Skip to main content

tv   Open Internet  CSPAN  January 26, 2015 2:50am-6:01am EST

2:50 am
flowed from fcc attempts to shoehorn the policy that it wants to fit the authority that it has. our discussion draft is largely based on the 2010 open internet order. it draws from the legislative proposal put forward by henry waxman. some pundits raise concern that it curtails the newfound authority the courts have read in 706 to the telecommunications act. it was written in 1976 and instructs the fcc to promote the employment of broadband networks. until recently come it was understood that it meant the fcc should use its authority to promote broadband deployment. however, last year, the courts for the first time interpreted section 706 to permit the fcc to take any action to promote rod band so long -- promote broad ba
2:51 am
nd so long as it is not inconsistent with the rest of it. it gives a most any authority to the fcc. this is a broad expansion. i pose the question, what happens when an fcc not to their liking grabs the regulatory throttle. that means that amazon betsy and every other m internet based company should be prepared to meet its new regulator. look no further than your fellow witnesses, mr. powell and miss baker, former regulators who currently represent the regulated. we who are elected to write the law and set the communications policy. my priority is to protect consumers and the internet we rely upon. my priority is to encourage its
2:52 am
expansion and to various segments of our population that are underserved and too often ignored. we have taken on complicated medications challenges and produced good legislative solutions. we are stood up to special interests and stood with the american people. the draft legislative proposal represents our good faith effort. our committee will not ignore our responsibility. as some of my colleagues know we have been working on the principle and draft legislation for months. we will take the advice and counsel from our witnesses today into full consideration. we will not let the old washington gridlock stand in the way of doing our job. with that i recognize the gentlelady from california. >> thank you mr. chairman.
2:53 am
today's hearing renewed a critical discussion about the internet. should it be truly open and equal? should privacy and the disabled be protected? should every region, city, town and reservation have equal access to broadband speed capable of leveraging innovative online content and services6. i reviewed your proposal carefully and i commend you for finally technology that we do have problems with online balking -- blocking throttling and authorization. we agreed that it should apply to fixed and mobile band services. what is abundantly clear in the proposal is that it is to purposely tie the hands of the fcc to prohibit them from retitling it.
2:54 am
on the one hand, the proposal will prohibit fast lanes, but under specialized services broadband providers can give themselves prioritized service and the fcc will have no power to define this. we want to have a system that can guarantee equal access of open internet to everyone, who will carry out and oversee this. this proposal carries an enormous bias against enforcement which does not give consumers a leg to stand on. it could unintentionally harm the 911 system, limit the authority to promote access by the disabled to communication services and could constrict access by competitors to utility
2:55 am
poles. it also attempts to address describing -- specific forms of discrimination, but who today knows what tomorrow's forms of discrimination will be. it takes away the authority of the fcc to address them. i don't think your constituents or mine are clamoring for a bill of rights for these companies. they are clamoring for an open internet, 4 million people spoke out and our goals should reflect there. we should protect ordinary consumers, promote innovation and advance startups. when we do, our constituents should be 100% confident that these things will be carried out. open internet is not only critical to the future but
2:56 am
essential for every american to learn, educate, conduct commerce innovate, expand our economy and to promote democracy. it will strengthen the middle class and will bring more into it. the pats we take -- paths we take will determine our future. we should not be tempted to establish rules that will create new best practices. >> does the gentlelady yield back the balance of her time? >> i yield the balance to doyle. >> thank you mr. chairman for holding this hearing. this draft legislation represents a step forward by my colleagues. that being said, the bill still falls short.
2:57 am
it permanently revokes and significantly weakens the ability to encourage competition, broadband deployment and protecting consumers and their privacy. technology policy needs to be flexible, not restrictive. it needs to be a adaptable to meet our future needs. the principles included are similar to what the fcc imposed in its 2010 roles. since then we have seen battles of netflix and isps over interconnection. renewed efforts by cities to build up their own infrastructure, to create jobs and continuing need for strong consumer protection. the last five years have been a lifetime in the technology world. i yield back. >> the gentleman yield back the balance of the time and we will now go to the chairman of the full committee, the gentleman from michigan.
2:58 am
>> this committee is known for working together to tackle the tough issues. the permission to get the job done were each side does a little bit to help the general public. the issue that has divided us for so long is how best to ensure the open internet. while i certainly believe that free markets address these issues, the fcc seems to believe that regulatory action is necessary. one of the only tools at its disposal is to provide tools from the roosevelt era to the 20th century. giving the choice between enacting prudent legislation are leaving the fcc with the tools unfit for the task, we choose to take action. last year we put together legislation that would codify the fcc's authority.
2:59 am
legislation protects consumers and innovators. our proposal prohibits internet service and providers from blocking content selectively changing the quality of traffic based on where it came from, and prioritizing certain traffic based on payment. it requires providers to be open and transparent with consumers, allowing them to make the most informed choice about their service. it also adds safeguards to close potential loopholes and prevent mischief. this should sound familiar to my democratic colleagues because they are the rules many of you and the president have been calling for. the fcc has spent years trying to craft rules that achieve those same goals. much of the bill's language is taken from past fcc attempts.
3:00 am
limits on the commission's authority have resulted in years of litigation and uncertainty. the consumers deserve certainty to know that they are protected by the rules. so they can move forward in the business models because without that certainty they suffer and consumers lose. the baggage of the law is created for the monopoly telephone service. only congress give the commission the tools. in the internet era and beyond this draft legislation provides a sustainable, responsible path to appropriately and effectively address the concerns from the left and the right.
3:01 am
it puts to bed one of the most contentious issues and allows us to move forward in double of modernizing the nation's communication law. the act can bring bipartisan change for the communication law that but we first have to come together and resolve this decade-long debate over the future of the internet. i yield the balance of my time to mr. barton. >> last night after the president's state of the union i came back to my office and did a little video that we put on my facebook page. also i believe we put it on twitter.
3:02 am
i have a 9-year-old son, who has an xbox, playstation four, cell phone, knows how to use the internet better than i do. he's spoiled. his mother bought him all the things. anyway, my point is to paraphrase, president reagan, he asked the american people are you better off today than you were four years ago? when you look at the internet you can ask the consumers are you better off today than you were four years ago. i see the advertisements every day. there is a texas plan right now give me your bill cut in half. i'm not going to name who is offering that, you all would know if i said it. the internet is not a monopoly like the telephone companies
3:03 am
were in 1930s. it's one of the most vibrant markets in the world. some of the people that are at this table helped develop policies to make that possible. i don't have any time that i'm supposed to yield. if the chairman would give him at least a minute i would ask consent that he has a minute. >> thanks to the witnesses for being here today. the fcc has indicated that it is moving forward with the broadband internet services under the title to communications act to be at this course of action will bring legal uncertainties, innovation investment and negatively impact american consumers. even though this is a classification recognizing the challenge, but would attempt to circumvent by for bearing the sections of the law, the plan
3:04 am
that would only seem to magnify and further postpone innovation. avenues of ending the long-standing precedent of the light touch regulatory framework that governs the internet would add unnecessary regulations on broadband providers and restrict the ability to continue investing the networks that the consumers demand. that's why it is performed by the chairman and senate and with that, mr. chairman, i appreciate the consent. >> the gentleman returns the balance of his time. before i proceeded to mr. load who i believe this is your first hearing is the ranking member of the full committee. so we welcome you for that. we will add with unanimous consent and extra minutes to your side of the aisle. and i've been told that
3:05 am
apparently during the opening statement, the microphones literally on the side where they could hear them screaming on the internet apparently not on your side. so i think we've got that corrected now. it was an attempt to throttle. [laughter] it wasn't supposed to catch anna along the way but anyway, i think we've got that. >> i think this has something to do with the deflated football. [laughter] >> ohio state -- i'm not going there. it's been painful enough. with that, we get serious and i recognize the gentleman from new jersey for six minutes. >> thank you, mr. chairman. let me start by stressing the importance of the network neutrality. it is a surprisingly simple concept that consumers cannot big corporate interests should control the access when they go online and it represents the idea that small businesses should be able to compete on a level playing field. access has become a critical
3:06 am
part of all of our lives and it's how we apply for jobs and how we help our kids with homework and grow our businesses and that is why 4 million americans reached out to the fcc, demanding strong net neutrality protections. and those 4 million people expect that we here in washington will pay attention. i'm heartened that my republican colleagues agree that we benefit from the rules of the road and forced by the fcc, and i welcome their interest in the bipartisan legislation so long as it is truly bipartisan from the start. mr. chairman, i don't want to undermine the fcc authority as i think you suggested. and i certainly don't think that that will serve to protect consumers. the fcc must continue to serve an important role in the broadband age and gain the cop on the beat standing ready to act whether it is to protect the consumer privacy to encourage the accessibility for americans with disability or promote broadband deployment in rural area and just as important as must maintain the flexibility to
3:07 am
keep up with new technology. so why are we in congress continue our work i do expect the fcc to continue its work. these are complicated issues with answers that have taken the fcc nearly 13 months to craft the rules that responded to the needs of the american public and congress couldn't be expected to get out in 13 days, days, so why are the fcc to continue to move forward as we begin this legislative effort. it has been over a year since they wiped off the net neutrality rules so it's been over a year since consumers and innovators last have a strong network neutrality and if it is too long. the time for the fcc to act is certainly now. i look forward to working with my colleagues and the commission to ensure that the internet remains an open platform for the commerce innovations and self-expression for generations to come. i would like to yield. i know i have an extra minute, so i would like to yield two minutes and then the rest of the time which is almost two minutes to mr. rush.
3:08 am
>> i thank the ranking member who yielded the time and of the witnesses for being here today. the american people have spoken clearly on how important the internet is too daily lives. and i've heard from hundreds of my constituents who right, call or come up to me to share their thoughts and i heard the message loud and clear when i hosted the hearing in sacramento last september on the net neutrality. i must say it is remarkable how it has shifted on the net neutrality. i am glad that my republican colleagues now agree that there are threats to the internet openness. i am concerned about the unintended consequences of the current draft bill. in particular, it could undermine the effort to transition to broadband, putting at risk broadband deployment and adoption advances in the urban and rural areas. that said, i do believe that there is a role for congress and that is why i introduced a bill
3:09 am
with senator leahy to instruct the fcc to write rules that ban the so-called internet fast lane. the bill has two components. it bans the agreement and it doesn't take away from the commission's authority. by contrast, the republican bill attempts to ban the agreement. i am very concerned that the overly broad definition of the specialized services in the bill could serve as a loophole for the partisan schemes. and create a 2-tiered internet system. the internet is dynamic. we don't know what tomorrow will bring. the fcc flexibility to adapt to changes in the marketplace. as the congress considers legislation, it is important that the fcc does not slow down or delay the vote. i look forward to continuing to work with my colleagues and to ensure the bipartisan fashion to raise the debt neutrality rules
3:10 am
and i yield to the congressman. >> i want to thank the gentleman -- gentlelady and the ranking member. for two decades now the battle on how to best ensure the free and open internet has been persisted as a clear victor of -- or clear verdict. all of this uncertainty harms america's broadband consumers. chronically and it disproportionately disconnected segments of our society and our local and state and federal governments and even our nations economy. certainly, it also affects broadband network and edge providers as well but make no mistake about it, it is the consumers that stand to be the
3:11 am
biggest losers of all. many consumers weigh in with congress for the strongest rules possible. these broadband consumers and users have said they love and depend greatly on the broadband service. and that they want for the services to be provided on a level of competitive terms. they also said to us with passion and fervor they do not trust the broadband providers would honor those terms for the selfish and anti-competitive motives. this should serve as a powerful
3:12 am
reminder to us and the issues arising around this controversy and it's propelled by the bipartisan concern and minimal to the bipartisan resolution and compromise. he is concerned all broadband consumers and citizens in our society regardless of the political affiliation. we have all seen and heard however that this manner is too important for the congress to stand by what you consider or markup only the majority republican draft. it is my intention to introduce open internet legislation in the not-too-distant future. i would hope to work with my
3:13 am
colleagues on both sides of the aisle with aspiration that whatever legislation is hammered out that it will be nothing but bipartisan. mr. chairman and ranking member, i yield back. >> that takes care of our colleagues for opening statements. we go to our panel of the witnesses and we are going to start out with what the federal communications commission we are delighted to have you back before the subcommittee and we look forward. please go ahead. >> nothing like starting with some easy. it's a fundamental
3:14 am
constitutional principle that the congress establishes the law and the federal agencies implement. the net neutrality debate raises critical institutional policy and practical problems that only congress can fully address. the open internet struggle has been long and torturous precisely because the congress has not established a clear foundation for the fcc to act. the commission has turned itself in knots for over ten years trying to adopt a simple set of internet regulations. to review the commission for its tether even where it found merit in the rules themselves. if the congressional authority is the problem, then surely the congressional action is the solution. in the absence of such action, the commission is poised to try again with another approach, prompting a third round of litigation with an uncertain outcome. congress has the power and the responsibility to end this roller coaster which is damaging to everyone other than leaders -- lawyers and advocates.
3:15 am
the title ii approach being pursued is establishing an fcc ruling and regulatory framework over the internet but congress has yet to fully consider and consciously adopt itself. congress adopted the title ii 80 years ago to address the parameters of the telephone regulation. the technologies were radically different. the prevailing philosophy favored monopoly rather than competition. consumers were passive recipients of service rather than active publishers and creators, the telephone telephone era didn't have giant internet companies influencing the services and network demand and consumer application. networks were specialized for a single purpose unlike the convergence of today. has congress worker that matter
3:16 am
anyone thought through for the digital future? we have no doubt congress will seek to advance legislation to rewrite the telecom law. but now the decision is made for congress rather than by congress in the name of the net neutrality with potentially far-reaching unintended consequences. regulators shouldn't have the final word on the serious questions. the institution that represents 320 million americans should decide them. by changing the status quo to the governing affairs committee commission would affect a major and a dramatic shift in the broadband policy. with sweeping domestic and international consequences that countries like russia, china and iran have consistently sought the subject of internet access to telephone regulation and give the state greater authority over infrastructure. they will cheer on the news of the leadership and the moral authority of the bulwark against the government control of the internet. the legal and practical problems of the title counsel for the congressional interaction for
3:17 am
one. it bans unjust and unreasonable practices. under the decades they've been able to charge for providing the service without violating this requirement and while they will attempt to declare all that these are unreasonable, it will face a serious headwind for the well-established precedent. only statutorily banned the prayer decision rules would avoid the risk. other are sure to follow. when one agency will narrow the jurisdiction of another. for example if the fcc declares broadband is is to look on service, the federal trade commission and the authority over such actions will be diminished. another unintended problem is the classification to result in the fees on internet service raising broadband bills for consumers and hurting the national efforts at adoption. america has an ambitious
3:18 am
national broadband goal. there is a strong national desire to reach more americans in more places. it will take nearly $350 billion by their own estimate to reach out to 100 megabits per second. and now we dream of the gigabit speed. no one can claim that title ii went against the flow of the private capital necessary to meet these ambitions. the edges can be smoothed by forbearance cutting away the data to the relations and leaving the fruit needed to protect consumers. but one person's weeds are another person's fruit and the continuous battle over this should be included and excluded itself a massive undertaking fraught with uncertainty and litigation risks. they they have to cover to eliminate all of this uncertainty and working together in good faith and consensus we believe the cooperative effort will yield positive great results.
3:19 am
we support legislation, the bipartisan legislation and we are open to working with all members of the committee to be too satisfactory resolution. thank you, mr. chairman. >> thank the gentleman for his testimony and we are now going to go to the ceo chad dickerson of etsy. please make sure your microphone is on and we look forward to testimony. >> thank you chairman and and members of the subcommittee for the opportunity to testify on this issue. as the ceo of a rapidly growing internet company, the technology company i'm here today because the internet along with the millions of businesses who depend on it under the threat. etsy is an online marketplace you can buy handmade goods from artists, designers and collectors around the world. we democratize over 1.2 million, 88% of whom are women to collectively we sold $1.35 billion worth of goods in 2013.
3:20 am
most are sole proprietors of work from home and they lived in all 50 states and they depend on the income to pay their bills and support their families. 18% support themselves full-time on etsy. to build and run the global platform that supports these businesses, etsy raised more than $91 million in capital and we employ over 600 people worldwide. without the incredible power of the free and open internet, we would not be where we are today. like many we had humble beginnings and we started started out of a brooklyn apartment, went from an idea to launching in just a few months. no one had to ask permission to launch etsy or pay for the privilege of reaching consumers at the same speed as other companies. this is the entrepreneurial environment we hope to preserve. without clear rules to preserve a level playing field online millions of startups will suffer. it is a low margin business and we charge just 20 cents to
3:21 am
list to the item and take only three and a half cents of every transaction. we couldn't afford to pay for the access to the consumers yet we know that the delay is of even the most -- millisecond have a direct impact. this is this isn't just about the video but everyone that depends on the internet to reach consumers. without the rules to prohibit discrimination on line we would be forced to raise the fees to have the same quality of service or accept the revenue that comes -- revenue loss that comes in. this would hurt the microbe businesses that depend on the platform the most. users understand what is at stake that is why 30,000 of them joined the internet users to urge congress and the fcc to protect the open internet. in her comments, tina from spring valley, illinois captured the sentiments of many of the businesses when she wrote we rely on all of my fails to make ends meet. any change in those and it is
3:22 am
the difference between the balanced meals for my children and cereal for dinner. we applaud the congress for recognizing the strong message of the rules are essential for innovation online. the discussion draft for the position addresses many concerns and we are encouraged to see bipartisan agreement on many points. in particular we support the outright ban on the paid preregistration blocking and throttling. we agree transparency must underpin the strong rules and we encourage to see that they apply to mobile. getting to the majority, given that the majority of the traffic now comes from the mobile sources it's essential that they they play rather uses your phone or laptop. i think that we're concerned the proposal doesn't ban all types of discrimination online leaving loopholes that could be easily exploited. for example under this bill
3:23 am
for example, under this bill broadband companies could prioritize over others. the authority to address the new types of discrimination. i worked in this industry my whole adult life and i know how quickly technology changed so how can we be sure that this bill anticipate every possible form of discrimination? we also have serious concerns that by revoking the authority under section 706 the bill would undermine the agency's ability to promote rapid broadband deployment across the country in the rural areas where the internet allows them to reach a global marketplace. for example linda from michigan said the internet is so important to me because if someone moved to the area from the urban center i rely on the fair and open access to grow my small but taste business. finally while we understand the legislation is narrowly focused on the last connection, the doors of the last mile is just as important. this bill doesn't prevent them from creating chokepoints at the last mile nor does it grant the authority to regulate the issue referred to as interconnection using a loophole that would
3:24 am
allow the companies to circumvent the legislation despite its good intentions. our position today is the same as it has been all along and we encourage the government to establish clear, bright line rules that ban the paid preregistration application specific discrimination, access fees and blocking online and to apply the rules equally to fix them in the mobile broadband and at the point of interconnection with the last providers. we believe they have all of the authority they need to implement the rules and that the congress has an important role to play as well particularly hoping to address the litigation risk that will follow the action. we welcome the opportunity to protect the open internet once and for all. >> we will not go to the vice president of public policy for amazon. a slightly larger platform. please go ahead. >> thank you very much. it's good to be back. thank you for your attention to this issue and for holding the
3:25 am
hearing and for inviting me back. amazon long supported maintaining the openness of the internet which has been beneficial to consumers and innovation. now there is widespread acceptance of the need for government action to ensure that the internet openness -- now policymakers need to only decide how to ensure that the internet openness of that atrocity is maintained and effective. our consistent business practices start with customers and work backwards. we begin projects by determining what customers want and how we can innovate for them. here in the context of net neutrality, public-policy we've done the same. we take our position from our customers, the consumers' point of view and they want to keep the fundamental openness to the choice it provides. consumers will recognize that the net neutrality is taken from them. if it is taken they won't care how or for example where it is taken.
3:26 am
we believe the fcc has ample existing statutory authorities. but of course congress has the power to set new policies for net neutrality either entirely true in in the statute were true in or true in a mix of the existing statutory authority. amazon remains very grateful for congress to continue the attention to the topic certainly worth the general oversight. but thank you especially for creating and ensuring your discussion draft bill and for providing the opportunity to begin discussing it today. the principles of net neutrality contained in the discussion draft are excellent. for example, the draft clearly acknowledges the throttling and decision must be banned and the protections must apply to wireless as well as the wider line into the providers must disclose practices. of course for these excellent principles of the internet openness to be meaningful to consumers they need to be effective and in the three instances the discussion draft could be interpreted to undermine that this was a bill should be modified accordingly.
3:27 am
first while requiring the consumer choice, developed exclusively except specialist services from the requirement and this could create a loophole if the specialist services involved the preregistration of some content services just like the prioritization. consumer choices baked into the internet, nothing would protect the consumer choice more than protecting them from interference by broadband internet access providers. second in the subsection to discussion draft bill would promote them to engage in reasonable network management that any claim of reasonable management should be used suspiciously than practices undermines prohibition of blocking the prayer decision etc. third the discussion draft bill is unclear on which parts of the broadband internet access service providers network are covered by the net neutrality protections. as indicated earlier the
3:28 am
consumer will not care where the next atrocity occurs but only whether it does occur. in some of these areas the draft should be modified and in order to ensure that the internet openness of next atrocity is maintained and effective. the addition to the draft should be modified to provide adequate detail and certainty to consumers and businesses in the internet ecosystem. michael businesses companies need confidence in the state of law and regulation in order to innovate and invest in products and services on behalf of their customers. details including factors considered during the come and procedures are essential for businesses and consumers to have the confidence to make choices about investments and purchases. we believe they should be empowered to create certainty in detail to the enforcement tools and notice in the comment rulemaking.
3:29 am
the discussion draft bill in the subsection says they may not expand internet openness obligations beyond the obligation establishing that those. the intention here is to establish the ceiling for the obligations and that is the prerogative of the reasonable expectation that we would support if the boldly went so far. however with such a ceiling in place, it isn't necessary to rescind the authority under title two of the act which has in the subsection could lead them hopeless to address the improper behavior as well in its authority under the ceiling. and it would leave consumers and businesses in the system without adequate certainty about the enforcement powers. also, in part because the subsection b. could be direct to establish the formal procedures for this decision could be interpreted to bar them from noticing the
3:30 am
rulemaking in this area and if that is the intent we oppose it. expecting them not to expand statutorily to establish obligations is one thing but we believe that it would be a mistake to prohibit them from providing the comment rulemaking out of the detail and the certainty to customers and consumers and businesses below the ceiling. in conclusion mr. chairman, i look forward to working with you and your committee to ensure that the internet openness of the net neutrality is maintained in defective and of course greg i welcome your questions. >> thank you and we look forward to working with you as well. i think we have ways to address a lot of what you pointed out and may actually already have but we look forward to working with you. next we go to the executive vice president general counsel of the hispanic media coalition. we are delighted to have you here at the subcommittee as well and we look forward to your testimony. >> thank you for having me back and all of the members of the subcommittee. the open internet as we heard already today is a crucial tool for all people to engage in our democracy, participate in the economy, become better educated and shared their stories. i am pleased the members on both sides of the aisle recognize the pervasive threats that blocking,
3:31 am
throttling and paid internet decision pose to the american people and our economy. because the open interest truly is a bipartisan issue. i am not on the panel to represent the industries. i'm here to speak for the millions of americans who follow this issue with a level of awareness that actually is very uncommon for inside the beltway telecom policies. over the past year i have been surprised on this issue with everyone from my conservative in-laws in the deep south to my liberal friends on the west coast, none of whom are particularly well steeped in the federal policy particularly not the telecom policy but they get it because it personally affects their lives. and also they support the congressional attention to this matter, to best protect consumers by respectfully urge the congress to allow the fcc to exercise its authority
3:32 am
completed the rulemaking process and an act light touch open internet rules. this is the most certain path to ensure that individuals and businesses are protected without delay. it would allow the expert agency flexibility to respond to innovation and changes in the marketplace. the fcc has wide support from nearly 7 million americans this negative comments were signed petitions as well as hundreds of civil rights and consumer advocacy organizations and leaders. the discussion draft of the legislation on the table today would represent a seismic policy shift with repercussions far beyond the open internet debate. it has drawn robust criticism for four main reasons. first it would strip the country's expert communications agency of the authority to protect consumers on the communications platform of the 21st century of ending the consumer protections that americans have come to expect and this subcommittee has supported for decades. privacy, network reliability access to 911 services committee disability access just to name a few. it effectively freezes them in time only allowing it to ever
3:33 am
confront a handful of harmful practices that we have contemplated based on the market conditions and the technology that exists today. second, it would pour cement on the fcc efforts to the efforts to close the digital divide such as the broadband subsidies and the modernization of lifeline which could bring greater broadband affordability to the working poor. today nearly one in three american people still lack home broadband access. the vast majority of these people are rural, poor, brown, black or a combination thereof. at the same time, standardized testing in american public schools is moving to digital format. it is critically important that we do no harm with legislation that would undermine serious efforts to achieve the now indivisible goals of digital and educational equality. third, as compared to the rules
3:34 am
crafted under title ii it would offer consumers admitted and inferior protection. the draft legislation doesn't ban unreasonable discrimination and create an exception for specialized services that threatens to swallow the rules. fourth, it would create market uncertainty by relying on the adjudication process. consumers would have the burden to identify, report and litigate violations but most of us are likely to lack the techno expertise to identify the violations of the source or would have the legal expertise to pursue the enforcement or both. those that oppose the reclassification point to forr concerns. my written report goes into the details but let me summarize
3:35 am
there is no evidence that it would harm investment innovation, home to the coanchor broadband or welcomed a protracted litigation. in fact the hard evidence including statements from the isp themselves suggest the opposite. it has allowed americans to engage in our democracy at a whole new level. tea party activists, dreamers, organizers of black lives matter are excellent examples of regular people who have harnessed the power of the open internet to disseminate messages and engage in the political process. this is democracy and free speech at work and it is a virtue that is deserving of the strongest protection. thank you for having me here today. >> delighted to have you back. and as for your comments on the legislation at issue at hand. we will now turn to the vice president and chief research policy officer from the minority media telecommunications nicol turner-lee council. we are delighted to have you here as well. please go forward with your
3:36 am
testimony. >> thank you very much chairman, ranking member of the committee. i do have to say as the vice president officer that we just changed our name today at 9 a.m. to the multicultural media telecom internet council. >> we reserve the right to extend remarks. [laughter] >> the acronym is still the same and the support and work to represent those of you that are other organizations that consist of the naacp, the rainbow/push coalition among others. so as my colleague recognized we also stand on the side of people who are on the other side of divide and i think that is important on the topic of open internet because they have been accessing this as historically disadvantaged communities embarked on the journey to first class digital digital citizenship and all of the opportunities so we welcomed the draft legislation in addressing the values. i want to use my time to bring three issues to the attention today. my statement is on record and much more detail, but my time is
3:37 am
best spent on these points. i would like to highlight the benefits an open internet brings to people of color and vulnerable populations we represent and encourage the committee consideration of legislation that promotes an open internet and finally, i would like to offer two friendly recommendations to strengthen and ensure that the legislation realizes the value of the consumers who want to acknowledge that a quality. i want to confirm the words of the ranking member that broadband access has the civil rights prerequisite. they allow people to obtain the skills to gain jobs, education and receive greater access to health care. today, however, too many americans still do not benefit
3:38 am
from all that broadband enables. the rate is disproportionately low and is contributing to the digital divide. despite the growth in the minority homes, the rate among african-americans and hispanics are still lower than whites, african americans over 65, for example, still exhibit especially low rates. 45% are internet users can get 30% only have broadband at home compared to 63% and 51% for white seniors. users overall cite a lack of relevance, affordability and the lack of a device in that order for their reason not not being online for closing the digital divide should be an important goal for policymakers during the right course of action to promote and protect and open internet is one of the ways to get their. i want to acknowledge congress has a proud history recognizing structural injustice in our society and acting to correct them.
3:39 am
in the 1860's the congress passed the 13th, 14 amendments which enabled the protection and enfranchised millions of americans for the first time. in the 1960's congress acted the civil rights act of 64, the voting rights act of 65 and fair housing act of 1968 all integrate measure to the reverend martin luther king. today, congress has the opportunity to show the leadership again. by acting as a solution that preserves the opening track, we all enjoy the congress can extend the promise of justice, and democracy to all and avoid a legal quagmire that will lead to the unending absurdity for the economies. i agreed with jessica gonzales's demand for broadband which in turn stimulates the investment infrastructure innovation. and we know firsthand about this and it's our belief that increased investment in broadband also improves access to the type of innovation we like to drive in the community. but of course, the way that we get there is going to have an impact. for the past 20 years, the administration and the fcc chairs from both political
3:40 am
parties have charted into successful platform for the benefit. look at the state of wireless of people of color. under the current regulatory framework nearly 75% of african-americans and 70% of hispanic cell phone owners use the device to access the internet more than the overall population. and people of color have two entries as equal of empowerment. under the current rule, we've actually seen the type of collective mobilization in ferguson, missouri, new york city and columbus, ohio. these drive policymakers to continue the progress that is -- has already been made. but unfortunately meaningful rules failed in the past year as the circuit court struck down the forces of the commissions open internet order and that was in the current framework that
3:41 am
would allow broadband to flourish and option to take hold the fcc now considers the position of the title ii regulation that we be the is ill-suited to the current reality. posing such heavy-handed frameworks on the internet would only serve to stifle broadband deployment discourage investment and harm innovation and also please uncertainty to the regressive taxation on the universal service and potential ambiguity of the enforcement. some have argued that the adverse affects of the regulation to the forbearance authority is the right way we think that misses the point. if the commission could exercise the forbearance authority and product the banner it still would take years to sort out and appropriately calibrate the set of rules and this uncertainty will continue to drive the attention of those issues that the community needs the most the modernization of the schools nad -- and universal service to perform in other areas. so, in closing it is for those reasons our troops have actually acted that we stay away from the tight regulatory framework to something that has more flexibility to allow the ecosystem to continue to grow and we think that the regulation
3:42 am
is close and actually getting there. i would like to close again with the additional recommendations for the congress in the debate as we look at this issue. first congress should address the harmful practice of the digital redlining. it's the refusal to building server low-income communities in on the same terms as wealthier communities and imposes the digital segregation. the experience of the country shows segregation harms and degrades all of us and this is no less true of the digital age. congress should empower them to prohibit the digital redlining and we urge in the legislation that congress also needs to look at how to prevent that because currently this is a problem. second, congress should ensure that its open internet rules will be enforced. we have recommended it to that commissioned the creation of an accessible, affordable and expedited procedure for the reporting of the resolution. one approach would be to use the process under the titles and framework of the civil rights
3:43 am
act of 1964. under title vii, and if they receive an expedited ruling and do not need to hire a lawyer or write a provocative filing whether the precise details of implementing a similar mechanism in the communication context the core principle here remains the same. consumers, particularly individuals from vulnerable populations to serve, as has been mentioned, an accessible, affordable expedited procedure to ensure the government protects them and this must apply at whatever solution we seek. my friends, the time is now to get past the debate that's been lingering more than a decade and when the congress's discussion and guidance on this issue, we think we can make it happen. and we look forward to working with congress to do such so that we can get to the issues that mean the most for the community's universal service, public safety and ensuring that we allow the internet to grow to the next level of innovation to solve our social problems. thank you. >> thank you for your testimony
3:44 am
and your suggestions. we will turn to the final witness this morning. meredith baker, president and ceo of the wireless association. ms. baker glad to have you back before the subcommittee as well. >> chairman, ranking member and members of the committee thank you for inviting me to share the wireless industry perspectives on the importance of an open internet. at the outset, i want to be clear america's wireless industry fully supports an open internet. wireless users demand it in a marketplace where competition has never been more vigorous. in the past 20 years, the wireless industry has grown from a luxury product to the key driver of economic growth. we all benefit from faster speeds, more services and lower prices. the u.s. is the global leader in wireless by any metric and it's at the forefront of mobile innovation in health, automotive and payment fields. central to that growth was the
3:45 am
congress' foresight and establishing section 332, a mobile specific regulatory framework outside of title ii. congress has the opportunity to grow the same stability for broadband. we greatly appreciate the committee's work to develop a regulatory foundation for future innovation with common sense net neutrality provisions. the draft is an excellent start and offers a viable path to preserve an open internet with enforceable requirements. a properly crafted legislation will guarantee the protections the president has called for by allowing broadband providers to continue to invest billions, create jobs and innovative products. we do not ask that wireless be exempt from any new law only that any new requirements reflect our industry, our technology and our inherent differences. i want to highlight three key differences. first, mobile services are technically different and depend upon limited spectrum resources. this requires substantial network management millisecond by millisecond to deliver
3:46 am
service to consumers. there is more bandwidth in a single strand of fiber than in all of the spectrum allocated to the commercial mobile services. second, we are competitively different. more than eight out of ten americans can choose from four or more mobile broadband providers. this is fierce competition it is driving new services offerings and differentiations that benefits consumers. third, we are evolutionarily different. the 4g networks are less than 5-years-old. and the future is bright with advancements like lte broadcasts, 5g and connected life application. it's vital any legislation is flexible to preserve the competition, differentiation and innovation mobile consumers enjoy today. while we are optimistic as a process on the hill will enhance the wireless experience for all americans, have significant
3:47 am
reservations with the fcc proposed path of title ii. the application of title ii in any form to wireless broadband would harm consumers and our economy. the title ii is designed for another technology and in another era in which competition is largely nonexistent if at all and innovation came slowly if at all. given our industry is great success with mobile broadband outside of title ii, we have significant concerns with how the 682 pages of regulation would apply to the dynamic mobile broadband space. if the commission proceeds as opposed to the path of the court contemplated a year ago, the wireless industry will have no choice but to look to the courts. given the language of the
3:48 am
section 332, we have every confidence that we would prevail but it is not our preferred course. under section 332, mobile broadband is legally different. in 1993, congress exempted a future non-voice mobile services like mobile broadband from the common regulation. it did so unambiguously. given our industry's greatest success with mobile broadband outside of title ii, we have significant concerns of how the 682 pages of regulation would apply. the commission and the courts have repeatedly found that wireless broadband is not a common carriage service. the fcc lacks the statutory authority to change the course and litigation would harm consumers with a year or more of uncertainty and delay. as leaders across the globe try to replicate the mobile success and embrace 5g, this is the wrong time to inject uncertainty into the nation's efforts.
3:49 am
we risk falling behind when the stakes have never been higher and the connected life and global competitiveness are more within reach. a better approach would be for congress to act and end the debate. doing so would free us up to turn to the bipartisan issues like spectrum reform and modernization. by acting congress can help ensure the united states remains the most dynamic and innovative mobile system. thank you for the opportunity to appear and i look forward to your questions. >> thank you for being here and thanks to all the witnesses. you have given us some really good starters. some of you like what we are doing and some of you don't. we can all agree on the principles at stake. it'ss a matter of how we get there. i have a couple questions i want to ask. to follow-up on your testimony ms. baker, regarding section 332 and i'm not trying to mimic the
3:50 am
former chairman mr. dingell did in the essence of time i have a couple yes and no questions but really would be helpful. do you agree with ms. baker that mobile wouldn't be covered under the existing authority when it comes to these new net neutrality standards? >> turn on the microphone there. >> we believe the fcc could reach wireless by classifying the broadband. >> you think they could get there even though it has a different view? >> i'm not an attorney. >> that makes two of us. >> the most important thing there is no difference between mobile and broadband. >> so you want them both covered?
3:51 am
>> i agree with the chairman's assessment. i also agree that consumers view these interchangeably and it should be the same policy for both. >> so you think it is sustainable? >> it is sustainable. >> i'm not an attorney but we think that the title number two would stifle the expansion of mobile so we think that is a bad idea. >> we found the fcc process so far to be quite open switch is quite possible. >> there is division. yes or no have you actually seen what to the fcc is proposing? >> >> no. >> we have seen principles.
3:52 am
>> have you seen the language? >> a no. >> they do not typically release the order. i have heard a great deal. having to read it. >> a don't know nothing. 1 -- [laughter] >> no. >> would everybody see it before they voted? >> no. does anybody anticipate seeing it? mr. dickerson? >> we found the fcc process so far to be quite open and we think it is quite possible we could. >> no. >> i am not sure if we would see it. probably not. >> no. >> we have two former commissioners and they said very unlikely. that is why we need a better process and you get to see it through the legislative
3:53 am
environment and you have given us great input as we move forward. there is a disagreement, that is what i am hearing regarding the application. if i heard different testimony some believe that fcc's order would allow it in some believe it would not. something our bill would preclude a but our question is with those service fees with the -- under what we know of the fcc's order at what they'll proposing, would be subject to the levy? >> congress requires an assessment of universal service from any telecommunications provider. if the sec reclassifies broad band, it would be in the
3:54 am
classification and subject to the assessment. an argument of the commission could forebear but an absence it would absolutely result in increased charges on federal universal service. >> all right. some of greek, some disagree that if goes down to title ii path and says that the internet is a public utility, it eliminates the authority on regulated common carriers. correct? >> that's correct under the clayton act, section five prohibited from exercising its , authority against telecommunications services providers. they are a champion of privacy today and broad authority to the franchise by this decision.
3:55 am
>> you are not the only one with that exemption of draft legislation. both the ftc and the president has set an exemption in to be -0 is -- is necessary to track the proposals have there been an that neutrality proposal does not acknowledge for specialized services. >> what we are concerned about with with paid prior prioritization that is the concern but then i don't know. in light of the prior comments from the chairman he is doing a by very thing. the commission ended forebear but it did not need to have but it could be partially done a very judiciously but we did have a much more precise about what
3:56 am
this means not to view it as all or nothing. >> we have another commission that changes that. i have gone over time i now recognize the gentlelady. >> thank you. i want to thank all the witnesses. i think you've done a marvelous job through your testimony today to highlight what you like and what you don't yet done that -- and you've done it very well and we're grateful for that. i just want to make a comment. it is thrown around and it is a hefty charge because everyone cares about this.
3:57 am
if we move in a certain direction the private sector will stop investing. free an to everyone else. but there is nothing to substantiate that. when you look at the wireless auction billions of dollars that come in and when we began that effort the chairman and the subcommittee they laughed and said he will not make as a dime. $45 billion so far. but i think that is a lot of money. that is a lot of investment. that is worth something. and the cfo of verizon says we will keep investing. whether title to or not the ceo of sprint. these are not insignificant comments.
3:58 am
so i take it is important for the record that someone makes that charged that it should be backed up because we beat fax -- we need facts and the evidence that comes with the facts. that would be most helpful to less. i just want to go to mr. dickerson and i should say today is the first time i have met you but i've met him on c-span he was part of a conference with the washington ideas conference and i was so taken on how he presented himself and what he
3:59 am
knew and thank you for being here and all the jobs you have created. if a broadband provider looks at the content what affect would that have on etsy if they'll created a new company? >> yes. i was actually chief technology officer before i was ceo because one of the things that we know and i did find this broadly from i was actually chief technology officer before i was ceo because one of the things that we know and i did find this broadly from amazon to rue google mitt is an obsolete directly correlated with revenue. things are slower revenue drops if it is faster revenue goes up. so smaller companies like etsy disadvantaged you can see those into -- vantage is based on
4:00 am
speed this would hurt those etsy sellers have a lower speeds than competitors. >> and put them on of business and we have sellers to make money using the internet and they use the money to feed their families or pay for school where do the things they need to do in their lives. >> under the proposed legislation the problem of the interconnection abuse is not only ignored the fcc is presented from doing anything in the future. do you believe it is not explicitly addressed but what would happen? >> i am not so clear in in the
4:01 am
bill of it is precluded or not. some people believe it is and to with than network operators' network only that it is occurring. with a gap in the legislation. >> of overtime. but chairman i fail to basket and this consent to urged the fcc to adopt a strong ( internet rules and now also asked from the national
4:02 am
association id of realtors that those are being included in the record of the legislative process should not hold up the sec for moving forward with strong legally enforceable objection. >> the chair recognizes is himself for five minutes. thanks for being here today and i find your testimony very interesting about putting a round peg again a square hole. but for many of us we have diverse districts was averted, herb did a cover rule, with the concerns the process may require them to overhaul
4:03 am
building practices. with the terms and conditions to be subject to the new enforcement rules. with a new regulatory burden should they be exempt from that neutrality rules? >> first of all, i would say is the support of the concept of the internet and was strong and sustainable growth. but what we are concerned about with a complex received two-stage relieve raise the
4:04 am
cost is a critical concern on the margins that have difficulty of rural america. to deploy that an infrastructure in those places will dampen the ability and enthusiasm to reach those hardest hit. >> under the sec began risk of title to to have more delays and also the harm of regional providers with the regime that it would do would this service to rural america could you
4:05 am
elaborate on that? >> of course, the association and is chaired from bluegrass cellular and it all have armies of regulatory lawyers to comply with transparency and other burdens. the uncertainty had stifled their deployment, they are worried and do not know what title ii brings. and the
4:06 am
wireless industry is extremely competitive they need to differentiate to serve their communities. they need to make sure they can compete with different concepts and they're not sure what article ii will operate without respect. it is called differentiation and that is part of it. >> especially if you are a small business in an area with not a good coverage talking about two weeks ago they had a problem being able to connect with their customers. so are you saying there would be hampered because of that? >> for those services. >> you go into detail how that
4:07 am
regulatory structure is rapidly evolving that ecosystem but title to regulations will do anything to can troll growth with the reclassification with providers to upgrade third ones to enter the market? >> of course, they will they have businesses to run that will lead be a division level compared to the velocity for what the country has? we have a president others talk about wanting every nation to achieve world-class top broadband speed and statice you want every american to access and we are impatient about that. networks are rebuilt between 80 and 24 months with $50 billion annually. to get the gigabit speeds hundreds of billions of dollars
4:08 am
acquired over some amount of time. it is simply common sense to understand increasing predatory cost or uncertainty will slow the magnitude or the velocity or the timing or the pace of that evolution. even like amazon or etsy they have just as much of the imperative of the high growth and evolution and network capacity that is primary to employ it to the businesses they provide. said the increased costs associated with the regulatory environment a cost of borrowing with the rates of return and the years of uncertainty to finalize and stabilize will have a negative effect just look at the recession with companies having plenty of capital with there of willie to
4:09 am
lou deploy or invest because of the uncertainty that surrounded the recession to have an example of how this works. >> my time is expired. the chair recognizes for five minutes. >> i will yield. >> i just want to state for the record something that is very important given what is baker said. wireless voice as you know, as a former commissioner of the sec since 1983 i think everyone needs to have appreciation of that i think the testimony reflected that. thank you spinnaker i feel we both agree pretty neutrality protections isn't good for consumers but how might they lose if it would enact the bill
4:10 am
we are discussing today? >> the question. i think what is done the table today there are serious threats to divide the fcc efforts to bridge the digital divide particularly concerned with real subsidies said the effort to reform the lifeline program that could have the potential to create affordable broadband to the working poor and undermines privacy and truth of building that we have come to expect and rely on and calls into question to protect us of the communications platform. >> my colleagues is consistent with the neutrality rules. will that provide the same level of protection?
4:11 am
>> there are some rules there are a number of distinction is that i've laid out but it strips the fcc of any flexibility to oversee consumer protection to ensure there is not harmful or discriminatory practices on the internet. that he essentially freezes the fcc in time so it cannot address any harms that fall outside of the principles laid out from the draft legislation nor can it address any new harms that present themselves of technology in the marketplace. >> we have heard the argument article ii will stifle innovation and it is called the nuclear option. how do we evaluate this argument that cable companies' stock prices are up since the president announced his
4:12 am
support? mcfadyen is the complex question and i am not a market expert but a careful examination historically over period some of regulatory intervention verses of light to regulation will demonstrate a clear pattern. when cable rates were regulated investment was suppressed until the prospect of the 1986 act that deregulating and they soared and in 2001 with to regulate friday and was put in place it the least radical increase of the investment $1 trillion over the course of the year. sincerely believe the market believes in the assertions and promises that article ii will run into a rage regulation for those that exist but unless that is clearly identified adult think it is priced into the market and very likely would be if anything would
4:13 am
change. >> maybe the economy is just getting so good. we're just sort based on what the president said last night. most broadband providers say they're already in compliance with network neutrality they are rarely afraid both the president and the sec they support for parents. if we all agree it should be off the table shouldn't congress address that issue and could be an intended consequences letter in the draft bill? >> first of all, rate regulation is the most dangerous but i went not conceive of the thousands that alone is a focus of our concern and we do appreciate the
4:14 am
president saying rate regulation should be from the assertions period simultaneously heard about the adoption of section two o one, two '02, two '08. two o one is a statutory provision for that says to insurer it is just and reasonable for cows so we don't at have any confidence that the words matched the direction of the order of the government will make sure rate regulation is off the table where they have that power but for now are choosing not to. >> thank you. we will now recognize the gentleman from illinois. >> my congresswoman had a shot across the dow to former commissioner baker so i thought i would give her a better
4:15 am
chance to respond to the statement made. >> i appreciate that. the ranking member is correct first of all, we know the care and free markets is working $112 billion of investment of the wireless industry the last four years but in 1993 when congress enacted section 3922 di regulate wireless data and mobile voice with limited title to requirements also the second bucket for all of the service is like global broadband and they specifically exempt the sec to apply article ii
4:16 am
requirements on news service is that mobil broad band was a new service. it has always upheld will pull broadband is not regulated by title to. >> i know my colleagues have giving credit to the chairman of the subcommittee i have always been to the point did you make a $30 billion of investment to upgrade the pipes then you have dash of the of revenue to do that or business model to do that. my whole position is not limited with government control of existing but the encouragement of more. but that was then and this is now we are now in a new world order where we have now looked at the debates and said businesses have done that to
4:17 am
weedy to get the monkey off our back in business is talk about certainty. socratic to the chairman to say let's go back to the previous debate what was put out in front by our colleague. where can we find middle ground? that is what the chairman set forth. now with great consternation from my friends on the other side. so i with the chairman that we can move forward with certainty but ina legislator. there is a process to legislate then allow the executive branch
4:18 am
and the sec to implement though lot. because of another sec comes to be established by another president it could be topsy-turvy again. just to give credit even breathing as kicking and screaming along with him on this policy because. >> can you yield? >> i am catholic and for catholics we understood and confession. thank-you. >> but i still believe in the paid prioritization. i am not sure we get there this way this is my concern. >> will you yield? >> remember part of the legislation first of all, we would want the fcc before they
4:19 am
go off to regulate that everybody has testified pretty well and has been light touch regulation how would has been ruled out with no overwhelming evidence of clear market failure of deep regulatory control so why do we have to go down the path? but the president is now turning fcc as his old puppeteer that this is what you have to do but the chairman said he is being pushed and we will act by february 26 and by the way in and of us will necessarily see that order that is our reform efforts that we passed out of the house with more transparency. they are proving we don't know precisely what that will look like we want to give certainty because of the issue from this baker with mobile devices
4:20 am
because we all go to a double blow world but the statue that authority does not exist at the sec. there may try to go there and there is a dispute but you will be in court. the marketplace will not have certainty for the third fourth time the lawyers will get rich and we are not lawyers so we'll just have to pay the bill so i prefer to get a committee together to find a common ground that is why we started with a 2010 order with the work the democrats had done then to give pause to the of market. >> where do we go now?
4:21 am
>>. let's me say the way it strips the sec of its authority to prevent them from giving in to enter its access key infrastructure under title to it needs access to every tool in the arsenal with the broad band infrastructure fed the entrance in the marketplace like a google fiber is driving u.s. innovation and ideas peace to offer faster or cheaper service by bringing much competition to the broadband market may also create jobs across the country and often in areas where the isp cannot make the investments themselves. both companies have high bandwidth applications are either of you concerned the
4:22 am
draft bill does not have any mention of intered connection is recently used to leverage pavements? >> we are absolutely concerned that interconnection in is not included i agree with what he said earlier with the customer experience regardless of the chokepoint could happen upstream does not matter. . . >> the discussions strip the fcc of authority to even investigate this issue and that is very concerning. >> as long as you give me the
4:23 am
time back. >> i don't believe our discussion would welcome that opportunity. and on this piece, we leave that authority with the fcc. we don't do away with that here although it is absent in the bill, it is still resident.
4:24 am
so that interconnection we would be happy to have. >> we also provided this about the specialized services and yet it doesn't allow the fcc to define what constitutes a specialized service. can you envision this language being used by an isp to advantage one competitor over another and even they themselves providing specialized services that can comparing the marketplace? >> i think the lack of specificity could be paramount to discrimination and so yes. >> certainly with respect to affiliated content, the network provider itself creates engagements and specialized services which look like as only a matter of ownership and we are very concerned. >> thank you.
4:25 am
i just want to add on to what we were saying with several news reports that senior executives from major companies that are represented by the chairman have made about title ii, which the chairman, i would like to enter into the record. it is one that all members have talked about. and as long as the federal communication waives parts of it, it would be an acceptable outcome. similar statements made by comcast and time warner cable. stephen, the chief technology officer of sprint, a member of ms. baker's organization, says that they will continue regardless of whether they are regulated by title ii section
4:26 am
706 or some other regulatory regime. and they said i need to be real clear. we are going to continue to invest and networks and platforms in where we need to so nothing well change that. >> the chairman yields back and we now turn -- oh, wait a minute, mr. barton is back. >> and you mentioned this is in my district, we are very proud
4:27 am
to have an interesting caught that and a successful roll carrier. we also talked about issues facing a small rural carrier. but in the context of reasonable network management, how are these issues different with networks in small rural carrier's? >> that is a big question. we did talk about this, they are deeply concerned in the record here about the concerns and so there we go. as far as the technical capacity standard, we have to be very careful. the chairman was watching and reversing the national football championship and ranking member, and you are taking
4:28 am
these e-mails on the same service providers. if we had, a bunch of 16-year-olds doing a tour of what congress looks like, that is a millisecond by millisecond management that has to happen by her carrier. it is constrained, one constraint is the same capacity of the entire electromagnetic spectrum. there's a lot going on. so if you are one of these smaller carriers, you are updating any sort of thing that can help you handle this data capacity just amazingly. you said $45 billion and the spectrum option because this was added and increased by 730%. >> how are they different? >> the data is increasing, the congestion is increasing.
4:29 am
>> let's talk about interference issues. >> we're all using the same, it is raining outside, more people come onto this and we have to manage it and we have to make sure that it is optimized so that all of us have the best user experience. >> thank you for mentioning that. i know the the issue is from earlier, but everyone wants the internet to remain open and vibrant, but is there some particular reason that they should see where the congress can enact the bipartisan bill? >> the decision of the commission has the authority of the statute and it divides the expertise it needs to make a decision and they also setting
4:30 am
their own time limits. >> when you were chairman in 2002, when they determine an information service, they indicated that the record shows that today's increasingly sophisticated service is more than ever before. can you explain this the perspective of technology that you had before you in 2002 to the comment expressed last year? >> i think one thing to note is the draft legislation as i ended rather than disenfranchising this authority is the way that the commission is classified for over 12 years. for both republican and democratic administrations including most recently in 2010 by president obama's first choice. it has been operating
4:31 am
under that definition is the very beginning of broadband and it's important to remember that this isn't completely discretionary but it creates service and to find some, it defines the telecom service and order information services. when broadband first emerged in maust village to see it come on the scene when i was at the commission, there was an open question as to whether the nature of the internet integrated service was telecommunications service or an information service under our precedent. it was a judgment that the factual characteristics, the way that it was used, it was much more faithful to the definition than the one it's set out for other services. it went all the way to the supreme court agreed with the commission judgment.
4:32 am
the commission now is reinterpreting the facts and applying it to the other definition. but the facts are fundamentally the same as they were in 2002 and that will be a serious source of litigation risk for the committee when it changes its mind about the underlying service. >> time has expired and we will now go to mr. welch. >> thank you, mr. chairman. i thank you in the and the ranking member because this is an excellent hearing. we are way ahead of where we were last year and this bill contains real responses to the comments that were offered to the fcc and that is terrific. and third i think that it has been extremely responsive and i have confidence that his experience in the industry as
4:33 am
well as the public sector side makes him someone who we can have confidence with respect to these regulations. but this is the heart of it for me, whatever we do is my concern, it is for access to the internet and in three out of four americans, this is especially true in rural america, it really had one provider and is question of what we do -- this neutrality has been injected into a major new issue, which is new and that is we take away jurisdiction from the fcc, that is a fundamental question that requires an enormous amount of
4:34 am
attention before we make a decision to go forward. i appreciate the point you made about uncertainty because if you make big investment decisions knowing what the rules of the road are, the uncertainty goes both ways and if you have legislation, it is very hard to change it and let's be real. if you have regulatory policy it is they are. it can respond to issues and i appreciate how specific you are in the legislation and the third is the broadband protected by the network connection and if there were a problem in any one of those three areas, who would resolve the remedy it was part of it.
4:35 am
>> there was a direction and the bill to establish this process, which sounds nice and practical and is not the provide the kind of certainty and details that most businesses and consumers seek. >> it's not just our legislation, we can all indicate. >> the commission under this president has the right what special services means was absolutely within the power to interpret this as but a best understood it. >> let me just understand because that is the important thing to me with what you said. you are saying that he would
4:36 am
have jurisdiction even though they are taking this way from the legislation. >> let's say amazon had a dispute. where would they go to resolve the question? would they go to their legislator? >> yes, they would complain to the federal commission to resolve that complaint is they do in regulatory situations. >> one of the questions that i have happens around this and centers around the internet service provider with the consumers. aren't there very real competitive concerns and impacts that arrive in the exchange between this and the networks as well and how can we
4:37 am
ensure that the connection continues to happen for smaller competitive carriers in the telecommunications marketplace. >> we have been very focused on the mobile industry and the technical parameters and the mobile industry, eight out of 10 americans have a choice of four oh more providers come in 94% have three or more providers and it's a different issue. so you might want redirector question. >> i think that my time is expired and i thank you and i yield back. >> i would like to submit for the record, the secretary commission from others as well.
4:38 am
that will be part of the record. >> this is a general information question. the gentleman there, i used to know, but he had some hair and he has no neutrality now. >> i just wanted to make sure before i asked her questions. let the record show. when you were chairman of the fcc did your commission give any thought to regulating under
4:39 am
title to? >> no, as i said, this was a question of when it was invented whether or not to relate this is in information services provider under title i, they voted to do the latter. >> are you aware of any academic or industry study that claims the internet is a natural monopoly? >> i think one of the most substantial decisions made when
4:40 am
it passed the telecom act was to abandon that regulatory policy and that they should be subject to competitive forces and it should not be regulated as such. that concerns us with the historical use of title to build and in that body of law. is it the assumption that they serve most efficiently by a monopoly and a state sanctions are not really as they once were for a long time? >> i think it is a correct assumption that the internet is not a natural monopoly that it is a competitive market and given your knowledge as chairman and the current capacity isn't on the street leader, do you view any participants on the provider part of the market to be called a monopoly market power?
4:41 am
>> no, not during my tenure. and i disagree that that is the case today. we know that you don't count noses but you look at the effects aren't in the markets. and has the market continued to invest. have prices gone up to run levels and i don't think any antitrust scholar or justice department can conclude that it is an unhealthy competitive market based upon the actual characteristics that they used to measure that. >> if it is not a natural
4:42 am
monopoly and there is no participant in the provider sector as it has this power and it stands to reason that this is correct, that we should explicitly say that you shall not regulate or do this under title two. do you agree with that? >> i have testified consistently and i do think that the cost our systems take are far outweighing things. it is pretty solid, bulletproof as we accept and we believe that that can be done without resorting to that. >> mr. chairman, i want to thank the former chairman for those comments. i do believe that it is wise to put that out as a draft. i think that there are some valid questions and friends are asking questions about how to
4:43 am
perfect the language and i have some concerns myself about certain parts of the draft. but isn't is it the fact that we should not regulate the internet, i think that that is beyond questionable. if we start from that premise, i think the discussion draft it is in excellent one throughout the details and i yield back. >> we now turn to the gentleman to welcome aboard. >> thank you very much, mr. chairman. i am new to this entire area and i'm learning a lot as we go. one of the things that intrigues me about this field is that we have a field that is changing as rapidly as anything in history has changed and some
4:44 am
of the members have talked about the difference between 1996 and now and how the world has changed but it is also the industries that have changed in the sense that this is a corporate structure that is out there now as well, a lot of consolidation going on in companies getting into various areas of the business of at one point they are acting like a commentary, including a content provider and so forth. you mentioned the distinction between information services and telecommunications services in this law. is that a meaningful distinction today? >> i think over time it should not be. >> we are entering a world in which a bid is a bid, data networks follow radically different characteristics than
4:45 am
the one that inform this written in the '30s or the '90s. it's one of the highly contentious issues related to ambiguity and it's even more inapplicable to modern functions and modern networks and i think that we will be ironing out this governing body for years to come and how it is properly applied, networks that do not behave in the way that these are. >> you say in your testimony the mobile broadband is different. and i agree with you that they need to take into account the technological difference between networks and we are discussing the ability to interpret the net neutrality rules once they are enacted.
4:46 am
how can they give wireless carriers the flexibility that they need without the authority to modify or clarify the network neutrality rules. >> i think that as we evolve we need to work on the definitions and make sure that we have the proper definition for network management that acknowledges the technological differences and that is important. and i think we have a great start and look forward to working with all of you on it. >> the 96 act created a partnership between the states of the federal government and we each have important telecommunications oversight responsibilities. our partners and the state governments are often closer to the ground and can include consumer complaints. i want to talk about this. should we beat thinking about the consumer protection role as well?
4:47 am
>> there has been a lot of talk about this to protect local choice in broadband and in particular there is an effort to ensure that they do not restrict local communities from these networks, but the draft legislation today would address this very serious issue of local choice for individual. >> we have been talking about the competitive situation of broadband in my community and it's basically one system. there is no system to provide great quality or service or consumer service. are you concerned about the ramifications for consumer protection if we go down this bill? >> yes, absolutely. it calls into question the goal and the role in protecting consumers and may be some competition, it might not be an
4:48 am
actual monopoly, but i think if you ask people around the kitchen table if they feel like they have choice and particularly their broadband connections, i think the vast majority of consumers feel kind of trapped. >> i agree. it is certainly my preference for congress to act in all of these areas and i have very serious concerns within the way the world is moving in the world is moving at 100 miles per hour. i think in this field and many others it's becoming difficult for us to make long-term policy decisions because the future is so uncertain and we talk about the uncertainty, there's not a lot of certainty. so anyway, thank you very much and i yield back. >> the gentleman yields back. and we now go to the gentleman from texas, mr. olson for five minutes.
4:49 am
>> mr. chairman, as you know today is my first hearing is a member of the subcommittee and i am thrilled to be here. ms. baker, as you know, ma'am, the communications act occurred 19 years ago. with the importance of our social fabric, this makes sense for congress to take a fresh look at how to tackle this rather than try to invoke provisions that are decades old. >> absolutely. we are very committed to work with you on that. >> thank you. we all agree that these changes imposed by the fcc will bring about legislation and i think
4:50 am
that we can all agree on that. how long will that last? we have to decide by the courts how long, a year or two, five decades. mr. powell? >> when my commission adopted as there they were three to four years before there was a revolution because of the supreme court. it is fundamentally the same thing, a brand-new untested definitional change coupled with other applications as we are talking about this litigation process depending on the complexity. >> is that sort of the whole window? >> welcome of the problem is that that could take a whole new commission will only be in
4:51 am
power for the next two years and it could start all over again. >> how long? >> well, we don't see this as mutually exclusive. and obviously mr. powell has a lot of experience and i think that congress -- i'm very encouraged. comes with an fcc order as well as with the proposed legislation and no matter what there will be legal action to clarify definition issue is in
4:52 am
the legislation draft and so while all of us. we would like to see as little litigation as possible. >> is that in the window of this uncertainty? >> the draft legislation opens up the opportunity for the case-by-case extrication of the various definitional issues the fcc would have to resolve. it could even be longer. >> i would say that it would reduce the amount of time that we will experience and i also think the draft legislation would give the congress as well as the fcc some room to look at the areas of the bill because out of the principles it needs to be debated and that is in the authority but i think the congress acts much quicker than the litigation we have and we would avoid the. >> ms. baker. >> about 2010 rules were not published for a while. there are various ways that they can extend the time before they publish them. once they were published they
4:53 am
were turned back and we are now at the fcc revisiting those into certainly the best way is for congress to act to it depends how you count it. it's 2015 and they will promote more rules depending on if they will be litigated that will be another window with several years of uncertainty.
4:54 am
>> about 2010 rules were not published for a while. there are various ways that they can extend the time before they publish them. once they were published they were turned back and we are now at the fcc revisiting those into certainly the best way is for congress to act to it depends how you count it. it's 2015 and they will promote more rules depending on if they will be litigated that will be another window with several years of uncertainty. >> i ask unanimous consent we enter into the record on the policy blog from the financial chief officer which deals with this issue of investment and
4:55 am
which others show the regulation increases and you end up with permanent regulations since the 1930s broadband access at the the networks will go down so it's a clarifying statement from december 11. >> we would enter that into the record without opposition so ordered. welcome aboard the subcommittee. >> i'm happy to jump into this one. it's the first issue is by the commission for mr. powell about the difficulty of the subject. i want to thank the ranking member as well for this hearing today. i've learned a lot. this is the first hearing i've had on the subcommittee on the larger committee as well. and a finite mr. chairman and i would like at the outset to offer the analysis of the draft
4:56 am
bill that we are discussing. i come from iowa and i have 24 counties in my congressional district. it is a much more diverse district and folks on either coast of the united states i might imagine. no offense to either the chair or the ranking member here but we have got a lot of issues in the district. what i would like to start with is a question. the statistics that you mentioned, eight out of ten have the choices, can you cite those statistics again? >> eight out of ten have a choice of more global broadband providers and 94% have a chance of three. >> do you know where the 20% for the 6% reside? >> i'm certain we can get you a map.
4:57 am
>> i would suspect although i don't know for sure it is probably in rural areas where those folks reside. it's my first year in the committee that i've been getting around the district for the last eight years and this is a huge issue that has come up with the accents on the areas to broadband, cellular service for all the things we are talking about. that's why i'm excited to be on the subcommittee so i can do what i can do to folks of my district and i want to thank all of you. i knew nothing about it until my daughter requested it as a christmas present. i immediately went online and found out what a wonderful service you offer so thank you for being here as well. i support net neutrality. i'm interested in working with both sides of the aisle so that we can craft some kind of legislation to bring us up to where we ought to be in 2015 fully recognizing that we will
4:58 am
never ask legislators understand all the issues down the road because things are going to be changing all the time. we will do the best we can and i appreciate the majority bringing the bill to the floor so that we can spend a lot of time working on this. but as i said, that rural areas are probably my major concern as a congressman. and i would like to ask perhaps the rest of you as time permits, but affects might this proposed legislation have on our rural consumers especially the universal service fund programs for which we already mentioned briefly. >> thank you for the question. this is one of my deep concerns with the draft legislation as it stands, stripping them of title 602 calls into question the commission to continue
4:59 am
ongoing processes that help subsidize expansion of broadband in rural areas as well as programs that could make it more affordable for those folks that do have a connection but can't afford to connect. we are concerned about people in rural areas driving down the road to wherever they can get a wireless signal to do their work. we need to ensure that this bill does no harm to efforts to increase digital inclusion and it's an important imperative for education as well. >> i want to say i think the bill if you flip it on the 02:12:59 other side has a promise if we were to look carefully at the authority over the title number two to increase the further
5:00 am
part of the reason why they have the authority is to get at the very issue that you're talking about and i think by looking at the bill in a way that is a point of debate because there is a discussion draft will allow us to be careful in the path we do take and if we take title two, we've already heard from the association leaders about the high capital investment in the community's overall come up with the communities like rural that we are concerned with will be the last on the list if the capital is depressed among the communities, so we need to be careful about that in the study i did at the national broadband map there was very little coverage that was the lowest in their areas and in their states and communities and it has been that we have seen a lot of growth particularly with wireless for some of the committees as well so i would caution against putting the baby out with the bathwater as we talk about what ways can section 706 offers some solutions that we are willing to work and sit down with the a sitdown with the members and staff to talk about
5:01 am
. but how can you actually leverage that point so that to the earlier point of the congressmen we don't spend a lot of time wasted where we can't do add to the debate of the universal service and other things you care about and we do, too. >> i would like a response from the others if it is possible for the record on moving forward. >> if they can get it to you quickly. >> in my opening remarks, i said that etsy is a democratizing force for entrepreneurship. democratizing entrepreneurship means providing rural broadband so that people are not disadvantaged by where they live and on whether or not they can take advantage of this great platform. so we are concerned that the legislation by revoking the fcc authority to really undermine
5:02 am
efforts to promote adoption in rural areas. >> i think what i would emphasize quickly is the biggest problem of reaching a sacred obligation of all telecom policies is because the costs are highly uneconomical for entering so you have to balance off the power to ensure that we are not raising the cost of providing services and further distance and infrastructure builders from coming into the community and that is the other worry about moving to the regime that could raise those costs. >> any others? >> thank you. it's hard for me to believe that investments require blocking not disclosing, engaging in the prioritization. >> all of which would be banned under the draft, correct? >> whether it is enforceable he band and whether operators can get out by offering specialized services or claiming reasonable network management. so there are
5:03 am
a lot of questions but those good things of principles should be protected. >> and remember you stil have the ftc in the background. >> it isn't enough for us to get there and we want the assurance that the commission can continue up going in the process. >> in response, i think that you are correct in terms of the assurances that are there there then it comes with but then it comes with everything else and that is what we are concerned about in the communities if you go back to the conversation of the regulation etc., the communities we represent, they are not even at the beginning of the finish line and we have a lot more work to do and we need to be cautious about the regulatory action given the fact that there are 30 million people that do not have access and i think the fact that we have had this conversation continues to
5:04 am
disadvantage the people we represent that need to get about the business of other issues and so respectfully i think you are right but at the same token it is much too excessive to actually get the things we want. >> schools and libraries exist since it is classified. we have an act that is going forward, so i think it's important and we all realize it is important and we can continue the conversation. >> i thought it would be helpful for the whole committee to hear everybody get a shot at it. if you would like to meet with us afterwards, we can show you what a real rural district looks like. [laughter] >> we are now going to go to the gentleman from florida.
5:05 am
>> thank you mr. chairman. honor to serve on the committee. it's been a terrific hearing. i have a couple questions. after speaking with a medium-sized broadband provider in my district, they were concerned that during the push for the reclassification the fcc hasn't conducted a single study on the impact that the reclassification would have on small and medium-sized operators. what are your thoughts on the ability of the small and atms highest to handle the increased burden of internet regulation? >> i think it is fair to say they are deeply concerned. i would emphasize they have a legal obligation on the regulatory flexibility act to take special consideration of small businesses in the cost-benefit analysis decision. our members filed with the commission raising great concerns that they have not complied with them as part of that analysis. that's an ongoing conversation with the commission that get another potential vulnerability in the rules that will come out.
5:06 am
>> i know that you touched upon this but maybe you will want to elaborate. i have a couple areas in my district has many members do where even today internet option is significantly behind the rest of the country and they are struggling to get reliable broadband up and running. can you explain why title to classification could disproportionately impact and further harm communities with the broadband adoption already? >> in my testimony and on the
5:07 am
record or statistics to actually talk about the fact that relevance leads when it comes to the reason why people do not get online. the cost of broadband and the device actually come after why do i need to use the tool and i think all of us in the room if we want to equalize democracy as as had earlier we need to get people online so they can realize the full value. the challenge with the title ii to the question is, you know again as i said we still have to get everybody to the starting point before we get to the finish line and try to manage around some of the hypothetical harm of what the internet can do does a disservice and the under monopoly telephone service we can only talk and hear. and broadband we can talk come here, discuss and do other things and for the other communities of color, we want to solve social problems that are chronically chronic disease or the lack of educational resource, etc. the possibilities investigations of the internet are so great and why would we want to restrict and regulate something that is still in its infancy and for our communities again, relevance is the issue. we have to move people of color like the poor and the disabled and seniors and the folks who do not speak english as a first language to the internet for the power of government resources so
5:08 am
that they can move from an in-line economy to an online economy. we have to move them to places to solve the problem much like in florida where people are not taking advantage of the new technology and having a restricted title has an impact outside of the chilling investment of employment. >> thank you so much. >> will this do anything to encourage incumbents to upgrade networks or companies to enter the market? >> i would like to take the latter part of the question because this is a serious overlooked aspect. it's a major disincentive for the competitive area of the market and all you need to do for looking at evidence and some of the examples that are held up as the sterling new entry like google fiber that entered the market by the way if only entered the market in a handful of selected cities. it elected to provide broadband service and provide video service but refused to offer telephone service.
5:09 am
it refused in its own public statement in saying it's chose not to provide telephone service because of the regulatory compliance costs associated with being a telephone company. in fact the president of the united states was in iowa recently in cedar falls talking about the municipal broadband company that provides a very fast internet service. the company also provides broadband and video service and today provides no telephone or telecommunication service in part because of the regulatory cost incentives. title ii fundamentally assumes an incumbent state sanctioned monopoly and it tends to her by a regime that is hostile to enter and provide a new competitive alternative. >> thank you and i will yield back. >> we now go to the gentle lady from california for five minutes. >> thank you very much, mr. chairman and ranking member for holding this hearing today. the internet is very dynamic and i must say this hearing has also been dynamic and lively and it's been much appreciated by the members here.
5:10 am
a year ago, no one was talking about paid prioritization and now people are talking a lot about it. it also calls the internet fast lanes. it is central to the net neutrality debate and that's why i introduced the bill with senator leahy to pay the prioritization or the so-called internet fast lane. the reason i bring this up is because this is where the consumer gets involved. the consumer understands this and when i had my hearing and at home i talked to the people, they understand, they don't like the idea of having to pay extra to access the content of the programs they want to see online and this is pretty clear. i talked to some of the institutions, schools and libraries and they also feel they can't afford to cut deals and neither can the startups cut deals with each to compete so this is central to what we are talking about today.
5:11 am
so our policy has to be very clear about how it impacts the consumer. do your associations support the advance of the paid prioritization? and i would like a yes or no. >> yes. >> thank you. this gonzales -- ms. gonzales, i would like for you to comment on this, too. from the consumer point of view, does the bill truly ban all forms of the paid prioritization and if not, why? we have been talking around this but can you please expand on it . >> many have raised the question around the definition or the lack thereof or of the specialized services and whether or not that create a gigantic loophole that could severely diminish the rule that was intended to ban the paid prioritization.
5:12 am
it's also worthwhile to consider issues of discrimination on the internet that fall outside the paid prioritization and there are quite a few. >> i think in addition to the concern about the specialized services which by the way isn't just possibly a loophole by the third parties but rather i affiliated companies engaging more or less the same behavior and you can imagine an internet broadband access provider also having an affiliated content business which get special treatment. it wouldn't be paid
5:13 am
prioritization in the sense that they are paid by a third party but prioritizing traffic based on the ownership rather than the payment and the other two areas of concern that we discussed previously, one is keeping the reasonable management carveout as narrow as possible and we should view that it does seem to favor some content over others and lastly enforce the business. it needs to be clear in the bill throughout broadband internet access network. >> do you feel this is a good starting point? how do you feel about this? >> yes, i do. i think it is a novel approach where a set of principles are clearly defined and kept in the ceiling. if that actually works it is a great start. our concerns expressed today are how that healing with the great principles would actually work. >> to you feel the same way? >> i'm pleased that members on the sides of the aisle agree that if neutrality is a serious problem and we need to address it through government action in one way or another. i have serious reservations
5:14 am
about the draft legislation as it stands mostly given the level of authority that it would strip of the commission right now and the lack of inclusion of the ban on the unreasonable discrimination on the internet. >> i strongly believe we have to get this right, either the fcc or the congress. it is too important to think about how the internet affects everything we do in our lives. and this is the first thing i think of a starting point is a 100% ban on the paid prioritization and we have to figure out how to do that. there can't be any loopholes. you're talking about some already so we have to start addressing that. if we can't get that right, we are moving backwards. our consumers will know that we
5:15 am
are moving backwards and we are stifling competition when you think about that, too mac. i have heard from many startups who feel they were able to start their businesses but in fact if we don't play this right and then the prioritization, we will go backwards and we cannot if we do not institute the strongest revenue protections for consumers and innovation so i truly need this is our opportunity and this is a wonderful hearing to begin the discussion so i will yield back. >> think the gentle lady for her comments and we look forward to working with you and appreciate your comments as well. that's obviously not our intent to ban it and create a loophole to allow it to go through so i appreciate your doing this to work with us. we are now going to go to the gentleman from ohio committed a member of the subcommittee and we are delighted to have you as a part of the team.
5:16 am
>> and the winner of the national championship. [laughter] >> and the gentleman's time has expired. [laughter] >> no, in all seriousness it is an honor to be on the subcommittee under your leadership. i look forward to the work -- >> no amount of sucking up is going to get you -- [laughter] >> to the panelists, thank you for being here. i have about 30 plus years of private sector and dod experience in information technology and if so i'm very familiar with the issues we are dealing with and the criticality of those issues. i can remember back in the 70s when i first got started in information technology and telecommunications we went through generations of technological upgrades about every ten years there was a generation from the 70s to 80s and 90s and about the mid-90s leading into 2000's it began to accelerate to where we are today. many of the devices we all use on a daily basis, many of them were not here five years ago.
5:17 am
today, we see a technological turnover about every quarter as soon as one model comes out, the next one comes in and so technological innovation requires the right conditions and more government means less flexibility and fewer opportunities to grow and i think it was president ronald reagan that said the answer to our problems is never more government. if you look at what the telecom industry needs in order to be successful, it needs to be nimble in order to innovate, which it can't do if they have a hand of government that prevents it from doing so in the windows of opportunity in the industry of telecommunication the only -open-brace very short period of time and innovators must have the certainty that if they jump into the fray and put investments on the next great thing that they will be able to take advantage and get a return
5:18 am
on their investment so on these issues we talk about today are extremely important and i know i represent a very rural district and we talked about how important this is to some of those areas and i appreciate those comments. mr. powell, in the end cta's comments in the open internet docket it stated that the title to classification, and i quote would stand in the infrastructure of the commission seeks to foster. these comments go on to indicate that the reclassification again, quote, but require that providers to divert substantial time and resources to design and implement numerous systems and processes necessary to comply with the various requirements
5:19 am
and obligations of the title to. can you quantify the time and resources that you're describing in those comments? >> i think it would be difficult to put a number without agreeing on the scope we would have to comply with and i think we have all recognized that it depends on what you're going to be subject to and what you're not. there are a thousand title to two regulations. how many of them will apply and the obligation is a huge open question. >> is it safe to say though that this type of time and resources would have the effect of chilling innovation? >> if people want a better understanding, go read the history of the biggest regulatory problems were in the 1960's, 1970's, 1980's telephone companies. there was an enormous dissatisfaction they were not investing that they were not innovating. what was the last telephone innovation that you recall in
5:20 am
the area, was it the pink princess phone or the blue one? there was a disincentive and it has been the government's policy both at the fcc and congress to the beach reading be re- treating from those regulatory tools for decades to spur more innovation into those industries and it really was that retreat that helped foster and explore the wireless industry, the cable industry as a competitor to broadcast and a whole host of other industries with a revision of those policies. so, i think that there's plenty of examples in the way that the current regulatory model does incentivizes and if you need one last example, go to get the experience in europe when we do find the information service they pursued the equivalent of the title two regulations. their ministers today are calling for an end to that regulatory environment and adoption of the u.s. model because of the pressing effects on innovation investment. >> like i said more government is never the answer to the problem. >> do you have a thought on that as well? >> i followed up his example
5:21 am
because the investment we want to put hard numbers to it greatly don't have it because we've never been under title ii but the real world example is europe and from 2011 to 2013 week with 73% more investment in europe and the networks are 30 times faster and we have three times more platforms than the rest of europe. we don't know how much. certainly we are going to continue to innovate and invest. the question is how much. maybe not as much. and i would say that when we look towards the future we look towards specialized services such as the connected car and what the mobile health services are going to offer and we need to have smarter, faster, stronger networks to perform the connected life activities and it is going to be exciting but we want to make sure that we continue the framework that has
5:22 am
shown such a great investment and opportunity that we are leading in the world. >> mr. chairman, the case has just been made by its critically important we do this right. innovation particularly in this industry gives us the tools that we need to get our economy thriving once again and we need to make sure that we do this the right way. >> appreciated the gentle man's experience. we've all turn out to the gentleman from california for five minutes. >> i'm thrilled to be back on the subcommittee and i want to thank you for holding this hearing and trying to get ahead
5:23 am
of the issue. also you heard our deep concern about the enforcement authority before the democrats on the panel and our panelists. i would love to be able to vote for the final package and i hope that we can work together to find something that will work. >> i sympathize with your concerns about the overregulation raising the costs to the providers. however i also have concerns about the enforcement authority raising the cost of reducing enforcement authority for the end-users. my first question has to do with the forbearance of the title to requirements as he's indicated that he is one of the forebears and even if he does this, the current concern is that the legislation may inhibit the ability to react in a just technological advance. do you share that concern that the legislation would inhibit the ability to react? >> i think they have way more to react to ban is being suggested. the fcc with any act has the first instance and responsibility to interpret those decisions and enforce them across a wide range of activities. even in the context of specialized service if the effect of something someone was doing was to block or ban or toddle i'm absolutely confident
5:24 am
the commission could reach that behavior even under this statute. the complexity of the forbearance are substantial. everybody including the chairman has professed an interest in doing so. if one were to pull out the record many of the advocates arguing that it would be a light touch are all on record with with laundry lists of other positions that shouldn't be forewarned groups like public knowledge and others have the requirements that should be maintained. there are also serious questions. >> do you think that the fcc is more agile than the congress in addressing these complex issues? >> not always, to be perfectly honest.
5:25 am
the commission has been no bastion of efficiency over time, regulatory proceedings, rarely taking less than a year. they often are quite exhausted and take a lot of time. sometimes that is because they struggle to find a clear direction from congress as to how to act. the clearer that direction, the more expeditious process works with fcc implementation. >> we had a chance to pass legislation here i believe that it may be a 2015 piece of legislation that is in effect for ten years so we have to get this right and give the fcc the flexibility that it needs to carry out that intent. at least that is my opinion. ms. gonzalez, would you briefly summarize the type of litigation
5:26 am
risk the fcc will likely face under the approach provided by the draft legislation? >> i think there's quite a few factual determinations. if we are talking about procedural risks the legislation poses i think it puts a burden on consumers to first of all ss whether or not they have had their net neutrality rights violated and then figured out how to bring up before the commission and its somewhat complicated that requires both lawyers that even many but even many of the startups that do have some resources more than the consumers at least have said they would be unlikely to be able to engage in because they have limited legal counsel. but beyond that over those decisions after they are issued there could be follow-up litigation because this creates a situation where we would have to get to the details on a case-by-case basis which could just be one lawsuit that would likely come from the fcc order but a series of lawsuits.
5:27 am
>> what the gentleman yield? >> i will give you a little extra with unanimous consent. how does what we are proposing here to put in place in the appeals mechanisms for consumers can appeal different from how it works across any other agency in the government? i am confused. don't we want citizens to have that ability to file a complaint? >> we want them to have the ability but we also want the internet service providers to have the burden to show that they are not discriminating. so it is about how we are shifting the burden and it is difficult.
5:28 am
there's not a lot of consumer activists doing the work and assume it is difficult for consumers to carry the burden alone. x we will continue the conversation -- >> we will continue the conversation. >> do you think that they have a role to play in the broadband competition? >> absolutely. and one of our concerns would be the draft legislation revocation authority of the fcc to do that. >> do you think the broadband market is sufficiently competitive to protect consumers? >> not at this time. >> thank you. i will yield back. >> i would go down to the gentleman from missouri. >> thank you, mr. chairman. you are talking about the technology and the old plan lines and telephone development and choices with a pink princess phone the pink princess phone or blueprints as phone and i had to think my twentysomething year old daughters what they would do if i handed in a rotary dial phone and said you need to make a telephone call i question
5:29 am
whether they would be able to do that. i saw a cartoon the other day of a young man in 1983 and he probably weighed 120 pounds and have a desktop computer like we all have and it showed 2015 and his computer was now this size and he weighed about the same thing i do today so as his computer got smaller and he got larger that kind of with this i am giving the reminder of the story steve forbes used to tell if the cell phone development was left to the united states government, what we would have in 1983, the first fun i had was a brick made by motorola and it weighed 2 pounds and in 1983 it costs $390.
5:30 am
this phone didn't cost me $3,900 he told me a story something to the effect if it was left to the government to develop cell phone technology today that same code away for pounds and it would cost $7900. so i think the innovation is a pretty good thing and the government government the more it stays out out of it the better we would be. we've had a long hearing today, had a full table of witnesses. a lot of my colleagues have spoken before me a lot of the questions have already been asked so normally i like to kind of cut through the chase at this point and just get to the meat of the issue. the consensus is that the internet should be open and vibrant. but isn't the controversy really about the extent of the authority to ensure that it remains open and vibrant whether it should be from title to or section 706 doesn't it make sense for congress to make that call?
5:31 am
>> yes, sir. i think we have to recognize that it is not for the fcc or any other regulatory agency to create its own jurisdiction. it's to act on the jurisdiction provided to it by this institution. there is no question that the reason this has been a torturous debate for decades is because of the ambiguity surrounding the commission's authority to adopt a set of rules that as you can tell from the panel have almost near unanimous consent around the substantive rules attempted to achieve. the only thing that has been argued about is what authoritative basis that's executed on and every time the commission intends to do that on its own it's going to face necessarily a big complexity challenge. that is within the cover of this institution to terminate and
5:32 am
settle once and for all and i think that's why we are so supportive of your efforts to find the bipartisan conclusion. >> the the title ii proponents tell us not to worry about the provision to the title because the fcc can simply forbear from applying it. is there anything simple about it and couldn't do numerous individual battles occur regarding what the commission has and hasn't decided upon their net neutrality once the order is released? >> there's not a lot of understanding of how it works. first there is an institutional risk. it is a pretty hostile thing to say that a regulatory the regulatory agency should sweep away broadly and act of congress without them directing it to do so. if you get the sweeping forbearance that we are desperately relying that we will get is the commission doing something in an untested and untried way that it eliminates statutorily past, presidentially signed legislation and that poses a significant risk. the other challenge is that the commission must make very specific findings for every rule that it forbears on and it will
5:33 am
attempt to do that in a global way that there is a risk that courts will say you are not permitted to do that. you are not permitted to brush away the title. you have to explain in micro-detail what each of the rules doesn't meet the standards for congress to set out for you. if that ends up being of the law, we are talking about a morass of the process to go through rule by rule and take pick a separate independent forbearance findings. the commission in the past proceeding has often said that it has to do with my market. so the forbearance definition says, is the market competitive? the market in missouri is arguably different than the market in new york city. there's been times they say you can only assess that question on the specific market basis and if that turns out to be required now we are talking about a voluminous set of calculations about whether the rule can no longer be implemented or not.
5:34 am
it's easy to be leave the commission as just a plenary committee free to make the judgments as he sees fit but it is down to very strictly by the tools at this institution sets out. while certainly it can try and i understand the sincerity and we are committed to trying to get that best resolution it is fraught with complexity that can easily be cut through by this institution. >> i was going to save a little time to yield backend but intel is everything good but i think i'm out of time. >> we turn now to the gentleman from illinois. >> thank you, mr. chairman, for this first-class hearing and i want to thank the panelists for being an all-star panel of what
5:35 am
-- witnesses. mr. chairman, i want to ask a the panel this question in the yes or no fashion. do you think the fcc is on a collision course with the dc circuit again if it exercises section 706 authority to reclassify the internet broadband as excess as a common carrier severance under the instant rules, yes or no? >> yes, sir i do. >> yes. >> if the network operators choose to make it so, yes. >> is the question whether they will go to the dc circuit or whether the dc circuit will uphold the decision or not?
5:36 am
>> will they be on a collision course? >> i think it is certain to go to litigation. i do believe that the d.c. circuit will uphold the title two if it is done well. yes, to the collision course. >> chairman i want to ask you again in a forthright manner do you have any concerns that under the republican draft congress would be restating its intent to say the section 706 is not a direct grant of statutory authority? >> let me say that i think that is a question for congress, but representing my industry, we do not have problems with the commission retaining some 706 authority and breathing room to address changing circumstances as the dc circuit found.
5:37 am
i found the interpretation questionable, highly in conflict with past rulings but the dc circuit ruled that is what it meant and i think we would rather live with the fcc administering the provision in title two. >> are you concerned that they will not be able to deploy broadband services and invest in the network facilities that provide service to the low income and minority communities other than this bill proposed?
5:38 am
>> under the current bill i think as it has been said there was additional discussion around the seven of six authority as we all talked about and i actually think to your question is whether the a win-win for what we were looking for for the low the low income consumers as well as the rural communities and as i said earlier it would be a great way to look at the digital redlining that had the potential to backstop and limit the progress of what we've been trying to do with the deployment among the communities. i want to keep regrading that adoption still is at the top of the debate and it continues to get swept under the rug when we talk about these issues and so we are talking about a parody and should stay on top as well as the legitimate concerns that need to be dealt with even in the case of the specialized services to consumer demand is driving everything so it's important to keep that as the bill is discussed and debated . but i think to your point we have to avoid a collision course you just mentioned and we are on a pathway if we don't put the right effects to make sure we don't do that. >> i want you to answer this question and i only have 30 seconds to 37 seconds.
5:39 am
if the chairman would give me a couple more seconds. the republicans want to authorize the fcc to hear and adjudicate complaints brought by individuals against their internet broadband provider on a case-by-case basis. should these complaints be germane to the fcc consideration or whether certain transactions will promote the public interest? >> i'm sorry, is the question whether or not this would serve the public interest to allow the commission to adjudicate on a case-by-case basis? >> no. if, in fact, the commission should they consider a that a certain merger transactions in association with these complaints brought by
5:40 am
, would the fcc consider these complaints germane to its decision? >> on mergers? when it considers complaints as to look at the ecosystem in general to determine whether or not there's competition. i think the merger determinations are in a separate docket and rightly so. but certainly when considering what kind of protections we need, we need to look at the marketplace and whether or not there's competition in the mergers and acquisitions and the level of competition certainly is relevant. >> mr. chairman, if i could ask for an additional 45 seconds. >> if you go fast. >> as you all know the cash cow on competition around the
5:41 am
passage of the total communications act was through long-distance voice that's where they were. congress gave the fcc and state commission the authority to allow competitors to enter the local markets through the retail connection. -- resale and interconnection. we saw billions and billions of dollars of investments following into that sector but the times have changed. congress knew about the internet and only a few people around the world is a game changer and the internet would become. in the decade it has become more apparent that the cash cows of the communication are not long-distance voice but instead wireless voice and later broadband data. over the course of a number of proceedings the fcc filed a broadband internet access services more like information services than total
5:42 am
communication service and perhaps congress should have stepped back in and reconsidered the definitions, but we did not. mr. chairman, i think that we are on our way in this hearing and additional hearings trying to settle the question of do the broadband internet service is internet services now service is now fit the criteria for the total communication services more than information services and with that i yield back. >> i will now go to the gentleman from new york of the subcommittee, mr. collins. >> i want to thank all the witnesses as a new member we are playing catch-up with it catch up a bit and your testimony has been very valuable. my question is for ms. baker. i know wireline and wireless are two different worlds and you represent a wireless world the wireless world into the language
5:43 am
in the bill does talk about reasonable network management. i would think that is the attempt to give you some flexibility because you are in different worlds. i also seem to understand your industry is opposed to title to which we are here and we are talking and we understand there's a difference. can you expand a little bit on the reasonable network management language, which all of us have raised that it may be difficult to interpret and let me know how you see that impacting the wireless world. >> thanks for the question. yes the wireless industry is different for a number of reasons. number one, we have our arms around as the parameters we operate on the spectrum which is limited capacity that is shared and it's moving so we need dynamic management millisecond to millisecond. and it changes all the time depending on who is sharing the spectrum and it's going to change from today because someone is going to come up with a more efficient way and we are going to upgrade their networks but they are not just technically different you are also you're also competitively
5:44 am
different and so our guys need to you to differentiate different services so they can compete more effectively against each other. we are worried that we might become one-size-fits-all. and we want the wireless industry to be made dynamic and competitive and continue to innovate and differentiate themselves that we are also very new so we are worried in the title two that we will not be able to introduce some of the things coming from the wireless platform when i talk about connected life meaning mobile health, connected cars, some of the innovations in education. so we want to make sure that the future in wireless we are the world's leader in 4g and we want
5:45 am
to make sure we are the world's leader in 5g. you want to make sure that the definition of the management includes technology. we will work with the committee on other definitions but we encourage the action here because they think that they are headed down the wrong path. >> that's helpful because i'm glad to hear you're increasing what we are doing especially that language and that you feel your industry can live with that language and certainly i think the committee would be very open as this moves forward and i just know there's been a discussion because they are two different worlds that are happy again to hear your support of the critical legislation. with time running late, i will yield back the balance of my time. >> it looks like they go to the final member of north dakota . thanks for sticking with us and being on the subcommittee. >> thank you, mr. chairman, for the opportunity. as you know, i spent nearly ten years in north dakota regulating
5:46 am
the various industries. and the more telecom cases that came before us, the less i was enthused about it because it seems every case that came before us was about a new technology that required less regulation and nonetheless was happy to carry out several cases and i think that we did one of the earliest. we did a very contentious cable company seeking the facilities and i don't know that any of them were unanimous. i'm proud to say that i was on the prevailing side in all of them were held up in court federal and state court. that said, i don't feel as smart as i used to today for some reason. i appreciate everybody. i have to say that i was amused by the admonition of the
5:47 am
catholic confession with mr. -- mr. shimkus, but i notice he said he came kicking and screaming, which is far short of repentance, i will tell you. >>[laughter] i appreciate your reference to the omission because this is a -- omission of the rfa, because this is a far too, no mission by -- far too common omission by several regulatory agencies in recent years and it was one that hadn't come to my attention yet but you're right a lot of issues could be solved much better to the liking of the investment opportunity. i'm also interested in the issue of the specialized services and maybe this will demonstrate a -- my ignorance a little bit
5:48 am
but if we are on the one hand arguing that we should give and we trust the use of flexibility determining the furtherance why wouldn't we trust the flexibility in determining the specialized services under this draft and is there a some ways we can tighten that up if it concerns some people? >> thank you for the question, congressman. i do believe the fcc ought to be empowered to help flush out rules, provide for notice and rulemaking. the detail and the certainty that businesses and consumers need under congress. if the bill goes forward it is fine but they ought to have the need. >> did you want to try to take a stab at that, mr. powell? >> the denigration of the specialized service this commission has repeatedly held that there is room for the special services even in the
5:49 am
2010 rules. the reason it is an issue is we use the same network for the provision of proprietary services that we build and privately financed and owned a network to deliver. a huge amount of that capacity is reserved and used the paper in the but they were in the business of selling. there is an effort to confiscate the entire platform for the public internet use. what the fcc recognized is that some portion of that infrastructure will always rightfully be available to the incumbent who built the network, delivered the service and innovate for the consumers in and the provision of the service of the business to provide. you have to provide an allowance for special services unless you are creating a taking of property in its totality. can we talk about how you define it or what the fcc flexibility is an interpreting his?
5:50 am
-- interpreting it? i have no problem with that. >> i will add quickly to the other comment. i think there is a conversation that can be had specifically if you go back to my testimony about adoption and relevance and if we look at the case of the program for example for the link on the minority communities that are not engaged there is some space to have a discussion on how those can be used for a public interest. i think you'd cut it back to the legitimate concern and the questions related to who is to say today that tomorrow we will be looking at telemedicine delivery and our ability to get our health records in real-time. so i think that there is room for conversation and the fcc is the expert agency to help us guide discussion as to what is important to consumers. >> that brings me to another point maybe i am not understanding clearly that we have heard a lot on the title to -- two authority being stripped
5:51 am
away and somehow that leaves them powerless and we haven't talked a lot about the ancillary authority which is there to deal with a lot of these issues and the ones that are not there we are here. there is a new one every couple of years. i feel like for too many years the congress has just sort of let the agency become congress and i think that is the balance we are trying to strike if somebody has a few seconds to add to that. >> i think the reason we are concerned about the stripping of the 706 is because of the court cases in the past decades that have stripped them of much of their ancillary authority and whittled away over the years and so that to us feels like a less certain solution. >> has the ancillary authority being stripped away? >> the commission has authority to come from a range of statutes not exclusively governed by the taught communication act. the commission has been aggressive in the protection of the access for communities because the spotty past which -- this body passed
5:52 am
authorities which authorizes them to apply the protections to the internet services and it is aggressively doing so. the commission has authority to protect surveillance and other kinds of issues. there is a host of authorities. and some are ancillary. they have also frequently used ancillary effectively for any number of socially positive regulations. >> thank you. this has been fascinating. >> that brings to a close the participation of our members. i have a series of letters that i would ask be added in letters, ipads, and things. -- op-eds, and things.
5:53 am
without objection, we will put that one in. there is an opinion piece by rick on net neutrality being the low hanging fruit for congress without objection we will put that in the record. from the telecommunications industry association, and supporting of legislative action from the chief executive officer, telecommunications industry association, a letter on the application developers alliance and and then there is a coalition group and a whole bunch of others as well, and individuals representing the educational institutions and elsewhere and legislative initiatives in whole or part. so, without objection, we will put that in the record, as well.
5:54 am
we want to thank all of our witnesses and especially we grant some forbearance for the two who have to go to the senate to repeat this. we thank you for your endurance and your participation to all of the witnesses. we are very sincere about following up with you soon rather than later. on language should deal with these issues. the principles we have outlined in the legislation that we feel strongly about. we are not creating loopholes. we look forward to collaborating with you on that within the appeals process in these various things. thank you all, and we stand adjourned. [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit] >> next, q&a with i intrude keen -- andrew keen.
5:55 am
then, "washington journal." today, the brookings institution hosts a conversation on the budgeting process, including how costs are estimated and the political implications. >> here are a few of the comments we have everything we received on the state of the union address. >> i heard a lot of great things talking about science and nasa. i can really appreciate the president's position on expanding nasa path role. -- nasa's role. i know there are a lot of people there who do great science. >> a couple of points i wanted to raise about the speech. i thought the rebuttal was really spectacular. i haven't seen a state of the union speech so improvised in a
5:56 am
long time. after 50 years of doing something the wrong way, we're finally getting the act together and opening up trade with a nation that has been very important in our hemisphere since our inception. the same thing can be linked to foreign policy. we have been doing the same thing in afghanistan and iraq and the middle east as a whole. we have been getting the same results. every 10 years, we go into a country, then there is blowback. he even mentioned how he was using drones responsibly. the idea that he has killed may be hundreds, if not thousands of people without congressional authority. >> i have a few things. i have seen a few things about the address. some of the stuff leading up to it, i have to argue the opposite because they have said that unemployment has gone down, the economy is improving. i don't think that is the case
5:57 am
because people have to remember that with unemployment, you can only have your extension for so long and then you don't qualify for unemployment benefits. when those people get dropped from unemployment, they are no longer counted as unemployed. that is not really an indicator of the economy going up. that is just people falling through the cracks and being forgot about. if you look at it from that perspective, the rate of unemployment in our country is probably 10% higher than the figures they are showing. >> continue to let us know what you think about the programs you are watching. call us, e-mail us, or send us a tweet. join the c-span conversation like us on facebook, follow us on twitter. ♪
5:58 am
>> this week on q1 day, our guest is andrew keen. he talks about the history of silicon valley and the tech world, the use of our personal data by internet sites, and what he thinks regular users of the web should know. >> andrew keen, where did you get this title? "the internet is not the answer." >> the original title, i can't say the original words because i'm sure this is a family show. the original title was "epic
5:59 am
fail." we had a long conversation with my agent. add one point, morgan shouted that the internet is not the answer. so it wasn't my title unfortunately. it's a good title, isn't it? >> i wanted to ask about the whole chapter you talk about failing, failcon. what is that? >> i'm sure you've been to silicon valley. it is a place of cults. it's this idea of failure. the bigger you are, the more you boast about failure. i attended a conference called failcon. one of the speakers was a young man who boasted he is now the
6:00 am
current ceo of uber, the darling of silicon valley, a company worth $40 billion. but he boasted about being sued by record labels for a quarter of a trillion dollars because he had a company called scour which is essentially like napster. so the cult of failure is one of the most irritating aspects of silicon valley. you have the black tim o'reilly a well-known publisher. he makes speeches like "how i failed to come -- "how i failed." but there are people who don't have jobs, people who are unemployed, who are underemployed, people who cannot get to college, they don't go around saying i am a failure. i think this cult of failure is one of the reasons why silicon valley is so profoundly out of


info Stream Only

Uploaded by TV Archive on