article of March 7, 2019, ``E & C's top Republican sets sights on
tech industry liability shield,'' by John Hendel, Politico Pro,
submitted by Mr. Walden........................................ 196
Editorial of March 8, 2019, ``Democrats want to `Save the
Internet.' They'll need Republicans' help.'' Washington Post,
submitted by Mr. Doyle......................................... 197
Article of February 27, 2019, ``Congress can finally get it
right: Pass the Save the Internet Act,'' by Ed Black, The Hill,
submitted by Mr. Doyle......................................... 199
Article of March 11, 2019, ``A permanent solution to net
neutrality for rural Oregon,'' by Joseph Franell, East
Oregonian, submitted by Mr. Doyle.............................. 201
Article of March 25, 2016, ``Updated: Netflix Gets Hammered Over
`Throttling,' '' by John Eggerton, Multichannel, submitted by
Mr. Doyle...................................................... 205
Letter of March 12, 2019, from Berin Szoka, President, and James
Dunstan, General Counsel, TechFreedom, to Mr. Doyle and Mr.
Latta, submitted by Mr. Doyle.................................. 208
LEGISLATING TO SAFEGUARD THE FREE AND OPEN INTERNET
----------
TUESDAY, MARCH 12, 2019
House of Representatives,
Subcommittee on Communications and Technology,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 11:00 a.m., in
room 2322 Rayburn House Office Building, Hon. Mike Doyle
(chairman of the subcommittee) presiding.
Members present: Representatives Doyle, McNerney, Clarke,
Loebsack, Veasey, McEachin, Soto, O'Halleran, Eshoo, DeGette,
Butterfield, Matsui, Welch, Lujan, Schrader, Cardenas, Dingell,
Pallone (ex officio), Latta (subcommittee ranking member),
Shimkus, Olson, Bilirakis, Long, Flores, Brooks, Walberg,
Gianforte, and Walden (ex officio).
Also Present: Representative Rodgers.
Staff present: AJ Brown, Counsel; Jeffrey C. Carroll, Staff
Director; Jennifer Epperson, FCC Detailee; Evan Gilbert, Press
Assistant; Waverly Gordon, Deputy Chief Counsel; Tiffany
Guarascio, Deputy Staff Director; Alex Hoehn-Saric, Chief
Counsel, Communications and Technology; Jerry Leverich,
Counsel; Dan Miller, Policy Analyst; Phil Murphy, Policy
Coordinator; Kaitlyn Peel, Digital Director; Chloe Rodriguez,
Policy Analyst; Mike Bloomquist, Minority Staff Director; Robin
Colwell, Minority Chief Counsel, Communications and Technology;
Jordan Davis, Minority Senior Advisor; Kristine Fargotstein,
Minority Detailee, Communications and Technology; Margaret
Tucker Fogarty, Minority Staff Assistant; Peter Kielty,
Minority General Counsel; and Tim Kurth, Minority Deputy Chief
Counsel, Communications and Technology.
Mr. Doyle. The Subcommittee on Communications and
Technology will now come to order and the Chair recognizes
himself for 5 minutes for an opening statement.
OPENING STATEMENT OF HON. MIKE DOYLE, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
I am very pleased to welcome everyone to the Subcommittee
on Communication and Technology's first legislative hearing of
this new Congress.
Today, we will be discussing the Save the Internet Act,
which I introduced last week along with 132 of our colleagues
here in the House.
First, this legislation would restore popular, bipartisan,
common sense net neutrality protections and put a cop back on
the beat to protect consumers, small businesses, and
competitors from unjust and unreasonable practices by internet
service providers.
Second, this bill would give the FCC the authority to
protect consumers now and in the future through forward-looking
regulatory authority.
Third, this bill would restore the commission's legal
authority to support broadband access and deployment programs
through the Universal Service Fund. These programs pay for the
deployment of broadband in rural communities through the
Connect America Fund and support access to working families,
seniors, and veterans through the Lifeline program.
The Save the Internet Act would enact permanent, effective
net neutrality protections into law by codifying the FCC's 2015
Open Internet Order as a new free-standing section of law. That
would ensure the internet remains an open platform for
innovation and competition, regardless of political changes at
the FCC.
By authorizing the order as a free-standing part of the
U.S. Code, this legislation also permanently prevents the FCC
from applying 27 sections of Title II of the Communications Act
as well as over 700 regulations, which is the majority of Title
II, to internet service providers.
The bill also permanently prohibits the FCC from engaging
in rate regulation or requiring broadband providers unbundle
their network.
Last but not least, the Save the Internet Act restores the
commission's ability to police unjust and unreasonable
practices by ISPs. The approach that we are discussing here
today charts a new course for net neutrality and puts in place
21st century rules for a 21st century internet.
In doing so we remove much of the regulatory overhang of
Title II that ISPs and our colleagues on the other side of the
aisle have long complained about.
Opponents of this legislation need to explain to their
constituents which unjust and unreasonable practices they want
ISPs to engage in and why they want to allow such practices.
Americans, broadly and overwhelmingly, support these rules.
Polls have shown that 88 percent of Republicans, Independents,
and Democrats support restoring strong net neutrality
protections.
This bill is a new approach and an open invitation to our
colleagues and ISPs alike to come together and support a new
way forward, because a free and open internet is critical for
so many communities and sectors of our economy and because
broadband connectivity touches almost every aspect of our
economy, politics, and culture.
I encourage my colleagues on the other side of the aisle to
seriously consider this legislation. Whether you are a rural
broadband provider based in Idaho, like Mr. Green's company,
Fatbeam, or you are working to ensure that minority and
underrepresented voices get heard online, like Ms. Ochillo's
organization, or you have heard from millions of constituents
who have called or emailed their elected representatives, the
message the people are sending us is clear.
We need to restore strong net neutrality rules and that is
exactly what this bill does. Together, we hope to advance this
legislation through the Congress and restore these essential
protections for all Americans.
I would also like to remind my friends and particularly my
friends on the other side of the aisle that this is the bill
that is before the committee today and this is the issue we are
discussing.
I am happy to talk to Members about other issues at the
appropriate time for them to be brought before the
subcommittee. But for today, this bill is the subject of our
discussion.
[The prepared statement of Mr. Doyle follows:]
Prepared Statement of Hon. Mike Doyle
I am very pleased to welcome everyone to the Subcommittee
on Communication and Technology's first legislative hearing of
this new Congress.
Today, we will be discussing the Save the Net Act, which I
introduced last week along with 132 of our colleagues here in
the House.
This legislation would restore popular, bipartisan, common
sense net neutrality protections--and put a cop back on the
beat to protect consumers, small businesses, and competitors
from unjust and unreasonable practices by Internet Service
Providers.
In addition, this bill would give the FCC the authority to
protect consumers now and in the future through forward-looking
regulatory authority.
Finally, the bill would restore the commission's legal
authority to support broadband access and deployment programs
through the Universal Service Fund.
These programs pay for the deployment of broadband in rural
communities through the Connect America Fund--and support
access to working families, seniors, and veterans through the
Lifeline program.
The Save the Internet Act would enact permanent, effective
Net Neutrality protections into law by codifying the FCC's 2015
Open Internet Order as a new free-standing section in the U.S.
Code.
That would ensure the internet remains an open platform for
innovation and competition, regardless of political changes at
the FCC.
By authorizing the order as a free-standing part of the
U.S. Code, this legislation also permanently prevents the FCC
from applying 27 sections of the Communications Act as well as
over 700 regulations, the majority of Title 2, to Internet
Service Providers.
The bill also permanently prohibits the FCC from engaging
in rate regulation or requiring that broadband providers
unbundle their network.
Lasts, but not least, the Save the Internet Act restores
the commission's ability to police unjust and unreasonable
practices by ISPs.
The approach that we're discussing here today charts a new
course for Net Neutrality, and puts in place 21st Century rules
for a 21st Century internet.
In doing so we remove much of the regulatory overhang of
Title 2 that ISPs and our colleagues on the other side of the
aisle have long complained about.
Opponents of this legislation need to explain to their
constituents which unjust and unreasonable practices they want
ISPs to engage in--and why they want to allow such practices.
Americans broadly and overwhelmingly support these rules.
Polls have shown that 88% of Republicans, Independents, and
Democrats support restoring strong Net Neutrality protections.
This bill is a new approach, and an open invitation to our
colleagues and ISPs alike to come together and support a new
way forward--because a free and open internet is critical for
so many communities and sectors of our economy, and because
broadband connectivity touches almost aspect of our economy,
politics, and culture.
I encourage my colleagues on the other side of the aisle to
seriously consider this legislation.
Whether you are a rural broadband provider based in Idaho
like Mr. Green's company Fatbeam, or you are working to ensure
that minority and under-represented voices get heard online
like Ms. Ochillo's organization, or you have heard from the
millions of constituents who have called or emailed their
elected representatives, the message people are sending is
clear.
We need to restore strong Net Neutrality rules, and that is
exactly what this bill does.
Together we hope to advance this legislation through the
Congress and restore these essential protections for all
Americans.
I would also like to remind Members, and particularly my
friends on the other side of the aisle that this is the bill
that is before the committee today, and this is the issue we
are discussing.
I'm happy to talk to Members about other issues and the
appropriate time for them to be brought before the
subcommittee, but for today this bill is the subject of our
discussion.
And with that, 29 seconds remaining, I would now like to
represent my friend and colleague, Mr. Latta, the ranking
member of the subcommittee, for 5 minutes for his opening
statement.
OPENING STATEMENT OF HON. ROBERT E. LATTA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Mr. Latta. Well, thank you very much, Mr. Chairman, and
good morning to our witnesses for being with us today. I am
glad you are here.
I am always happy to be here with my colleagues and learn
more from the real experts on important issues in the telecom
space. I have to admit I am confused why we need to spend
another entire hearing on net neutrality less than a month
after talking about the same thing.
In the meantime, the majority has introduced essentially
the same bill that has already failed to garner the support of
their entire caucus as a CRA in the last Congress.
Make no mistake, there are a lot of different ways for
Congress to go about protecting consumers with permanent net
neutrality rules.
For example, the bill I introduced last month is based on
Chairman Waxman's approach in 2010 and my colleagues,
Republican Leader Walden and Mrs. Rodgers, offered two more
bills based on the rules from FCC's 2015 order and Washington
State's bipartisan legislation of 2018.
These bills all originated from Democratic net neutrality
proposals or laws. Anyone interested in a bipartisan
legislative solution would consider each of them to be a
reasonable starting point for real discussion.
In contrast, the majority came to that hearing with no
ideas. Since that time, we have not heard a word from them
until they were ready to announce yet another net neutrality
hearing.
Worst of all, instead of engaging with us to try to solve
the problem, my colleagues have retrenched back to the most
extreme position in this debate.
The idea that only Title II is real net neutrality is
dangerous and wrong. Those who are newer to the subcommittee or
to this debate should not be fooled.
You have heard over and over again that we need to protect
consumers from blocking, throttling, and internet fast lanes,
which sounds reasonable enough.
Well, we can easily do all of these--of this without giving
the Government free rein over the internet through the specter
of Title II.
Everyone who has followed this net neutrality debate or on
even the most superficial level is aware that Title II is a
nonstarter with Republicans, and even with some Democrats. It
has no chance of even passing the Senate or being signed into
law.
Yet, here we are, in a repetitive hearing followed by a
string of partisan victories that will simply ensure that
anyone--if that anyone digs in further and nothing meaningful
ever gets done to protect consumers.
Even if there were a chance that the majority's Title II
bill would become law, we now know unequivocally that it would
be the wrong direction for rural America.
As we heard from Mr. Franell at the last hearing and from
countless other rural carriers as well, Title II was a
devastatingly investment killer for small ISPs who need to be
expanding to serve more of our constituents of rural America.
At that hearing, so many Members on both sides of the aisle
engaged Mr. Franell with questions and concerns about this
impact. There seemed to be an overwhelming bipartisan interest
in working to close the digital divide and get modern broadband
service out to the communities that are being left behind.
So, why aren't we spending our time working together on
that instead of putting the crushing regulatory regime of Title
II back onto the folks we need to be out there investing and
expanding? It makes no sense.
I look forward to hearing from our witnesses today and with
that, Mr. Chairman, I yield back the balance of my time.
[The prepared statement of Mr. Latta follow:]
Prepared Statement of Hon. Robert E. Latta
Good morning and welcome to our panel of witnesses. While I
am always happy to be here with my colleagues to learn more
from the real experts on important issues in the telecom space,
I have to admit I'm confused why we need to spend another
entire hearing on net neutrality less than a month after
talking about the same thing.
In the meantime, the majority has introduced essentially
the same bill that has already failed to garner the support of
their entire caucus as a CRA in the last Congress. Make no
mistake, there are a lot of different ways for Congress to go
about protecting consumers with permanent net neutrality rules.
For example, the bill I introduced last month is based on
Chairman Waxman's approach in 2010 and my colleagues,
Republican Leader Walden and Mrs. Rodgers, offered two more
bills based on the rules from the FCC's 2015 order and
Washington State's bipartisan legislation from 2018. These
bills all originated from Democratic net neutrality proposals
or laws. Anyone interested in a bipartisan legislative solution
would consider each of them to be a reasonable starting point
for a real discussion.
In contrast, the majority came to that hearing with no new
ideas. Since that time, we have not heard a word from them
until they were ready to announce yet another net neutrality
hearing. Worst of all, instead of engaging with us to try to
solve the problem, my colleagues have retrenched back to the
most extreme position in this debate.
The idea that only Title II is ``real'' net neutrality is
dangerous and wrong. Those who are newer to this subcommittee
or to this debate should not be fooled. You have heard over and
over again that we need to protect consumers from blocking,
throttling, and internet ``fast lanes,'' which sounds
reasonable enough. Well, we can easily do all of this without
giving the Government free rein over the internet through the
specter of Title II.
Everyone who has followed this net neutrality debate on
even the most superficial level is aware that Title II is a
nonstarter with Republicans, and even with some Democrats. It
has no chance of ever passing the Senate or being signed by the
President. Yet here we are in a repetitive hearing followed by
a string of partisan victories that will simply ensure that
everyone digs in further and nothing meaningful ever gets done
to protect consumers.
Even if there were a chance that the majority's Title II
bill could become law we now know unequivocally that it would
be the wrong direction for rural America. As we heard from Mr.
Franell at our last hearing, and from countless other rural
carriers as well, Title II was a devastatingly effective
investment killer for the small ISPs, who we need to be
expanding to serve more of our constituents in rural America.
At that hearing, so many Members on both sides of the aisle
engaged Mr. Franell with questions and concerns about this
impact. There seemed to be an overwhelming bipartisan interest
in working to close that digital divide and get modern
broadband service out to communities that are being left
behind. So, why aren't we spending our time working together on
that instead of putting the crushing regulatory regime of Title
II back onto the folks we need to be out there investing and
expanding? It makes no sense.
I look forward to hearing from our witnesses, and with that
I yield back.
Mr. Doyle. The gentleman yields back.
OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
The Chair now recognizes Mr. Pallone, chairman of the full
committee, for 5 minutes for his opening statement.
Mr. Pallone. Thank you, Chairman Doyle.
Words like net neutrality and open internet don't capture
how central this issue is for our society. We are talking about
what the country stands for.
We are talking about saving economic opportunity and
innovation, saving our kids' educational opportunities, and
saving our democracy, and it is that important.
Without net neutrality, a free and open internet simply
does not exist. We have all heard the fears of our
constituents. In my district, small businesses like Rock Star
Bakery and Second Life Bikes in Asbury Park are concerned that
without net neutrality their businesses could be blocked from
reaching their customers.
They worry large corporations could buy ``fast lanes,''
which would make their businesses less competitive.
Conservatives and liberals alike worry about their voices being
shut down by corporations that don't agree with their point of
view, and without access to a free and open internet, my
constituents are worried it would be harder to find a job,
harder to get the training they need, and harder for their kids
to keep up at school.
After all, today, people need the internet to find good-
paying jobs and to prepare their children to succeed in life. A
free and open internet isn't just about making sure that we can
watch videos on our computers or on our phones.
It is much more than that. It is about protecting free
speech, commerce, creativity, and innovation, and that is why
it is sad that we even have to hold this hearing on legislating
to safeguard the internet.
The FCC's order in 2015 established strong net neutrality
rules and that was upheld twice in Federal court. The debate
about net neutrality was over. Consumers and small businesses
were protected.
But the Trump FCC defied the American people and rolled
back those common-sense protections. It didn't matter that
polling showed that 86 percent of Americans supported these
protections, nor did it matter that a historic 24 million
people commented on their action, and the overwhelming majority
in opposition.
And that is why this committee must act. The Save the
Internet Act will restore the meaningful net neutrality
protections Americans want. It will stop this FCC or a future
FCC from undermining free speech, small businesses, and
consumers, and we must act swiftly.
There is no time for delay. Without net neutrality, we are
already seeing the slow march of anti-consumer behavior. ISPs
are charging internet users more for using their smart phones'
internet connection on another device. In other instances, they
are charging consumers more for watching high-definition
videos. And that is not what a free and open internet looks
like.
So that is why I am very happy that so many of my
colleagues have joined with Chairman Doyle in signing on as
original cosponsors of this legislation. After unveiling the
Save the Internet Act last Wednesday, the bill was introduced
with 132 original cosponsors.
And the Save the Internet Act will bring back the FCC's
commonplace bedrock principles. It will put a cop on the beat
at the FCC and protect Americans and small businesses from
abusive and discriminatory network practices.
Mr. Pallone. And with that, I would like to yield one
minute to the vice chair of our subcommittee, the gentlewoman
from California, Ms. Matsui, whatever time she may consume.
[The prepared statement of Mr. Pallone follows:]
Prepared Statement of Hon. Frank Pallone, Jr.
Words like ``net neutrality'' and ``open internet'' don't
capture how central this issue is for our society. We are
talking about what the country stands for. We are talking about
saving economic opportunity and innovation, saving our kid's
educational opportunities, and saving our democracy. It is that
important. Without net neutrality--a free and open internet
simply does not exist.
We've all heard the fears of our constituents. In my
district, small businesses like Rockstar Bakery and Second Life
Bikes in Asbury Park are concerned that without net neutrality
their businesses could be blocked from reaching their
customers. They worry large corporations could buy ``fast
lanes,'' which would make their businesses less competitive.
Conservatives and liberals alike worry about their voices
being shut down by corporations that don't agree with their
point of view.
And without access to a free and open internet, my
constituents are worried it would be harder to find a job,
harder to get the training they need, and harder for their kids
to keep up at school. After all, today, people need the
internet to find good paying jobs and to prepare their children
to succeed in life.
A free and open internet isn't just about making sure that
we can watch videos on our computers or our phones. It is much
more than that. It is about protecting free speech, commerce,
creativity, and innovation.
That is why it's sad that we even have to hold this hearing
on legislating to safeguard the internet. The FCC's order in
2015 establishing strong net neutrality rules was upheld twice
in Federal court. The debate about net neutrality was over.
Consumers and small businesses were protected. But the Trump
FCC defied the American people and rolled back those common-
sense protections.
It didn't matter that polling showed 86 percent of
Americans supported these protections. Nor did it matter that a
historic 24 million people commented on their action, the
overwhelming majority in opposition.
And that is why this committee must act. The Save the
Internet Act will restore the meaningful net neutrality
protections Americans want. It will stop this FCC or a future
FCC from undermining free speech, small businesses, and
consumers.
We must act swiftly. There is no time for delay. Without
net neutrality, we're already seeing the slow march of anti-
consumer behavior. ISPs are charging internet users more for
using their smart phone's internet connection on another
device. In other instances, they are charging consumers more
for watching high definition videos. This is not what a free
and open internet looks like.
That's why I am thrilled so many of my colleagues have
joined with Chairman Doyle in signing on as original cosponsors
of this legislation. After unveiling the Save the Internet Act
last Wednesday, the bill was introduced with 132 original
cosponsors.
The Save the Internet Act will bring back the FCC's
commonplace, bedrock principles. It will put a cop on the beat
at the FCC and protect Americans and small businesses from
abusive and discriminatory network practices.
With that, I yield one minute to the vice chair of the
subcommittee Ms. Matsui.
Ms. Matsui. Thank you, Chairman Pallone.
As you know, paid prioritization has been a priority of
mine for several years and I think we all agree that calls
terminating at public safety answering points shouldn't be
dropped and various content delivery systems and network
traffic operations have become important parts of the internet
ecosystem that can improve the consumer experience.
The core issue here is ensuring consumers don't have to pay
more for the same products and services online and it doesn't
take a technologist to know when you are getting a bad deal.
I am mindful of the potential use cases that next-
generation networks can facilitate and I previously introduced
legislation to ensure that allowing all consumers to access
content equally remains at the center of the important debate
on the service requirements and consumer benefits of our open
internet policies.
I am very pleased that we are having this hearing and I
feel it is very, very necessary. We need a free and open
internet and hearings like this are very necessary.
Thank you, and I yield back.
Mr. Doyle. The gentlelady yields back.
Does the gentleman yield back his time?
Mr. Pallone. Yes, I do. Thank you.
Mr. Doyle. The gentleman yields back.
The Chair now recognizes Mr. Walden, the ranking member of
the full committee, for 5 minutes for his opening statement.
OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OREGON
Mr. Walden. Good morning, Mr. Chairman.
Mr. Doyle. Good morning.
Mr. Walden. Thank you for having this hearing.
Before I start, I just have a question for the Chair. Does
18 U.S.C. Section 1001 involving false statements to Congress
apply to witnesses who testify here even if they don't stand up
and swear in?
Mr. Doyle. It does.
Mr. Walden. OK. Thank you.
I want to thank our witnesses, especially our sole
Republican witness. Mr. McDowell, it is always good to have you
before the committee.
A permanent legislative solution produced in good faith
with our Democratic colleagues is the only way to protect
consumers, innovation, and an open internet.
I have repeatedly called for an end to this ridiculous
partisan back and forth. It is time for bipartisan legislation
that could actually become law and I think we could find common
ground as this committee has a history of doing.
Yet, even after offering a menu of bipartisan legislative
proposals at our hearing last month to preserve an open
internet once and for all, unfortunately, my friends on the
other side have not decided to work with us on a bipartisan
solution and I am really disappointed.
The partisan approach is not the answer. It will not become
law. Title II is not necessary to preserve a free and open
internet. We could permanently ban blocking, we could
permanently ban throttling, and Ms. Matsui's concerns--we could
permanently ban paid prioritization without the heavy-handed
approach of Title II.
We heard last month about the regulatory impact of Title II
on rural broadband deployment from a small internet service
provider, Mr. Joe Franell of Eastern Oregon Telecom. Indeed, he
is from my district in eastern Oregon and across rural America
it is where we rely on small ISPs like Eastern Oregon Telecom
to help connect our communities with high-speed internet.
In an opinion piece in the East Oregonian that is running
this morning, Joe wrote that the heavy hand of Title II,
``shifted Eastern Oregon Telecom's focus from our consumers to
regulatory interference and the draining cost of reporting and
compliance,'' closed quote.
Joe went on to say that every dollar he spends on reporting
to regulatory agencies is a dollar not spent on serving rural
Oregon.
Frankly, Title II could provide the Federal Government near
unlimited and unchecked authority to regulate and tax--regulate
and tax--the internet. It is not an internet that protects
consumers nor is that an internet that would allow for American
ingenuity to thrive. I think we could do better.
I would also like to take note that the internet seems to
be working today, despite all the hyperbolic rhetoric to the
contrary last year. So what internet crisis brings us to the
hearing room today?
It is certainly not the abuses by the tech platforms that
occupy the news every day, not the limiting of conservative
voices on social media, shadow banning and throttling and
things of that nature, not the seeming inability to curb
harmful and illicit behavior online, not how tech companies
make their deals to prioritize internet traffic on the off
ramps, not their own agreements on sharing the people's
personal information.
No, that is not what brings us here today. What brings us
here is that Speaker Pelosi still believes broadband providers
are the real threat and so I assume, directed the majority
would move this bill.
The internet of today grew dramatically with little or no
Government interference. Saddling it now with an archaic
regulation from the 1930's monopoly-era copper land-line phone
company seems like an odd way to spur investment and
innovation.
Meanwhile, big tech companies want complete freedom not
just from regulation but also from liability for facilitating
all sorts of harmful and illicit activity.
Twenty years ago, Republican Congress and a Democratic
president granted special liability limitations to help the
tech sector to flourish.
This is Section 230 of the Telecom Act of 1996 and, without
objection, this bipartisan agreement accomplished its primary
objective. Online platforms are now major venues for
communication and commerce and not just in the United States
but around the world.
But Section 230 was also supposed to be about
responsibility. With a liability limitation in their back
pocket, we increasingly see the tech giants wield their power
at the wrong targets.
When will this subcommittee seriously consider the role of
edge providers either as common carriers in the information
age, or how they are the ones with business models that
actually use our data for their profits?
If you are going to protect consumers online, should those
online protections apply to the whole internet ecosystem?
Meanwhile, Mr. Chairman, we should hear directly from the
Federal Communications Commission about how this legislation
will impact the vitality of the internet.
I was under the impression the majority planned to have the
FCC up here to testify in the first quarter of this year.
Unfortunately, that hasn't happened yet.
From a process standpoint and considering the need for the
full commission to weigh in on the impact of this proposal, Mr.
Chairman, will you commit to letting us have a hearing with the
Commissioners before this measure is ushered through in a
markup?
I know Ms. Eshoo was quite vocal last summer when
Republicans wanted to match our bipartisan success of enacting
the FCC reauthorization with completing an NTIA
reauthorization.
Despite having had numerous hearings that included NTIA's
administrator as well as former administrators and interested
parties, there was still a demand by the Democrats that Mr.
Redl appear again following our legislative hearing.
So what I would like to know is can we have the Commission
here before we are asked to markup this legislation?
Mr. Doyle. I will make sure to let you know when we invite
them.
Mr. Walden. That is a little different, but thank you, Mr.
Chairman, for your response.
[Laughter.]
Mr. Walden. And I yield back.
[The prepared statement of Mr. Walden follows:]
Prepared Statement of Hon. Greg Walden
Thank you and welcome to our witnesses, especially our sole
Republican witness Mr. McDowell, a former Commissioner of the
FCC.
A permanent, legislative solution produced in good faith
with our Democratic colleagues is the only way to protect
consumers, innovation, and an open internet. I have repeatedly
called for an end to this ridiculous, partisan back-and-forth.
It's time for bipartisan legislation that can actually become
law. Yet, even after offering a menu of bipartisan legislative
proposals at our hearing last month to preserve an open
internet once and for all, unfortunately our Democratic
colleagues have once again refused to work with us on a
bipartisan solution.
Their partisan approach is not the answer. Title II is not
necessary to preserve a free and open internet. We can
permanently address blocking, throttling, and paid
prioritization without the harmful, heavy-handed approach of
Title II.
We heard last month about the regulatory impact of Title II
on rural broadband deployment from a small Internet Service
Provider, Joe Franell of Eastern Oregon Telecom. In my district
in eastern Oregon and across rural America, we rely on small
ISPs like Eastern Oregon Telecom to help connect our
communities with high-speed internet. In an op-ed in the East
Oregonian this morning, Joe wrote that the heavy hand of Title
II ``shifted Eastern Oregon Telecom's focus from our consumers
to regulatory interference and the draining cost of reporting
and compliance'' Joe went on to say that every dollar he spends
on reporting to regulatory agencies is a dollar not spend on
serving rural Oregon.
Frankly, Title II could provide the Federal Government near
unlimited and unchecked authority to regulate and tax the
internet. That is not an internet that protects consumers nor
does it allow for American ingenuity to thrive. We can do
better.
I'd also like to note that the internet seems to be working
today, despite all the hyperbolic rhetoric to the contrary last
year. So what internet crisis brings us to the hearing room
today? It's certainly not the abuses by the tech platforms that
occupy the news everyday--not the limiting of conservative
voices on social media, not the seeming inability to curb
harmful and illicit behavior online, not how tech makes their
deals to prioritize internet traffic, and not their own
agreements on sharing of people's personal information. What
brings us here is that Speaker Pelosi still believes broadband
providers are the real threat, and so directed the majority to
act on a bill that won't become law.
The internet of today grew dramatically with little or no
Government interference. Saddling it now with archaic
regulation of the 1930s monopoly-era copper landline phone
company seems like an odd way to spur investment and
innovation. Meanwhile, Big Tech companies want complete freedom
not just from regulation, but also from liability for
facilitating all sorts of harmful and illicit activity.
Twenty years ago, a Republican Congress and a Democrat
President granted special liability limitations to help the
tech sector to flourish. This is Section 230 of the Telecom Act
of 1996, and without question this bipartisan agreement
accomplished its primary objective. Online platforms are now
major venues for communication and commerce, and not just in
the United States but around the world. But, Section 230 was
also supposed to be about responsibility. With a liability
limitation in their backpocket, we increasingly see the tech
giants wield their power at the wrong targets.
When will this subcommittee seriously consider the role of
the edge providers either as common carriers in the internet
age, or how they are the ones with business models that use our
data for their profits? If you're going to ``protect''
consumers online, should those online protections apply to the
whole internet ecosystem?
Meanwhile, we should hear directly from the Federal
Communications Commissioners about how this legislation will
impact the vitality of the internet. I was under the impression
that the majority planned to have the FCC up to testify in the
first quarter of this year. Unfortunately, that hasn't happened
yet. From a process standpoint and considering the need for the
full commission to weigh in on the impact of this proposal, Mr.
Chairman will you commit to letting us have a hearing with the
Commissioners before this measure is rushed to a markup?
I know Ms. Eshoo was quite vocal last summer when
Republicans wanted to match our bipartisan success of enacting
the FCC reauthorization with completing an NTIA
reauthorization. Despite having had numerous hearings that
included NTIA's Administrator as well as former Administrators
and interested parties, there was still a demand by the
Democrats to have Mr. Redl appear again following our
legislative hearing. Can you assure me that the majority will
hold itself to the same standard in this case?
With that, I yield back.
Mr. Doyle. I would just say to my friend--and he is my
friend--that I must have missed the phone call when you said,
let us get together and sit down and see if we can work
together on net neutrality.
What we got instead was three bills being dropped without
our knowledge, before any of us knew about it. I would just
suggest to the gentleman that that's not the way to work
together.
Mr. Walden. Mr. Chairman, may I respond?
Mr. Doyle. Yes, you may.
Mr. Walden. Thank you.
For 4 or 5 years I have had an open door. I have had draft
legislation and I have publicly and privately offered up the
opportunity to sit down and work through these things, and the
idea of having three bills out there was simply to say here is
menu of options. We didn't expect you to cosponsor those.
But we remain willing to work with you to find a bipartisan
solution.
Mr. Doyle. Yes. I am glad your door is open. Mine is too
and I just--if you had wandered into it, we might have had a
conversation before you dropped the bills. OK.
Let us move on. The gentleman yields back.
The Chair wants to remind Members that pursuant to
committee rules all Members' written opening statements will be
made part of the record.
Before I introduce our witnesses, I do want to recognize
and introduce a former Member of Congress and a member of this
Energy and Commerce Committee. Former Congressman Ron Klink is
in the audience.
Ron, nice to see you. Welcome. Yes, you could clap for Ron.
[Applause.]
Mr. Doyle. OK. I would now like to introduce our witnesses.
Oh, and standing right in front of me. Chip Pickering, please--
Chip also a member of the committee.
[Applause.]
Mr. Doyle. Sorry, Chip.
OK. Now, let us get to today's witnesses.
Ms. Francella Ochillo, vice president of policy and general
counsel for the National Hispanic Media. We also have Mr.
Gregory Green, chief executive officer of Fatbeam; Mr. former
Commissioner Robert McDowell, senior fellow at the Hudson
Institute and partner at Cooley LLP; and last but not least,
Mr. Matt Wood, vice president of policy and general counsel for
Free Press Action.
We want to thank all of our witnesses for joining us here
today. We look forward to your testimony.
You are each going to have 5 minutes to do your opening
statements. We do not have the lighting system here in front of
you, but we will be tracking this here, and once you get to
your 5 minutes you will hear a little gentle tap of the gavel
and know that it is time to wrap up your testimony if you
haven't already done so.
So, we will start with Ms. Ochillo. You are recognized for
5 minutes.
STATEMENTS OF FRANCELLA OCHILLO, VICE PRESIDENT OF POLICY AND
GENERAL COUNSEL, NATIONAL HISPANIC MEDIA COALITION; GREGORY
GREEN, COFOUNDER AND CHIEF EXECUTIVE OFFICER, FATBEAM; ROBERT
M. McDOWELL, SENIOR FELLOW, HUDSON INSTITUTE, PARTNER, COOLEY
LLP; MATTHEW F. WOOD, VICE PRESIDENT OF POLICY AND GENERAL
COUNSEL, FREE PRESS ACTION FUND
STATEMENT OF MS. FRANCELLA OCHILLO
Ms. Ochillo. Good morning, Chairman Doyle, Ranking Member
Latta, and other members of the subcommittee.
My name is Francella Ochillo. I am the vice president of
policy and general counsel at the National Hispanic Media
Coalition based in Pasadena, California.
For years, NHMC has advocated for a free and open internet.
We help policymakers and lawmakers like you understand the
impact and what is at stake for Americans who do not have the
resources or the capacity to engage in these types of debates
in Washington, DC.
Today, my comments are intended to reflect those voices
including families, students, creators, and activists who
support a free and open internet but do not have the good
fortune of being able to join us in this room.
The net neutrality consumer protections that we have fought
so tirelessly to restore were always intended to safeguard an
open and free internet, the one that we envision for tomorrow.
Access to that open internet has revolutionized the way
that we think, the way that we work, the way that we
communicate, the way that we learn. It has challenged the way
that we see each other and tested our willingness to grow.
In all of its wonder, the internet has also been one of the
most important tools in remedying a long history of
discrimination that still plagues our country.
Taking messages online was the only way that activists were
able to get the nation to stop and listen to the cries of
Native Americans protecting sacred lands in North Dakota and
how disenfranchised voices were able to put a spotlight on
unarmed African-American men being shot by police.
Online social justice movements forced people to stop and
ask hard questions about contaminated water in Flint and why
families seeking asylum at the border were irreconcilably
separated from their children.
But when there is a premium for access, the dangerous
underbelly of the internet exposes people to a risk whether or
not you are online, creating a digital caste system of those
who can afford to pay more. It feeds the dark chambers of the
internet where division and hate speech and discrimination
thrive.
Sunlight and open access--that is the best remedy because
this internet has connected us in a way that, historically, our
nation has been unable to do so.
It serves as the digital encyclopedia where students can go
to find out why the Japanese should have never been in
internment camps or the many reasons why Jim Crow was wrong.
Being able to discover those unpleasant truths about who we
are as a nation and how we grow together requires that all
Americans have access to the same information.
Under the current regulatory framework, ISPs have no
obligation to transmit messages as is. There are no rules that
prevent them from blocking content online, slowing down certain
websites, or giving preferential treatment.
In essence, they have the power to decide what we see
online and whose voices are heard. Simply put, this is a
dangerous experiment at the expense of the American people,
which should give all of us pause.
The United States regularly ranks as one of the most
expensive places for internet among developed countries in the
world and affordability remains the main barrier to adoption.
In 2018, approximately 24 million people still did not have
access to broadband of any kind. Forty percent of those
people--40 percent of Americans living in rural communities had
no access and 60 percent of people living on tribal lands face
the same fate.
These Americans, all on the wrong side of the digital
divide, regularly find their opportunities for growth, their
opportunity to participate in our democracy, as well as their
upward mobility that is directly linked to their level of
access.
If we can find a way to provide wife for astronauts while
they are outer space, I don't understand why we can't find a
way to connect people in Peoria, Illinois, or Augusta, Georgia,
or Granville, Texas, or Chi mayo, New Mexico, or even in my
hometown of New Orleans, Louisiana.
We have a choice. We can affirmatively protect the internet
that was started with public funds and always intended for
public good, or we can hope that this digital caste system of
the haves and the have nots steers clear of the communities
that we call home.
We have a responsibility to ensure that every American has
an opportunity to participate as well as a responsibility to
understand the insurmountable costs and the consequences when
they are disconnected, because while they may shoulder the
individual burden, there is a collective cost.
If this is, in fact, the digital revolution then that means
that we are having one of the most important conversations of
our time and we need to be vigilant about understanding the
consequences of creating an internet where some have basic and
limited access and others get a VIP pass.
We have to decide what type of digital infrastructure that
we plant to leave behind for generations to come and the only
questions that remains is did we stand up for them when we had
the chance.
Thank you.
[The prepared statement of Ms. Ochillo follows:]
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Mr. Doyle. Thank you.
We now recognize Mr. Green for 5 minutes.
STATEMENT OF MR. GREGORY GREEN
Mr. Green. Chairman Doyle, Ranking Member Latta, thank you
very much, and members of the subcommittee, thank you for
having me.
I am Gregory Green. I am the CEO and cofounder of Fatbeam.
Fatbeam is a small ISP and fiber-based infrastructure provider
in the West Coast.
Today, Fatbeam operates in seven markets--Washington,
Idaho, Montana, Wyoming, and Oregon. We also just opened a
region in--Southwest region in Nevada, Arizona, and New Mexico.
We build fiber optic networks in, typically, markets tier 2
and tier 3, 150,000 in population and below, and in those
markets we provide healthcare providers, Government agencies,
schools, education, higher ed, and other businesses, and
institutions open access to our network, which also means that
we share our fiber network with other ISPs such that they can
deliver residential and other services that maybe we don't
initially provide in that market space.
I have also been a proponent of net neutrality. Fatbeam
supports net neutrality and we support very much the FCC order
in 2015 for net neutrality.
In fact, since net neutrality, we have invested in eight
new markets from the order coming out in 2015. Overall, we have
invested $30 million in fiber-based infrastructure--not
wireless, but fiber-based infrastructure, and we are in 40
markets, as I mentioned, that we operate today.
The driver for that is, obviously--in other words, demand
for our inventory and our product set is driven by our
customers. When there is a need we will prevail, and we provide
that solution and we very much enjoy coming into a marketplace
that is requesting demand in services when in fact there is
only maybe an incumbent of a cable company and a phone company
in place.
In 2017, I wrote a letter--an open letter--supporting the
rules for net neutrality. I was concerned about the repeal and
I remain so today.
I have 20-plus years in the organization, and I am very
confident that over those years we have had many successes
including that in the cellular industry where we utilize Title
II.
There is a fallacy that seems to be out there that there's
a history and the fallacy of investment where AT&T and Comcast
and others would possibly invest less money if net neutrality
were to continue and, having looked at those actual numbers,
there may have been a smaller investment but was very, very
minuscule.
We continue to invest today, and we continue to grow our
business, and net neutrality is a very large component of that
because we believe in the foundation that net neutrality
provides for equal access for everyone.
We know that in a lot of marketplaces that 70 percent of
the consumers only have one choice for their ISP and we do not
feel that is a competitive--it may be a competitive advantage
but it is not an open access advantage so that the consumer
ends up with what they need at the end of the day. They need
competition, they need a landscape which they can count on, and
investment in the community.
I am not a lawyer. I am a businessman. But I was very much
part of the bipartisan Telecommunications Act of 1996 when
Craig McCaw and myself and a lot of other gentlemen began the
path down a company called Nextlink.
You remember the name Nextlink and Craig McCaw. We built a
company called Nextlink. It later became XO Communications, one
of the first CLECs in the United States. We raised $400 million
during that time, and the Telecommunications Act of '96 gave us
that very opportunity to do so.
So, I appreciate the opportunity to speak today. I
appreciate the opportunity that you provided us to be a part of
this. I would like to say that we very much support net
neutrality and we will answer any questions that you may have
today.
Thank you.
[The prepared statement of Mr. Green follows:]
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Mr. Doyle. Thank you, Mr. Green.
The Chair now recognizes Commission McDowell for 5 minutes.
STATEMENT OF MR. ROBERT M. McDOWELL
Mr. McDowell. Thank you, Chairman Doyle. It is great to be
here. Ranking Member Latta, Chairman Pallone, and Ranking
Member Walden, it is an honor always to be back before your
committee. So thank you.
I did serve at the FCC from 2006 to 2013. I am a partner at
Cooley LLP. I am also a senior fellow at the Hudson Institute,
but I testify today only in my personal capacity and the views
today that I express are purely my own.
The debate over the best way to keep the internet open and
freedom enhancing has raged for about 15 years. While the
national political pendulum has swung back and forth during
that time, the American internet ecosphere has blossomed as the
most powerful explosion of entrepreneurial brilliance in human
history.
And let us make no mistake. The American internet market is
the envy of the world. The legal and regulatory framework that
provided the necessary certainty and protections for the
phenomenon that became the internet was rooted in consumer
protection, pro-competition, and antitrust statutes such as the
Federal Trade Commission Act, the Clayton Act, the Sherman Act,
as well as tort and contract common law, among others.
Furthermore, a fundamental agreement in the successful
public policy recipe was Title I of the Communications Act of
1934. A quarter century ago at the time of the internet's
privatization, the Clinton-Gore administration made a wise
choice to insulate the internet ecosphere from the heavy-handed
regulation of Title II of the 1934 Act.
This monumental decision made it a crucial tipping point in
historical arc of the net, enjoyed not only bipartisan and
nearly unanimous support here in the U.S. but internationally
as well.
In short, reliance on this time-tested legal construct
created an environment where ideas hatched in dorm rooms or
garages could become some of the most successful companies in
the world in just a handful of years.
Light touch regulation not only allowed the internet's edge
to flourish, but it also provided the certainty and stability
needed for the capital markets to take the leap to invest more
than $1.6 trillion in private risk capital in broadband
infrastructure since the mid-1990s.
Furthermore, it was not that long ago that the FCC itself
issued unanimous and bipartisan orders classifying broadband
internet access service across all platforms as an information
service. I supported such efforts in concert with my Democratic
colleagues as recently as 2007.
Needless to say, the political and public policy atmosphere
has changed a few times since then. The FCC has attempted to
regulate broadband services in various ways over the past 11
years including by classifying broadband as a Title II
telecommunications service for the first time in early 2015.
And most recently, it acted in December 2017 to restore the
pre-2015 legal framework that was proven to work so well.
To be clear, I do not think that additional legislation is
needed to protect consumers, startups, or broadband
investments. The proof is in the pudding of the internet's
brief but brilliant history.
Nonetheless, the public policy pendulum has been swinging
back and forth above the heads of internet entrepreneurs like
the sword of Damocles and has created uncertainty and it is
counterproductive.
For instance, anticipating uncertainty in 2015 surrounding
the Title II classification, there is evidence that capital
markets slowed their investment in broadband infrastructure.
After the Restoring Internet Freedom order of 2018,
investment in broadband rebounded. The time has come, however,
for Congress to provide clarity and certainty by enacting new
legislation.
Such an effort could end this era of bitter and vitriolic
zero-sum advocacy where, in order for one faction to win others
must lose.
The 116th Congress serves during a unique period in the
internet's history and it has the power to forge a reasonable
majority to craft new bipartisan legislation that could last
for decades and serve as a beacon for an open and freedom-
enhancing internet across the globe.
Any bill passed by this House must have a reasonable chance
to garnish 60 votes in the Senate if there is to be any hope of
it becoming law.
The only path to that goal of meaningful, positive, and
constructive public policy for the internet, a law that will
last beyond election cycles of two to four to eight years, is
through finding that majority that offers a win-win-win
scenario for all who build and are affected by the internet.
Without a large bipartisan majority, any legislative effort
is, largely, symbolic. A hopeful starting point, however, could
begin with the principles laid out by FCC Chairman Michael
Powell in 2005, some of which were echoed by Chairman Julius
Genachowski in 2010, such as no anti-competitive throttling,
blocking, or prioritization.
This Congress has a rare opportunity to create a lasting
legacy for the internet ecosphere and I look forward to helping
you achieve it.
Thank you, Mr. Chairman.
[The prepared statement of Mr. McDowell follows:]
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Mr. Doyle. Thank you, Commissioner.
We now recognize Mr. Wood for 5 minutes.
STATEMENT OF MR. MATTHEW F. WOOD
Mr. Wood. Chairmen Doyle and Pallone, Ranking Member Latta,
Walden, and subcommittee members, thank you for inviting me
back.
Free Press Action is a nonpartisan nonprofit with 1.4
million members around the country and we support H.R. 1644,
the Save the Internet Act.
Our members know that having equitable access to technology
and information is the key to making change and making a
living. Net neutrality is an issue of economic and racial
justice. It is a timeless nondiscrimination law safeguarding
people's rights to say and see what they want online, free from
unjust interference by ISPs.
This bill restores the FCC's 2015 Open Internet Order
released four years ago today, as luck would have it, and it
brings back the three bright line bans on blocking, throttling,
and paid prioritization.
But it does more than that and that's a good thing. It
restores the FCC's whole decision that adopted those rules, put
them on the bedrock of Title II, and forbore from the parts of
that law that we don't need.
Restoring the 2015 framework is precisely the right
approach on the law and the facts and is tremendously popular,
too. Huge majorities oppose this repeal. Eighty-six percent,
including 82 percent of Republicans, supported keeping the 2015
rules.
So when I hear we can't have the 2015 rules back because we
need a bipartisan solution, it reminds me of the ``Princess
Bride'' line, ``You keep using that word. I do not think it
means what you think it means.''
This bill restores the FCC's power to make new rules,
preventing new forms of ISP discrimination. That is why Section
202 of the Communications Act is crucial.
The FCC needs that authority to address any unreasonable
discrimination like AT&T's schemes to favor its own video
content and voice services or Comcast's abuse of
interconnection points to slow traffic to a crawl.
Provisions like Section 201 are crucial, too. It allows the
FCC to address unjust and reasonable behavior like Verizon
slowing down firefighters' data.
Those who cynically say that wasn't a real net neutrality
violation suggest that the FCC fiddled while forests and homes
burned rather than have the power to protect people's lives and
public safety.
They also say that Title II is somehow too new and
untested and yet also too old while claiming, funnily enough,
even older antitrust and FTC laws can protect the open
internet. Their claims don't add up.
The FCC has used the 2015 framework with great success for
decades for internet access, wireless voice, and business grade
broadband, too. When it returned to the right law for net
neutrality in 2015, that decision was upheld in the courts
twice.
Some still say we have no business applying laws written
for 1930s monopolies. But what about present day ones? By 2017,
39 percent of people in the U.S. still had, at most, one choice
for wireless broadband offering downstream speeds of 25
megabits per second.
At 300 megabits per second, that figure is 77 percent. But
even if they have a couple of choices, I doubt many
constituents back home complained to you that broadband is just
so darn affordable and reasonable they would be glad for no
oversight at all.
Yet, while the Save the Net bill restores the FCC's ability
and mandate to watch out for abuses and fraudulent billing, it
also locks in the FCC's 2015 decision to forebear from rate
setting under Section 205.
It also puts the FCC back on solid ground to protect a
whole host of broadband rights outside of net neutrality with
provisions like Section 254, offering a solid base for
broadband universal service, and Section 224, granting
competitive providers access to rights of way.
And it fixes in place the 2015 order's decision not to
apply resale or unbundling obligations in Section 251 but, by
their own terms, do apply to telephone services alone.
In sum, the bill restores not just the fundamental
communications rights internet users need but the certainty
that broadband providers have. That is why they continue to
invest and deploy at, largely, the same pace and on the same
trajectory as they did before the 2015 vote.
New numbers for 2018 show that Chairman Pai's simplistic
and silly promises on booming investment after repeal have not
panned out. Broadband investments and speeds trend up over time
though spending does come in cycles, and it trends that way for
rural carriers, too.
As my written testimony explains, one witness here last
month claimed that he couldn't get a loan or expand his
coverage for two years all because of Title II's supposed
shadow.
Yet, during the first two years of Title II's return he
invested $2 million in fiber and tripled the speeds offered to
all of his cable broadband customers in rural parts of Oregon.
Thankfully, the Save the Net Act cuts through the clutter
of false claims about supposed investment impacts and it
restores all of the rights that internet users need.
Thank you very much, and I look forward to your questions.
[The prepared statement of Mr. Wood follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Doyle. Thank you, Mr. Wood.
So, we have now concluded opening remarks and we are going
to move to Member questions. Each Member will have 5 minutes to
ask questions of our witnesses.
Let me say to my colleagues that I am very interested in
your questions but not after they go over 5 minutes. So, I
would ask all of our colleagues to get their final ask in
before their 5 minutes. We will allow the witnesses to answer a
question if it goes past there. But let us all respect one
another's time as we move forward.
And I will start and try to set a good example by
recognizing myself for 5 minutes.
Mr. Wood, this bill would permanently prevent the FCC from
enforcing the majority of Title II. Let me say that again for
all my colleagues.
This bill would permanently prevent the FCC from enforcing
the majority of Title II. However, it would keep the
prohibition on unjust and unreasonable practices.
I want to know why you think this provision is necessary
and what are some examples of practices that were not
violations of the three bright lines that we all seem to agree
on that limits blocking, throttling, and paid prioritization?
What are something outside the three bright lines that
would be a violation of unjust and unreasonable standards and
why we need that section in the bill?
Mr. Wood. Thank you, Chairman Doyle. I mentioned the
firefighter example. I think that one cries out for attention.
It was not necessarily a throttling violation under one of the
bright line rules because Verizon was not throttling content
coming into the firefighters. It was, basically, slowing them
down no matter what they were doing with their service.
So the unjust and unreasonable standard in Section 201
actually couples with the nondiscrimination standard in 202 and
would apply in situations like that.
It would apply to fraudulent billing practices or other
sort of price gauging that ISPs might engage in, not with the
FCC deciding what rates providers could charge but having at
least some oversight of that rate making that the providers do
for themselves.
Mr. Doyle. Mr. Green, at our last hearing we heard from
another small ISP about how open internet rules hurt investment
in his network.
I am curious, did the 2015 rules or FCC oversight hurt your
ability to get financing or impact your investment in any way,
and has a potential investor ever declined to invest because of
net neutrality rules?
Mr. Green. No. We have, in fact, had great success with net
neutrality rules. The discussion maybe comes up once in a while
because it is so public. But I actually sit on the board of an
organization, Northwest Washington--excuse me, Northwest
Telecommunications Association.
I am very familiar with the member that you are referring
to--the ISP. We certainly--I certainly have a position to
disagree with the opinion that it has any way deterred any
investment into our sector by any such imagination.
So, we have had great success since the Act in 2015.
Mr. Doyle. Thank you.
Ms. Ochillo, are you concerned that, based on Chairman
Pai's restoring Internet Freedom Order that millions of
Lifeline subscribers could be at risk of losing access and does
Safe the Net bill put Lifeline program on a firmer legal
footing?
Ms. Ochillo. Thank you for that question, because I didn't
have time to focus on Lifeline in my opening statement and it
is one of the programs that my organization is most passionate
about.
Lifeline is the only Federal telecom subsidy for people who
are in need to actually get connections to both broadband
internet via phone or wireline phones at home and I think that
it is important for us to recognize that Title II is where the
actual authority for FCC to have those types of universal
service plans comes from.
I think that this bill is something that we need. I think
that it is important for the FCC to have express authority to
do universal service programs like Lifeline and the others that
are funded through the USF program.
Mr. Doyle. Thank you.
Mr. Green, tell me, how does Save the Net bill help your
business, and do you feel that it balances appropriate net
neutrality rules with regulatory certainty that you need to
conduct your business?
And I am just curious, are you comfortable with the
obligations that the Save the Net bill would put on you as well
as the way that it preserves the integrity of the product you
sell access to--an open internet?
Mr. Green. Thank you for the question, Mr. Doyle.
I am very much a proponent of Save the Internet. I think
that it gives us all the protections, and I don't just mean a
few. I mean all of the protections that are necessary such as
interconnection, enforcement, and conduct. So, I very much
support Save the Internet.
Thank you.
Mr. Doyle. Thank you very much.
And with 45 seconds left on my time, I am going to yield
back to set a good example for the rest of our colleagues and I
am now going to ask my friend and ranking member, Mr. Latta,
you have 5 minutes to ask questions.
Mr. Latta. Thanks, Mr. Chairman, and again, thanks to our
panel of witnesses for being with us today.
Mr. McDowell, if I could start my questioning with you. My
concern with reinstating Title II is that the broad authority
it provides would open the door to intrusive Government
regulation that has nothing to do with net neutrality.
Will you answer yes or no to whether Title II could lead to
the following scenarios?
The Government setting prices.
Mr. McDowell. Yes, Title II could.
Mr. Latta. The Government determining what services ISPs
could offer consumers and whether and how they could be
bundled?
Mr. McDowell. Yes, Title II does that as well.
Mr. Latta. The Government directing where ISPs put their
investments and how much they should earn.
Mr. McDowell. Title II has that authority--that power, yes.
Mr. Latta. The Government dictating how parts of the
internet should be interconnected and on what terms.
Mr. McDowell. Yes.
Mr. Latta. The Government requiring ISPs to share networks
they have built with private capital.
Mr. McDowell. Yes, same answer.
Mr. Latta. OK. Let me move on.
I want to clarify something from Mr. Wood's testimony,
contrary to his argument. Before 2015 the FCC had never
classified broadband internet access under Title II.
I would like to introduce for the record a letter you wrote
back in May of 2010 to then Chairman Henry Waxman, which
explains how the FCC issued a series of orders all without
dissent that classified all broadband services as information
services.
Mr. Chairman, I would like to offer that for the record.
Mr. Doyle. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Latta. Thank you very much.
Mr. McDowell, will you explain to us why it is a myth that
broadband was regulated under Title II?
Mr. McDowell. So as I outlined in that letter, which is
almost nine years old but the history remains the same, so you
can go back to the 1996 Act when Congress had a chance to make
a distinction between enhanced and basic services, which it
did.
So think of enhanced services as advanced services or
computer-to-computer communications, going back to the computer
inquiries at the FCC. So it is their storage forwarding
processing of data is there something--some other service other
than a pure transmission service.
So, Congress looked at that in 1996 and then the FCC in
1998, pursuant to the prompting of Senator Ted Stevens, issued
what would be called in the vernacular the Stevens report.
So this was the Clinton--second Clinton term and this was
Chairman Bill Canard of the FCC--which looked at the emerging
broadband or internet access space, which became broadband--and
concluded that those services--internet access services--were
rightly in Title I.
Where this gets confusing or sometimes gets deliberately
conflated is what do you do about the underlying transmission
facilities if they are owned or operated by a carrier that is
otherwise providing Title II services.
So the transmission facilities, especially during the
implementation of the 1996 Act--Section 251 and other
sections--were under Title II.
Folks often point to a GTE--the GTE ADSL order of 1998 as
well, saying, aha, that was the FCC classifying internet access
as a telecommunications or Title II service.
That's not the case. The FCC did not reach that conclusion.
That was about a tariff, again, of the underlying transmission
component of DSL or ADSL services by GTE at the time.
So there is a lot of confusion. It gets very technical very
fast. Both legalese and engineering involved. But suffice it to
say that internet access services have never been classified as
common carriage. They have always been classified as an
information service, or in the old days we called those
enhanced services.
Mr. Latta. OK. In my last minute, what concerns did you
have about the 2015 rule's so-called general conduct standard
and are there consumer-friendly services that could be
prohibited under that standard?
Mr. McDowell. So the general conduct standard in the 2015
Title II order allowed the FCC to basically roam around the
internet ecosphere so long as it could tether its decision to
broadband.
It was certainly untested in the appellate courts, but it
was very open ended. I think it would have led to a lot of
appeals, and keep in mind that, you know, Title II--just
Sections 201 and 202--have been appealed in the courts hundreds
of times and within the FCC thousands of times.
And so that general conduct standard actually took the
leash--Congress's leash off of the FCC's jurisdiction and would
let it regulate as it saw fit until an appellate court put it
back inside some boundary.
Mr. Latta. Thank you very much.
And, Mr. Chairman, I have 10 seconds left. I will yield
back my time.
Mr. Doyle. Thank you very much.
I would just note, for the record, that all of the
questions that the ranking member asked of Title II with the
exception of the interconnection question was accurately
answered by Commissioner McDowell except that those are all the
sections of Title II that are not part of this bill. So, I
would note that for the record.
The Chair now recognizes Mr. McNerney for 5 minutes.
Mr. McNerney. Well, I thank the Chair. I thank the
witnesses. It is a good hearing. It is a good subject.
My district does care strongly about net neutrality
protections. When the FCC moved to repeal net neutrality, more
than 8,000 of my constituents reached out to me to express
their concerns.
So, I held a town hall meeting on net neutrality. I heard
from a veteran. I heard from a librarian. I heard from students
and I heard from a small business owner about their concerns
what this would do to their--to their interests.
Mr. McDowell, thank you for your service as a Commissioner,
as a chairman. You were an FCC Commissioner when the agency
issued its first net neutrality enforcement action in 2008.
Is that right?
Mr. McDowell. That is correct.
Mr. McNerney. Thank you. And you dissented from that action
and issued a statement. Is that right?
Mr. McDowell. Correct.
Mr. McNerney. I would like to--I have a copy of your
statement. I would like to submit that for the record.
Mr. Doyle. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. McNerney. Mr. McDowell, I also have a copy of the
dissent you filed when the FCC adopted the 2010 Open Internet
Order. Can you confirm that you dissented?
Mr. McDowell. Yes.
Mr. McNerney. All right. I would like to submit a copy of
that for the record as well.
Mr. Doyle. Without objection.
[The information appears at the conclusion of the hearing.]
Mr. McNerney. And you sat down for an interview with the
Wall Street Journal in 2017. Can you confirm that you sat for
an interview on this subject in 2017?
Mr. McDowell. I may have. I don't--I had many interviews. I
am sorry to say I don't remember the specific one you are
talking about.
Mr. McNerney. I understand.
Mr. McDowell. But for the--for the sport of it, yes. Let us
say that.
Mr. McNerney. But I have a copy of that and I would like to
submit that for the record, without objection.
Mr. Doyle. Without objection.
[The information appears at the conclusion of the hearing.]
Mr. McNerney. So while I appreciate your willingness to
engage on the issue and your suggestion that perhaps some rules
are appropriate, I have to wonder whether you are truly
interested in any safeguards to protect the free and open
internet.
In 2008, you claimed that net neutrality issues may be
better left to nongovernmental internet governance groups. In
2010, you said that net neutrality would cause irreparable harm
to broadband investors and consumers.
In 2017, when talking about net neutrality you said it is
hype. My constituents don't think it is hype. And the broadband
market is competitive as is. It seems like the only time you
have agreed with the Government actions on net neutrality was
the FCC's 2007 order repealing protections.
Given you repeated opposition to net neutrality, it is hard
for me to see that your critiques of our bill are anything more
than a tactic meant to delay or halt efforts at giving
Americans and my constituents critical online protections.
Mr. McDowell. Am I--can I address these other questions?
Mr. McNerney. Sure. No, it's not a question but----
Mr. McDowell. OK. So----
Mr. McNerney. If you can respond in 30 seconds.
Mr. McDowell. Real quick, in observance of your time.
So in 2008 that was an attempt to enforce the principles as
rules and I objected on that basis--that they were not rules.
The appellate court agreed with me and struck it back and
turned it back to the FCC.
In 2010, I thought the FCC had overreached. You are right.
I didn't think that rules were necessary because there were
other laws already on the books that I talk about in my opening
statement that gave us this wonderful internet ecosphere that
we enjoy today.
But I also thought the FCC overstepped its bounds and
didn't explain itself well and the appellate court, largely,
agreed with me regarding the 2010 order.
So in both of those cases, that is true. When it comes to
today and having this sort of Damocles swing back and forth
every two to four to eight years--and we have learned that
surprise elections do happen so we don't know what is next--can
we get a bill through the House that would get 60 votes in the
Senate? I think that is a big question for this committee
today.
Mr. McNerney. All right.
Thank you for your response to that.
Mr. Wood, what do you think about Mr. McDowell's critiques
of past FCC efforts to give consumers' open internet
protections?
Mr. Wood. Well, he is, obviously, right that those attempts
failed in court in 2010 and in 2014 but that was because those
rules weren't grounded in Title II.
So, I think the Save the Net Act neatly solves that problem
by permanently grounding the rules in the right part of the law
and doesn't leave it prone to challenges from ISPs like Comcast
and Verizon who went in and sued and had those rules knocked
down.
I also don't see the Sword of Damocles that he is talking
about because, as Mr. Green testified and his research shows,
investment has trended along just fine.
Mr. McNerney. Well, I am going to follow up on that a
little bit. Would you--would the proposed legislation give ISPs
both large and small certainty in opening up investment?
Mr. Wood. I believe so yes. I think that is what the record
shows. They have continued to invest on the same path and
trajectory that they did before 2015 during the Title II period
and then since it has been repealed.
Mr. McNerney. Do you have any estimates for how much
investment might be--have been made?
Mr. Wood. Well, I mean, the last page of our written
testimony has some current aggregate figures. It tends to be,
on the aggregate, about $70 or $80 billion a year. But we think
those figures are actually somewhat uninformative because we
look at individual companies and we see that they are investing
at about the same percentages they have been for the past
decade or more.
Mr. McNerney. Thank you.
All right, Mr. Chairman. I give you four seconds.
Mr. Doyle. I thank the gentleman.
The Chair now recognizes the full committee ranking member,
Mr. Walden, for 5 minutes.
Mr. Walden. Thank you very much, Mr. Chairman. Again,
thanks for this hearing.
Mr. McDowell, a quick question for you. Would Section 201
allow the FCC to do basically everything Mr. Latta asked you
that could be done?
Mr. McDowell. Section 201 is a very powerful statute that
has been litigated both administratively and in the appellate
courts many times and the power of 201 is very broad and
powerful.
Mr. Walden. So the FCC could, basically--the questions Mr.
Latta asked?
Mr. McDowell. Yes 201 and 202, by the way. It's a necessary
cousin as well. Yes.
Mr. Walden. Necessary cousin. That is an interesting
phrase.
And so this legislation would not preclude the FCC from
using its Section 201 and necessary cousin 202 to engage in all
the things Mr. Latta expressed?
Mr. McDowell. Not in my opinion.
Mr. Walden. They could do a rulemaking and do that?
Mr. McDowell. That is what it appears.
Mr. Walden. OK.
Mr. Green, I am curious about Fatbeam. Are you principally
a business-to-business internet service provider?
Mr. Green. Thank you for asking--thank you for asking the
question.
We do deliver indirectly--directly and indirectly
residential services as----
Mr. Walden. So what percent of your business is residential
versus business to business? Because I was looking at the
website and it really seems to be marketing more to business-
to-business, schools, hospitals.
Mr. Green. Yes. I would say that probably less than 12
percent of our----
Mr. Walden. Less than 12 percent is residential. So very
little of your business would actually fall under the Title II
regime then, right?
Mr. Green. Not necessarily. We have edge providers and
other providers that would lease facilities from us.
Mr. Walden. So but the edge providers aren't covered under
Title II?
Mr. Green. They are not.
Mr. Walden. Do you think they should be?
Mr. Green. I am sorry?
Mr. Walden. Do you think they should be?
Mr. Green. They should not be.
Mr. Walden. OK. So it is okay for them to throttle and
block and do that sort of activity that they do as part of
their business plan?
Mr. Green. They have a different set of rules that they
operate under.
Mr. Walden. Yes, they do, don't they?
Mr. Green. Yes.
Mr. Walden. Yes. And so then I want to go to Mr. Wood's
testimony, which I have been through, and I see you spent a
very--incredible amount of time trying to rebut the witness we
had from my district the other hearing, Mr. Franell, on Page 25
and all.
And so we had the opportunity last night to share your
testimony with Mr. Franell. When did you--did you reach out to
Eastern Oregon Telecom?
Mr. Wood. No. After the hearing, we published a piece about
that, and I understand----
Mr. Walden. Right, but my question--it is a simple
question. Did you email them? Did you talk to them?
Mr. Wood. No. We relied on public and news reports about
investment at the time----
Mr. Walden. Right.
Mr. Wood [continuing]. And FCC data as well.
Mr. Walden. Yes. That's why I was concerned about your
testimony and why I raised the issue about, you know, how
witnesses should behave here because Mr. Franell's testimony--
he sends the letter and I want to read from it, just part, and
I will submit it for the record without objection, Mr.
Chairman.
Mr. Doyle. Without objection.
[The information appears at the conclusion of the hearing.]
Mr. Walden. He says, in part, he goes through what really
happened here in detail and I will make sure you see it,
because he basically rebuts what you are saying and says, ``Mr.
Wood's assertions are, simply put, ill-informed and,
unfortunately, tell a story far different,'' and then in
parentheses ``and not accurately from the one that actually
occurred here in eastern Oregon. Had Mr. Wood simply picked up
the phone or emailed I would have helped him so that his
testimony could be a complete representation of the facts.''
And he points out that his deployment was limited in scope
to a lack of available cash, ``ultimately only resulting in us
building out to about 700 homes in Hermiston. The loan we
secured to do the build was obtained prior to the Open Internet
Order and had to be guaranteed by Umatilla Electric Co-op.
Sadly, the project scope that we had hoped for was
significantly limited due to a lack of capital.''
And then he said in response to Mr. Wood's second bullet on
Page 25 of his written testimony, ``We obtained a cable system
at zero dollars through RFPs from Boardman, Hermiston, Umatilla
in unincorporated areas in northwest Umatilla County as they
had been abandoned by their previous owner. We originally
activated them with DOCSIS 2.0 cable modem termination system--
CMTS--bought on eBay. They allowed us to provide download speed
up 30 megs. We upgraded the system to 3.0 systems in 2016 using
Huawei-distributed CMTSs using cash organically generated. This
new and extraordinarily cost-effective upgrade now allows us to
offer speeds up to 100 megs to home.''
And so there is more to this story than what your testimony
gives this committee and it is, I think, unfortunate that you
didn't actually reach out and do the rest of that--of that
look.
Mr. McDowell, so for what part of the internet's life and
flourishing occurred under the Wheeler order of net neutrality?
Mr. McDowell. Well, most everything up until February of
2015. So pretty much everything we know today.
Mr. Walden. And then that order was repealed when?
Mr. McDowell. That order was voted on December 14th of
2017. I think it became effective last summer.
Mr. Walden. So,--and I know I am out of time, Mr.
Chairman--but, basically, two years of the internet's lifespan
was under the Wheeler order?
Mr. McDowell. Yes. The internet was not born in February of
2015.
Mr. Walden. I yield back.
Thank you.
Mr. Doyle. I thank the gentleman.
The Chair now recognizes Mr. Loebsack for 5 minutes.
Mr. Loebsack. Thank you, Mr. Chair. I do want to thank
Chairmen Doyle and Pallone, Ranking Members Latta and Walden,
for having this hearing today and I thank the witnesses for
their participation as well.
Net neutrality, obviously, is a very important issue with
this committee--I think for the country, and I am really glad
that we are taking action today or at least beginning that
process.
As a representative of a rural district, I think net
neutrality comes down to being pretty similar to many of the
challenges that face rural Americans. That the challenge of
access as much as anything.
Rural Americans, I think, are often left behind when it
comes to access to infrastructure and having many of the same
opportunities as those living in the coasts--on the coasts or
in urban areas. I know that is a constant refrain from me here
on this committee and others on this committee as well.
I have been a constant advocate before this committee for
rural communities--in my southeast Iowa district, about 12,000
or so square miles--it is very rural--and broadband in
particular, because expanding access for all Iowans is one of
the biggest challenges for my district as it is for many of the
folks--districts of the folks on this committee.
And the hard truth is that for many of my constituents it
is not a question of where is service is being throttled or
blocked but whether there is reliable service, if any, at all.
And so that is a really important aspect of what I am
interested in is just making sure that we have the services and
access to good quality service across my district and open
internet principles I think are an important part of that
conversation as we consider the larger tech and internet
environment facing us out there.
Our responsibility is to make sure that Americans have
reliable service everywhere and we do need to make sure that
that access isn't being unfairly blocked or slowed down or
degraded.
So, I do want to turn to some questions and I apologize. I
had to step out briefly. So, I thank my friend. Mr. McNerney
may have addressed the issue of investment and I apologize for
not being here to hear your answers.
But I do want to talk about that because, you know, we have
talked about the time frame here when we had the Open Internet
Order, when it was repealed, when it--when the repeal went into
effect and then where we are now.
When it comes to investment, Mr. McDowell, how did the Open
Internet Order affect investment? And I really would like you
to be specific about that as well.
Mr. McDowell. Absolutely. So if you look in the record of
the FCC, filings made by the Wireless Internet Service
Providers Association--we call them WISPs--and these are often
mom and pop operations in rural areas including in Iowa, about
80 percent of their members, they said in comments to the FCC,
had trouble getting financing or loans.
I am delighted Mr. Green's company hasn't had that problem,
and so there may be better cases than others. But for these,
these are the smallest of the small ISPs and----
Mr. Loebsack. And when specifically did this happen and for
what length of time?
Mr. McDowell. From the time of the Title II order in 2015
onward that they were having trouble raising money, because
they would get questions. Same with the American Cable
Association--ACA. They filed in the record that there were many
of their members having trouble getting financing----
Mr. Loebsack. And did you say----
Mr. McDowell [continuing]. As well as municipal broadband
companies.
Mr. Loebsack. Did you say it was a survey of the small
providers, that you said 70 or 80 percent of them are having
trouble?
Mr. McDowell. So that is the WISPA said about 80 percent of
their members were having trouble.
Mr. Loebsack. And that was a survey that was done on them.
Is that correct?
Mr. McDowell. Right. And then----
Mr. Loebsack. And when was that survey done, specifically?
Mr. McDowell. After the Title II order.
Mr. Loebsack. But can you tell me when specifically?
Mr. McDowell. Between 2015 and into 2017 when the FCC was
collecting comments.
Mr. Loebsack. I am sorry. I am a former social scientist,
so I like to be precise about when things were done.
Mr. McDowell. Yes.
Mr. Loebsack. If you could provide that information to me
in writing that would be fantastic because I would like to know
those specifics.
Mr. McDowell. In the FCC's records. I would be happy to get
it for you.
Mr. Loebsack. That would be great.
Mr. McDowell. Same with the ACA filing. Same with the 19
municipalities that said the same thing. Same with the
independent Wall Street analysts who really have no dog in the
fight. They said the same thing, that this is affecting--mainly
because there are so many questions being asked.
Mr. Loebsack. Right.
Mr. McDowell. And I--you know, part of what I do is I help
investors understand Washington, which is no easy task
sometimes----
Mr. Loebsack. And I will----
Mr. McDowell [continuing]. And then other questions I would
get or got----
Mr. Loebsack. I really hate to cut you off, but I have a
limited amount of time. I got to ask some other folks.
Mr. McDowell. OK. Sure.
Mr. Loebsack. Thank you so much.
Mr. Green, would you like to respond to that?
Please do.
Mr. Green. Yes. We have not had any difficulty. In fact, we
have had great success in terms of getting financing. I would
say that the stability of net neutrality in 2015 even helped
more.
Mr. Loebsack. Right.
Mr. Green. I would view it in that--in those terms, if I
could.
Mr. Loebsack. Yes. Thank you.
Mr. Green. I don't know if that's specific enough for you.
Mr. Loebsack. And maybe you could give me some specifics in
written form, if you would, and I have 17 seconds left.
Mr. Wood, I would like you to answer that question, too,
and then whatever more you would like to say beyond the time
here I would like to see that in writing and respect the rules
of the committee here.
Mr. Wood. Sure. But we do have some of that information in
our written testimony. We had some in our previous testimony,
too.
I don't think there are very many specifics in what
Commissioner McDowell gave you, with all due respected. WISPs
said they had trouble getting financing.
What we look at and what we looked at for Eastern Oregon
Telecom and also 5 other ISPs who came to the FCC in December
2017 and said that they had had trouble as well was we look at
their deployment data that they file with the FCC and we look
at the investor reports that the publicly-traded providers make
to the SEC.
What we see there are companies basically investing at the
same level. Sometimes they go up. Sometimes they go down. But
that is because of their upgrade cycles, not because of any
impact of the rules.
Mr. Loebsack. Thank you, Mr. Chair, for indulging my going
over the time.
Mr. Doyle. I thank the gentleman.
The Chair now recognizes Mr. Shimkus for 5 minutes.
Mr. Shimkus. Thank you, Mr. Chairman.
It is great to have you all here.
Mr. Green, I just want to make a point. I did--a colleague
one time--one time I had a colleague and we voted differently.
Then he went on to explain to the media why he thought I voted
the way I did.
Obviously, I went to meet with him on the floor and I said,
``I will define how I would vote, not you.'' I would caution
you to comment in direct analyses of other people's business
models and when the small providers in my district think that
this is going to be harmful.
And that is just a cautionary note because speak to your
own business model. Don't speak to any other business model
that you may or may not know who they are serving, how they are
serving, and why they are serving it.
Mr. Green. Duly noted. Thank you.
Mr. Shimkus. Mr. Wood, we talked last time and I brought
up--so Adam Kinzinger, our colleague here, is a National Air
Reserve pilot. Flew two weeks on the southern border.
My friends on the Democrat side want smart technology on
the wall at the southern border. Part of that is National Guard
deployment and that is kind of what Adam was doing.
The panel last week all agreeded with Mr. Wheeler, who
highlighted in his order that that ensured the protection for
smart wall protections. All but one witness in the last panel,
which was you and your--and the Free Press Action were opposed.
I just want to give you an opportunity to correct the
record if you are okay with that sort of prioritization since a
smart wall is the proposal from my friends on the Democrat
side.
Mr. Wood. Thank you, Congressman.
I think if I remember the question, it was about whether we
supported two things--funding for a wall or for somebody to
sort of----
Mr. Shimkus. No, it was on smart wall technology and
prioritization.
Mr. Wood. Right. So the answer on prioritization--to stay
away from the wall for a second--is that prioritization----
Mr. Shimkus. Well, it is kind of defined the same. I mean--
--
Mr. Wood. Right. Well, as I talked about last year----
Mr. Shimkus [continuing]. That is part of the debate of--
part of it is the smart wall.
Mr. Wood. Right.
Mr. Shimkus. Smart technology, using electronics and so I
don't want to----
Mr. Wood. But what I testified to last year, sir, was that
prioritization of public safety services is allowed. I don't
know if the question was posed in a way that got people to
answer with their opinions on the wall. We don't support the
building of any wall----
Mr. Shimkus. No, I am just talking about the smart wall
technology on the wall. So you----
Mr. Wood. So under the 2015 rules, prioritization of public
safety services is definitely allowed. What's not allowed is
charging the public safety services for that privilege.
Mr. Shimkus. So you--so I think, if I hear what you are
saying is, prioritization for public safety is allowable.
Mr. Wood. That is not defined as paid prioritization under
the rules.
Mr. Shimkus. Well, it is prioritization.
Mr. Wood. Right. The paid part--paid is an important word
there, sir.
Mr. Shimkus. It is prioritization.
Mr. Wood. That is right.
Mr. Shimkus. OK. Thank you.
Mr. Wood. It could be if it is necessary.
Mr. Shimkus. It is paid. It is prioritization.
Let us go back, and I just do this because Anna Eshoo and
I, we are really in the 911 space. This is not broadband, but
this is FirstNet--FirstNet's premise is based upon
prioritization. Companies use a system and then if their--the
answer is this and if there is a need they push everybody off
to allow first line responders to use that.
Let me go to Mr. McDowell.
Search engines provide content to consumers on the
internet. When a consumer searches for content, do search
engines prioritize the ads that are served to the consumers
based upon paid prioritization?
Mr. McDowell. They do. It is an algorithm. Yes. Absolutely.
Mr. Shimkus. So this is--to Mr. Wood's word, this is
actually where paid prioritization occurs?
Mr. McDowell. There is paid prioritization all throughout
the economy and is actually--it can be very efficient.
Mr. Shimkus. So in your----
Mr. McDowell. And consumers want it, in many cases. It is
anti-competitive paid prioritization. That is the problem. So,
we shouldn't conflate the two, all right.
Mr. Shimkus. So in your communication and conversations--I
was down for the Health Sub gavel--to Mr. Walden, you said edge
providers play by a different set of rules.
Mr. Green, so what are those different set of rules?
Mr. Green. Well, first of all, thank you for the question.
First of all, the provider--as the infrastructure provider
and ISP, we are transport----
Mr. Shimkus. No, I am talking about edge providers. This is
your----
Mr. Green. Yes. I am here to respond. That is not what we
do.
Mr. Shimkus. No, I know. But you--so, I want to know what--
since you know edge providers play by different rules--I mean,
that is your statement you just made--what are they?
Mr. Green. Correct. I am not an attorney. I don't make
those rules.
Mr. Shimkus. But you are the one who said edge providers
play by different rules. So what are those different rules?
Mr. Green. So the rules are different. We are a--okay.
[Laughter.]
Mr. Shimkus. OK. I got that.
Mr. Green. Yes. Yes. We are a communication----
Mr. Shimkus. Mr. Chairman, my time has expired.
Mr. Green. OK. Thank you.
Mr. Doyle. They are governed under a different set of rules
than ISPs are is what I think he was----
Mr. Shimkus. Well, if you will allow me to respond. He is
the one who defined that and then he wouldn't answer the
question.
Mr. Doyle. I think--I think he responded appropriately.
OK. Who is next? The Chair recognizes Mr. Veasey for 5
minutes.
Mr. Veasey. Thank you, Mr. Chair, and before I ask my
questions I just want to clarify. I know that the gentleman
that just finished asking questions said that he didn't want
his thoughts interpreted wrongly.
And so I don't want us to call each other names on the
committee, but I think he said Democrat Party, which is a kind
Republican operative type word, and it is the Democratic Party.
So if he is going to refer to us he ought to refer to us
correctly if he doesn't want his thoughts being interpreted the
wrong way.
I wanted to ask Ms. Ochillo a question, because you
mentioned the Lifeline program which I think is a very
important discussion that needs to be had in this entire
debate.
And when you start thinking about the Lifeline program and
who it serves, which is a lot of the constituents in the
district that I represent, I wanted to ask you, about 50
percent of Americans with households under $30,000 have
broadband and as a--as a good friend of mine that was very
wealthy that has passed away now from Texas had said, if you
make $30,000 a year and you don't have to pay one cent in
taxes, you probably--especially if you have kids, you probably
still don't have any money at the end of the month.
And so I wanted to ask you how do you think that having
this service disrupted in any way would undermine the routines
of these families that make under $30,000 a year? Because that
is a big number.
Ms. Ochillo. Yes, and thank you so much, Congressman
Veasey.
I want to make sure that I frame the background to this
because this is--forgive me, this is my first hearing and some
of what happens the--maybe the tone of the dialogue--people in
my home state they don't care about Democratic or Republican.
They don't care about Title II or net neutrality.
What they care about is that they have access and that
their families can apply for jobs online or that they can apply
for scholarships to go to school so that they have a way out of
poverty.
And then you mentioned the statistics. Just to give
background, when you're talking about Latino communities, 30
percent of Latinos do not have access to broadband of any kind
and when you talk about the non-English-speaking groups, that
number even goes higher.
When you're talking about tribal groups, we have literally
60 percent of Americans who do not have access to any
broadband. So when there are programs like Lifeline that are
basically--their legal foundation is Title II and the FCC has
an obligation to connect these disconnected people, that is
life or death for some of them.
The Lifeline program in times of hurricane is what gives
people a way out to actually get access to FEMA and make sure
that they can fill out their applications for students.
Sometimes it is the only way that they can access to broadband
to do their homework. For some families, that is their only
opportunity to connect, maybe to apply for jobs or to get
healthcare.
So, it is so important that we fund not only just Lifeline
but even start being more imaginative about the way that we
connect people because Lifeline is not enough. But right now,
it is the only program that is connecting people to telecom
services.
Mr. Veasey. Yes. No, thank you very much, and you mentioned
something very important. Seven out of 10 children do their
homework--need broadband access to do their homework.
My son is one of those students. He is in 7th grade and
much of the homework that he does that's required and most of
the kids at his school are on free and reduced lunch, they have
to have this program.
I wanted to ask Mr. Wood a question. You know, one of the
things that happened by the FCC chair was that he reversed a
decision made by the previous chair that allowed nine new
providers of Lifeline into the program.
Of course, most of the people that offered this Lifeline
they are resellers. They are not a lot of the big companies
that we know about.
Can you please just sort of touch on, very briefly, by
taking the competition out by the current chair--removing the
competition and making it harder for these new providers to--or
resellers to provide Lifeline--what that has done to the entire
program and what it has done to undermine it?
Mr. Wood. Yes, sir. Thank you for the question. I think
that is a great follow-up to the last one.
As you said, one of the consequences of this FCC's fight
against Title II and the sound basis it provides for Universal
Service was that they tossed out of the Lifeline program nine
providers who are either already providing or willing to
provide a broadband-only service.
And so what they have done is by getting rid of Section 254
and also swearing off Section 706 of the Telecom Act as the
source of authority they have said, well, if existing
providers--if the existing phone company wants to provide
broadband, that is fine.
They can use USF money for that. They really have no way to
require them to provide that service and in fact, as you noted,
when a company wants to only provide broadband and not a
telephone service, historically, they may not even be eligible
for that Lifeline or any other Universal Service funding.
So, we think that is a problem for keeping out new entrants
and innovation.
Mr. Veasey. Thank you very much.
Mr. Chair, I yield back.
Mr. Doyle. Thank you.
The Chair now recognizes Mr. Olson for 5 minutes.
Mr. Olson. I thank the Chair, and welcome to our witnesses.
A very special welcome to Chairman McDowell. My wife, who I
have been married to for 25 years, is a Duke Blue Devil, and
just like you, she will never buy another pair of Nike shoes
because our star--his shoes blew apart--Zion Williamson--
against their arch rivals, North Carolina, 30 seconds into the
game.
Mr. McDowell. They will be back. Don't worry.
Mr. Olson. OK. That is off my chest.
I am very concerned about returning to the so-called
Wheeler Title II rule. We keep playing ping pong with net
neutrality, just back and forth, back and forth, back and
forth. That means the market is unstable, it is unsure, and,
sadly, the majority party had little outreach to us on our side
of the aisle, which means this bill will die--in the Senate. It
is dead.
And so this is just plain messaging and the people who use
it need real rules. They need this thing to work. But, again, I
don't think it is going to happen with this bill.
My question is for you, Mr. McDowell. In the Title II
order, the FCC, led by Chairman Wheeler, recognized that
sponsored data programs are pro-consumer because they allow
consumers to watch and listen to their favorite content without
being charged for data.
All right. But the FCC also put them under the, quote,
``general conduct standard,'' end quote, and opened quote,
``bureau investigations,'' end quote, in the companies who
offer these pro-consumer plans under the vague general conduct
standards.
How does the threat of these investigations impact a
company decision looking to innovate with the internet?
Mr. McDowell. So what that does is create an atmosphere of
what we call ex ante regulation, which is before the facts, or
``Mother may I.''
So before an innovator wants to do something they were
having to go to the FCC to make sure it was okay to do that,
other than, you know, just trying to experiment in the
marketplace and say here is a sponsor data plan or zero rating
and things of that nature, which are very popular with
consumers.
So that slowed down innovation and the rollout of some
experimentation that consumers ended up liking.
Mr. Olson. And a follow-up to that question. Since the FCC
restored the long-standing Title I classification in May of
2017, ISPs are no longer being scrutinized for every pro-
consumer innovative offering they might introduce to the
market.
What innovations do we have now today that we might not
have had we let the general conduct standard still be in
effect? And specific examples of what this bill may do, once
again?
Mr. McDowell. So what is interesting about this debate is
sometimes we don't know what does not make it to market because
it didn't make it to market, right?
So now we do have an environment where there can be
experimentation in things like zero rating or sponsored data so
long as it is not anti-competitive, and I think the word anti-
competitive has to be part of this conversation because there
is the Federal Trade Commission Act, the Clayton Act, the
Sherman Act, common law tort law, common law contract law, and
other things.
If there were violations of any of those, there would be
investigations by the Federal Trade Commission and there have
been some over the years in this space.
So it is important to make sure when we talk about either
discrimination or the offering of services, is it competitive
or anti-competitive, is it pro-consumer or not, and that is
really the litmus test.
Mr. Olson. Any specific examples of how a business might
have stepped out because of concerns about the Wheeler rule,
just all these things----
Mr. McDowell. So there were some offerings such as Binge On
by T-Mobile, which was held up for a while while the FCC
investigated and that is now a thing in the marketplace--a very
popular service offering--which is not anti-competitive. It is
pro-competition. It is pro-consumer and consumers seem to love
it.
Mr. Olson. And competition drives prices down, encourages
innovation, and just good, good, good. The free market works,
works, works.
Mr. Chairman, I will bank 45 seconds.
Mr. Doyle. I thank the gentleman.
The Chair now yields to Mr. McEachin 5 minutes.
Mr. McEachin. Thank you, Mr. Chairman, and thank you for
pulling this hearing together today.
Mr. Chairman, as you know, I am a new member on this
committee. I am also a forming lawyer, and what that means or
what I hope that means is that I am not necessarily burdened by
the knowledge of the past since I wasn't here for a lot of it.
But I am also intrigued by the past.
And last month, Chairman Wheeler really captured my
imagination and my attention when he discussed the fact that we
really dealing with 600 years of English common law or English
jurisprudence--600 years--of that if for some reason some of my
friends here on the other side of the aisle want to just toss
it out of the window and forget it ever happened.
Mr. Wood, based on building on Mr. Chairman Wheeler's
testimony, would you please speak to the points of common
carrier protections to the openness of what is the most
powerful technology in this era?
Mr. Wood. Certainly, Congressman. Thank you for the
question.
I think you are exactly right. Common carriage law is a
time-honored tradition, but it is one that is still vital. I
think the big difference that we are not hearing about so far
in this hearing is the difference between common carriage law
and antitrust law or other consumer protections statutes, and
that is that common carriage law and the Title II foundation
for the net neutrality rules that we look to restore here
protect everybody's speech on the internet.
So a common carrier cannot discriminate against their
individual users and they are not just prohibited from
interfering with competition but with any free and open use of
the transmission capacity that they sell.
And so that is why I think it is true that, yes, the big
edge providers do play by a different set of rules, as we have
heard, but they are speakers. They are publishers. They are
aggregators. They are users on the edge of that common carrier
network.
There could be some debate to be had about which of those
companies are transmitting speech. I don't think we have the
answer to that right now. But what we do know is we need common
carriage law to preserve that open transmission pathway that we
have had for decades and even centuries on many of these
infrastructures you are talking about.
Mr. McEachin. Thank you. And as a follow-up, how does the
Save the Internet Act ensure the important aspect of common
carrier law are kept in place while many of those that need to
be omitted because they are outdated?
Mr. Wood. Well, it does that, sir, by restoring the
provisions that the FCC kept in the 2015 order and that does
include Title I--excuse me, Section 201 and 202--what we said
the necessary cousins. Is that the phrase we are using?
I wouldn't say those are--that is a bad thing. For me, that
is a feature, not a bug. I don't think most internet users or
most of your constituents are worried about Comcast's hands
being tied or AT&T's or Verizon's.
What they want is somebody to be able to step in and act as
a watchdog when a company does abuse those kinds of privileges
that they can take under the current lack of any rules.
And so you talk about zero rating. In my testimony, I cite
examples of research saying that zero rating actually makes
costs go up for wireless users. There may be no such thing as a
free lunch, and when these wireless companies say we will put a
data cap on you but then we will exempt you for some of those
purposes, that, to us, doesn't sound like a great deal.
What we have seen in the market since the 2015 rules came
into place, not just because of them but thanks to them and
thanks to other developments, as we've seen, a return to
unlimited data on wireless programs and wireless carriers
service offerings.
So, we actually think that giving people the data they pay
for and letting them use it for what they want is a good thing
and not something to be worried about. In fact, it is exactly
what we all need.
Mr. McEachin. And I thank you for that and thank you to all
of our witnesses.
Today's high-speed internet services are intimately tied to
social mobility, economic quality, and community growth. As
such, we must ensure that access to internet services remain
open and not dependent on one's ability to pay.
The Save the Internet Act does just that. I look forward to
it becoming law.
Thank you, Mr. Chairman, and I will yield you a whole
minute, Mr. Chairman.
Mr. Doyle. I thank the gentleman.
We will now recognize Mr. Flores for 5 minutes.
Mr. Flores. Thank you, Mr. Chairman. I appreciate the
witnesses for joining us today.
In a letter that I would like to submit for the record, the
chairman of the Vermont Telephone Company, or VTel for short,
notes the very direct connection between its investments and
the light touch that the FCC reinstituted in 2017 and that VTel
would not have made the decision to invest millions of dollars
on Ericsson 4G and 5G upgrades in the absence of restoring
internet freedom order.
Mr. Doyle. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Flores. Thank you, Mr. Chairman.
Mr. McDowell, Ms. Ochillo talked about the digital divide
and I am glad you brought that up.
Mr. McDowell, what impact would Title II classification
have on broadband investment when it is needed most to close
the digital divide?
Mr. McDowell. Well, as we have seen and we can debate, but
as we have seen in the FCC's record and the record of the
hearing here a few weeks ago as well as today, there are a lot
of rural carriers, in particular--not that this is just a rural
issue--who felt as though their ability to raise revenue to
build out for mainly residential consumers was impaired by the
Title II regime.
But, overall, let us keep in mind that the FCC has an $8
billion Universal Service Fund and under that umbrella are a
lot of other funds and Lifeline was one that I defended
vociferously when I was at the commission. I was worried about
its fiscal long-term health in 2012.
But we also expanded the support of Universal Service to
broadband to advance services which, by the way, Section 254
allows for, and I know if Congressman Pickering were testifying
today--because he helped write 254--he would agree with that.
So in the fall of 2011, we actually had a unanimous
bipartisan decision, the only one of its kind in FCC history to
expand Universal Service support to broadband and, ultimately,
to the Lifeline recipients as well.
So that is a huge component of this. Sometimes the market
does not work for everybody and that is what the Universal
Service Fund is there to do.
Mr. Flores. Continuing on this subject, Mr. Wood's written
testimony claims that just because small providers continued to
invest in their networks while Title II was in effect that
Title II did not hurt them.
The challenge with that is that these investment decisions
are made far in advance. How far in advance do you think these
decisions are made?
Mr. McDowell. They could be sometimes years in advance.
But, and again, I am going to enumerate--I dug through my
folder here--there is Gigabit Minnesota, there is Shentel,
there is Schurz, there is Sjoberg's, there is CATV
Telecommunications.
There are a lot of smaller outfits who filed in the FCC's
record saying that Title II impaired their plans. There are far
more smaller companies--ISPs--that said that than others.
Mr. Flores. That is right, and I appreciate you helping us
make sure we have a holistic record of the investment decisions
that were made when Title II was--when the 1930s-era statute
was slapped on the internet.
And that is important to me because about 90 percent of the
land mass in my district is rural and I care about closing the
digital divide. I would like to see rural America have just as
much access to capital and technology as my constituents do
that live in urban and suburban areas.
And it is unfortunate that we are having a messaging bill
today instead of one of the three bills that would actually
solve the issues that have been complained about and that is
the blocking and throttling and paid prioritization.
And so this bill has no chance of passage and so I think we
would be better spending our time on something else.
During our hearing a few weeks ago, I had the opportunity
to ask former FCC Commissioner Powell about the possibilities
of further Government intrusion under a Title II regime.
Chairman Powell shared my concern that under Title II the
Government could eventually set prices or direct investment
decisions of private entities.
Looking at the bill that we have before us today, Mr.
McDowell, could some--has the Democrat proposal that we have
before us have they safeguarded against these possibilities of
changing prices or regulating prices or investment decisions?
Mr. McDowell. I am sorry. Could you repeat the question?
Mr. Flores. Yes. Let me--let me rephrase it. The Democrat
proposal today, is it safeguarding against the ability of the
FCC to set prices for internet services or to direct the
investment decisions of private entities?
Mr. McDowell. The concern with inviting the Title II beast
into your tent is even if you only have a few claws of it in
the tent it is a pretty big and strong beast.
I am an attorney in private practice. I think there would
be tons of appellate work. I should be all for this, selfishly,
but I am not because I know that there will be tons of appeals.
But let me say something real quickly, if I may, that is
counter cultural, which is actually I have faith in this
Congress. I have faith that you can find common ground on this
issue.
I don't think this is the bill for it. But I think you can
do this, and you can find 60 votes in the Senate, and I am not
just being naive saying that.
Mr. Flores. Well, and I agree with you and this committee
has a long history of bipartisanship. This bill is not that.
So thank you. I yield back the balance of my time.
Mr. Doyle. I thank the gentleman.
The Chair now yields to Mr. Soto for 5 minutes.
Mr. Soto. Thank you, Chairman. I want to start by having
everybody take a deep breath and exhaling. I know the stakes
are high but, you know, let us start by a perspective and what
this bill is, which is an opening offer as we negotiate these
very complex and important rules.
We are going to conduct hearings, yes, more than one. This
is the internet. So, I think we could have even a half a dozen
hearings and that may not be sufficient about the information
we need to get.
We will have a markup so this bill is not just messaging.
It will be an opportunity for amendments. I, for one, am open
to amendments and we have heard some good ones here today.
The Senate appears open to negotiate after passing a
similar CRA. So this idea that there is no chance of passage is
also not true. We were asked by the public to create basic net
neutrality rules and this bill is a start to doing that.
In addition, we were asked by industry to create a new
chapter and this bill will create a new chapter. Don't you
think the internet deserves its own chapter? I mean, it is so
all-encompassing.
And then we were asked to make sure there was some parity
between the ISPs and edge providers and this bill does that
through memorandums of understanding and that was sort of a
confusion. So, I want to clarify what our staff has explained.
By reinstating the 2015 that applies Section 201 and 202 of
the Commutations Act that creates a standard to prevent unjust
and unreasonable and discriminatory network practices. This
would apply to everyone--edge providers and ISPs. Those were
two recommendations from business in the space that we are on
the road to meeting.
But I want to get some consensus on some of the things this
bill does. By a show of hands, how many of you are opposed or
believe this bill should give FCC regulation over blocking?
Raise your hand if you believe that the FCC should, under
this bill, be able to stop blocking? Raise your hand.
Mr. Wood. Blocking by regulated entities, sir. But yes.
Mr. Soto. OK. And how many of you believe the FCC should
have the authority to regulate throttling? Raise your hand.
Raise them a little higher. Come on, everybody.
Mr. McDowell. You're saying under this bill. Is that right?
Mr. Soto. Under this bill.
Mr. McDowell. OK.
Mr. Soto. OK. How many of you support the FCC having the
ability to stop paid prioritization? Raise your hand if you
support that. OK. How many of you believe there should be FCC
investigatory power for consumer and business complaints given
to the FCC? Raise your hand.
OK. And fines for violations? Raise your hand.
Thank you. I want to personally thank the chairman for
reviving FCC authority to fund rural broadband and Lifeline.
That is important for areas of my district like south Osceola
County and Polk County that, obviously, are really important.
There are a series of concerns that Congressman Latta
brought up which I think we do need to hash out. Mr, Doyle has
already said that setting prices and rates, dictating capital
investments has now been part of the bill--is now part of what
the intent of this bill is.
So, Mr. McDowell if we explicitly put in place exclusions
saying that the FCC shouldn't be setting pricing arrays or
dictate where ISPs or edge providers have to put in their
capital, would that make the bill more palatable, in your
opinion?
Mr. McDowell. I wouldn't be able to endorse it. I think
this Congress can do better than that. I think we can do better
than relying on Title II. I think the internet, to your point,
deserves its own chapter and Title II is not the internet's
chapter.
Mr. Soto. But you do agree this isn't the old telephone
company model where people have a monopoly and we would need
these pricing rates and that it would greatly improve the bill
if there were--if we were explicit in these two areas?
Mr. McDowell. If the intent is to fashion something new,
then let us fashion something new. But taking a couple of piece
parts of Title II isn't the way to go.
Mr. Soto. I would like to give each of our other
witnesses--give us one suggestion you would like to see in the
bill, starting with Ms. Ochillo.
Ms. Ochillo. If I were to add something to the bill, I
would like to see that the FCC had some sort of obligation to
actually disclose how their--how effective their Universal
Service programs actually are. So, they should have an
obligation to do so as well as to actually create incentives
for deployment explicitly.
Mr. Soto. Thank you.
Mr. Green.
Mr. Green. Not some but all protections.
Mr. Soto. OK. Mr. Wood?
Mr. Wood. I don't think, Congressman, there is anything to
add because we supported the 2015 rules and we don't think, as
I said in my testimony, there are people who do face a monology
today.
But we do have a long track record under Title II with
wireless voice and business broadband services where there was
not after the fact rate regulation for more than two or three
decades now at the FCC.
So, we don't really think that is a realistic danger or one
that your constituents should fear or would look askance at.
Mr. Soto. Thanks. My time has expired.
Mr. Doyle. I thank the gentleman.
The Chair now recognizes Mr. Walberg for 5 minutes.
Mr. Walberg. I thank Mr. Pallone and thank you to witnesses
for being here.
A little over one month ago we sat here in this room, as
has been noted, discussing net neutrality. Here we are again
and already over the half of the hearings I have attended on
this subcommittee have dealt with net neutrality and it is only
March.
The last time around, my Republican colleagues introduced
three net neutrality bills to kick off discussion on a
potential legislative solution that would preserve
congressional prerogative over agencies to which it delegates
authority.
And, unfortunately, it looks like we are going the opposite
direction--truly back to 1930s or Ma Bell-type-regulation that
I am old enough to remember.
I am glad we are past that, in most cases. As legislators,
Congress must be clear about what authority the FCC has and
does not have when we think they failed. This seems to be a
clear case where Congress must cut through the uncertainty that
is hampering broadband investment in places like my district--a
rural district--and not rubber stamp an old commission's
decision.
Codifying existing commission action doesn't seem to be a
serious attempt to legislate this issue as the title of this
hearing suggests and falls short of delivering the expectation
of a free and open Internet our constituents desire.
I expressed my willingness last hearing to work across the
aisle on this issue and I remain willing to have that
discussion today. But while I respect the commission as an
expert technical agency over communication issues, I firmly
believe that ultimately Congress needs to provide the certainty
and clarity that consumers demand.
Mr. McDowell, you refer in your testimony to some
legislative efforts as zero-sum, implying that in order for one
faction to win others must lose. Can you explain what parts of
this debate are not zero sum?
Mr. McDowell. And, sir, my testimony is referring mainly to
the regulatory actions at the FCC.
So, Title II does bring uncertainty. It does bring
uncertainty to the investment community, to analysts, to the
folks making the loans, to Internet service providers. That's
just a fact. That is just the case.
So that becomes zero sum. So when you bring in Title II and
whether the intent is to have the specter of rate regulation or
not in this particular bill, there will still be questions
about that because lawyers will get paid to find the maximum
path forward of that language as well as others on the other
side to try to make it as narrow as possible.
So zero sum, when you start--it starts coming into play
when you talk about Title II in this regard. I think that if
you were to take Title II off the table and start with some
principles, which I think everyone in this room shares--those
core principles that I talk about in my testimony--then you
have a chance at a large bipartisan majority to get through
those 60 votes in the Senate so something could actually become
law and last for decades.
Mr. Walberg. And so following that up, does the bill before
us today or any other net neutrality legislation like the bills
introduced by Republican leaders Walden, Latta, or Rodgers
incorporate features that are not zero sum that everyone has
agreed on?
Mr. McDowell. So for you Star Trek fans, there is an old
Vulcan saying that says only Nixon can go to China. So let me
say this, which is the 2010 FCC order, I think there are many
parts of that which--some of which are echoed in the Latta bill
could be the nucleus for some successful legislation.
Mr. Walberg. Can each of you down the line, starting with
Ms. Ochillo, quickly answer if you think this issue is zero
sum.
Ms. Ochillo. I don't. I don't think is a zero sum. No.
Mr. Walberg. Mr. Green?
Mr. Green. I don't think----
Mr. Walberg. My time is running out.
Mr. Green. I don't think that it is a zero sum.
Mr. Walberg. Mr. Wood?
Mr. Wood. Yes. I am not sure that we all understand the
question, sir, but I do think that this is a net positive is
what I would call it. Setting the rules straight again and
making it certain to people that they can say what they want
online and see what they want online without interference by
their ISP but, as my testimony shows, with no interference to
broadband providers' investment decisions, despite what we have
heard today.
Mr. Walberg. And I would suggest if that is what we were
doing I could agree with you, but I can't.
I yield back 90 seconds.
Mr. Doyle. I thank the gentleman.
The Chair now recognizes Mr. O'Halleran for 5 minutes.
Mr. O'Halleran. Thank you, Chairman Doyle, and my
colleagues on this subcommittee for continuing this critical
conversation on how we can codify important bright line
protections for consumers on the internet while promoting
innovation in every corner of the internet ecosystem.
At our first hearing on this issue it was clear that broad
support exists when it comes to making the principles, we all
care about permanent.
Today, I look forward to examining the Save the Internet
Act with that same spirit. Everyone on this committee
understands the necessity for protecting access to broadband
for our communities and our economy.
As I have previously said, I want to see a permanent
solution that is enforceable, robust, and has lasting
protections for consumers and our small businesses.
Mr. Green, as someone who represents an incredibly rural
district, as I do--I know up in Idaho you have many of those
same type of districts--I would like to thank you for your
organization's work in serving rural communities in the western
United States including some in Arizona with critical access to
the internet.
In your experience, how are small businesses in rural
communities impacted by a lack of certainty regarding net
neutrality rules?
Mr. Green. Thank you for your question, Mr. Congressman.
I think that, obviously, the business that we are in is
delivering service to a community that is requiring demand.
Demand is creating this need. So, we are a for profit business.
So I will start with that, to try not to take up your time.
But I will also say that as we build that business and
enterprise network for your business communities, surrounding
communities, for education, for economic development, we also
provide connectivity in and out of that community so that you
have access to the internet.
Let us just hope that one day a child, someone in college,
someone working from home, will get a better education.
Let us hope that maybe someone, some young talented
individual will create the next Netflix in a rural market that
you live in and you support like Netflix and that sort of,
quite frankly, is really one of our goals.
Yes, we are for profit. We are a business. But at the end
of the day, if the outcome is that a child can have the same
access in your community that they can in New York, in any
other markets in the United States, then we have done our job.
Mr. O'Halleran. There is nothing bad about for profit. I
think that is a good way to invest in America and invest in the
future of America.
But I guess I am coming from the perspective that there is
a sentiment within our country that rural America is kind of--
well, they are out there. We know they are out there.
But, you know, for them to participate is just going to
cost way too much money. It is not going to get us where we
need to be and, yet, at the same time we need everybody in the
workforce up to the highest level we can as far as education.
We need good health services. We need people to fully
understand the connection between our entire country, not just
parts of our country at the same level. And I heard some
discussion earlier about, well, you are mostly for businesses.
Well, if you get in to the communities in my area, and
others can get links to you, then you are for everybody in that
community and that is a critical element and that investment is
important to each and every one of those communities.
Mr. McDowell, I agree with your statement that the time has
come for Congress to provide clarity and certainty by enacting
new legislation with regard to neutrality rules.
Now, I haven't been here for your entire testimony and you
have brought up a lot of ideas and concepts that I would like
to hear more about.
But I also have noted that a lot of what you have talked
about is kind of, as they would say, in the cloud and not
specific to how you personally would like to see this type of a
bill address the issues that you do not agree to.
Mr. McDowell. Thank you, and first of all, happy early St.
Patrick's Day to you.
Mr. O'Halleran. And the same to you.
Mr. McDowell. Thank you, sir.
So as a starting point, I want us to listen to the Supreme
Court from 2005 when it talked about Title II reclassification.
It said, quote, ``Title II reclassification was subject to
mandatory common carrier regulation of all information service
providers that use telecommunication as an input to provide
information service to the public,'' end quote. That's at
U.S.--545 U.S. at 994. I think that is important.
Mr. O'Halleran. Mr.--I am sorry. My time is up and we will
get back to it another time.
Mr. McDowell. OK. Thank you.
Mr. O'Halleran. Thank you, Mr. Chairman. I yield.
Mr. Doyle. I thank the gentleman.
The Chair now recognizes Mr. Bilirakis for 5 minutes.
Mr. Bilirakis. Thank you, Mr. Chairman.
I want to talk like--again, I know some of the members
before asked but I want to start again with this issue.
Clearly, the FCC needs congressional authority to prevent these
huge swings of all--again, of all or nothing rule under the
Title I or Title II.
If we are all in agreement that we must prevent blocking
and throttling of service--and I think we are all in
agreement--then let us codify those consumer protections and
let us do it now in a bipartisan fashion. I believe that is
what the people want, in my opinion.
What I am afraid of for my constituents is the open-ended
forbearance that the 2015 order, H.R. 1644, puts in place.
Mr. McDowell, under the 2015 order, if the current FCC
decides to forbear a particular Title II regulation, does
subsequent FCC leadership have to abide by that decision?
Mr. McDowell. Under the 2015 order, no.
Mr. Bilirakis. No? OK.
Under the current law, internet users are protected from
the Universal Service fee by statute. Is that correct?
Mr. McDowell. Correct, essentially. Yes.
Mr. Bilirakis. OK. Essentially. OK.
Florida greatly benefits from this protection so as we are
already a payor. So, we are a payor state into the Universal
Service Fund and do not receive--we don't receive our
proportionate share of benefits. That is the case in a lot of
matters, unfortunately.
Again, Mr. McDowell, if passed, would H.R. 644 remove this
protection and potentially allow the internet to be subject to
U.S.F. fees?
Mr. McDowell. So the 2015 order equated IP addresses--
internet protocol addresses--with phone numbers. That not only
had implications potentially for Universal Service--for
contributions--I will call it taxation, although that is
controversial for me to say that--for Universal Service
purposes but also internationally as well for just
international intergovernmental regulation of internet
services.
So there is that potential, again, that when you start
talking about Title II, as I was saying earlier, and that is
the backdrop, it starts to bring up all of these questions and
that is why I think you need to erase the white board and start
clean.
Mr. Bilirakis. OK. Thank you very much.
I yield back, Mr. Chairman. Thank you.
Mr. Doyle. I thank Mr. Bilirakis.
Let me just say for my colleagues, for the record, that
when the--Mr. Bilirakis asked if a future FCC Commissioner
could unforbear the--once again, Mr. McDowell correctly
answered that under the 2015 Open Internet Order that answer is
yes. But under this bill that answer is no because this bill
puts in statute that forbearance and only an Act of Congress
could do that.
Who is next? Oh, I see the Chairman of our full committee
has returned and we yield 5 minutes to Mr. Pallone.
Mr. Pallone. Thank you, Mr. Chair.
Net neutrality is really about the core values that
Americans hold dear--free speech, competition, innovation.
I wanted to ask Mr. Wood, I know these ideas are important
to Free Press. Can you discuss how the Save the Internet Act
would promote free speech and economic opportunity for small
businesses and how that compares to the Republican neutrality
proposals that we have seen recently?
Mr. Wood. Sure, Chairman Pallone. Thank you very much for
the question.
We have heard today that the FCC rules could be a sort of
``Mother may I'' for ISPs. I don't think that is actually true,
based on the conduct of the FCC.
The last thing we want and the reason we are so much in
support of these rules is we can't afford a ``Mother may I''
for American businesses.
So what these rules do is they provide that open pathway
that people have always had to start a business, to get
educational opportunities, to say what they want, to organize
for change, without having to get the cable or telephone
companies' permission and that is a good thing. It keeps in
place the rules we've had albeit on a shifting legal framework
over the course of the last decade and a half.
Mr. Pallone. Thank you.
Ms. Ochillo--I hope I am pronouncing it properly--it is
incredibly important to this committee that we help every
American be able to afford the incredible power that comes with
broadband internet access and I know making sure more people
can access a wide array of material on the internet is key for
the National Hispanic Media Coalition.
So my question is can you explain how the Save the Internet
Act would help low-income folks get access? And I have heard
some say that without net neutrality poorer Americans will be
relegated to second-class status online, only being able to
afford junk internet plans. So what do you think about that?
How would the bill help low-income and what about without
neutrality what would happen? Would they just get junk plans?
Ms. Ochillo. To the first part of your question--thank you,
Congressman--I do want to tie it to something that I said when
Congressman Soto asked me about what I would add to this, and
since we are in the spirit of compromise and talking about
things that we can do to make it better, I think that we should
think about putting in protections for Lifeline and,
specifically, Lifeline, as I have mentioned over and over
again, is one of the only programs that people have to get
access to telecommunications and there are no other Federal
agency--there is no one who is dreaming up any other programs.
To why net neutrality is helpful to people who are
currently denied access, I think we need to be honest about the
fact that when there are--when there is no net neutrality in
place, even though it will be hard to detect at first, ISPs are
going to slowly start to rise--like, prices will eventually
start to rise.
They are going to start putting in more tolls to access. If
they say you have a Comcast plan, but you want to have Netflix,
you want to have Hulu, it is going to cost you maybe instead of
a $10 add-on it might be $12. And I think that it is important
to note that when the net neutrality repeal was announced back
in November of 2017, that day Comcast actually removed from its
website its three-year pledge against paid prioritization. Not
the paid prioritization that is helpful for safety but paid
prioritization that costs consumers more for the things that
they access now.
So, I think that we would be fooling ourselves if we
thought that if we just left it to internet companies to
regulate themselves that we wouldn't eventually pay more
because when the cable companies went and interrupted the
broadcast in 1960s, they were supposed to be offering new
competitive and diversity and all sorts of things.
And 20 years later, they started bundling packages and
saying, I think the consumers in this section of the country
want to watch X and I think that you should pay Y because this
is what this provider is charging you.
So I think that it is just--we have to have an honest
conversation that eventually that will trickle down to
consumers.
Mr. Pallone. I appreciate that, and I have one last
question for Mr. Green.
At our last hearing, we heard some argue that we shouldn't
have strong net neutrality protections because they would
undermine investments in networks.
But I find that hard to believe, since we saw the Financial
Times report recently that the big four broadband companies
invested less in capital projects last year after the repeal of
net neutrality protections, undermining the Trump FCC's
reasoning for doing away with the rules.
So, Mr. Green in your experience, as an internet service
provider, should we believe these arguments that strong net
neutrality, like those that the Save the Internet Act would
reinstate, would undermine network investment, and why or why
not?
Mr. Green. Demand is driving the investment. That is just--
the end of the day, it is the economy. If there is demand and
there is a need, people like myself in business, entrepreneurs,
will find the capital and the resources to create a return for
their investment and compete in a fair marketplace.
Mr. Pallone. So, you don't think that reinstating the rules
under the Save the Internet Act would undermine network
investment at all? You don't see that being linked?
Mr. Green. No, I do not.
Mr. Pallone. All right. Thank you so much. Thank you, Mr.
Chairman.
Mr. Green. You are very welcome.
Mr. Doyle. I thank the gentleman.
The Chair now recognizes Mr. Long for 5 minutes.
Mr. Long. Thank you, Mr. Chairman.
And Mr. McDowell, Title II is intended for common carriage
networks such as the state-of-the-art telegraph and railroads.
But what strikes me is that with each network revolution the
old rules no longer make sense and new rules were needed.
That is exactly why we need 21st century rules for a 21st
century service, not rules from the 1930s for rotary telephone
service.
From your vantage point, what are the risks to regulating
the internet in the same way as common carriers?
Mr. McDowell. Thank you, Congressman. So excellent
question.
So, you know, the history of common carriage goes back to
the idea of natural monopolies like a canal. You dig a big long
ditch, fill it with water, and it is the shortest point
between--distance between point A and point B.
The telephone system was considered to be a natural
monopoly because of the telephone poles and the wire you had to
string up, or railroads--again, the shortest point between
point--shortest distance between point A and point B.
And then that common carrier regulation really started with
the Interstate Commerce Act of 1889 in our country for
railroads and then was applied to airlines and trucking, et
cetera and we still have the 1934 Act, obviously, with the Ma
Bell monopoly.
But things are different with the internet and it was
actually during the Carter administration--Jimmy Carter's
administration--where a lot of these common carriage statutes
and regulations started to be regulated. So railroads,
airlines, trucking--those were all deregulated under the Carter
administration.
We saw investment go up. We saw transit time go down for
the transportation sector. We saw consumer choice go up. A lot
of what is advertised to be the benefits of common carrier
regulation it is actually the opposite.
So what does that tell us? That tell us that transit times
were slower under common carrier regulation. Prices were
artificially higher under common carrier regulation. Consumer
satisfaction was lower. They just didn't know it because that
was the only choice at the time.
So those are some of the problems with common carrier
regulation.
Mr. Long. OK. Thank you.
And, Ms. Ochillo, while you were speaking to Chairman
Pallone a minute ago, you said, when we are in the spirit of
compromise. Some others have said compromise and they call it
bipartisanship at a earlier hearing.
When we are in the spirit of compromise, do you think
attacking people on Twitter is a good idea or a bad idea?
Ms. Ochillo. Sir, respectfully, I don't attack people on
Twitter any day of the week. So, I don't ever do something like
that.
Mr. Long. I appreciate that. Thank you. I am glad that you
don't attack people on Twitter.
Mr. Wood, one question comes to mind is Free Press was--I
don't know if that was pun intended or not when they named Free
Press. But I have two items that I would like for Free Press to
respond to on the record, and I know you won't have these
figures with you here today. So if you can provide those in
writing I would appreciate it.
The first is how many fundraising emails your organization
sent regarding net neutrality and the open internet rules
within the--in the last two years, and second, how much money
Free Press raised through those emails?
I want to highlight the fact that Free Press, Flight for
the Future, and other groups exist by dividing Congress on this
issue. During the February 7th hearing, as soon as a
representative from the majority said he or she would like to
work on bipartisan legislation they were--from the minority, I
think, they were immediately attacked by you on Twitter and you
attacked me on Twitter right after that hearing.
Attacking people is the only thing Free Press does where
they seem to think they need to operate in a bipartisan
fashion--where they need Republicans, which is somebody to
attack, and I think all Members of the committee should be wary
when an organization says compromise and bipartisanship is the
enemy, especially if their financial interests are involved.
And I hope you would follow Ms. Ochillo's lead and quit
attacking people on Twitter when we are trying to do things in
a bipartisan fashion and, as she says, in the spirit of
compromise.
I yield back.
Mr. Doyle. I guess that wasn't a question, pardon me?
OK. The gentleman yields back.
Mr. Long. It was a question. I said I would like for him to
respond in writing, so I yield back.
Mr. Doyle. OK. Thank you.
The Chair now recognizes the vice chair of the full
committee, Ms. Clarke, 5 minutes.
Ms. Clarke. Thank you very much, Mr. Chairman. I thank you
for holding this hearing. I thank our witnesses for their
expertise today.
And I just want to say I don't know why Ms. Ochillo's name
was even raised in that last piece that you had. We should
restrain ourselves from trying to contrast and compare
panelists. It is not a good thing. People can get confused from
what was being said.
Mr. Long. Will the gentlelady yield?
Ms. Clarke. I will.
Mr. Long. I didn't intend to cast any aspersion on Ms.
Ochillo and I know she doesn't----
Ms. Clarke. It came across that way, sir.
Mr. Long. Well, I apologize because she does not--I knew
she didn't attack people on Twitter.
Ms. Clarke. Thank you. That is all I needed was the
apology. OK. Very well.
Mr. Long. I wanted her to say, I don't attack on Twitter--
--
Ms. Clarke. Yes.
Mr. Long [continuing]. Because I don't think that is a
good----
Ms. Clarke. I understand that. But we are in a hearing
where we are trying to make sure that the record is accurate.
And so I appreciate your apology, Mr. Long.
Mr. Long. I yield back.
Ms. Clarke. Let me get to my questions. So, Mr. Wood could
you remind the committee of some of the historical net
neutrality violations we have seen that the Save the Internet
Act would actually address?
Mr. Wood. Certainly. Thank you, Congresswoman Clarke.
There have been several. There were some that happened
before the decision that Commission McDowell referred to
earlier.
So, one of the most famous ones was Comcast was actually
blocking video not from a competitor but, really, from any
streaming video service being sent over a file-sharing
application called BitTorrent. Before that we saw local phone
companies in rural areas blocking Vonage and other VOIP
applications.
More recently we saw AT&T not allow usage of FaceTime on
mobile networks unless people were willing to pay more money
for that privilege and, in fact, you pay an unlimited--pay for
an unlimited voice plan.
So, we have seen a lot of these kinds of transgressions
even with the rules in place or principles in place throughout
the last decade and a half.
Ms. Clarke. Very well. And in your prepared testimony you
described the ability of the Save the Internet Act to protect
marginalized communities by repealing the 2017 FCC order and
returning to the regulatory framework outlined in the 2015 Open
Internet Order.
Can you expand on the role Title II Section 202 of the
Communications Act plays in protecting marginalized and low-
income communities?
Mr. Wood. Certainly. Thank you again.
So what we want to have and make sure that we have is
nondiscrimination protections for anything someone says, not
just for competitors. I think sometimes net neutrality is cast
as some sort of battle between Comcast and Netflix or between
AT&T and Google.
And, really, what we think it is is a guarantee for every
internet user's right to see and say what they want online. So
we have examples of this--actually, other services sometimes.
Verizon blocked text messages about abortion rights at one
point in 2007, I believe. It could have been a year or two off
of that.
And actually, NARAL and the Christian Coalition came
together and said, this is the last thing we want. We can't
have carriers dictating what we can say to our members.
So that was a Title II service at that point in time, or
arguably one, in text messaging and sometimes ISPs will say why
would we block things for political purposes. It is exactly the
same kind of decision that we see them making at times.
If they think something will be unsavory to their users,
they might decide to block it or treat it in a less favorable
fashion and we can't afford that.
Ms. Clarke. Very well.
Ms. Ochillo, in your opinion, does this seem reasonable for
one of the approximately 24 million Americans without access to
broadband to file an antitrust suit against a major ISP?
Ms. Ochillo. Absolutely not, and I do want to point out
that NHMC last year pointed out--I actually visited a lot of
offices here on the Hill just to raise that the FCC at some
point had an ombudsperson who was able to at least receive the
open internet complaints and at least help people navigate that
process. But, in general, consumers don't have any recourse and
wouldn't know who to call.
Ms. Clarke. Very well.
Mr. Green, can you--there was something in your testimony
that you said earlier I need a little clarification on. Aren't
enterprise broadband services, while not under the Open
Internet Order, still under the nondominant carrier Title II
just as broadband internet access service is?
Mr. Green?
Mr. Green. I thought you said Mr. Wood. I am sorry.
Ms. Clarke. No, I am sorry. Mr. Green. Let me repeat.
Aren't enterprise broadband services, while not under the
Open Internet Order, still under nondominant carrier Title II
just as broadband internet access service is?
Mr. Green. They are.
Ms. Clarke. Very well.
Mr. Chairman, thank you very much. I yield back the balance
of my time.
Mr. Doyle. I thank the gentlelady.
The Chair now recognizes Mrs. Brooks for 5 minutes.
Mrs. Brooks. Thank you, Mr. Chairman and Ranking Member
Latta, and thank you to all the witnesses for being here today.
I apologize I have not been able to be here. I have been a
part of a hearing on Select Committee on the Modernization of
Congress where technology has been a big part of that hearing.
So we have been hearing from Members all morning and it just
finished, so I apologize.
I do feel a little bit like in a bit of deja vu right now
because, I feel like we had discussions about this about a
month ago, and I just want as members of the committee to know
that I believe all of us support a free and open internet that
has proper transparency protections to ensure there is no
blocking and throttling, and I know we are debating a bill that
I wish was not partisan--that I do wish and I heard when the
hearing began we need to end the ping ponging on this issue
and, I think the country really is demanding that.
But I think right now, as I understand it, the bill that is
before us has no chance of really being taken up by the Senate
or being signed by the president. So, we need to move forward.
And one of the reasons we need to move forward I am a
cofounder of a 5G caucus here in the House of Representatives
and we have got to stop fighting about this in the country.
We have got to get our act together as a country, so we are
not falling behind the rest of the world and falling behind
many other countries that are going to beat us in this next
round of technology called 5G.
So, I have been proud to work with colleagues on both sides
of the aisle on some of these issues. I want to continue do to
that.
I guess I would like to start out, Mr. McDowell, and would
ask all of you actually what impact would, if you were to
restore the FCC's 2015 Open Internet rules, have on the
likelihood that U.S. will be able to lead the world in the
deployment of 5G network and services, something I think we all
need to be very focused on?
Mr. McDowell. First of all, congratulations on founding the
5G Caucus. I think that is very important.
Mrs. Brooks. And for the record, I founded that with
Congresswoman Debbie Dingell, also Congresswoman Annie Kuster
and Congressman Tim Walberg.
So, we are going to be focused on this. We have to be
focused on this as a country. It is a bipartisan caucus. I
encourage my colleagues to join the caucus.
But let us talk about how what we are talking about could
have an impact on our global competition to be a leader in the
world on 5G, and I will start with you.
Mr. McDowell. And so the U.S.'s leadership in 5G is by no
means a foregone conclusion. It is not inevitable, and you are
right to call that into question. There is a lot that has to be
done as we spend maybe $300 billion or more over the next six
or seven years as a country to build out 5G.
So when you are raising that kind of capital, you are going
to get questions from lenders, from investors, of all stripes
as to what are the potential economic effects of the economic
regulation of Title II. And Title II, make no mistake, is a
statute all about economic regulation. That is exactly what it
is.
So that could cause a stutter step, as we have seen
evidence in the record thus far with the smaller ISPs--for not
just smaller ISPs in the 5G space but the larger ones as well.
So that kind of uncertainty is not what we need to win the race
to 5G.
Mrs. Brooks. I guess I would ask some other panelists how
would you assure me and assure those of us who are trying to
promote 5G that this type of regulation would not impede 5G
implementation.
Ms. Ochillo?
Ms. Ochillo. I don't think that net neutrality regulations
impede it. However, I do want to acknowledge that a lot of 5G
is based on actually some paid prioritization networks.
5G, I think that people forget, is based on fiber wireline
in the ground and, essentially, we have to create incentives
for companies to want to go into places, especially hard-to-
reach rural communities, poor communities where they are not
getting the same return on those--that investment.
I think that we can create incentives from both the Federal
and State Governments by saying if you want to get a permit to
lay wire in this district then you also have to lay it these
other two.
I think that there are other creative ways that we can
think about this rather than saying that net neutrality is
closing a door, because if we are giving access to people with
net neutrality by saying here, here is something that everyone
should have access to this universal platform and,
concurrently, the United States is working on becoming a leader
in the 5G network, that does not mean that they have to compete
with one another.
They might complement one another. But that is going to
take some creativity and a commitment from the Federal and
State Governments.
Mrs. Brooks. Thank you.
Mr. McDowell, I keep hearing the word balance more around
this debate. Given that you think no legislation is needed to
ensure the rights of consumers with broadband investment, what
do you think the FCC should do to prevent throttling, blocking,
or prioritization, looking forward?
Mr. McDowell. Those concepts are all about competition or
what's anti-competitive, right. So, I think Section V of the
Federal Trade Commission Act covers that, as do other antitrust
statutes.
What is important to understand, too, about the FTC, a
consumer doesn't have to file an antitrust complaint. The FTC
is a consumer protection agency and thousands of times a year
responds to average everyday consumers and acts on their
behalf.
It has, you know, over $300 million and 600 lawyers to do
just that and that is what they do. You don't need to be
spending any money as a consumer or worry about time. That is
precisely what it does. That is where broadband internet access
services are today is at the Federal Trade Commission.
Mrs. Brooks. Thank you. I yield back. I am out of my time.
Thank you. I yield back.
Mr. Doyle. The Chair recognizes Ms. DeGette for 5 minutes.
Ms. DeGette. Thank you very much, Mr. Chairman.
I really agree with my colleague, Mrs. Brooks, about the
need to get some certainty here and, I really think it is
important. But I need--when we look at certainty, we need to
make sure that we are putting the rights of the consumers and
of access first that is what I really think.
But I was so happily reminded by my staff that I was on the
Energy and Commerce Committee in 2005 when Chairman Martin
issued his first version of the net neutrality rules.
Then I was still on the subcommittee in 2010 when Chairman
Genachowski issued his version of net neutrality rules. And
then now I was still on the committee in 2015 when Chairman
Wheeler issued his version of the rules.
And so we have had no shortage of creative approaches to
this issue and, of course, we've had court decisions and other
things that intervened.
And I guess I want to ask--I want to start with you, Mr.
Green. Would you say that this long-running process has created
more or less certainty for your company, as you make your
business plans?
Mr. Green. I find it to have created less certainty on the
long run. I certainly feel your pain in sitting through those
number of changes.
I would also add that around 5G, number one, we should
thank the FCC for removing some barriers to open up things in
the area of 5G so we should appreciate the FCC for the changes
that they have made and acknowledge that.
The other thing I would say is that, you know, this open
internet--the very reason we are here today, it is a driving
investment for 5G.
I mean, open internet is a driver for 5G. So, I think it is
very important to acknowledge it.
Ms. DeGette. So would you agree with Ms. Ochillo that 5G
and open internet are not necessarily counter to each other?
Mr. Green. I would agree with that. I think open internet
is another--first of all, the one thing you have with open
internet is, you know, you have a common ground in terms of
competition and then from there the competitive demands will
drive--will drive one another.
Ms. DeGette. Thank you.
Mr. Wood, is there any reason you can see why Congress
should start all over on a whole new bill?
Mr. Wood. No, I don't believe so Congresswoman. I think
that is the important part about compromise here and the
legislative process.
Sometimes I say if we want the same rights, we will have
the same fights about these bills, and I think that is in my
testimony. So, I don't think that the last 15 years have been
legally certain. That is obvious. The rules have gone back and
forth.
Now, the FCC won when it used Title II and it lost the
previous two times. But each time those three lawsuits were
brought by cable and telecom providers or their lobbying
associations.
So if we are tired of ping pong, I would respectfully ask
those companies to put down the paddle and just to keep
investing as they have done throughout that time.
The trend lines have been basically the same and the
investment goes up and down over time because, as AT&T said,
investment is cyclical. They actually called it lumpy.
And, so companies invest and we are seeing the wireless
companies ramp up their investments now for 5G.
Ms. DeGette. But, you know, even for those companies, like
Mr. Green's company, the lack of certainty has to be a real
impediment.
Mr. Wood. I think it is a factor. But we haven't seen it in
the numbers at the FCC, what the companies tell their investors
in analyst calls. Despite what Mr. McDowell said, we don't see
analysts or the companies themselves, more importantly, saying
there is an impact and we also see steady--not necessarily
sufficient but steady improvement in rural areas, too, if we
look at the FCC's deployment data.
Ms. DeGette. Thank you.
One last thing, and I know some of my colleagues talked
about this, but my congressional district includes Denver,
Colorado, which is one of the top places not only for telecom
but also for Millennials moving there.
And, whenever we talk about net neutrality this is the
number-issue that my constituents raise. When I tell my
colleagues this they can hardly believe it sometimes but it is
the number-one issue for the constituents and what they are--
what they are saying is they think ISPs are a mean to an end,
whether that is streaming music or movies or accessing my
congressional website or whatever they are trying to do.
So my question--my last question for you, Mr. Wood, is what
does public opinion polling tell us about what average
Americans think about net neutrality.
Mr. Wood. Thank you.
It is, remarkably, high the consistent level of support we
saw last April. Eighty-six percent of people saying they
supported keeping the FCC's 2015 rules and opposing that
repeal. That included 82 percent of Republicans.
I think most people think of this as common sense, and then
when we talk about the edge providers as well, they do see
internet access as a means to get there.
I want to be clear. We don't have some sort of blank check
for edge providers. We think that they are engaging in all
sorts of abuses. But they are still different from the wire
that gets you there and that is why people basically want and
demand that these rules be restored and be put back the right
way.
Ms. DeGette. Thank you. Thank you, Mr. Chairman.
Yield back.
Mr. Doyle. I thank the gentlelady.
The Chair now recognizes Mr. Butterfield for 5 minutes.
Mr. Butterfield. Did we run out of the minority, Mr.
Chairman?
Let me just begin by thanking the four panelists for coming
today and thank you so much for your testimony.
Commissioner McDowell, I was listening very carefully to
your opening statement and I just want to thank you for your
thoughtful approach to the subject matter.
You called for a bipartisan approach. You called for
certainty, and I am going to do something I rarely do. I am
going to take your opening statement home with me tonight and I
am going to read it again.
Mr. McDowell. I am so sorry.
Mr. Butterfield. And so I thank all of you.
[Laughter.]
Mr. Butterfield. But, Commissioner McDowell, in 2015--and
I, too, have been here under three chairs--Genachowski,
Wheeler, and Chairman Pai.
But in 2015, the--I think you had just left a year or two
before then--the FCC forbore over 700 regulations that the
commission had the authority to enforce under Title II.
Will this bill as we know it make it more or less difficult
for the FCC to utilize its forbearance authority on additional
regulations in the future?
Mr. McDowell. I will take it face value Chairman Doyle's
assertion that the intent is to make it harder for the FCC to
wiggle away from the parameters of the bill.
But I will say this, as an attorney. There will be lots of
lawyers trying to argue both sides of that. They will argue
every word of it. So the uncertainty doesn't necessarily go
away.
Mr. Butterfield. Commissioner McDowell, ISPs have expressed
concern that the additional regulations under Title II have a
chilling effect on their ability to invest in the expansion of
their networks, and I understand their anxiety. Even though I
may not agree with it totally, I certainly understand their
anxiety.
How will this bill affect the deployment of rural broadband
by ISPs?
Mr. McDowell. We have seen in the FCC's record as well as
your hearing a few weeks ago and throughout the debate concern
by the smallest of ISPs.
So perhaps we can all say that the big carriers can take
care of themselves. Actually, most of them are engaging in M&A
in areas outside of broadband in order--which can also distort,
by the way, their CAPEX figures.
But the smaller ISPs I think are genuinely, sincerely, and
verifiably very concerned about the questions they will get
from lenders and that is in the record. It is under oath. It is
in a lot of different places.
Mr. Butterfield. Mr. Wood, if I can address this to you,
sir. Historically, the FCC's policy positions have changed with
each administration. Will this bill provide ISPs and other
stakeholders with the regulatory certainty to innovate and to
invest?
Mr. Wood. Yes, Congressman. Thank you for the question.
I believe it will. I would not quibble with the
characterization, but I would alter it perhaps slightly to say
that the FCC hasn't changed policies.
It has just changed the legal grounds on which it has
founded those policies. And so when the FCC tried to adopt the
internet principles--open internet principles in 2005 and
grounded those on Title I, they failed in the court of law.
The same thing happened with the Genachowski administration
or the Genachowski FCC. They, once again, were struck down in
court. They came back with essentially the same principles.
There had been some changes in the wording and the rules
over time. But we have had the same kind of principles that the
FCC has tried to enact three times and they finally got it
right on that third try and were upheld in court two times.
Mr. Butterfield. All right.
Ms. Ochillo, thank you for your testimony. In your
testimony, you remarked that the way in which we decide to
regulate the internet will have a direct impact on broadband
adoption and access.
How will this bill create opportunities for communities of
color and help to eliminate disparities that you and I know
exist in broadband access?
Ms. Ochillo. I think that it is important--thank you very
much for the question, Congressman.
I think that it is important to put net neutrality
protections in statute, and I think at this point we need to be
very aware of the fact that the people who are left behind in
the digital divide don't have an opportunity to come into this
space and to, basically, fend for themselves.
And our organization is constantly just trying to explain
if we are not aggressive about saying we need to actually make
sure that no one can have discriminatory practices to make sure
that access is a priority for Congressmen, for everybody,
whether it is a provider, for everybody.
There is actually a cost when people can't get online, and
I think that it is important for us to support this type of
legislation because at least it gives people an opportunity to
acknowledge that the internet is like a utility.
It is something that everyone needs, and the truth is that
even the FCC has acknowledged that it is essential for every
single part of daily life, and I think that this is something
that supports that proposition.
Mr. Butterfield. Thank you.
Thank you, Mr. Chairman. I yield back 16 seconds.
Mr. Doyle. I thank the gentleman and I would comment that
while my good friend, Mr. McDowell, acknowledges that the bill
would make it--would make it--prohibit forbearance--
unforbearing what has been forbeared in the order that we all
understand his comment that an attorney will argue anything as
long as someone will pay him to do it.
So, I think that is something we are never going to change
no matter what the bill looks like. But I thank the gentleman.
Mr. Schrader, you are recognized for 5 minutes.
Mr. Schrader. Thank you, Mr. Chairman.
I just want to thank you for bringing the bill to the
hearing here. It is a good opportunity for us to have this
debate. The testimony has been informative for me at least and
I look forward to moving on and hopefully come to some
bipartisan agreement, as everyone has talked about, at some
point in time.
The best legislation stand the test of time through various
administrations and different Commissioners. It would be best
if we actually got together and tried to come up with a
compromise that would work for everybody out there because we
all do want a free and open internet, at the end of the day.
With that I yield back, Mr. Chairman.
Mr. Doyle. I thank the gentleman.
I see that Mr. Welch has entered the room and he is
recognized for 5 minutes.
Mr. Welch. Thank you very much, Mr. Chairman.
And by the way, I really appreciate the work you are doing
in leadership on this. We have got a--and I missed some of the
testimony but watched some of it on TV.
Mr. McDowell, it is good to see you back.
You know, the bill that we have--I know you have discussed
this--but it really seems practical to me. There is uniformity
that we don't want blocking or throttling or some of the other
things.
We also don't want the heavy hand of regulation, and what I
thought was very wise about the proposal here was that we
guaranteed there would not be all the Title II concerns and
that was in response, frankly, to a lot of our colleagues and
some of the folks in industry expressing apprehension about the
uncertainty with the potential of heavy-handed Title II
regulation.
I wasn't fearful of that. You know, Mr. Wheeler, when he
was the head of the committee or when he was the Chair forbear
but--trust but verify. So this to me, makes a lot of sense, and
I hope that we ultimately can proceed.
But so thank you, Mr. Doyle, on that.
I want to go to Mr. Green. I think you have been asked this
already but I would like to hear it again because a lot of the
argument that we have had here is about this crucial question
of how we deploy broadband and the apprehension that some folks
have that unless there is certainty it will inhibit the
deployment of broadband.
That is an incredible concern to Republicans and Democrats
on this committee who represent rural areas because we have
been left behind and it is intolerable.
So you were investing before under the old rules and you
are investing now under the new rules, and I would like you to
just elaborate on that because I think all of us, at the end of
the day, want to be confident that there is going to be
investment to deploy broadband.
Mr. Green. Thank you for your question, Congressman.
We have had excellent success and we have been very
fortunate, and we have been blessed. I always like to mention
that because that is my higher calling, from my perspective.
But we have $30 million of fiber assets in the ground
today. We started in 2010. I am just an old telecom guy from
Spokane, Washington, and Coeur d'Alene, Idaho.
But the investments at the moment--to answer your question
more specifically, we have $10 million of backlog, meaning we
have $10 million of customers who have requested services from
us to reach to internet and at the moment we are deploying that
capital so that we can get those customers connected to the
internet.
So, we are having great success. If you look at the fact
that we have $30 million in the ground and in the last year we
created another $10 million of demand, that is, obviously,
telling you the demand is great and it becomes greater and
greater every day.
It is a combination of 5G. It is a combination of, you
know, the cloud, streaming, all of those sorts of things. And
so we are having excellent success and have had excellent
success during the tenure of our company and, certainly, from
the Act of 2015.
Mr. Welch. So this Act in your view, would not--this
proposal by--authored by Mr. Doyle would not inhibit your
plans, going forward?
Mr. Green. Not at all.
Mr. Welch. All right.
You know, my goal here on the committee with respect to
internet has been to do two things: expand broadband in rural
areas and across the country and, second, guarantee that the
internet remains free and open. I think we are all on the same
page on that.
But in my rural State, we are not debating 5G. We are
dealing with no G in many places, and it has got to be a
decision that we make in this Congress as to whether we are
going to treat internet much like we did electricity in the
1930s.
And there is not an economic case to be made to put it out
in rural America but there is a social case to be made. We are
all in it together or we are not.
Do you see having clarification about these rules that are
codified in this proposed legislation as being helpful to
accomplish that?
I will ask you, Mr. McDowell. I will let you weigh in on
that.
Mr. McDowell. So first of all, let me say something at the
outset, which is--and I know we don't have much time but that
open internet and Title II don't have to be synonymous or
exclusively synonymous to each other.
From the time the internet was privatized in the mid-90s
until the 2015 Title II order, we had an open and freedom-
enhancing internet. I think that is very important.
It has just been raised here a few times that the only way
you can have an open internet is by bringing in Title II. You
might be able to bring up a principle of Title II. I think it
is better to start with the 2005 principles from Chairman
Powell.
But Title II is not synonymous with an open internet and
brings in a whole host of collateral circumstances and
unintended consequences.
So that is what provides a lot of investment uncertainty or
just operational uncertainty, going forward, especially as
ISPs, as was said earlier, are merely a means to an end.
Actually, ISPs are converging into many business lines and
offering multiple services and benefits to consumers just the
way edge providers are providing not just content and apps or
algorithms but also delivery systems.
So as you see this convergence I think it is important for
this committee to take that into account as you come up with a
new piece of legislation.
Sorry, Mr. Chairman.
Mr. Welch. I yield back.
Mr. Doyle. The Chair now recognizes Mr. Cardenas for 5
minutes.
Mr. Cardenas. Thank you, Mr. Chairman. I appreciate the
opportunity for us to talk on this bill and have a better
understanding of what is going on out there and how we are
going to effectuate change, especially when it comes to
consumer protections.
One of the goals of this legislation is to codify the
provision of the 2015 rules that forbears 700 regulations from
applying to internet service providers.
During the last hearing here, former FCC Chairman Wheeler
argued that some of the most onerous provisions of the Title II
regulation don't make sense for the internet, which is why the
FCC forbore these provisions in the 2015 order.
This component is important to balance consumer protection
while also ensuring business can invest and build their
networks on consumers, which have great products to choose
from.
So Mr. Wood and Commissioner McDowell, if this bill is
enacted into law, could any future FCC apply any of those
regulations that have put in forbearance--that are putting in
forbearance?
Mr. Wood. You said my name first. I guess I will go first.
Thank you, Congressman.
I don't believe so. As we have heard, that could be
litigated and that is, obviously, true. I would point to the
decades of lucrative litigation after the '96 Act to reinforce
Chairman Doyle's notion that any new bill could be litigated. I
think this one is actually very tightly written, though, and
would prevent that kind of retreat by the FCC.
Mr. Cardenas. So, you see that this bill would protect
against that if it comes along?
Mr. Wood. I think that is exactly what it says, that it
would basically ratify the 2015 decisions and make those part
of the statute or part of a congressional enactment rather than
leaving it to the FCC to strictly determine forbearance.
I should say that over the years that is what they have
done. They have forborne from wireless voice and from
nondominant carrier regulation of broadband when it sold to
businesses. So, we do have a track record of that. But this
will would make Congress giving the stamp of approval to that.
Mr. Cardenas. Thank you.
Commissioner McDowell?
Mr. McDowell. Given sort of the long lens of history and
the history of common carriage regulation, I would say not--
that actually history--the trajectory of history is on the side
of sort of a one-way ratchet of common carrier regulation--that
once you have some you are going to get more.
So, I would respectfully say that this bill actually would
open the door and not close the door to more regulation.
Mr. Cardenas. Yes. OK. Do you have an opposite answer to
Mr. Wood?
Mr. McDowell. No.
Mr. Wood. That is right. We never disagree. You always used
to talk about the bipartisanship at the FCC, right? It is 95
percent of the time we agree.
Mr. Cardenas. OK.
Mr. Wood, can you talk about how Lifeline broadband was
provided before the 2015 rules?
Mr. Wood. Before the 2015 rules, sure.
The FCC has, for some time, been asking this question and
before they reclassified basically the FCC was relying on
Section 706 and other authorities it has to say, well, we can
provide support at least for telecom companies because that is
the way the Universal Service statute is written. You have to
be an eligible telecommunications carrier.
So basically, the FCC allowed telephone companies to
provide Lifeline but it didn't have great mechanisms for
requiring that they do. We think the 2015 order actually got
that right and treated broadband as a telecom service.
And now, not only has the Pai FCC walked away from Title
II, they have also said Section 706 is not a source of
authority. So now we are not really sure what they can do at
least on a solid legal basis, speaking of litigation.
Mr. Cardenas. Can you give an example on what--on what way
the 2015 rule has impacted the Lifeline program?
Mr. Wood. Well, I think we talked about this a bit earlier.
I know Ms. Ochillo talked about it, too. There were nine
providers who were offering a broadband only progress, or at
least plan to.
I believe one of them had launched service in Queens, New
York, and they were cut off from the program because the FCC
basically said, we have no way of funding you anymore if you
are not an eligible telecommunications carrier, to use the
words in the statute in Title II.
Mr. Cardenas. So this legislation, if enacted into law, Mr.
Wood, it would affect--in your opinion it would affect the
opportunity for Lifeline programs in a good way, to flourish
more, or would it limit them?
Mr. Wood. I think it would clarify that broadband is a
telecom service and fully eligible for eligible
telecommunications carrier status and, thus, for support under
the deployment aspects and also under the Lifeline program and
Universal Service.
Mr. Cardenas. OK.
Mr. McDowell. But just so there is no confusion, under the
second Obama--the first Obama term, FCC, in 2011 and early 2012
we expanded Lifeline support and other Universal Service
support to broadband, right. So that was before the 2015 Title
II order at the FCC. So, I want to make sure folks are
understanding that Lifeline is supported even if it is not a
telecommunications service.
Mr. Wood. And I would just ask under what authority that
step was taken. If it was Section 706 or if it was Section 254
or some other sort of murkier cloud of authority.
Mr. McDowell. All of the above. That case went to the 10th
Circuit under a variety of theories and survived appeal.
Mr. Cardenas. Mr. Wood? What section do you----
Mr. Wood. I think it survived appeal because they had 706
and how this FCC has said not only do, we not want to use Title
II, we don't think Section 706 is a grant of substantive
authority. So now I am not really sure what is left--what
survived in the 10th Circuit--if we actually see another
challenge to that.
Mr. Cardenas. So with what time I have left, Mr. Chairman,
I think it is important and I thank you, Mr. Chairman, for us
taking on this responsibility because when we don't do our job
as a legislature then we leave the appointed officials to do
the job.
So thank you very much, Mr. Chairman. I yield back.
Mr. Doyle. I thank the gentleman.
I don't want anyone to think that we are ignoring Mrs.
McMorris Rodgers over here. But she is going to waive on to the
committee and under our rules she would be entitled to speak
after all Members of the committee have spoken.
So, Mr. Lujan you have 5 minutes.
Mr. Lujan. Thank you very much, Mr. Chairman, and to our
ranking member for holding this important hearing.
Mr. Wood, yes or no--does Mr. Doyle's legislation prevent
internet service providers from blocking content?
Mr. Wood. It does. It restores the rules.
Mr. Lujan. Yes or no--does this legislation prevent the
throttling of content?
Mr. Wood. Yes.
Mr. Lujan. Yes or no--does it prohibit paid prioritization?
Mr. Wood. Yes.
Mr. Lujan. Yes or no--does the Republican proposal clearly
prevent blocking, throttling, and paid prioritization?
Mr. Wood. Some do that. They have some different
approaches. Some say they would prohibit other behaviors and
some actually do try to adopt the three bright line rules but
in ways that we think are not sufficient to fully protect
internet users.
Mr. Lujan. Yes or no--am I correct that Mr. Doyle's
legislation prevents the FCC from applying 700 regulations
under the Communications Act?
Mr. Wood. Yes. I think that is the count.
Mr. Lujan. Beyond that, though, does Mr. Doyle's
legislation include any other provisions that would
unreasonably or needlessly handcuff the FCC including the
authority to engage in rulemaking, going forward?
Mr. Wood. No, I don't believe so and I think that is key--
that rulemaking authority is preserved, and the FCC isn't
handcuffed in doing its job to implement the statute.
Mr. Lujan. Yes or no--is that true of the proposals
introduced by my Republican colleagues?
Mr. Wood. Again, I think they differ in some respects from
each other. But no, it is not true, as a rule.
Mr. Lujan. Let us put aside the legislation before us
today. Do you think it would be reasonable for Democrats as
part of free and open internet, meaning no blocking, no
throttling, and no paid prioritization to trade codifying those
provisions for a Federal Communications Commission without
meaningful rulemaking authority, going forward?
Mr. Wood. No, I don't believe that would be a wise trade.
Mr. Lujan. Why not?
Mr. Wood. Well, we talked about a lot of the things the FCC
does outside of net neutrality under Title II. So, the Lifeline
discussion with Mr. Cardenas and the rest of Universal Service
was a good example of that.
But then there are also these questions that the FCC was
trying to answer and needs to be able to answer about whether
or not discriminatory conduct is in fact unreasonable even if
it doesn't fit neatly within one of the bright line rules.
So, we don't see that as a problem. In fact, we see that as
necessary--that the FCC had some residual authority as it is
granted in Section 202 of the Communications Act to assess
other kinds of unreasonable behavior even if they don't fit
into the bright lines that this body may draw at some point in
their future.
Mr. Lujan. Those were very similar points that I raised
during the 2015 hearings on this particular subject. There was
either markup or hearings on legislation of interest by
Republican colleagues and this was an area that I focused on
from a rulemaking perspective.
On another subject, can you also tell us why
interconnection protections are so important?
Mr. Wood. Sure. So what we have seen in the last half
decade or so as occasionally or probably even more than
occasionally but one especially well-documented period,
millions of internet users were not getting the content that
they had chosen to receive at the speeds that they deserved,
and that wasn't because of congestion in the last mile, as it
is sometimes called, but congestion outside of the network that
comes to your home--the last mile of broadband network. And
there were some disputes about what was causing that.
We think the evidence shows that companies like Comcast,
AT&T, and Verizon were choking off the flow of information at
that point and then they demanded payments in some cases,
struck deals with not just Netflix but also other kinds of
carriers, and that resolved the situation at least to our
knowledge.
But we think there has to be some sort of oversight of that
kind of behavior, and I think to your rulemaking point, too,
this is exactly why we need it. You know, we have heard a lot
about the FTC today and under context one of the things people
note about the FTC is that it is not always able to do the best
job it could do because it lacks rulemaking authority.
So while we talk about granting rulemaking authority to the
FTC at times, I think we have to remember we shouldn't take it
away from this agency to address these kinds of new problems
and new impacts on internet users, and that is why this bill is
actually the right way to go to keep that residual substantive
authority as well as the agency's discretion to implement it.
Mr. Lujan. Commissioner McDowell, are interconnections
important to small ISPs across America?
Mr. McDowell. Absolutely. Interconnection is an important
part. Interoperability as well as standards. All related.
Mr. Lujan. What are your thoughts with the importance of
inclusion of interconnection protections to ensure that smaller
ISPs are able to survive?
Mr. McDowell. So what happened since the internet was
privatized in the mid-1990s until the Title II order of 2015 is
that you didn't have Title II governing that, right. So, you
had a thriving internet marketplace with ISPs, small WISPs, et
cetera, even in New Mexico, without Title II.
So why was that? Well, you had----
Mr. Lujan. Well, being a former utility Commissioner myself
I can tell you that many of those ISPs had to go before the
local utility commission and the committee--the commission
itself had to require some of those interconnection agreements
be enforce because of the lack of rule of law.
Mr. McDowell. Well, in that there were Title II common
carrier transition components that they were either leasing or
offering themselves. That is where the common carriage came in.
That is where state jurisdiction came in--mostly the Title II
transition component of all that.
But there is Section I and II of the Sherman Act, Section
III of the Clayton Act, Section V of the Federal Trade
Commission Act. All of that could help in that regard.
Mr. Lujan. OK.
Mr. Chairman, I will be submitting a question to the record
for Ms. Ochillo based on her profound testimony as well,
especially looking at comparison between New Mexico and New
York and I very much appreciate where that testimony is going.
So thank you, Mr. Chairman.
Mr. Doyle. I thank the gentleman.
The Chair now requests unanimous consent to allow Mrs.
McMorris Rodgers to waive onto the committee. Without
objection, so ordered.
And I now recognize her for 5 minutes to ask questions.
Mrs. McMorris Rodgers. Thank you, Mr. Chairman. I
appreciate you being willing to have me join you all today and
I continue to seek a bipartisan solution to address this issue
of net neutrality and I believe that there is bipartisan
support for the bright lines for, you know, making clear no
blocking, not throttling, nor paid prioritization.
I am very disappointed to see the majority moving forward
without really seeking a bipartisan solution. It is clear that
this bill will not go anywhere in the Senate and if it is as
dire as the other side continues to suggest, then I would--I
would implore this committee to come together in a bipartisan
way.
I believe that there is really an opportunity for us to
come together and stop politicizing this issue. What we
continue to see is a lot of rhetoric around net neutrality that
has really been driven to a fever pitch.
We see dire predictions as to the end of the internet. We
saw threats against the chairman of the FCC and his family--
death threats--as well as some of our own colleagues.
And if it were truly the crisis that it is made out to be,
I believe that there should be more willingness to solve it
instead of moving ahead with a partisan approach.
This bill is not going to pass the Senate. It is not going
to be signed into law and it is not really intended to do that.
It is apparent the goal is not about protecting consumers,
innovation, and internet. It is about scoring political points.
For those who say they want to save the internet, however,
in the time since Title II was repealed, network speeds are up
drastically. Investment in coverage in rural areas has
increased.
As we work to continue to close the digital divide, we need
to decrease barriers to deployment, not increase them. I agree
we need to protect consumers. But we also need to do it in a
way that does not leave underserved areas of our country
behind.
I represent a rural area of eastern Washington where we
continue to have broadband needs and we need more deployment.
Republicans for years have been offering to work with the
Democrats to find an agreement only to be blocked and denied
again and again.
Earlier this year, Mr. Walden, Mr. Latta, and I introduced
three separate reasonable solutions to protect consumers and
ensure the internet remains free and open.
My bill is based upon a law that passed in Washington State
with overwhelming bipartisan support, signed into law by
Governor Jay Inslee. It gives the FCC clear authority to
enforce the bright line rules of net neutrality--no blocking,
no throttling, no paid prioritization.
It is a solution that does not institute changes to the
internet that would stop innovation, stifle broadband
deployment and leave millions of Americans behind.
If my friends on the other side would like changes to my
bill or others, we need to have that conversation. Let us work
together. It is time to end the regulatory and legal confusion
and bring certainty to consumers and the marketplace.
We want to guarantee that the United States remains a
leader of technological innovation that we have been the last
20 years. We want every American to have access to the internet
and the economic and social and educational benefits that
connection brings.
We want to ensure that the next generation of networks
originate here, ushering in a new era of technology that we
can't even now imagine, and we should want to do it in a
bipartisan way.
As Senator Cantwell tweeted when the Washington State bill
became law, quote, ``In our State, Republicans and Democrats
came together. Why can't we see this same bipartisanship in the
U.S. House?''
And I would like unanimous consent to enter into the record
various tweets of support from Republicans and Democrats for
the Washington State law.
Mr. Doyle. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mrs. McMorris Rodgers. Mr. McDowell, can you speak to the
bipartisan consensus you saw around the issue, both at the
commission and here in Congress prior to Wheeler's FCC move to
reclassify broadband under Title II in 2015?
Mr. McDowell. Sure. In 2005, which was about a year before
I got to the FCC under Chairman Powell, there was unanimous
bipartisan adoption of the internet freedom principles--the
consumer kind of bill of rights for the internet, if you will,
and I think that is what could be the starting point.
Subsequent to that, though, you had bipartisan and
unanimous votes after the Brand X decision, which was in June
of 2005--the Supreme Court decision--making sure that it was
clear that cable modem and broadband over power line and DSL
and wireless broadband--all of those were properly classified
under Title I and those were unanimous and bipartisan through
the year of 2007.
But I think what we have seen today and in other
discussions is--you know, no anti-competitive conduct that
involves throttling and blocking and prioritization that is
anti-competitive, et cetera, I think those are great starting
points forward. You could have an overwhelming bipartisan
majority of both Houses.
Mrs. McMorris Rodgers. Great. OK. Thank you.
I will yield back and just urge again that we come together
and do this in a bipartisan way.
Mr. Doyle. I thank the gentlelady.
Let me just say a few things. If the minority desires a
bipartisan approach and wants to work with the majority, they
should let us know about that. I got no phone call from the
Chair or the ranking member of the subcommittee that they were
interested in sitting down to discuss this.
What we got instead was three bills that were dropped
without our knowledge, without us being informed in advance
that you were going to do that, and then we got a letter that
we didn't know was coming also on it.
I would suggest a better approach would be to sit down and
talk with us before you drop bills. I know that after being in
the majority for so long it might be difficult for some of my
friends to recognize that they are not anymore and that the
proper approach would be to talk to us before you drop bills.
Let me say a couple other things, too. This has been tried
a long time. We talk about the ping pong that has gone on, and
it has. But, you know, when this was tried by the FCC under
Title I back initially in 2005, eventually Comcast--it was done
as not a rule but as a set of principles.
But when it was put in real form Comcast sued and the
commission lost. In 2010, once again, when the commission tried
to do net neutrality rules under Title I, Verizon sued and the
commission lost.
Under 215, Chairman Wheeler again put net neutrality rules
that were anchored under Title II and it survived two
challenges in court. That is where we are today.
What are Democrats doing with this bill? We are stepping
towards our colleagues--our colleagues and people in the
industry express concern that Title II with all its
regulations, some which have no applicability to today's
internet and the over 27 sections and 700 regulations, even
though Commissioner Wheeler had forbeared on them that a future
FCC Commissioner could unforbear, and that caused them great
concern.
So what we have done to address those concerns and step
towards our colleagues is to codify the 2015 Open Internet
Order, which also codifies the forbearance, which means those
700 regulations in 27 sections are no longer applicable, and
while my good friend, Mr. McDowell, says attorneys can file
lawsuits, well, that is what attorneys do and no matter what
bill was put forward that could happen.
So this was a good faith effort to move in their direction.
I would remind my colleagues that in the Senate for the CRA 52
Members voted for the CRA in the Senate and that was before we
have codified forbearance, basically eliminating 700
regulations and sections under Title II.
So, we are trying to work in a new way to put out a bill
that recognizes some of the concerns we have heard from the
minority and from some of those people in the industry and we
are going to continue to move forward in regular order.
We have had our hearing today. We intend to put this
through a subcommittee markup and then a full committee markup.
The minority will certainly have opportunities at that time to
express their opinions and their amendments and we look forward
to that.
To the extent that they want to talk to us in advance about
things we may be able to work on together, I would recommend
that would be a good course of action.
So with that, I am going to ask unanimous consent to enter
the following documents into the record: Number one, an opening
statement from Representative Eshoo, an editorial from the
Houston Chronicle, an op-ed from The Hill, an LA Times
editorial, a letter from ALLvanza, a blog from ALLvanza,
statement from CTIA, a statement from the NCTA, USTelecom blog,
tweet from Rick Boucher, Bloomberg article, Politico Pro
article, Washington Post editorial, The Hill editorial, East
Oregonian op-ed by Joseph Franell, Multichannel article, letter
from TechFreedom to Chairman Doyle and Ranking Member Latta.
Is that everything? Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Doyle. I want to now thank the witnesses for their
participation in today's hearing. We appreciate your testimony
and we appreciate how patiently you have sat there and answered
every question that was thrown at you, and it has been very
helpful to this committee.
I want to remind Members that pursuant to our committee
rules they have 10 business days to submit additional questions
for the record to be answered by the witnesses who have
appeared, and I would ask each witness to respond promptly to
any such questions that you may receive.
[The article appears at the conclusion of the hearing.]
At this time, the subcommittee is adjourned.
[Whereupon, at 1:49 p.m., the committee was adjourned.]
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