tv Politics and Public Policy Today CSPAN September 26, 2016 11:00am-1:01pm EDT
our family's in banking, cash flow velocity is so low and getting lower. do we have to fix that? is it going to cause a problem? and if so, what should we do about it? >> that's a steve question. >> not an expert on monetary policy. i do think that -- what do we want from our monetary system? we want clearer rules, we want a stable dollar. and i think that's it. you know, this idea of everybody guessing what jenna yellen is going to do, we've put -- what was the liquidity, $3 trillion in the economy, it's had no effect on growth. i just want trump to put somebody in here who will basically follow a price rule. but i'll say this, though. look, i do not think -- and i know some people in this room may disagree with me -- i don't think our problems right now are monetary. i don't. i think the regulatory and tax and this kind of blank -- wet blanket that we're putting over businesses and you solve those problems and i just don't think -- monetary policies are not ideal, but it's not like
1979 when we had 14% inflation. so that's my tame on it. >> amity, please. >> i would be a little more cautious than steve there and say maybe our problems are monetary, because the prices don't seem to accord with what the government is saying. so, if a certain price is way much higher, and we were told nonetheless we have no inflation, that's confusing. we need another data set. we need another philosophy. in the olden days, your family banks would not have spoken of inflation, they would have spoken of credit or credit tightening. that's the lexicon of classical economics. maybe that lexicon works a little better to explain the spongy, bubbly feel of the economy right now. most of us believe that federal reserve policy has a lot to do with the stock market increase, that maybe the companies aren't all doing that much better. that it's just our next bubble, which means our next pop, our
next trouble. and the way out of that is stability in money, even pegging money to something, and we shouldn't be afraid to talk about that. >> so, andy, you run restaurants. how much pricing power do you have? i mean, it's an incredibly competitive industry. what do your hamburgers go for? >> right now, we really can't. there's so much pressure on labor that we're having a very difficult time lowering prices. >> what does that mean, pressure on labor? >> minimum wage has caused labor costs to go up. leave policies cause -- all of these different government policies that they're trying -- obamacare. so, everything trooidrives the of labor up so normally you would have seen wendy's, mcdonald's, burger king, as commodity prices come down, and they have, beef is a lot cheaper than it was a year ago, you would have seen restaurant prices come down as well and you would have seen ¢0.99 offers and
$1.21 offers. well, you're not. cost of eating at restaurants generally -- i wish i had one of steve's charts, but it's stayed very steady. think of it as a flat, wavy line. eating at home, because grocery stores reduce their prices, milk goes down in cost, they reduce the milk cost. eating at home's gone like this. eating at restaurants has gone like this because of pressure from labor. so what's happened to sales until the restaurant industry? well f you read the "wall street journal" at all, you would know that sales at restaurants have been terrible in the past six months, so it's -- >> why is that? >> labor it ha. >> because people can eat less expensively. >> so you're saying we shouldn't raise the minimum wage to $15 an hour. >> back to regulatory reform, to the gentleman's question, we
also need stable prices and monetary reform. >> i got a whole hour on minimum wage so you probably want to -- >> who's next? >> next question, please. right here in the back. this gentleman. name, affiliation, and question. >> hi. thank you. my name is rich. i'm a local elected official in denver and i'm a small business owner, i'm here as the guest of colorado pioneer action, and my question is for steve and andy regarding entitlement spending in relation to your advising mr. trump. we talked about how to get out of our fiscal malaise and you talked how we got to grow the pie but we have to get entitlement spending under control as the senator mentioned in his speech. mr. trump is the one republican who has said he's not going to touch entitlement spending. help. what the hell can you do? fix this, please. >> is he going to make it -- >> the entitlements? look, trump's position is we're not going to cut medicare and social security, at least out of the gate. i think it's a -- personally, i think it's a political loser to
talk about cutting medicare and social security. republicans think there's something virtuous about talking about cutting social security and medicare and nancy pelosi runs ads of republican throwing granly over a cliff. trump has said, we're not going to do that, say that people are going to get their benefits cut. i do think, me personally, this single most important entitlement reform, other than getting rid of obamacare, is we should let every young person in america take their 15% or 12% payroll tax money and put it into a private ira account where they can own it themselves and allow the compound interest. if you do that, you're going to have a nation of millionaire retirees in 40 years. it's the most important thing we could do for the millennials. i really believe that. >> steve, could you get them to accept a rubio argument, to say
if you want these entitlements, then we have to reform them? >> andy, that -- >> so that's no? >> steve hit -- look. this is the third rail of -- this is the death rail of politics. if we -- even paul ryan, the most rational, nicest, honest, sincere guy in the country, he goes out and talks about entitlement reform and he's pushing the woman over the cliff. the problem is, until there's economic growth, we're not going to reduce the debt, and people are going to cling to these entitlements like they're a lifesaver because for many people, they are a lifesaver. if we have economic growth, if we have 4 to 5% gdp growth, if people have money and feel optimistic about the future, i think not only will we be able to reduce the debt but we'll be able to address entitlement reform. the problem is you can't address it in this environment because people are scared to death and they should be. >> be aware that social security, as many of you know, actually, increases when growth increases because it's pegged to
average growth in the real wage. so, a lot of this entitlement grows with growth. whether you -- as a pragmatic decision, you decide not to talk about that until the election, okay, but it does have to be reformed, even after growth, just as andy is saying, it might be easier once you have other cash around, other hope around, for people. second thing i would say is, why can we not have this conversation? what is wrong with us? even in election year that we can't -- and it's true, apparently, that it's a third rail, but if you keep saying something's a third rail, it is, right? >> and how do you get a mandate to reform it if you don't talk about it?. >> how do you get if you don't talk about it? you can put four kids in honors econ in high school in a room and they could rewrite social security for you. so, they could. in one afternoon. it doesn't even have to be honors. it could be the regular class,
it's not that hard. we all respect the political necessities, power, it will make kids happier if they know they can change it. it's just not that hard. medicare is harder, rights, but social security is not hard. you can even keep -- you can even grandfather the grandfathers, that is, promise people that you'll get what you thought you were going to get. you can grandfather poor people so they get what they thought they were going to get, and reduce for the middle class, increases, i'm not say whag they're going to get, but just increases, and we can have this discussion, we're grown-ups but i do think high schoolers as well. so part of the problem through our media is we've all always said, it's a third rail, can't talk it, and we got ourselves into this situation. i do believe people understand this. steve has written, i've written, andy's written, probably, that more young people believe in extra terrestrials than their
social security money's going to be there for them. it's out there. i would like to do that poll again just to affirm it. it's out there. they know something's wrong, and we can talk to them, but it does take a political investment and time, early work so you don't -- so you're ready for the gotcha commercial of throwing granny out the window. >> we've been in vigorous agreement about everything else but finally we've found areas of slight disagreement. so hoo ray for that. this lady here. >> my name is kelsey alexander and i'm affiliated with a whole bunch of things. i'm from castle rock, colorado, and i'm in the steam boat institute advisory board. i really liked when amity talked about end the bailouts and maybe using that terminology, if you end or lower entitlements, in a way, you're lowering bailouts. bailouts aren't just to big banks. so can you give us some talking points that we can use to go out and sell that idea?
because look what happened in greece. you start taking away people's entitlements and you do that when you end regulations as well, you take away people's goodies and they riot and they don't vote for you. so can you give us some talking points? >> starting with the banks is good. because the banks probably -- and say, we are -- we'll start and take it away from the banks or the big companies, probably bailouts aren't good, also probably not for detroit. we've done that quite a bit. let's get a no bailout culture and try to reduce, and then let's try to reduce. it doesn't have to be -- let's certainly, no bailout rule for the big banks, but let's try to reduce and move towards a no bailout standard for the rest of us. of course, we always need a safety net. there are the very needy, but this idea of bailing out
everyone, well, that's a problem. an example -- i was thinking when andy here was talking about all the rescues, well, the next obamacare is definitely the universities, because university is becoming an entitlement. we've got to get to the young people and talk to them about earning your way, not being owed your way. and i think steve mentioned governor daniels, he has a program whereby investors may buy equity in students, that is, they may -- and if student -- and they can bet on a student and engineer student will learn really well later and get a share of that student's income later so the student earns his way through college instead of borrowing his way. that's a cultural shift. you earn your way through college. it's about you. and we saw that price was what broke the camel's back with health care. the price became untenable. you saw the television show this
morning, an ep pen costs how many hundreds of dollars? therefore we should go to socialism. so we can't let that happen with education and we're glad for education reformers. if we drive the price too high, the next answer will be socialism, as with health care, so i do believe in young people. one of the things we did at the coolidge foundation was we created a merit scholarship that paid for a full ride to any college, which is very extravagant, as steve's data points with his kids attest. but we said this is a merit scholarship. you earn it and you can use it at any college. and we didn't really advertise because we're a small foundation. we had 12,000 kids sign up for the merit scholarship process, and then we had 2300 very serious applicants who wrote a full college application to the coolidge foundation. that is, they got their recommendations, they got their
transcript, they wrote their two essays about president calvin coolidge and all that, and they were a fantastic pool and most of them wrote, i would love to have the money for a full ride to college because i don't want to be dependent on my parnlirnt. i don't want that welfare. i'm 18 years old. in another generation, i would have enlisted, maybe i should enlist, but i want to get the g.i. wibill or something. i want to pay my own way. fafsa doesn't allow that, right? and why am i yapping on about this? because these are the future minds that you have to convince. i want to earn my own way and we had a final applicant pool when you got to the top 100 that was better than the average ivy candidacy for this scholarship, and they kept saying, we love the money, and a lot of them would win a full scholarship somewhere else because of their need, for example, but we want to win on merit. we want a society that appeals
to us on merits so say, here's what i did in high school and why i deserve this not here's why i'm a loser and i need entitlements. all colors applied for that. so it's the signal we send to the yeworld about merit that wi shift the whole discussion. so i guess i'm saying culturally, you have to do something too. to shift the culture with a few great signals to immigrants, to young people, that this is a country of opportunity and merit and striving, even if you're not the brightest bulb, then you're going to do fine. but in a culture of fear, which is what we have now, obvious you're going to hold on to whatever banana you get, whatever bonus you get, oh, they're giving out computers in the next room, i better run because they might run out and there might be no other computers elsewhere. that's the fear culture. you want an environment where, there will always be computers
and maybe i'll be able to buy one, and people will relax. so i think the culture of fear and concern and entitlement is your problem. >> great. over here on the left. >> my name is jim. my affiliation is that i'm a citizen, a veteran, and a businessman. i think we're all agreed that we're desperately in need of reformed tax policies and excellent arguments have been presented on that basis. however, neither mr. trump nor any other president can do anything about taxes other than veto a bill because tax legislation has to originate in the house and given that we've had republican majorities in both houses of congress, why aren't we seeing any tax reform? >> so, one of the things that i think people should recognize, the gentleman who was the head of the republican party here in colorado, and that's not -- that troubles me about some of the never trump people. it's related to your question. if you look at the political layout in america today, the
republicans control 32 of the governorships, most of the big states. they control two-thirds of the state legislatures. we control the house, the senate. if trump wins, we will nominate the next head of the federal reserve and the next president will have probably three supreme court nominees. what i'm saying is, whether you like trump or not, this is something that we, as republicans and conservatives, have waited a lifetime for. we will control every single lever of political power, and this is, by the way, the democrats understand this. they know that if hillary loses, they lose everything. now the the reason i say that is, think of what we can do if we have these levers of power. i mean, think about what you can do, for example, on tax reform. we devised our tax plan. it's what, when you say 75 to 85% overlay of where paul ryan is. so, think about this.
i really believe we could implement within the first 100 to 150 days of his administration the most sweeping overhaul of the tax system in 35 years. and you can do these other things because republicans will control -- i mean, look, i agree with you. obama told us the formula. you go in there and you just do everything you possibly can. you pass your agenda. unfortunately, you know, he got it all passed and you can see the results of that. but we could do that to them now. we can pass an incredibly pro-growth agenda in the first, you know, 150 days, certainly within the next year that can truly transform america into a free enterprise country, not a socialist country. >> well, that's a great place to leave it. i know we're out of time. everybody, please thank me -- and thank these -- >> thank you. >> grab them outside. grab them outside if you have more questions. they'll be out there.
thanks very much. >> with government funding set to expire at midnight friday, congress will be working on a short-term continuing resolution to fund the government. the house is back today dealing with a number of bills including cyber security, emergency care for veterans, and food security. the rest of the week, they'll be waiting on the senate to pass the continuing resolution, and they may also take up a vote to override the president's veto of a 9/11 victim's lawsuit bill. live house coverage on c-span. the senate also back today at 3:00 eastern. they'll be talking about a short-term bill, a procedural vote on that scheduled for tuesday. live coverage on the senate over on c-span 2. also today, president obama hosts the leaders of hundreds of native american tribes at the white house. the administration recently ordered a work stop on a section of a pipeline pending further
environmental review. the president scheduled to speak at the tribal nations krchs at 3:35 p.m. eastern. we'll have his remarks live here on c-span 3. >> once more, we will have a government of, by, and for the people. >> we are stronger together. and no matter what, remember this. love trumps hate. >> c-span's campaign 2016 continues on the road to the white house with the first presidential debate tonight live from hofstra university in new york. beginning at 7:30 p.m. eastern with a preview of the debate. then at 8:30, the pre-debate briefing for the audience. at 9:00 p.m., live coverage of the debate, followed by viewer reaction. the 2016 presidential debate on c-span. watch any time on demand at
cspan.org or listen live for free on the c-span radio app. all five fcc commissioners testified before the senate commerce committee on fcc oversight and telecom issues. the chair of the fcc faces criticism from both sides of the aisle and some of his fellow commissioners over the upcoming fcc vote that could make pay tv set top boxes obsolete. >> good morning. this will come to order. we're delighted to have the fcc chairman, the other four commissioners with us today for an oversight hearing and let me just preface what i'm going to say. my opening statement is fairly hard hitting. it is designed in the interest not of my personal feelings but just the importance of the
relationship between the congress and this institution and the importance of the institution as well. and so i want people to understand, as i make -- my remarks, that is the vain in which it is intended. in the past people used to say that the telecom policy was not particularly partisan and that both parties could often find common ground to work together. the voting record at the commission bears that out with previous five permanent fcc chairman combining for just 14 party line votes in open meetings during their tenure. in this commission, under chairman wheeler, this agency has too often pursued a highly partisan agenda that appears driven by ideologically beliefs more than by a sober reading of the law. chairman wheeler has forced votes a total of 25 times. three years under chairman wheeler, the fcc has seen nearly twice as many partisan votes
than in the previous 20 years combined. what were once very rare events are now standard operating procedure at the commission. a free and open internet, universal broadband access for americans innovative offerings tor pay tv customers and privacy protections all have broad bipartisan support. so, why is the current fcc continually advance divisive policy at the scene expense oaf certainty for consumers and innovators that only bipartisan solutions can offer. of course consensus is not always achievable on every issue, i would be the first to acknowledge that, but when there have been opportunities for common ground, the commission has frequently chose an partisan path over collaboration by relying on unnecessarily partisan tactics, mr. wheeler has, i believe, missed opportunities for bipartisan accomplishments. chairman wheeler has used things as a political weapon. we've seen conveniently timed leaks and disclosures used as
tools to benefit the partisan agenda. but he skpa spoke earlier this week, i reiterated my call for the fcc to be as transparent as possible, not using the disclosure of nonpublic information as a sword would lead to a better process at the agency which in turn would only improve the commission's work product. while process issues at the fcc may seem to be just a minor transgression that can be chalked up to business as usual in washington, d.c., in this case, it illustrates a divisive leadership approach which threatens to undermine the credibility of the agency now and into the future. this part sanship has been used to do the following things, a complete upending of how the internet is regulated, stripping important consumer protection responsibilities from the federal trade commission, a failed attempt to override states right on knmunicipal bro bad. increasing the size of the
universal service fund by billions of dollars while simultaneously undermining by partisan efforts. the unnecessary and unlawful disclosure of trade secrets and a than that could have the fcc and its kmeed bureau design and dictate the future of television apps. the common thread among these partisan actions by the agency is a clear intent to install the federal communications commission as the most important player in the communications landscape. the ashter through which all new innovations must pass. if you're working to develop a new app, sorry. you need to first make sure it conforms to the license required and regulated by the fcc. if you're a mobile subscriber enjoying competitive service plans that make data more affordable for you, enjoy it while it lasts, because while the commission might be okay with that today, they could easily deem it unlawful next wear or even tomorrow. and if you're a small business
seeking a new way to promote your company online, sorry, the fcc is going to saddle would be disrupters with rules preventing them from challenging the dominant players in the online advertising market. rather than exercising regulatory humility and putting faith in the marketplace, over and over again t fcc has required companies to beg for government permission to innovate. and republicans are not alone in noticing the nbcfcc's overreach. copyright office strongly criticized the earlier proposal for set top boxes which was far less complex than the new one. the staff at the federal trade commission called the fcc's privacy roles not optimal which is bureaucrat speak for really bad and the department of justice refused to defend the fcc's unlawful action on municipal broad band. this all stands in contrast to the good faith efforts by republicans and democrats in congress to work on telecom
policy. the bipartisan noble now act is the most prevalent example. the amateur radio parody act, the sandy law, the improving rural call quality and reliability act, and more. and congress, communications policy is often a rare oasis of cross aisle cooperation but even here, the partisan toxicity of the commission has reached across d.c. for proof of this, one need look no further than senator reed blocking the senate's telecom agenda while admitting that this committee has h done its work, including reporting nominees in bipartisan fashion. what's perhaps most unfortunate is we have clear examples of the good the commission can do. earlier this year, they worked together to address the stand alone broad band problem that threatened rural communities. more recently, the fcc shoould a
spectrum frontiers order, which is an important down payment. i want to urge all members of the commission to treat each other fairly and respect the law and ask congress tor guidance and to seek consensus wherever and whenever possible. in doing so will result in agency actions that are more likely to endure. further less controversy at the commission will improve its credibility and providing it with more wherewithal to carry out its statutory responsibilities. and and while this agency is far from the largest expansive jurisdiction, its importance to our future economy is hard to overstate. communications and media networks are at the center of american's live and that role is only going to increase over time. regardless of how the agency operates, or who's in charge of leading the commission, it's important and worthwhile for the commerce committee to hold regular oversight hearings of the fcc and today's hearing should be viewed as establishing
a regular biennial schedule for fcc oversight. thank you, and i'll recognize the ranking member, senator nelson, for his opening statement. . >> mr. chairman, i too have a rather hard-hitting opening statement. and i certainly acknowledge with you the highly charged partisan times. and i acknowledge also that this committee, indeed, with the relationship that you and i have personally, cuts through a lot of that partisanship and comes up with bipartisan solutions on -- on issue after issue. and as you look back across that chart that your staff just held up, indeed, administrative
agencies often reflect the times in which they are holding their administrative hearings and their votes. and this has been one of the most contentious. as a matter of fact, it is still beyond my understanding when one of the two republican members was confirmed with the direct agreement between the two leaders of the senate that then jessica rosenworcel would, in fact, be confirmed as a follow-up. and that was the agreement. can you imagine everett dirkson and can you imagine mike mansfield, as a matter of fact, i've heard stories about mike
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. 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
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
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
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,
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
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 have you in front of the committee and look forward to hearing from each of you today. so, mr. chairman, if you could 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 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 a 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 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.
now as has been referenced later this month, the commission will vote on whether to fulfill a mandate that the congress gave us 20 years ago, to ensure that consumers have competitive choice in how they access cable and satellite programming. last february, we put forth a proposal to follow the statutory command of the communications act that, quote, the commission shall adopt regulations to assure the commercial viability of competitive navigation capability 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.
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 supplied by that provider, end quote. six years ago. and consumers 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 submitted for our record found that while set-top box fees increases 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 congressmandated they should have an alternative to paying. for the last seven months, we have been working with the affected 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' 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 or her suggestions for 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 proposal "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 forward with it." they correctly assessed how both consumers and creators are protected by the improvements that have been made to the original proposal. as commissioner rosenwercel said, " @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 rosenwercel 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.
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 indelible mark, and in my family, that mark is personal, because one of my relatives died in the twin towers. but it's just as important to recognize what has 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 public safety. and in light of this week's anniversary, it's 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's 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 the system was not designed for. this is a problem. because while technology has
changed so much in our lives, our communications 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's 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 devised 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 realtime
video from an accident. it will mean the ability to provide first responders with an instantaneous picture of a fleeing suspect or emergency incident, which can especially help rural public safety officials 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 has been strictly a local affair. there's 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're typically a small line item on your phone bill.
but not all states follow through and actually use the 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 auctions that are being run by the fcc. and these auctions, 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 help support next generation 911. but somehow, this program has stalled, and has yet to begin more than four years after congress passed this legislation. it's time to get this program up and running. it's the best near-term and national resource we have to put next generation 911 in place. and while those funds are limited, they can have broad impact if we use them wisely and fund projects that can be a blueprint for updating 911 in communities nationwide, and when we do, those states that are shortchanging 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 you might have. >> thank you. commissioner pai. >> chairman thune, ranking member nelson, members of this committee, thank you for holding this hearing and giving me the opportunity to tough this morning. since 2012, it has been a
privilege to work alongside you on issues as varied as broad band deployment and freeing up more spectrum for consumer use. i would like to build upon the sentiments 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 sold, leased or 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, senators roberts and moran, for introducing the kelsey smith act. this bill would help law enforcement 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's geographic coordinates
from her carrier for days. once they did get the information, it took law 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 for myself firsthand from law enforcement that a 5-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. 24 particular, i want to commented the chairman and the ranking member on the introduction of the mobile now act and this committee for passing it. i'm especially grateful for you for asking the fcc to move forward on opening up spectrum above 24 gigahertz, which are the 4 millimeter we've bands. opening up these bands are a key
part of our 5g future and a 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 of 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 asking the fcc to give broadcasters the option of using this next generation standard. in turn, we, the fcc, asked for input on atsc 3.0 and the result was clear. widespread support.
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 5g, so too we should be at the forefront of innovation in the broadcast space. i, therefore, hope that the fcc will issue a notice of proposed rulemaking on atsc 3.0 no later than the end of the year. chairman thune, ranking member nelson, 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. chairman pai. >> thank you for the opportunity to participate on the committee's 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, 5g 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 5g. if successful it could effect e effectively produce a wireless fiber with amazing speeds, enormous capacity. thankfully, the united states is on an accelerated pace to bring 5g to american consumers and help shape the global
marketplace for these services for the next decade or two. my colleagues deserve credit for effort to make the requisite brand width available. my effort was to push to successfully include the adoption of four-spectrum bands and to expand the spectrum 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 those delaying 5g dough mroiment 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-centric alternative, an approach i have advocated for realization of the direction of the current marketplace. i should state that i appreciate the chairman and his team jettisoned the previous model
but the new effort comes with its own baggage. 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 ultimately set up the commission as an arbitrator 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 unreasonable limits on consumer access, complete with a start-up terms that would be allowed, some that would be unquestionably unreasonable and a wide gray space in between. this draft is unacceptable n my opinion my last issue is the commission's overall functionality. during my time at the commission
i've highlighted certain shortcomings in the commission's 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, testified, 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 public 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 subject. 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 nelson 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 dulles, know that i am honored to be here and thankful for the opportunity to outline my vision, the vision is blurred, though -- for bringing robust, affordable and ubiquitous connectivity to all americans. 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 from rural and urban communities, as well as those with and without connectivity. just last month i visited new mexico, where i joined senator udall for roundtable discussion 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 fixed broadband is 7.5 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 mexi mexico, new york, pennsylvania, washington, of course, 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 inquiry, the commission has built a record that shows there
are real challenges facing 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 urban areas to have low
broadband access and high rates of diabetes. similarly, the neediest counties 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 5g 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
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 priorities with you this morning, and i look forward to answering any questions you may have. >> thank you, commissioner clyburn. can we get you a cup of coffee? >> road bull? >> well, despite the charisma of the members of this committee, our hearings have a tendency to put people to sleep anyway, so if you've been up all night. we'll proceed with questions and i got a list here of members. but let me start, chairman wheeler, as i pointed out in my opening statement, you provided over the most partisan fcc in agency's history. and twice the number three to two party line votes.
and i say that because i'm concerned about the precedent that that creates for future fcc chairs. what is to prevent the -- if there's 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 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 an endless cycle of regulatory uncertainty. which is what i think everybody who follows these proceedings and everybody that's involved with telecommunications policy is concerned about, is creating certainty. and it seems to me at least, that the current pattern trend if continued could create greater uncertainty because
future commissions could come in and do everything by party line 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 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 those 3-2 votes were me
voting against one or both of my democratic colleagues. i mean, i recall that on the -- 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 -- but this is a collegeal body. this is a body where the deliberative process is important. and i, too, hope that we can find ways to resolve issues in a
con common nant 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 will remain intact under a set-top box proposal. and the fact sheet said deals made between paid tv providers and content providers are not affected by this proposal. commissioner o'rielly, you stated that the order prohibits nvpds from signing contracts with programs that the agency with programmers 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's inaccurate.
i outlined why. because it is putting the commission right in the middle between the programmer and nvpd. we are preventing them from signing contracts that contain certain things that we deem -- that tom wheeler deems is unreasonable. we won't -- commissioners won't get a chance to do that because it will be 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's inaccurate to say we are leaving those intact. now, whether it goes relt row active, it's unclear from the item, but nothing prevents the commission from going backwards. >> okay. chairman wheeler, you, in your opening statement, you called the ftc's 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 look 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 the fcc privacy proposal before you all vote on it? and if not, cue tell us why? >> thank you, mr. chairman. if i can go back to the previous question -- i'll come to this one, too, but i want to make sure. this is what the deliberative process is about. and if there is a desire to remove the specific 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've been saying is that we're not setting up ourselves to second guess a contract after it's been done. what the provision that the commission is referring to says that -- that nvpds cannot behave
in the kind 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
ongoing deliberative process so the door isn't closed on anything. now, to your privacy question. the ftc did file with us on privacy, and they have made multiple suggestions to us in terms of how to improve our original proposal. and as i indicated to you the other day, and you just referenced, we take 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 at&t, at&t alleged that the ftc did not have any jurisdiction over any activity, any activity, of any company regulated by the fcc. and the ninth circuit agreed with them. so, 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 to the point -- 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's different between publicly comment, though. >> they can certainly publicly comment, certainly. >> anybody else on set-top boxes or the privacy issue before i hand it over to mr. pai? do you want in on it? >> senator, i would agree with commissioner o'reilly's assessment, and i think it underscores the importance of releasing these adults publicly so everybody can have a chance to see exactly what the terms are that the fcc is going to be voting on. because as i read the document, i share commissioner o'reilly's concern, that they declare unreasonable contractual and 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 picked up on the bipartisan flavor that the chairman and i had commented upon earlier in our comments, and the need for building consensus. and, commissioner o'reilly, 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.
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, can you explain -- >> sure. >> -- those comments in that's press conference. >> so, the phrase that i used, the comment that i used is --
has been mentioned -- i worked 20 years in congress. it was used repeatedly. and so i -- i was repeating -- it wasn't my comment. i was repeating something that was repeatedly said by many of my employers over the years. what whoa had just come from was a situation where we had an agreement on a particular item -- unless you want to go into the subject -- but we had an agreement, bipartisan agreement on an item, and it was the third time where one of my colleagues had backed out of the deal. and so it's hard -- i also said as part of my confirmation process, when i give you my word, it's my word. we have instances where people backed out of the deal five minutes before the opening meeting. 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's a frustration level, and maybe the comment is impolite,
but it wasn't my comment. it was a frustration level to the fact that we had an agreement and we can't count on the word of my colleagues. and i've had difficulty with that going forward. and it's been harmful to our relationships, to -- but i turn back to the point that since then, we have had different agreements since then. so things like 5g, 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. circuit's decision is more than disappointing. it also confirms why every parliamentary trick in congress was used to pack this particular court, end of quote. do you think that accusing senate democrats of packing the
d.c. circuit court to determine the outcome in the net neutrality case, 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 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 don't think my comments are inaccurate. i'm not trying inflame any member of this body in my thoughts. i still 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. 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's not trying to insult you in any way. >> do you think the d.c. court was packed in order to determine the net neutrality outcome? >> net neutrality in itself, no, sir. do i believe it was done to change the outcome of many proceedings, including the direction of the -- multiple administration? yeah. here's a comment i pulled, because i know we talked about this before, but a couple comments from senator reed and he said we put onto 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're the ones who said the president can't have recess appointments, which we've had since this country started. we focus very intent on the d.c.
circuit. we at least need one more. there are three vacancies. we need at least one more and that will switch the majority. >> i think what is happening is this hype other partisan atmosphere is causing these 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. chairman. >> thank you, senator nelson. senator wicker. >> well, i think this committee has worked on a bipartisan basis. and i have the highest regard for the chairman and the ranking member. i will simply say this because i don't want it to go unchallenged.
commissioner o'rielly has not 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 you a letter july 11th. and it was led by senator manchin and by this senator regarding the build-out of rural
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 to us dated yesterday. 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. >> the record available on that, with all due respect, sir, has not been good because of the manner in which the commission
collected the data. the first way that we did that was the 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 but not on 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 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 expect to have that information by hopefully the end of this month. so, 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 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
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. pai, chairman wheeler's talking points say this. the proposed final rules will allow consumers to access their pay tv content via free apps on a variety of devices so they no longer have to pay monthly rental feeings. i think mr. o'rielly said an app centric approach is what he wanted.
enable integrated search and protect content and privacy. is at least that much of his talking points accurate? and are there going to be more or fewer set-top boxes if this proposal by chairman wheel er goes forward? >> thanks for the question, senator. i wish i could say it were, but i don't think it is. and i think the last point of that, for example, is critical. the protection of content is something that i think a lot of people have focused on. again, it underscores the importance of making this pertinent. don't rely on our word for it. so people can judge for themselves. the proposal would interject the fcc into two different relationships. in terms of regulating the terms they had be allowed to agree with and the relationship between those two and the third-party device manufacturers in terms of the standard licensing. so, with respect to the standard licensing agreement, the fcc says, well, media bure rue could
second-guess any con ken success that programmers might come to as to what should be in that agreement. 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. senator cantwell. >> thank you, mr. chairman. i'm not sure i understand every knew answer we have been having. but one thing i can say, i'm very glad that the fcc decided to step up and protect the internet with net neutrality. and continuing 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 interests here, because it's very important. so, one thing i wanted to ask
about that, and the ranking member brought this up a little 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. 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 carriers all since the development of the adoption of the open internet order. insofar as your question about ican 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 in which one of our colleagues called it a bunch of tubes, which obviously wasn't really what this is. and to have a global network is critically important for that
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 mccaskill. >> thank you. so many subjects, so little time. it's really hard. very briefly, i do just want to make a comment on bds. you know, the business data services has been in front. commission for ten years. count them, ten years. you're waiting on data. you've got data. let's go, let's go. let's make a decision. this is important. bds is important. so, i just 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. but i've nifr seen a 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 licensing part of this, can you, chairman wheeler or any of the members, explain where congress has granted you the authority to involve itself in copyright licensing like this as it relates to the creative community? the copyright licensing part, i'm -- 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 told me. i don't have any choice. that's what we're trying to deal with. on your specific question insofar 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. because it is not our goal to become a judge of the contracts between nvpds and programmers. >> well, i'm glad you acknowledge you're not there. so, let's keep -- >> no, this is -- 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 fulsome discussion back and forth on this and this is a very 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 cable and satellite industry. we've done the first hearing. 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's startling, the practices that have been embraced.
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, that you do not have that authority with satellite, correct? >> correct. >> so, i would certainly urge you to listen to the phone call i taped when i called my satellite provider about an item on my bill. and i taped the conversation. i said clearly who i was. and they were charging me a maintenance fee for the equipment they own. so, i was trying 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. why would you be charging me for that? i want to take it off. i want you to know, they tried to tell me they were going to charge me to quit charging me. and it's all on tape. it's on the website. and it was a startling -- this was two days before the hearing. so, this is the kind of stuff that's been going on. and i -- i just hope that we deal with the fact that we do
not have the authority -- you do not have the 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. >> thank you, senator mccaskill. senator fisher. >> thank you, mr. chairman. chairman wheeler, welcome. as you know in june i sent you a letter along with several other members of congress, and we were raising concerns about the fcc's recent life line 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 participate in the federal universal service programs. 12 states, including mine in nebraska, are suing the fcc. so it appears to agree. mr. chairman, do you assert that the fcc's recent pre-emption 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 an 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. 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 reduce any existing state authority, but to say that for broadband, which the statute does provide for the fcc can say you 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?
>> 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 pai, 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 statute, as i read it. but it creates a policy problem because the states have been on the front lines in rooting out
a lot of the waste, fraud and abuse we see in the system. in oklahoma, for example, it was the state commission that was determined that they had fleeced taxpayers, including you and me, of over $27 million. we want to keep states as a partner, instead of shutting them out on the front end, which is a reason 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 usac are unclear what role the states are supposed to play after the fcc's order. how do you plan to remedy that? >> well, i did not realize that usac was unclear. i will -- we will move immediately to get usac and the appropriate authorities together
with whoever the appropriate state body is to work through what our 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 usac. i meant narac, to work with the state commission. i'm sorry. >> okay. thank you, mr. chairman. >> thank you, senator fisher. senator blunt has returned and he's up next. >> thank you, chairman. chairman, i intended to talk about copyright law, but i think my colleague from missouri and senator thune have both done that, so i will look at what you all had to say about that. i chair the rules committee, which is the committee that has jurisdiction over the library of congress, which has the copyright rules, and i may very well have to -- may want to submit some 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 cases apparently on a party line vote, its quadrennial review of broadcast ownership rules. nothing substantially changes in those except there are two areas i want to mention just to be sure that 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 a sense earlier of how these agreements would go forward. but after multiple bipartisan letters, two acts of congress and a court ruling bit 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 secretary thiond ti
think is new is in the service agreements, joint service agreemgts, 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 nunderstand 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 second question? the first question is, am i right in believing that now the new rules allow these joint sales agreements to go forward? >> yes, sir. you are corrected. and what we tried to do was to take the specific language or the specific intent of the language as it was explained to us in the appropriations rider about grandfathering and to adopt that.
insofar as -- >> joint service? >> -- as 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 you do 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. but if either mr. o'reilly or mr. pai would like to comment on this, lild toik to hear what you
have to say. >> thank you, senator. i did dissent from that decision in part because of the 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. and with respect to shared services agreement, i think the writing is on the wall, that the fcc is collecting information as a step toward, as you put it, more regulation. essentially prohibiting shared service agreements, and that's something i would be -- i think it would be unfortunate for the marketplace and for consumers in particular. >> mr. o'rielly? >> i agree with my colleague on his two points. i think this is the first step. the ssa declaratory structure is intended to -- for a future commission to impose new rules and limitations on stations and their ability to share such activities. >> and can anyone tell me a way that these new broadcast
ownership rules could now be appealed or ask for a change? mr. pai? >> i think it will be appealed. i imagine the third circuit would. given the previous decision where the court said the fcc needs to take a serious look at 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. >> thank you. i also had questions on the cross-ownership rules and i will put those on the record. i thought i'd start with you, commissioner rosenworcel, 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 have long chaired that caucus along with representatives
askew, and we have done work in getting the $115 million and grants for the next generation 911 impe 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
rural communities, urban communities, and everything in between. so that when we're done with it, communities all across the country can copy and benefit. >> thank you very much. as you all know, i worked hard on the broadband issue with the chairman. and 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 think i'll just put some record questions here 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
would hold it up? >> anything else that 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 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 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 today 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 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. 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 broadband to rural communities.
there are a number of pending orders highly partisan and controversial 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 rosenworcel 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. 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 attorney generals unfair deceptive practices act? >> thank you, senator. let me say one thing. i look forward to working with commissioner rosenworcel 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. 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 committed to work with senator schatz and others on 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 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 auction operation. but at the same time, there are
some pieces of that spectrum of what we have identified that have licensees and we are work to go facility sharing, transfers, what whatever activities may be necessary there to get that spectrum 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. it's an expression i like and may borrow. thank you. >> thank you, senator moran. senator schatz. >> thank you very much. there are no snakes in hawaii. so that's the first. 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. the fcc has been a bastion of bipartisan but not recently. i'm struck by the collective desire certainly described different from the elephant to
get to 5-0 where we can. it seems there are two 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'rielly 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 absoluteup