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tv   Politics and Public Policy Today  CSPAN  September 23, 2016 3:00pm-5:01pm EDT

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mansfield, when a democratic senator did not keep his word to a republican senator, that mike mansfield, in the home state of that democratic senator, rebuked him. where have those days gone? and why do we still sit around and wait for the confirmation of mrs. rosenworcel. so, indeed, and i say this with a heavy heart, but at the same time, with an encouraged heart because of the relationship that you and i have and how we've been able to get some things done here, not the least of which just recently was the faa bill. and so here we have the session of the federal communications commission. it is a very full agenda.
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it is an ambitious agenda. and while proceedings like this one, this one on broadband and privacy are incredibly important, i want now to touch on chairman wheeler's latest proposal to free consumers from having to pay annoying and excessive monthly rental fees for set top boxes. everybody agrees, i don't see much dissent that we need to move beyond as technology rapidly advances. move beyond set-top boxes. the market place should constantly strive for ways to give consumers what they want. congress said, as much in '96, thank you, senator, from
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massachusetts, '96. congress said as much in '96 when we required the fcc give consumers some alternatives to the boxes. and yet, 20 years have passed and consumers are still renting these boxes months after months. we're beyond that. that's why this senator is fully supportive of the fcc efforts to use its authority to give consumers relief. as the chairman wheeler and i have discussed, i'm encouraged that your leadership and your relentless drive have gotten us so close to that shared goal. now, we've spent a great deal of our time here in the senator trying to put politics aside, as we have stated on a number of
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issues, in order to reach agreement. and i learned long ago that no matter how good intentioned the proposal, if consensus can't be reached, then it's not going to be a success. so we sit here two weeks from a planned vote on the proposal in the commission, and i continue to hear from many stakeholders that there are elements, mr. chairman wheeler, of your proposal that continue to need work. as much of that concern comes from the approach that you've taken on copyright and content. and in fact, i share those concerns and have stated those concerns to you. and i've stated those concerns publicly months ago. if we stay on the present course, i fear the fcc's actions to promote set-top box
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competition would be tied up in the court and ham strung for years. we just experienced that reality with net neutrality. which created a decade-long fight and left consumers without effective consumer protections as they use their broadband service. and so it is my hope that the commission will take the time necessary to reach out to stakeholders in good faith to try to resolve some of these concerns so that we could once and all free consumers from the monthly set-top box fees. it's very, very important to consumers and it needs to be done. let me just mention a couple of other issues. at our last oversight hearing,
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mr. chairman, you and i talked about the need for congress to act to help advance the ongoing evolution of our nation's 911 infrastructure to the next generation of 911. it is a public safety priority for the federal government and states also and to further this transition to make sure that 911 service remains robust and able to respond adequately and effectively in emergency. we all rely on it. it is a call that we hope we never have to make. and it's time for all of us to do everything that we can to make it a reality throughout the entire country. so i will be offering for co-sponsorship in the near future legislation to promote the development and deployment
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of the next generation 911 services, and to make this transition a success. and i invite all of our colleagues to join. and so with that, mr. chairman, thank you for the opportunity and thank you for the opportunity of working with you. >> thank you senator nelson. appreciate that. thanks for your opening remarks. we'll turn to the panel and we'll start on my right and your left, the chairman and then commissioner rosenworcel and commissioner pai and commissioner o'rielly and clyburn. welcome, we're delighted to hearing from each of you today. so mr. chairman, if would you please proceed. >> thank you, mr. chairman, senator nelson, members of the committee. you know, as a certain november event approaches, and a new administration is on the horizon, this may be may last
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appearance before this committee. i will cooperate fully with the new administration to assure a smooth transition at the fcc. but i do want to take this opportunity to observe that it has been i privilege to work with this committee over the last three years. i'm grateful to the committee for recommending my confirmation. and for the dialogue that we have had throughout my tenure. i look forward to that dialogue continuing today. one of the dialogues that we have had ongoing, senator nelson just raised and that is the issue of the next generation 911. the benefits of ip networks are simply not being realized. because for far too many americans, next generation 911
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networks don't exist. this not only defers the advantages of next generation technologies but it increases the risk of 911 failure to those communities remaining on legacy 911. as we meet today, our old 911 networks are under attack. last saturday's washington post had a big article describing how telephone denial of service attacks can and have shut down 911 networks. and the fbi and dhs are reporting record levels of ransom ware attacks on 911 systems. there is a crisis cooking in our 911 networks. the decision-making of congress will be necessary on this important public safety issue.
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now as has been referenced later this morks the commission will vote on whether to fulfill a mon mandate that congress gave us 20 years ago to assure consumers have competitive choice in how they access cable and satellite programming. last february we put forth to follow the statutory communications act that, quote, the commission shall adopt regulations to assure the commercial viability of competitive navigation capable to the satellite and cable services consumers pay for. now i've heard the question asked, why are you doing this if the market is working. it isn't. 99% of consumers had no choice, despite the statutory mandate that they shall have choice.
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the cable industry has been playing rope-a-dope with that statutory mandate for 20 years. first they created a licensing body to license -- but failed to license that technology in a meaningful manner. then, in 2008, comcast announced, quote, the age of the closed proprietary set-top box is behind us. the era of open cable is here." eight years ago. consumers have seen nothing happen. then in 2010, in cta filed in an fcc proceeding, quote, consumers should have the option to purchase video devices at retail that could access their multichannel providers without a set-top box provided by that provider, end quote. six years ago, and consumers
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have seen nothing happen. a recent harris poll showed that 74% of consumers believe set-top box rental fees are too high. and with good reason. one study committed for our record found that while set-top box fees increased 180% during that same period the cost of other consumer electronics fell by 95%. yet every month by one estimate, consumers are charged $1.6 billion that congressman dated they should have an alternative to paying. for the last seven months, we have been working with the effected parties to improve and simplify the original proposal. when the cable industry proposed a much simpler apps-based approach, we adopted it. we also adopted the programmers'
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suggestions to assure that copyrights and contracts are protected end to end. we are now at that point in the rule-making process when each commissioner reviews the work and makes his and her suggestions from improvement. we have demonstrated our willingness to make significant changes in the original proposal, while remaining faithful to the mandate in the statute. i look forward to my colleagues' input and to working with them. the beauty of this commission is the deliberative process in which we are now engaged. when the los angeles times, the hollywood hometown newspaper editorialized that our propose add shows how the fcc can live up to that congressional mandate while still protecting copyrights and saving u.s. consumers billions of dollars and the commission should move
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forward with it, end quote, they correctly assessed how both consumers and creators are protected by the improvements that have been made to the original proposal. as commissioner rosenworcel said, when we we adopted the nprm, it is time, past time to live up to our statutory obligations and foster the competition that consumers deserve. finally, mr. chairman, let me close by expressing how much i hope that commissioner rosenworcel will be able to continue to serve on the fcc. this committee knows, from her service on its staff, her tremendous abilities and her depth of understanding of the issues before the commission. as chairman of this agency, i hope we can continue to count on commissioner rosenworcel's insights and leadership.
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thank you very much. >> thank you, chairman wheeler. with that, commissioner rosenworcel. >> good morning. chairman thune, ranking member nelson and the members of the committee. thank you for the opportunity to appear before you today. i'm going to start by noting what is important and what is obvious. we began this week on the anniversary of one of our darkest days. what happened 15 years ago on september 11th changed us all. it left an in dellable mark. and in my family that mark is personal because one of my relatives died in the twin towers. but it is just as important to recognize what is not changed. we are resilient, we are optimistic and we are strong. and i think communications networks also make us strong. they strengthen our economy, they give rise to digital age opportunity and they support
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public safety. and in light of this week's anniversary, it is public safety that i want to focus on today and specifically what can be done right now to improve our nation's emergency number system. 911 is the first telephone number i taught my children. it is a number that every one of us knows by heart, but none of us hopes to ever have to use. but use it, we do. in fact, across the country we call 911 over 240 million times a year. and 70% of those calls are made over wireless phones. in other words, the vast bulk of our calls are coming into our nation's 911 centers over technology that is the system was not designed for. this is a problem. because while technology has changed so much in our lives,
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our communication systems that are used by our nation's 911 call centers, they just haven't kept pace. i know, because i visited nearly two dozen 911 call centers all across the country from alaska to arkansas, nevada to new jersey, california to colorado and a whole bunch of places in between. and it is not that work isn't being done. in the last two years alone, the fcc has put in place policies to facilitate texting to 911. we've deviced a framework to improve the ability of 911 call centers to be able to locate callers using wireless phones. and this is progress. but what comes next is so much bigger. because next generation 911 services can support a whole range of data and video communications, so for those who call in an emergency, it will mean the opportunity to offer real-time video from an accident, it will mean the ability to provide first
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responders with an instantaneous picture of a fleeing suspect or a emergency incident which could especially help rural public safety official prioritize and deploy limited resources. but to remake the nation's 911 system to fully reflect the digital age takes funding. and historically, supporting our nation's 6,000, 911 call centers is strictly a local affair. there is no national program or annual federal revenue source. but still, there are two things we can do right now to kick start local 911 modernization. first, we need to end fee diversion. approximately $2.5 billion is collected each year by local and state authorities to support 911 service. and those funds, they are typically a small line item on your phone bill. but not all states follow through and actually use the
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dollars collected from that line item for 911 purposes. in fact, in the last year for which the fcc has data, eight states transferred funds collected for 911 for other purposes. including things that have nothing to do with public safety. in fact, in the past some of those have used these funds for overtime pay for state workers and dry-cleaning services for state agencies. this has to stop. second, tucked in the middle class tax relief and job creation act of 2012 is another way to jolt start 911 modernization. as you know, this legislation authorized a series of wireless spectrum options being run by the fcc and the options which are still ongoing have already raised enormous sums. a portion of those funds -- $115 million was set aside by congress for a grant program to
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help support next generation 911. but somehow this program has stalled and is yet to begin more than four years after congress passed this legislation. it is time to get this program up and running. it is the best near-term and national resource we have to put next generation 911 in place. and while those funds are limited, they could have broad impact if we use them wisely and fund projects that could be a blueprint for updating 911 in communities nationwide. and when we do, those states that are short-changing their own 911 programs with fee diversion, they should be at the end of the line. thank you. i look forward to answering any questions that you might have. >> thank you, commissioner rossen worsel, commissioner pai. >> chairman thune, ranking member nelson, members of this committee. thank you for holding this hearing and giving me the opportunity to testify this morning. since 2012 it has been a privilege to work alongside you on issues as varied as broad band deployment and freeing up
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more spectrum for consumer use. in my opening statement, i would like to build upon the sentiment expressed by the chairman and the ranking member in their opening statements, sentiments that i share. in particular, i would like to focus on four issues where i think we could reach a bipartisan consensus and benefit the american people. this committee and its members have shown tremendous leadership on many of these issues. the first is ensuring direct access to 911. earlier this year, senators fisher and klobuchar and senators cornin, cruz and shots introduced the kerry's law act of 2016. to would require all multi-line telephone systems installed in the united states will allow direct 911 calling as the default setting. it would ensure that calling 911 always works. i hope that this worthy legislation becomes law soon. second, i want to commend, among others, my home state senators,
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roberts and moran, for introducing the kelsey smith act. this bill would help locate wireless 911 callers in emergencies by ensuring they have critical access to location information. it is inspired by the sad story of 18-year-old kelsey smith, whose parents i had the opportunity to meet earlier this year. days after she graduated from high school, kelsey was kidnapped in overland park, kansas. almost four excruciatingly long days later law enforcement found kelsey's bodies. she had been raped, killed and left about 20 miles from where she had been abducted. it never should have taken that long to find kelsey. she had her cell phone with her. but her family and local law enforcement and even the fbi were not able to get the cell phone geographic coordinates from her carrier for days. once they did get the information it took law
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enforcement approximately 45 minutes to locate her body. we already knew that the law that bears her name works. over 20 states have enacted similar bills. and they've helped locate victims and save lives. i heard from myself firsthand from law enforcement that a five-month-old baby in my home state of kansas was saved as a result of this solution. i hope that a bipartisan compromise could be reached that would allow this federal kelsey smith act to be enacted. i'll turn next to spectrum. an area where this committee has been leading. i want to commend the chairman and the ranking member on the introduction of the mobile now act and this committee for passing it. i'm grateful for asking the fcc to move forward on opening up spectrum above 24 gigahertz which are the 24 millimeter wave bands. opening up these bands are a key part of the 5-g future and
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critical input into american leadership in this space. thanks in no small part to your efforts, the fcc recently expanded the millimeter wave proceeding to include over 17 gigahertz additional spectrum. many of these bands were identified in the mobile now act. i'm glad that we reached a bipartisan agreement on this issue with the fcc and i hope we move quickly to reach a final resolution to this part of the proceeding. finally, i would like to touch on another area where i hope that the commission could move quickly and in a bipartisan manner. it involves something called atsc 3.0 which is the next generation broadcast standard. in april, broadcasters and the consumer electronics industry filed a petition to give broadcasters the option of using the next generation standard n. turn, we, the fcc, asked for input on atc 3.0 and the result was clear. widespread support.
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there is no dispute that this next generation broadcast standard will allow broadcasters to provide better service to the american people. it will be easier for consumers to watch over the air programming on their mobile devices. picture quality will improve. and broadcasters will be able to provide advanced emergency alerts with localized information and much greater amounts of data. i believe it is important for the fcc to act with dispatch on this petition. just as america is leading the way on mobile technology such as 5-g, so too should we be the forefront in the broadcast space. i hope you will issue a rule making on the 3.0 no later than the end of the year. chairman, ranking member, members of the committee, thank you once again for giving me this opportunity to testify and i look forward to answering your questions and look forward to working with you in the time ahead. >> thank you.
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chairman pai. >> thank you for the opportunity to participate in the commitez oversight of the fcc. as i have stated before, while fundamental differences remain on many matters, individual commissioners still seek to find areas of agreement. today i'll focus on just three issues but look forward to answering all of your questions. first, 5-g and wireless infrastructure. the functionality of worldwide wireless services has helped cultivate a demand for even more. this development has helped produce a global race among certain countries to be the world leader in the market for the next iteration of wireless services, commonly referred to as 5-g. if successful, it could produce a wireless fiber with amazing speed and enormous capacity andin fint he is mal latency. thankfully we are on pace to bring it to american consumers and shape the global market place for these services for the next decade or two. my colleagues deserve credit for
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effort to make the requisite brand width available. we included four spectrum brands and to expand to new additional bands. standing in the way of progress however are some localities, tribal governments and states seeking to extract enormous fees from providers and operating citing review processes not conducive to a quick and successful deployment schedule. at some point, the commission may need to exert authority provided by congress to preempt the activities of these delaying 5 g deployment without justifiable reasons. switching topics to the commission consideration of the new set-top box rules. chairman wheeler recently circulated an order based on the new app-sent rick alternative approach i have advocated for the direction of the current market place. i should state that i appreciate the chairman and his team jettisoned the previous model but the new effort comes with its own baggage.
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instead of embracing the video distributors filed proposal, the latest version adds complicated and flawed provisions to that offer, effectively threatening and undermining the viability of the entire apps approach. the proposed rule would set the commission up as an arbiter of the compulsory license which the copyright office confirmed we have no authority to do. and although the proposal is touted to leave programming contacts between nvpds and programs in tact, nvpds would be prohibited from signing contacts with programs that could create limits on consumer access complete with terms that are allowed and some unreasonable and a wide gray space in between. this graft is unacceptable in my opinion. my last issue is the commission's overall functionality. during my time at the commission i've highlighted short comings
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in the commission processes. i certainly believe there are better ways to operate the commission that would not jeopardize the prerogative or the power of the chairman, whoever that may be. to facilitate this, i've given speeches and testified and written blogs and discussed at length many steps the commission can take to correct bad practices and improve general operations. unfortunately, little has been accomplished to make these or other changes notwithstanding chairman wheeler's comments in favor of many of my suggestions. process reforms are necessary at the commission and if the commission won't fix itself, i hope congress will continue to review the suggest. thank you and i look forward to engaging with you on these subjects and others as well. >> thank you commissioner o'rielly. >> commissioner clyburn. >> chairman thune and ranking member and members of the committee, good morning. please excuse the red eye. despite an overnight flight that arrived about 6:57 a.m. out the
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dulles, know that i am hopperno to be here and thank you for the opportunity to out line my vision, the vision is not good, but there is much to report in the six months since i last testified before this committee. in april, i launched my connecting communities tour, a concept formed out of a desire to see and hear froo rural and urban communities and those with and without connectivity. last month i visited new mexico where i joined senator you'dal on expanding broadband access. in the days following my visit i heard from randy, a software developer from edgewood, new mexico. despite living just 20 miles east of albuquerque, his fastest option for broadband is 7.5
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megabits per second at a price of around $62 per month. in his letter he described broadband as a cold, hard necessity in the digital age. unfortunately, my experience in traveling the country has demonstrated that randy's story is not unique. when my connecting community tour wraps up on october 19th with the solutions focus policy at georgetown university, i will have visited ten states including arizona, california, colorado, massachusetts, new mexico, new york, and washington and west virginia. and i'm also excited to share that the commission will tee up a notice of proposed rule-making later this month which stems from our inquiry on independent programming. following more than 36,000 filings from our prior notice of inqui inquiry, the commission has built a record that shows there are real challenges facing
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independent programmers. for consumers, this can mean higher monthly programming costs, as well as restrictions that limit their ability to watch their favorite content through online platforms. third, the commission through its connect to health task force continues to focus on the intersection of broadband and health policy. just last month, we launched our new broadband health mapping tool which allows federal, state and local agencies as well as the private sector to examine the relationship between connectivity and health at the local level identify current issues and develop future solutions to address connectivity gaps and promote positive health outcomes. from this initiative, we've learned that rural counties are ten times more likely than rural areas to have low broadband access and high rates of diabetes.
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similarly, the neediest counts, when it comes to the intersection of broadband and health, are concentrated in the south and midwest. knowing this information will help both the public and private sectors target limited resources to improve infrastructure and deploy connected health technologies. finally, i believe the commission is on the the cusp of something big when it comes to the deployment of 5-g wireless services. we've seen the need for mobile data continue to grow as more american consumers take advantage of the smartphones and tablets in ways unheard of, even a few years ago. opening up spectrum above 24 gigahertz is just the next of many steps in the path toward 5-g technology. as we move into this new age of increased connectivity, it is essential that those who live in rural and high-rent, urban areas
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are part of the new frontier and that industry and government work together to make sure to narrow rather than widen the digital divide in this country. thank you once again for allowing me to share my proorts this morning and i look forward to answering any questions you may have. >> thank you commissioner. could we get you a cup of coffee. [ laughter ] >> well, despite the charisma of the member of the hearing, so despite that any way -- if you've been up all night. we'll proceed with questions and i have a list of members. but let me start, chairman wheeler, as i pointed out in my opening statement, you presided over the most partisan fcc in agency's history and twice the number of 3-2 party line votes as the five previous commissioners combined and i say that because i'm concerned about
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the precedent that that creates for future fcc chairs. what is to prevent, if there is a republican fcc to come in and just reverse what you and your colleagues have done, or then another democrat administration to come in and reverse the previous republican majority and on and on. and i think you see where i'm going with this. so my concern is, and i'm wondering what your view on this is, is whether that approach could lead to a destabling or stabilizing and cycle of regulatory uncertainty and which i think everybody who follows these proceedings and everybody involved in telecommunication policy is concerned about is creating certainty and it seems to me at least the current pattern trend if continues to create greater uncertainty because future commissions could do everything by party line
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vote. your thoughts. >> thank you, mr. chairman. and i think you raise a legitimate issue. i mean, one of the interesting saving graces that the commission has is the need to make a decision on the record. and i agree that we don't want to have this up and down, in and out kind of situation. and any changes would, of course, as i say, have to be based on the record. i think it's important -- your chart is correct, i presume, i haven't done a box score, but i -- i presume that you did. and about 90% of the decisions that we make are unanimous. and just for the record, i was trying -- sitting here trying to think about the times when some of these 3-2 votes were me voting against one or both of my democratic colleagues. i mean, i recall that on the --
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on the question of whether there was effective competition for cable, that it was commissioner pai and commissioner o'rielly and i who were the three. i recall that on the alaska plan for carriers in alaska, it was commissioner rosenworcel and commissioner pai and commissioner o'reilly and i that were the three. my memory is weak in terms of pulling things out on the spur of the moment. but this is collegial body and a body where the deliberative process is important and i, too, hope that we could find ways to resolve issues in a common
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manner. >> let me shift gears for just a minute to one of the issues that you talked about earlier and i'll pose this to commissioner o'rielly, but chairman wheeler in his opening statement said that all copyright and licensing agreements remain in tact under the set-top box proposal and the fact sheet said deals made between paid tv proverdicts and content providers are not affected by this proposal. commissioner o'rielly, you stated that the order prohibits mvpds from signing contracts with programs that the agency deems to be unreasonable. and so i'm wondering, i direct this to you to start with and then perhaps widen in out, but do you think it is accurate or potentially misleading to say that the draft order would have no effect on the freedom of negotiation between content orders and mvpds for programming carriage. >> i don't want to characterize this but -- but i will say that i think it is inaccurate. i outlined why.
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because it is putting the commission in between the programmer and the mvpd. we are preventing them from signing contracts that contain certain things that we deem -- that tom wheeler deems is unreasonable. commissioners can't do that because it is done at the bureau level with the chairman's oversight so that imposes that commission in the middle of those decisions. so i think it is inaccurate to say that we are leaving those in tact. whether it goes retroactive, it is unclear from the item. but nothing prevents the commission from going backwards. >> okay. chairman wheeler, you, in your opening statement, you called the ftc input on your privacy, npr particularly helpful, and during our discussions you've indicated that the ftc filed good comments and the final rule will look a lot like that and the fcc rule i should say. and i appreciate your deference to the fcc experience recording consumer privacy protection. but i would like to know, will the ftc have an opportunity to review and publicly comment on
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the fcc privacy proposal before you all vote on it and if not, could you tell us why. >> thank you mr. chairman, if i could come back to the previous question and i'll come back to this one, to make sure, this is what the deliberative process is about. and if there is a desire to remove the specific provision that commissioner o'rielly just talked about, we can do that. the matter of interfering with contracts however, i want to make a real clear point on. what we are saying is we are not setting up ourselves to second-guess a contact after its been done, what the provision that the commissioner is referring to says that -- that mvpds cannot behave in the kind
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of anti-competitive manner in contracts with programmers. as you know, for seven or eight weeks this summer we held extensive discussions with both cable industry and programmers. this was a provision that the programmers specifically asked needed to be in to protect their contracts. i keep saying, i'm for protecting programmers' contracts. if that was a mistake, as with anything else in that item, and my colleagues have a different approach or different thoughts, let's do it. let's get at it. and deal with those through this
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ongoing deliberative process so the door isn't closed on anything. now to your privacy question. i have made multiple suggestions to us in terms of how to improve original proposal -- and as i indicated to you the other day and you just renferenced, we tae those seriously and are embracing them in what -- in what we do and we have an ongoing dialogue with the ftc. as you know, the situation with the ftc's authority on privacy has been significantly constrained, however, by a recent ninth circuit decision. in which in a suit brought by
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at&t, at&t alleged that the ftc did not have any activity over the fcc and the ninth circuit agreed with them and therefore there is not an ability, if there ever were, for the ftc to exert its jurisdiction -- to exert authority over the question of the privacy activities of common carriers. >> but the question i had was will they have an opportunity to publicly comment on the privacy proposal? >> as recently as yesterday we were working with them on this. >> that is different between
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publicly commenting, though. >> they can certainly publicly comment, sure. certainly. >> anybody else on set-top boxes or the privacy issue before i hand it over to mr. pai? do you want in on that. >> i would agree with commissioner o'rielly's assessment and i think it underscores the importance of releasing the documents publicly to everybody could have a chance to see exactly what the terps are that the -- the terms are that the fcc is voting on because as i read the document i share commissioner's concern that they declare unreasonable contractual that they will not be allowed to enter into even if the programmer is asking for those to be included in the contract. >> thank you. senator nelson. >> i noticed in each of your opening comments that you all
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picked up on the bipartisan flavor that the chairman and i had comments upon earlier in our comments and the need for building consensus. and commissioner, o'rielly, i remember in your confirmation you actually were asked how you could ensure there is not a partisan divide at the commission and you responded that you have a history of working across the aisle. i think that's good. just a few months ago, you said in a press conference, quote, it reminds me of an old phrase on capitol hill, never count on a democrat to hold their vote.
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now, as you have already heard the chairman and me talking about how we try to operate in the best traditions of the senate, so when i hear comments like that made publicly, in which you, in effect, insult every democratic member of the senate, then i wonder how is this going to bring about consensus and attempts at unanimity. >> sure. >> so could you explain those comments in that press conference. >> sure. so the phrase that i used, the comment that i used is -- has been mentioned -- i work 20 years in congress, it was used
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repeatedly and so i -- i was repeated -- it wasn't my comment, i was repeating somebody that was repeatedly said by many of my employers over the years. where we had just come from was a situation where we had an agreement on an item, unless you want to go into the subject, we have a bipartisan agreement on the item and it was the third time where one of my colleagues had backed out of the deal. and so it is hard -- like i think i also said as part of my confirmation process, that when i give you my word, it is my word. and so i will be there. we've had instances where people have backed out of the deal five minutes before the open meetings. in one instance we postponed the open meeting a number of times so the item could be rewritten against my interest even though we had a previous agreement. so it is a frustration level and maybe the comment is impolite but it wasn't my comment but it was a frustration level to the
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fact that we had an agreement and i can't count on the word of my colleagues and i've had difficulty with that going forward. and it has been harmful to our relationships to -- but i turn back to the point that since then we've had different agreements since then. so things like 5-g, things like the alaska plan where we can, i have put those things aside and made deals that sometimes not all of my colleagues agreed with. >> let me ask you about another one. >> sure. >> this was a statement that you made following the open internet order. quote, the d.c. circuits decision is more than disappointing, it also confirms why every parliamentary trick in congress was used to pack this particular court. end the quote. do you think that accusing senate democrats of packing the
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d.c. circuit court to determine the outcome in the net neutrality race, don't you think that inflames the partisan divide. >> i think it is pointing out the fact that i believe that occurred -- i was here during the time that we went to -- i left just before the nuclear option was initiated, november of 2013 is when i was confirmed and took my job. so i lived through three years of threats of the nuclear option and then eventually it did happen and participated in all of the meetings at the leadership level when this was discussed so i was at the highest conversations so i i don't think my comments are -- i'm not trying to inflame any member of this body in my thoughts. i return to the point that i am willing to sit down and negotiate any item that is before the commission and have done so on multiple occasions. so i'm not trying to insult you in any way.
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i was just again, to the previous comment, it was just an accurate statement, that my views were reflecting what had happened. so i don't -- it is not trying to insult you in any way. >> do you think the d.c. court was packed in order to determine the net neutrality out com. >> that net neutrality in itself, no, sir. do i believe it was done to change the direction of the meetings, including multiple administrations -- sure. this is a comment that i pulled because we talked about before and a couple of comments from senator reed and we put on to the court three people and i don't think they deserve to be on any court, but they -- we put them on there and they have been terrible. they are the ones that says the president can't have recess appointments which we've done since this congress started. we focus on the d.c. circuit. we need one more. we need at least one more and
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that will switch the majority. >> i think what is happening is this hyper partisan atmosphere is causing these venting comments venting comments to come out when in our government to function, we've got to have a modicum of civility and respect for the rule of law. and i would encourage people to be mindful of their comments in the future when observing that. thank you, mr. chair. >> thank you, senator nelson. senator rickert. >> well, i think this committee has worked on a bipartisan basis. and i have the highest regard for the chair and the ranking member. i will simply say this because i don't want it to go unchallenged. commissioner o'reilly has not
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said anything today in testimony that isn't accurate. and i agree with what he said. and it may sound partisan coming from a commissioner, but it was absolutely what happened to the d.c. court. and in quoting the democratic leader, he's correct. now, i'd like to get on with other issues. but i feel i have to defend the commissioner in that what he said is factual. let's talk about something that is bipartisan. chairman wheeler, 26 of us sent is you a letter july 11th. and it was led by senator manchin and by this senator. regarding the buildout of rural
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broadband and the mobility fund, july 11, 26 of us on a bipartisan basis signed that. so thank you, senator manchin, for helping with that and thank you all who signed it. we got an answer yesterday. and i'll just say, mr. chairman, it's disappointing to me that we have to have a hearing to get a letter back on something that over a quarter of this body asked about. and basically the response was, we're looking into it. we hope to get back to you by the first of the year. no decisions have been made on the best target the mobility fund phase two support, the commission staff is continuing to process and review the record. so i appreciate the fact that apparently this hearing being scheduled today persuaded you to write a letter dated yesterday.
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can you give us any specific steps beyond what you said in the letter? or are you unable to do that, about how the commission might be expanding broadband into the rural community? >> thank you, senator. yes. let me be specific in that in two areas. the first thing that we have to know is where is there not coverage? we pretty much know that. record available on that, all due respect, sir, has not been good because of the manner in which the commission collected the data.
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the first way that we did that was a national broadband plan in which we relied on the states to provide information, and it wasn't very good information. so then we went out and we hired a third party to collect information on a census block basis. gee, that's pretty small. getting down to a small area. but it wasn't granular enough because, okay, well, there's coverage in this census block but it could be on the left side of the census block and not the right side of the census block. so it was insufficient information. it is my hope that by the end of this month we will have the analysis of the new form 477 that we have required the carriers to provide with us for the first time. so we put a new third bite of the apple. let's get the carriers to give
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us specific information with responsibility for data. and then let's put that into what is called a shape file. and that means let's see it in this area and show where there is coverage here, there's not coverage here specifically and not just the generalities. we hope to have that by the end of this month. that's kind of step one. we will have the information on which to make a decision. step two then is how are we going to fund that? i am hopeful that by the end of this year we will have moved a broadband mobility fund revision. and it's going to have to make
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some really tough decisions. because there are recipients of our funds today who are serving areas where there is already coverage. and the question we're going to have to decide is whether we should be funding only those areas where there is not coverage where we now have this very granular information. and if that's the case, how do you be fair to those who have been continuing -- who have been receiving universal service funding in competitive situations to give them some kind of a glide path? that's the challenge we're
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working on right now. >> well, let me say your answer is certainly more comprehensive today than it was yesterday. and i hope you can move quickly on that. let me just say i've got to ask a question about set top boxes and the answer from chairman wheeler was long and extensive. mr. pine, chairman wheeler's talking points say this. the proposed final rules will allow consumers to access their pay tv content free of apps on ava right of services so they no longer have is to pay monthly rental fees. i think mr. o'reilly said an app centric approach is whaeplted. an able integrated search and content in privacy is at least
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that much of his talking points accurate. and are there going to be more or fewer set top boxes if this proposal by chairman wheeler goes forward? >> thanks for the question, senator. i wish i could say it were, but i don't think it is. and i know the last point of that, for example, is critical. the protection of content is something that i think a lot of people have focused o. it underscores the importance of making this pertinent. so people can judge for themselves. the proposal would interject the cc in two relationships. regulating the terms they would agree with and the relationship between those and the third-party device manufacturers in terms of the standard licensing. the fcc says, well, the media bureau could second-guess any con census that programmers might come to as to what should be in that agreement.
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if they don't reach a consensus at all, they will write the standard licensing agreement. i think unfortunately the combination of those two provisions makes it highly unlikely, i think, that content would be adequately protected in the view of all stakeholders. >> thank you, sir. >> thank you, senator. >> thank you, mr. chairman. i'm not sure i understand every knew answer we have been having. but i'm very glad that the fcc decided to step up and protect the internet with a net neutrality. it continues to have that consumer protection from being charged for fast or slow lanes is vitally important. so i think as you go through this discussion too that you continue to look at the consumer interest here, because it is very important. so one thing i wanted to ask about that and the ranking member brought this up a little
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bit. there was a little bit of discussion during that whole net neutrality discussion that we were going to see a flight of capital outside because of this rule. have you seen that thus far, mr. chairman? and do you have any comments on this i can discussion and some of my colleagues's concepts about what they think they can do here in controlling the internet as a u.s. domestic product? >> thank you, very much, senator. we have seen increased investment in broadband networks. we have seen a 13% increase in fiber. this is all since the open internet order. we have seen an increase in venture-backed activities using the now open internet.
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we have seen an increase in usage in the internet. and as a result, we have seen an increase in the revenues coming from the internet to the cares all the since the development of the adoption of open internet order. in so far as your question about i can is concerned, that's a matter that's in the department of commerce, and i'm glad of it. >> you have no thoughts on -- >> it's -- it is not in my remit, ma'am. >> well, i just -- we had a discussion long ago on this committee and which one of our colleagues called it a bunch of tubes, which obviously wasn't what this is. and to have a global network is critically important for that
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functionality. we want to access international markets and having it work is very important. so thank you so much. thank you, mr. chairman. >> thank you, senator. senator mckaskel. >> so big subject, so little time. briefly, i want to make a point on pds. you know, the business data services has been in front for 10 years. you are waiting on data. you have data. let's go, let's go. let's make a decision. this is important. bds is important. i wanted to be a cheerleader for a decision on bds within the coming weeks. set top boxes. interesting about this is i am big on competition. i think competition is really important. and as i'll speak to in a moment, i think the set top boxes have been a source of some of the many scams involved with billing in the cable and satellite industry.
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but i've never seen unanimous opposition from providers, programmers, and the creative community. usually in this chair they're on different sides. they're all arguing with each other. they're all unified in their opposition to this. so, you know, the licenses part of this can you, chairman wheeler, or any of the other members explain where congress has granted you the authority to involve itself in copyright licensing as it relates to theive community. the copyright licensing part, this is new. and i would like to know where the authority comes from. >> thank you very much, senator. your first comment, the report that you put out on cable pricing and consumer activities, as you know, one of the major issues in there was the surprise that comes at the end of the month. oh, my golly i have to pay this for this box and nobody ever
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told me. i don't have any choice. that's what we're trying to deal with. on your specific question in so far as copyright authority, what the commission is trying to do is not to write copyright policy but to write a policy inside its authority which does not interfere with existing copyright authority and with the contractual terms that copyright holders do inside that authority. as i said, we worked for months with the copyright holders to try and find the way to do that. we're probably 90% there. i'm looking forward to working with my colleagues on what does it take to lock things down.
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because it is not our goal to become a judge of the contracts between mbvds and programmers. >> well, i'm glad you acknowledge you're not there yet. >> this is the -- we're down to the deliberative process at the commission. and we've got five smart commissioners. i'm sure we're going to have a very full discussion back and forth on this. this is an important part of it. >> you mentioned our investigation through the permanent subcommittee on investigation. senator portman and i have been doing a bipartisan investigation on the satellite. we did one. we have another one coming up. this report talks a lot about what we found. if any of you haven't read it, i hope you will. because it's startling. it is startling, the practices that have been embraced.
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and i know you have the authority to issue customer service and truth in billing guidelines for cable. but it's my understanding, disagree with me if i'm wrong, dow not have that authority with satellite, correct? >> correct. >> i would certainly urge you to listen to the phone call i called by satellite provider. i said clearly who i was. i taped the conversation. they were charging me a maintenance fee for the equipment they own. so i was trying to get them to explain to me why are you charging me to maintain equipment that you own that if it doesn't work, i can't see the programming so i don't have to pay you. i want to take it off. and i want you they tried to tell me they were going to charge me to quit charging me. it's all on tape. it's on the website. this is two days before hearing. this is the stuff that's been going on. i hope we deal with the fact that you do not have the
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authority with satellite to clean up some of these practices. and people are outraged at the bait and switch and the business model that this uncovers that is not consumer friendly. so thank you, mr. chairman. >> senator mckaskel. senator fisher. >> thank you, mr. chairman. i sent you a letter in june along with several is other members in congress and we were raising concerns about the fcc's recent lifeline order. this letter echoed the concerns of nearly 100 state commissioners that by creating a new federal life line broadband provider designation, the fcc is eliminating the state's role in deciding which carriers can offer lifeline within their borders. this new designation directly contradicts the language of the communications act which gives states primary responsibility for designating carriers to
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participate in the federal universal service programs. 12 states, including mine in nebraska, are suing the fcc. so it appears appears to agree. mr. chairman, do you assert that the fcc's recent preemption is lawful? >> thank you, senator. nothing that we did changed the existing authority of any state puc. the question that had to be dealt with was how do you determine a atc when, for broadband service, that broadband provider is a nationwide provider. and unlike telephone company, not just located in nebraska or wherever and with a relationship with the puc.
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and we were being told that by broadband, by national broadband providers that they would not be able to offer broadband if they had to do individual state etc certification. the goal was how do we get broadband to all americans? so the decision that got made was not to rusney existing state authority, but to say that for broadband, which the statute does provide if the fcc can say you're an etc, and that's what we did. >> first of all, i would ask did you share the broadband provider's concerns with the state commissions?
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>> throughout the proceeding there was a healthy back and forth on this. >> and haven't the states always designated carriers where they took jurisdiction by state law and then the fcc by law only fills in the gaps? >> i think you just specifically put your finger on the issue when you said the state identified carriers. we were talking about companies that are broadband providers that are not carriers. under state jurisdiction. >> commissioner, how would you answer my questions? >> senator, thanks for the question. i do think that the fcc essentially divested in states of the authority to decide which eligible telecommunications carrier should be certified, which i think is an obvious legal problem given the stat chute as i read it. but it creates a policy problem because the states have been on the front lines in rooting out the waste, fraud, and abuse we see in the system.
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in okayilahoma it was the state commission that determined they had fleeced tax payers, including you and me. one of the reasons why a wide variety of states have seen fit to sue us, to make us follow the law. >> and mr. chairman, in your response to my letter you mentioned a partnership between the states and the fcc. and i've heard that the states and the program administrator you are unclear about what the role states are supposed to play after the fcc's order. how do you plan to remedy that? >> well, i did not realize that usack was unclear. we will move immediately to get u sack and the appropriate authorities together with whoever the appropriate state body is to work through what our
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belief is to what the process is. >> and you will work with the state commissions as well in trying to clarify the issues that are before them -- >> i'm sorry. i said u sack. i meant narac. >> thank you. >> thank you, chairman. chairman, i intended to talk about copyright law. i think my colleague from missouri and the senator thune have both done that. so i will look at what you all had to say about that. the committee that has jurisdiction over the library of congress which has the copyright rules. i may very well want to submit questions on that topic. i want to talk about two other things that we have talked about before. in august, the commission adopted, like in many other case on a party line vote, it's
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quadrennial review of broadcast ownership rules. nothing substantially changes in those except there are two areas i want to mention just to be sure we're understanding what you've done in the way i believe it's been done. one on joint sales agreements where one broadcaster selling advertising time on behalf of another in local markets. as you know, this committee has been particularly active in challenging earlier how these agreements would go forward. but after multiple bipartisan letters, two acts of congress is and a court ruling by the third circuit court, the fcc, i believe in its new rule, acknowledges grandfathering in joint sales agreements when there's a transfer of ownership. and then the second thing that i think is new is in another joint agreement, joint service
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agreements, those are contracts to share resources like a helicopter that two news teams might use. there are new disclosure levels in these rules that stations have never had to disclose before in terms of the specific -- as i understand it, the specific economic terms involved. that would be outside anything a station independently would have to disclose. so is this a step toward regulation is the fitter question. the second question, am i right in believing the new rules allow these joint sales tkpwraepls to go forward? >> yes, sir. what we tried to do is to take the specific language or the specific intent of the language as it was explained to us in the appropriations rider about grandfathering in to adopt that.
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in so far as -- >> joint service? >> ssas, the issue here is how do we make a judgment as to whether or not the rules are being circumvented through contractual arrangements? and one of the ways dow that is to have information. what you cited was a collection of information, not a decision. but what is the information? we just had a discussion a minute ago about how we have had imperfect information on which to make decisions. this is an attempt to get good information. >> two of you did not vote for this package. this may or may not have been one of the topics. if either mr. o'reilly or mr. pine would like to comment on this, i would like to hear what you said. >> i did dissent from the decision in part because of the
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restrictions on joint sales agreements and shared services agreements. with jsas, they are unchallenged in my view. some of these agreements have been useful in helping broadcasters provide the public vital information. the writing is on the wall that the fcc is collecting information as a step toward, as you put it, more regulation, prohibiting shared service agreements. >> mr. o'reilly? >> i agree with my colleague on his two points. i think this is the first step. the ssa declaratory structure is intended to, for future commission, to impose new rules and limitations on stations and their ability to share such activities. >> and can anyone tell me a way these new broadcast ownership rules could now be appealed or
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asked for a change? mr. pine? >> i think it will be appealed. i imagine the third circuit would. the court said the fcc needs to take a is serious look whether these regulations remain necessary. the fcc having not just doubled down on them but made them stricter. i think the court is going to take -- to have serious concerns with what the fcc did. >> thank you. thank you, chairman. >> thank you. i also have some questions on the cross ownership rules. and i will put those on the record. i thought i'd start with you, commissioner rosen worth well the work that you have done on the 911 issue. i appreciate that. you have come out to my state. as you know, senator burr and i long chaired that caucus along with representatives askew and
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getting the $115 million in grants for the next generation 911 implementation grant program and have worked to further the technology. could you talk particularly about the grant program and how it is best leveraged to pave the way for broader investments? >> thank you, senator. and thank you for your leadership as the head of the 911 caucus and also for visiting a 911 center in minnesota with me. here's the thing. this program was set up four years ago. we don't have many federal programs to help accelerate 911 and bring it to next generation. congress asked that rules would be developed within 120 days of passage. we are probably some 1,500 days since this law was passed. so i think we should get it up and running. and when we do, we need to make sure we have a national definition of next generation 911 based on nationally accredited standards. and then we also have to make sure we take these funds and use them to develop blueprints in
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rural communities, urban communities, and everything in between. so when we're done with it, all communities can copy and benefit. >> thank you very much. as you all know, i worked hard on the broadband issue with the chairman. we appreciate the bipartisan work you did to get this done. i wasn't one of those votes. as you know, there is still more work to be done i will just put record questions about the universal service reforms. chairman wheeler and just the concerns we have in getting those done. i thought i would turn to one question about business data services. and if you could just answer it briefly, earlier this year, i joined several of my colleagues in writing to ensure that the business data services proceeding is based on complete and accurate data. do you have any other concerns that would prevent the proceeding from moving forward? i know that you indicated that you are confident that the commission has the right data. but is there anything else that
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would hold it up? >> i hope not. i hope we are going to be moving on this very soon. and i believe we do have the data. and there are yon going discussions virtually every day that generate more data. >> very good. >> on the set top box issue, obviously we see the cost increase choices for consumers and the ranking member of the judiciary. and i trust subcommittee, which focusing on the ftc. i know the issue was raised already, which i appreciate, on the ftc/fcc issue of enforcing the privacy standards and there's also been major copyright discussions here. but i wanted to specifically focus on the copyright issues with regard to smaller programmers with the current proposal, which already face narrow margins, difficult competitive landscape. any changes that would
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inadvertently harm the value of their copyrighted material or increase the likelihood of piracy could force some of those innovative and competitive companies out of business. what assurances would you give them? i'm trying to figure out how this would work for them, as well as other concerns raised by my colleagues. >> thank you, senator. yesterday we received a letter from the writers guild west endorsing our new proposal, and specifically talking about how it created opportunity for independent programmers. >> so you believe there aren't any problems at all? >> the challenge independent programmers face todayed is that, a, will the cable operator let them on? and, b, are they subjected to some kind of a purgatory where they have to be out here and
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hard to find? if you have the kind of integrated search we are talking about, it creates opportunity for independent programmers. and that's why we have a very robust record of independent programmers saying they support what we're doing here. >> i think i'll go back to my universal service reform question. when can consumers have all the information they need to make on the reforms to the usf? >> i'm glad you asked that question. as you know, they are going to make a decision november 1st. right now we're out. we've got workbooks out. we're working with the various rate of return carriers to help them understand, and this is the question about whether they want to choose the new model or want to stay with the legacy approach. and we're working with them right now, including with having a new workbook that's out.
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you have to go through and say, okay, how do you look at capital costs. there are all kinds detailed questions to walk through and give tools on that. >> so do we know the timing on that, though? >> it's out. the workbook is out. >> so they have what they need now? >> i hope that the workbook is the beginning of the determination of what they need and that we are available and working with them through various means to answer any questions they've got. >> so is all the information on their buildout obligations and budget caps, is that out? >> yes, ma'am. >> all right. thank you. >> thank you, senator. senator moran? >> chairman, thank you very much. commissioners, and mr. chairman, thank you for being here. first of all, i recognize the member of the commission from kansas and thank him for his call to action in regard to
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broadband to rural communities. there are a number of pending orders before the fcc. i want to make sure we don't forget every dollar spent on compliance with those orders and potential regulations mean less dollars being spent in deployment of broadband, particularly in rural areas. and rather than using the in adequate broadband deployment for regulation, commissioner, you seem to try to remove the barriers towards that deployment. and i appreciate that. i'm going to, with the short time and vote that has been called, i'm going save chairman wheeler to the last so he gets to keep talking and not cut into my time. first of all, commissioner rosen worth el on the set box top proposal, tell me what are you thinking, how do you see the proposal? what's on your mind? >> sure. thank you, senator, for the question. you know, set top boxes are clunky and costly.
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consumers don't like them. and they don't like paying for them. and that is not just my professional opinion. it's my personal opinion too. so we're taking a hard look what the chairman has put before us. and there's a lot in there that seems to work. i'm going to be very candid with you. i have some problems with licensing and the fcc getting a little bit too involved in the licensing scheme here. because when i look at the communications act in section 629, i just don't think we have the authority. which i will commit to keep on working with my colleagues because i think bringing some change to the set top box office would be good for consumers, my household included. >> chairman wheeler, on this topic, under your final proposal, will device manufacturers be required to comply with section 631, 338 i of the communications act with respect to privacy, or simply be subjected to the ftc and state
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attorney generals unfair deceptive practices act? >> thank you, senator. let me say one thing. i look forward to working with commissioner rosen worth el and all the other colleagues on the first issue you raised. secondly, in so far as we do not have jurisdiction over device manufacturers. we have worked with the ftc on this issue and are advised if our rule requires that devices warrant to consumers that they are complying with 338 and 631 that the ftc will have the ability to do the necessary enforcement to protect that privacy. >> thank you. we'll have the ftc in front of my subcommittee and this committee in the near future. we have some preference in the way that they do business.
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we will have that conversation with them. on the topic of broadband relocation, the options, it remains increasingly concerned about the potential funding shortfalls and timeline. and i'm excicommitted to work w members of the committee to see that we have a plan in case the things we're fearful of happening actually do happen. so we look forward to your reports in regard to that as this process goes forward. i'll ask this to you, mr. chairman. i'm also particularly focused on 5g. and the last time you and i spoke here at congress committee i asked about spectrum frontier and the upcoming high band auctions. i appreciated that you moved to complete the frontier
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proceedings quickly. and i would ask again about the timing for high band spectrum options. i get to visit with you and others as well. this year they total $124 million. i'm concerned about the yon going incentive option. when will we hear about the high band options? >> so as i have told you in your appropriations hat, i'm seriously concerned about the cuts that have been proposed to the option budget and our ability to do all the heavy lifting and options that we have. inso far as the new millimeter option because it is is not scheduled -- it has to work its way through the python in the operation. but at the same time, there are some pieces of that sprupl of what we have identified that
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have licensees and we are work to go facility sharing, transfers, what whatever activities may be necessary there to get that sprupl to work even preoption. >> thank you, mr. chairman. you have added to my vocabulary. i have never heard of a pig working its way through a python. i like it and i may borrow. >> thank you very much. in there are no snakes in hawaii. this hearing started with a very important principle which is to say that the commerce committee, and you all know this having many of you having worked on the committee or certainly with the committee. and the fsc has been bipartisanship. i will describing different parts of the elephant to get to 5.0 where we can. it seems there are two
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principles to adhere to when we're trying to get to 5.0, right? one is compromise. and i'll get to that especially on the set top boxes in a minute. and the other is conduct. you know, the exchange that senator nelson said with commissioner o'reilly i thought was important. not because we want to single you out, but because all of us say things that maybe don't lend themselves to get to 5.0. i just offer to you, commissioner and to all of us that we ought to think through whether or not what we are saying is constructive and leads us to strengthen the institution of the fcc, which has done so much over so many years. and to strengthen the institution of the senate. and this committee to get back to that history, that disposition of trying to get to 5.0. so now on set top boxes, i absolutely support the principle that people shouldn't be ripped off by being forced to rent a
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device. that is a commonly held bipartisan principle. and i wasn't without some objections over the months and years. but now we're very, very close to getting across the finish line. my concern, both on process and on policy, is that the thing that i thought i was trying to and advocating for may be accomplished in the next 15 days. but hrts of other things which i think deserve more scrutiny and oversight and discussion may also be accomplished. and it's not at all clear to me that it is necessary to do all of these other things in order to get across the finish line when it comes to providing consumers with some relief on set top boxes. i'm absolutely encouraged by all the commissioners's willingness to kind of get at what the offending provisions may be. i heard commissioner o'reilly and pine talk building how
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licensing agreements are sort of -- would be overseen in the future by the commission. and commissioner rosen worth el and weaver talk building their willingness to discuss and probably pursue a compromise. and so i want to just get as clear as i can without sort of referees the commission's deliberations. first, for commissioner wheeler, it sounds as though you are open to modifying this to accommodate some of these quite legitimate concerns. is that accurate? >> yes, sir. if we can do that and protect the mandate from congress, which i believe we can. >> commissioner pine, part of the difficulty when conducting a negotiation is to find out whether or not these are two of the many objections that you may have to the current proposal, or if these are the two main
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objections. to the extent wheeler makes accommodations and you pop up with three new objections, and i'm not suggesting you would, i want to be clear if we're trying to get to 5.0 and he does back-flips to accommodate these concerns, we don't find three new concerns 72 hours out. do you want to comment on that. >> absolutely, sir. we put our suggested changes that we vote on at our monthly meetings. on our internal chain, sometimes several weeks in advance so everyone knows what the universe of our concerns might be and what our proposals are. those are two key ones. another one, on i don't want anything to inadvertently delay innovation. any change to the standard licensing agreement has to be approved by the media bureau. that might slow things down. the other thing is i don't want mbpds to be either deterred or just delayed in introducing new
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delays in their new equipment. they would have to ensure the consumer experience is replicated on 6th other app or every other way of accessing the program. they have to make it available on every other platform. >> you are just flushing out the original objections. these are not different objections? >> well, this is related to it. it is related to that core concern. so that's one of the things we're going to be hopefully talking about in the days to come. >> okay. thank you very much. >> thank you, senator shot. senator danes. >> thank you. in the expert of senator ships let me take a shot at that as well. in march of this year, the united states house passed the small business broadband deployment act. it was a vote of 4-11-0.
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very few votes in the united states house where you have a zero on the end of anything. it then came over here. this is my bill. it passed this committee 21-3. that's a pretty good shot. three touchdowns versus a field goal. so that's about as strong bipartisanship as we will see around here. the commission is set to consider extending the exemption again in december. it is clear that congress has spoken on this issue. i would argue it hasn't stuttered. it shouted pretty loud. maybe i will start with the chairman. do you agree that congress's intent on this issue is clear, and will you vote to extend the exemption for small businesses? >> thank you very much, senator. one of the issues about on the whole small business question, what is the definition of a small business when you're in the broadband business? the sba defines a small business
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as $38 million or less in the broadcasting space. >> and a lot of times they are looking to stratify and look how you segment businesses within a particular vertical. congress has spent a lot of time, and we debated that. i worked very is hard with some of my colleagues across the aisle. we took a subscriber view of that versus a revenue video. 250,000 subscribers. >> we're sensitive to what you -- the interesting thing is 250,000 subscribers is about $250 million in revenue when you take a revenue approach s. and so you've got to say to yourself, are you going to keep transparency because it's too expensive away from consumers who are on companies that do a
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quarter billion dollars a year in refuse stphaou and i'm not trying to be judgmental with that. that is the facts. what we're doing is we have until the end of the year to decide are we going to extend this or not. >> okay. so it's not so much whether we principally agree with there should be a lawn drawn, it is where the line is drawn? >> yes, sir. >> in the spirit of trying to hopefully generate more bipartisan agreements at the fcc level, congress has spoken very loudly on that, very clearly on that. and i hope you would respect at least our guidance there as you deliberate on where that line should be drawn. >> thank you. in fact, the only difference was a 5 versus 3 is the difference. we're in agreement on where the line should be drawn. i want to shift gears and talk about wireless coverage. in montana, the wireless coverage is really a public safety issue. many montanana, as many people
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live many miles from the next home, from a hospital. and having that kind of connectivity is essential. mr. chairman, you talked about competition. thank you for coming to montana. in montana, competition can be limited. and i'm curious on your thoughts on what can be done, what are you doing to promote competition particularly in rural america. >> thank you very much, senator. i think there's multiple things. one, i know your question was about competition. but first we have to make sure everybody has coverage. that's what i was talking to senator wicker about. we are going to adapt the mobility fund to work with that, to move towards that. secondly, i think that there are new technologies that hold great promise. you know, there are, you know, rwanda, which is worse than
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montana in terms of disburtion has infrastructure sharing things they're doing. i mentioned two weeks ago they might want to look at things like that. i think 5g and the promise of 5g, the folks of verizon has been telling us they think 5g is a rural solution in many ways. and they refer to it as wireless fiber. so i think that there are multiple solutions, including our policies, innovative approaches, and 5g. >> thank you, mr. chairman. i'm out of time. boy, it goes by fast when you're having fun. a closing comment, we are getting a fair amount of input about a.m. radio. i want to share my concern. as is written today, it could leave some montanans without
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a.m. service. i want to discuss it a little further. sometimes you can't get connectivity, a.m. radio is your link. it becomes a link for weather forecasts is and so forth for folks out there spending time on tractors. thank you much. >> thank you, senior danes. senator markey. >> two years ago i voted for commissioner o'reilly. i've known him for 20 years. he's a conservative. he's a republican. i voted for him. commissioner rosen worth el two years ago was promised a vote. by unanimous consent, we can bring that vote up this afternoon on the floor. so commissioner rosen worth el doesn't have that cloud over her head. and i ask we confirm her on unanimous consent. we can do it immediately. and i just think it is an important statement for the
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committee to make. this is a -- this is a relic of the past. it's a typical satellite or telco top set box. it is today. this could be in your house today. an investigation led by senator blumenthal and i found that one, approximately 99% of american paid tv subscribers, rent this set top box from their paid tv provider. two, subscribers spend on average $89 a year renting a single set top box. but the average household spends $232 a year on set top box rental fees renting about two and a half boxes. in other words, over 10 years, the average family is paying $2300 to rent this box. $2,300. that's a good business to be in.
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the set top box rental market may be worth $19.5 billion a year. now, this little device i have here in my hand is an amazon fire stick. it costs $40 for a consumer to purchase. and there are many other devices like this out there such as roku, chrome box, apple tv. consumers today can use these devices to watch content from multiple sources. hulu, netflix, for which they all still pay. but this device cannot play the programming package that consumers pay for each month from their cable satellite or telco provider. the only way for a consumer, the approximately 100 million households who subscribe to paid tv is to watch the programming that they have paid for is to rent a box from their cable satellite or telco company.
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consumers cannot watch their paid tv programming on these third-party boxes. $2,300 every 10 years for this. good business. that's what the fcc is considering right now. how do we transition to the modern technology and not air cake technology? we did it with the black rotary dial phone. you don't have to rent that anymore from the telephone company. you can go out to the store and buy one. we had to change the laws. on the programming, the program was a big controversy in 1992. rural americans wanted 18-inch satellite dishes. but the cable dishes wasn't willing to sell hbo and showtime and cnn to them. so we had to change the laws to those 18-inch dishes could get access to the programming. it has to be reasonable. that's the standard. but we changed the law. who would imagine a world today without directv? we had to create it. it needed access to the program.
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so this device is something that only the fcc now can do something about. the fcc's proposal will ensure that through an app created by the cable company, the cable programming package can be played on this third-party device so consumers aren't forced to continue to pay exorbitant rental fees. we don't want consumers to be forced to rent a box in perpetuity when they can buy a device that gets the same job done. that lack of choice has to end now. so chairman wheeler, you've heard these concerns on programming, on copyright. we had the same issues back with the 18-inch satellite dish. we created a standard that worked. we worked it out. so talk about how hope you are to finding a common sense solution that can work so over
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the next 14 days the consumers can be freed from these chains that have been binding them since the day they first had a cable system installed in their house. >> thank you very much, senator. i hope that the significant departure from structure but not from principle that our new proposal represents is a real life indication of how we are willing and seeking to resolve remaining concerns while allowing that chain to be chopped. thank you. >> and, again, if anyone wants to continue to rent this for the rest of their life, they will be
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allowed to under the law. no one is going to stop them from paying for the next 10 years. you still have options. >> the interesting thing i read in business week is that comcast is shipping 40,000 set top boxes a day, a day right now. >> that's our job and your job to find this common sense solution. but we have to find a solution. we did it for 18-inch satellite dish. we did it for the black rotary dial phone. past commissioners found the issue. that's your job, and i urge you to do it in the next two weeks. i think americans will say that is one of the best days in history to be freed from this kind of a chain. >> senator from massachusetts, hold up that amazon fire stick. all right. there it is. the letter from amazon, the fcc, as is opposed to this, by the way. >> i will add one more fact. all the programmers back in 1992
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opposed having to sell their programming to the 18-inch satellite dish. discovery came in to me and said we don't want to have to sell to the satellite dish. i said you can write a note to me in five years when you have four discovery channels on satellite. i understand you have gotten a call you can't refuse. we know the only way this works is we as the government steps in to free up these programmers so they can sell to as many devices as possible. >> it is not often that a company opposes or self-interest. but the statement is lay competition and delay customers from receiving the service they already have on their choice. >> that is a concern about the licensing. it is not a concern about whether or not this device should be able to process the license part.
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the cnn, hbo. we can work out this licensing board issue. and these commissioners are brilliant. they have the capacity to be able to resolve it. >> it would be good if they worked that out. it would be good if they published that so people could see it before they adopt it. >> next up is senator gardener. >> thank you, mr. chairman. senator markey, we finally found al gore's lock box. is that it right there? chairman wheeler, as we've discussed before, satellite tv in plata in southwestern colorado, currently received new mexico-based broadcasts. tphae they left access to without over the air broadcasting. with significant mountains, denver, front range, durango. both broadcasters and satellite providers continue to engage as
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they work to deliver colorado tv to all four corners of colorado. congress also worked to address this issue in the 2014 stellar legislation by extending the market modification process to satellite tv. as they crafted the final rules to carry out this provision i, along with senator ben and others, urged the fcc to permit county commissioners to petition for market modification. and i thank you for adopting that option. in light of the rules, the commissioner from la approximate plata and mont zuma suppressed interest in moving forward. dish has indicated that providing can colorado television is not infeasible. colorado broadcasters sent senator bennett and i a letter that they are willing to provide dish in the two counties. with this progress, i'm calling on the county commissioners in colorado at this hearing, the county commissioners in colorado, the broadcasters, and dish together so that we can
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convene in a meeting next month in colorado so we can reach a final resolution. i hope senator tipton will be able to join me in that meeting as well. we have to get this this solved >> so chairman wheeler -- >> if we can help in that we would be happy to be at that meeting too. you tell me how we can be helpful. >> thank you. i would reiterate that commitment. you've given it to me before. we'll review any market modification petitions submitted by laplatta. thank you very much for that. in light of the discussion, and i'm sorry, senator yudall, i don't mean to offend new mexico tv. that's certainly not intended to be that way. just the broncos. got to keep them there. got to keep them there. we talked about the complexity of these rules and regulations that senator markey brought up that chairman thune is talking about. commissioner rosenworcel a couple of months ago, you
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expressed concerns of the initial set top box calling it -- we make things simplier by making it more complex. do you agree with that, the new rule is simpler than the original plan, and your concerns about complexity been addressed? >> well, as i said before, it's time to inject competition into our set top box market. nobody has ever written me telling me that they love their set top boxes. maybe that's happening to you, but i pretty much doubt it has happened to anybody who serves in this room. i appreciate the chairman has started a conversation on this point, but if i have one concern and mentioned this earlier to senator moran, it is that the licensing scheme we have here gets the fcc and the business of trying to figure out model licenses, and i don't see how that easily fits under the
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statute we have. so that would be the kochl plco that needs work, but i'm going to continue to talk with my colleagues to see if we can iron that out. >> commissioner riley would like to address this issue of s simplicifaction. >> we had a much simpler one than we had before. the set top box proposal, i would hope we embrace more of the original apps proposal as was presented to us, and instead of adding in the fcc review of programming agreements and standard licensing agreement and so forth. >> yeah, i would agree. i think that the -- what's been presented, circulated, is simpler than before. it still has difficulties, and problems that i've outlined on the two major areas need to be
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addressed and hopefully we'll be able to do that in the coming weeks. >> thank you, mr. chairman. >> thank you, senator gardener. senator booker has returned. senator booker. >> i'm really grateful and always excited when there is a corey to corey connection here. the corey caucus is thriving. >> both four-letter words. >> so as you all know, i was the mayor of newark, and cities is where innovation is happening. they're finding creative ways to get things done, innovative private/publ private/public partnerships. no republican or democratic way to fix a pothole. you just fix it. so you don't see the kind of partisan rankor up here. you just get it done. so i'm so supportive of the ideas of municipal broad band, especially in areas where there
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is poor or rural folks who aren't getting service. this idea that somehow the private sector is going to get this done, well, they're not, and other countries have greater broadband penetration than we have. and so we see that when it comes to overall, this crisis in our country, which i think is the broadband deployment, we have to focus on municipalities to get things done. so the slow broadband or none, and one of the things i did as a senator is to introduce the broadband act, to preserve the rights of local governments to invest in broadband networks. now, with consent, i would like to put in the record a new york times story from august 28th, that was really just disturbing. it is about some folks who are rural consumers, who did not, in
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the wilson, north carolina, my father's home statement, and if i could have consent to enter this article into the record. >> without objection. >> but it's based upon a rural broadband program that was done by municipality, they were able to make massive investments in upgrading their farms to really fascinating article of innovation at the local municipal level and in agriculture. but that's all now being put at risk. as it says, broadband law off of superhighway. this a bunch of people doing one line sports betting or whatever. these are folks that need this for education, that need this for work. that need this for their businesses. and so i was disappointed, if not angered, by recent court decision that overturned the fcc's actions for communities seeking to supply local broadband. i was even more troubled that the fcc will not pursue the case
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further. i sympathize with the commission's tight resources and need to make tough choices, but i think we owe the american people a chance to fight, to make sure that they can get broadband access. to in light of the court's decision, how important is it then, and the fcc's inability to put the resources into pursuing this case? could you give a quick, chairman, a few moment thoughts on how important it is for congress, then, to act on this? >> a-number one importance. there is a few words. >> that's a few words. if everything was as cooperative in my life as you were, i might be married. moving on. i can't help with that. >> moving on. i know there has been a lot of dialogue, and forgive me for having to step out to vote, but i just want to get back to the
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set top box, controversy. i have my own unofficial polling mechanism, which is when my twitter blows up, i know that this is an issue on the minds of lots of diverse interest groups around america. one of the most robustly debated topics is something that is great interest to me is a guy who has both a tivo in one room and a regular cable box in the other one. the product, the cable box is so inferior, so much more costly a aggretated and seeing my a neighbors build filled for this device. there are a lot of friends who i trust, some of the greatest companies in this company, who create tremendous wealth, are responsible for the exports, who have expressed to me legitimate
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concerns. i would like to conclude, if you would, in the a most succinct way before. i lost my notes. but you said that you've been talking with them, that you're 90% of the way there. i just want to, for my own benefit, can you be more specific about the progress, what the 10% gap, is and how do we get to a point where some of the valued companies in america are satisfied? what's going to get us to 100%. >> thank you very much, senator. let me try to be succinct in a complex area. the congressman dated competitive boxes. the industry responded with a licensing body that they created. so all this stuff about licensing bodies, a licensing body they created, that then put out -- then did not put out
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licenses, okay. now, as we look at this situation that we've got here, how do we set it up so that the industry, not us, is determining how this licensing structure works. but how do we learn from the past. so one thing that we did was we said okay, let's put a little tension on the board. let's put programmers on there so that the cable operators and programmers are kind of keeping each other honest. but you know, there is an occasional back scratching that goes on between those two, so we said, well, why don't we put on the equipment manufacturers, and have a three-way discussion there. so they're kind of everybody keeping everybody else honest, so the licensing can move forward. absolutely not. programmers wouldn't agree. cable wouldn't agree.
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that will blow everything up. okay, so then who is going to be the trust but verify backstoper in this. well, why not the commission. that's the thought process that brought us to where we are. as i have said repeatedly, we are now in the deliberative process at the commission. and that we are open to whatever can solve the problem that has been identified, in terms of licensing, which i'm not sure is a real problem, but i'm open-minded about how you solve it, and at the same time, respect the mandate of the congress that said thou shall have competition. and


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