The FCC has a much different makeup
than it did not long ago. Even putting aside a new chairman, we’re still
learning about the priorities of other various members. (Consider that when our
industry met for the spring NAB Show in 2012, four of the five members
were not yet on the commission).
We can glean their thinking
by reading what they wrote in preparing to testify before the House Subcommittee
on Communications and Technology, part of the Committee on Energy and Commerce,
which was discussing oversight of the FCC.
extended excerpts. These are lengthy but provide insight into their respective
personalities and priorities about ownership rules, process reform, AM radio and much else.
CHAIRMAN THOMAS WHEELER
Democrat, sworn in November 2013.
In my first few days in office, I have
put forth a set of principles that I believe should guide the Commission as it
makes its decisions. I have described myself as a “network guy” and that is who
I am. More importantly, that is who America is – a nation leading the world in
the creation of new networks and a place where the new networks and the new
economy are synonymous.
We are living in the midst of a
great network revolution – the marriage of computing and connectivity known as
the Internet. Like other network technological revolutions that preceded it,
our new network revolution is redirecting both our commerce and our culture.
Any such change comes with an ample supply of challenges.
It is from the history of these network revolutions – their struggles,
their successes and their lessons – that we derive three overriding principles
that I believe should guide our work at the Commission:
Promoting Economic Growth and
National Leadership – technological innovation, growth and national
economic leadership have always been determined by our networks. Competition
drives the benefits of those networks, and we have a responsibility to see to
the expansion of those networks, including the appropriate allocation of
adequate amounts of spectrum.
the Network Compact – a change in technology may occasion a review of the
rules, but it does not change the rights of users or the responsibilities of
network providers. This civil bond between network providers and users has
always had three components: access, interconnection, and the encouragement and
enablement of the public-purpose benefits of our networks (including public
safety and national security). The Commission must protect the Network Compact.
For example, the right of access also means the ability of users to access all
lawful content on a network. That is why the FCC adopted – and I support – the
Open Internet Order.
Networks Work for Everyone – it isn’t just that high-speed expands, but
also what it enables. How networks enable a 21st century educational system,
enable the expansion of capabilities for Americans with disabilities; and
assure diversity, localism and speech are basic underpinnings of our
At the core of our networks is
competition. My time in the private sector has left me an unabashed supporter
Competition is a power unto itself that
must be encouraged. Competitive markets produce better outcomes than regulated
or uncompetitive markets. Where we are fortunate enough to have workable
competition, we should protect it. Where there may not be fulsome competition,
we should promote it. Congress has given us tools to accomplish this goal. We
will use these tools in a fact-based, data-driven manner.
In today’s world, businesses are moving fast, innovation is moving fast,
and technology is moving fast. The FCC must move quickly as well. So before we
take your questions, let me note three areas where the Commission is taking action to better keep pace with
today’s innovation economy while maintaining our commitment to sound and
effective decision-making and the public interest.
First, is Process Reform.
of my top priorities is improving the efficiency of the FCC, especially the
timeliness of FCC decision-making. I know this Subcommittee has been focusing
on this issue. Yesterday, you moved legislation related to this goal. We have
indicated our goal is to manage the FCC in the best possible manner with the
most transparency. We will work with Congress to have the best functioning FCC.
On my second day on the job I announced that I had requested a
senior member of my staff to attack the process reform topic and provide me
with a report on process reform recommendations within 60 days. For example, I
have instructed staff to consider actions that would:
the accountability of the decision-making process at the FCC, by establishing
smart internal deadlines, and updating our tracking systems to better monitor
and report on the status of open items;
-Expedite the licensing
process and reduce the amount of information applicants need to file, with the
aim of speeding the process;
-Shorten the processing time of
applications for review through an “automatic” affirmation process, as
Commissioner Pai has suggested;
-Streamline the consumer complaint
process and create a searchable database that would enable us to analyze the
data received more effectively, as Commissioner Rosenworcel has proposed;
-Take aim at backlogged matters and initiate aggressive plans for getting
these matters decided, as Commissioner Clyburn did during her tenure as
Chairwoman; and, of course;
-Weed out regulations that are outdated,
and incorporate performance measures for the most significant activities being
proposed by the FCC.
No one has a monopoly on good
ideas. That is why we have used a crowd-sourcing mechanism to solicit input
from the FCC staff on reform suggestions, receiving close to 300 excellent
ideas. Their suggestions – and those of external parties – will make a
In putting forward these suggestions, I am
eager to work on a bipartisan basis, both within the Commission and with
Congress. For example, I heartedly subscribe to Commissioner Pai’s statement
that, “[i]f we make it easier for others to hold us accountable for our
performance, I’m confident that we would act with more dispatch.” On this, and
other, items, I believe we can find common ground.
also have urged staff not to wait to pursue streamlining initiatives, but
rather to take whatever steps they can to speed decision making immediately. I
believe the recent action to approve the very large – but non-controversial –
Verizon/Vodaphone transaction via a Bureau-level Public Notice rather than a
lengthy order is a good example of this kind of common-sense approach.
Second are the spectrum auctions and especially the
The availability and efficient use
of spectrum for all purposes is, as it should be, a very high Commission
priority. I am very pleased about the recent progress toward making additional
spectrum available for wireless broadband – something for which this Subcommittee, NTIA and the Department
of Defense deserve to take substantial credit. I am committed to working to
ensure the Commission meets the statutory deadlines established by Congress,
including permitting the pairing of the long-sought 2155-2180 MHz and 1755-1780
MHz bands. This Subcommittee – on a bipartisan
basis – has played a critical role in this effort. The Guthrie-Matsui
legislation marked up yesterday is a timely example of your commitment to this
Of course, the incentive auction, which Congress
instructed us to conduct, represents both a great opportunity and a great
challenge. The opportunity to rely upon a voluntary, market-oriented approach
to determine the highest and best use of spectrum is self-evident. Delivering
on those instructions is a non-trivial undertaking. There is no single topic on
which I have spent more time over the last 39 days. These meetings have given
me an appreciation of the very complex nature of the undertaking. I am
confident that this project is in the hands of very skilled professionals and I
am committed to augmenting their number as required. I believe that conducting auctions in the middle of 2015 will
substantially enhance their success; to that end, we are scheduled to consider
adopting a Report and Order in the spring of next year.
And while we are talking about spectrum and weeding out
regulations that are outdated, the issue of what to do with spectrum while on
an airplane has garnered a great deal of attention and been widely
The FAA is the expert agency on
determining which devices can be used on airplanes.
FCC is the expert agency when it comes to technical communications issues. For
over 20 years, the FCC banned the use of mobile devices on airplanes because of
their potential to interfere with networks on the ground below.
At the FCC’s Open Meeting later today, the Commission will
consider an item that seeks public comment on a proposal to update this
outdated rule. There are two parts to the proposal:
Part 1: Maintaining
the existing prohibition and, in fact, expanding it to prohibit transmission on
all mobile frequencies.
Part 2: If the airline elects to install new
on-board technology to provide a mobile signal to passengers within its planes
and control its transmission, the airline would be allowed to do so. This
technology has been operational in many of the world’s major airlines since
2008 and has been demonstrated to resolve the interference problems on which
the FCC rule is based.
If the basis for the rule is no
longer valid, then the rule is no longer valid. This is a simple proposition,
as applicable to the rules about the telegraph (which we still have on the
books and should be eliminated), and the rules about on-board interference
which technology has made unnecessary.
I understand the
consternation caused by the thought of your onboard seatmate disturbing the
flight making phone calls. I do not want the person in the seat next to me yapping
at 35,000 feet any more than anyone else. But we are not the Federal Courtesy
Commission. Our mandate from Congress is to oversee how networks function.
Technology has produced a new network reality recognized by governments and
airlines around the world. Our responsibility is to recognize that new reality’s
impact on our old rules.
I have placed calls to the
CEOs of major airlines to deliver a simple message: we are not requiring them
to do anything and that, absent new systems on their planes, the ban on mobile
devices continues. I am reminding them that if they choose to install
the new technology, it permits the airline to disable the ability to make calls
while still allowing for text messaging, emails and web surfing.
I am painfully aware of the emotional response this proposal
has triggered. Yet, I firmly believe that if we are serious about eliminating
regulations which serve no purpose, the decision is clear. A vote not to
proceed on seeking comments on this issue is a vote against regulatory reform.
The third area of focus is the Internet Protocol (IP)
That’s with an “s” – transitions – because
there are more than one. What some call the “IP transition” is really a series
of transitions; a multi-faceted revolution that advances as the packets of
IP-based communication replaces the digital stream of bits and analog frequency
waves. The impacts on networks have already begun and will be profound. Fiber
networks are expanding. Bonding technology is showing interesting possibilities
with regard to the nation’s traditional copper infrastructure. Communications
protocols are moving from circuit-switched Time-division Multiplexing (or TDM)
to IP. And IP-based wireless data services are increasingly prevalent with IP
voice not far behind.
At our Open Meeting this
afternoon, we will hear a status report from our Technology Transitions Policy
Task Force. This report will lay out the schedule, including plans for an Order
for consideration at our January Open Meeting. That Order will recommend to the
Commission how best to: (i) obtain comment on and begin a diverse set of
experiments that will allow the Commission and the public to observe the impact
on consumers and businesses of such transitions (including consideration of
AT&T’s proposed trials); (ii) collect data that will supplement the lessons
learned from the experiments, and (iii) initiate a process for Commission
consideration of legal, policy, and technical issues that would not neatly fit
within the experiments, with a game plan for efficiently managing the various
adjudications and rulemakings that, together, will constitute our IP transition
Let me finish with a phrase I have used a lot in
my first month. I believe we are the “Optimism Agency” of the Federal
government. The 21st Century flows through the FCC. I am an optimist about the
benefits the new 21st Century network can bring to the American
people. But I am optimist without illusions. Network change is always
accompanied by new challenges. And in addressing these challenges, we – the
Congress and the Commission – are stewards of the public interest.
COMMISSIONER MIGNON L. CLYBURN
Democrat, sworn in August 2009
Since the last time I appeared before
this body, I had the incredible opportunity to serve just over five months as
Acting Chairwoman of the FCC. During that time, we had several challenges
facing us, but I am glad to note that with the support of my colleagues and the
assistance of a skilled and dedicated staff, we were able to move a number of
important items, which we believe clearly advance the public interest and inure
to the benefit of consumers.
We kept the essential, but
often overlooked, day-to-day functions of the FCC in operation until our
distinguished Chairman, Tom Wheeler, could take the reins of the Agency. And
for that opportunity, and for the support from Members of this Committee, I
This hearing comes at a critical stage
in our communications policy continuum. We are experiencing tremendous
technological change that affects every aspect of our lives, and the quality of
our lives as well. Just a few days ago, I had the opportunity to participate in
the FCC’s inaugural MobileHealth Expo, where two dozen companies – both large
and small – displayed communications systems, equipment and applications
devoted to helping Americans use communications technology to improve personal
I was particularly impressed by the
high level of technological innovation and harmonization with existing
wireless, online and wire line applications. Also noteworthy was the support
many of these companies have received from average consumers, who are
seamlessly adopting these technologies to meet their critical day-to-day needs.
As we look ahead to the challenges of tomorrow, I believe it
is important to understand the terrain over which we travelled yesterday to
arrive at where we are today.
Mr. Chairman, Members of
the Committee, with your indulgence, I would like to point out a few highlights
of what our agency accomplished during the transition, all of which we can be
-We reached a voluntary interoperability industry
solution in the lower 700MHz bandto
address an issue that, for years, had been impeding the deployment of valuable
-We launched a proceeding to modernize the FCC’s
schools and libraries program, known as E-rate, to ensure that our children
have the resources and connectivity they need to support digital learning and
become the leaders of tomorrow;
-We adopted an Order to
address rural call completion, because it is unacceptable in today’s world that
calls to non-urban areas are not being completed;
adopted an Order to reform inmate calling services to finally provide relief to
millions of families and 2.7 million children who have been paying unreasonably
high rates to stay connected with incarceratedloved
-We adopted a declaratory ruling on Consumer
Proprietary Network Information (CPNI) data to better protect consumer data on
-We improved the service for those with
speech disabilities to communicate through telephone networks and empowered
those with disabilities by implementing the 21st Century Communications
and Video Accessibility Act (CVAA);
-We enabled the H
Block spectrum auction and the AWS-3 proposal to take major steps forward on
government and commercial spectrum sharing, and moved forward on the special
access data collection;
-We adopted reforms to the FCC’s
Form 477, which will streamline the broadband data collection initiated by NTIA
to populate the National Broadband Map;
-We approved the
-We took significant
steps with the Connect American Fund to extend broadband to all Americans with
the second round of CAF Phase I, which will bring broadband to consumers in 44
states and Puerto Rico, and made progress with the cost model and
implementation of Phase II;
-We adopted procedures and
set the date for Tribal Mobility Fund I;
ongoing reforms to Lifeline and proposed significant forfeitures to companies
not following the FCC’s rules,
-And not insignificantly,
we adopted and released over 2500 items, many of which were under the radar.
I look forward to my continued work with Chairman Wheeler, and
my fellow Commissioners, to build on the progress we have made thus far.
As the Chairman has made clear, the voluntary incentive
auction proceeding will continue to be a top Commission priority. Congress directed
that the incentive auction of broadcast television spectrum should have three
major pieces: (1) a “reverse auction” in which broadcast television licensees
submit bids to voluntarily relinquish spectrum usage rights in exchange for
payments; (2) a reorganization, or “repacking” of the broadcast television
bands to free up a portion of the ultra-high frequency (UHF) band for other
uses, and (3) a “forward auction” of initial licenses for flexible use of the
newly available spectrum.
For those broadcast TV
licensees who want to continue to use their spectrum to provide those services,
the Act mandates that the Commission make all reasonable efforts to preserve
the coverage area and population served of each broadcast television licensee.
The Act also had clear directives for the proceeds from the
forward auction. It requires that the incentive auction results in proceeds
that are greater than the sum of the following: (1) the compensation the
Commission must pay successful bidders in the reverse auction; (2) the cost of
administering the incentive auction, and (3) the estimated amount of the
relocation cost reimbursements.
The first $1.75 billion
of the proceeds would go into a fund to repay costs that broadcast TV licensees
reasonably incurred pursuant to the need to change frequencies as a result of
the repack process. The rest of the proceeds would be deposited in the Public
Safety Trust Fund to fund a national first responder network, state and local
public safety grants, public safety research, and national deficit reduction.
I believe the public safety goals of the Act are important.
When Congress created the FCC in 1934, it made one of the Commission’s
foundational obligations “the promotion of safety of life and property through
the use of wire and radio communications.” We may not be able to prevent
natural disasters, but we can, and we must, improve our nation’s ability to
respond to these events. Doing our best to make First Net successful would go a
long way toward enhancing our responses to these crises.
Congress also gave the Commission authority to promote the use of
unlicensed spectrum. The Act allows the Commission to implement guard bands
that are technically reasonable to prevent harmful interference between
licensed services outside the guard bands. The statute also permits the use of
such guard bands for unlicensed use. I believe it was important for the NPRM to
propose a band plan with an appropriate balance of unlicensed and licensed
spectrum. Unlicensed spectrum plays a critical role in advancing more efficient
use of spectrum, and commercial wireless carriers are increasingly using
unlicensed Wi-Fi services and small cell architecture to offload their
I expect that the Commission will
keep moving carefully, but expeditiously, to comply with both the spirit and
plain language of all the mandates in the Act. I also appreciate that the
Commission staff has been proactive in seeking the engagement of the public and
They began conducting webinars and
workshops even before Congress passed the Spectrum Act, and they plan to hold
several more such events throughout this proceeding. In addition, FCC staff
members have been trying to implement these statutory directives with the same
bipartisan approach that resulted in Congress passing the Act.
In September 2012, the Commission unanimously adopted a Notice
of Proposed Rulemaking which sought comment on the full range of procedural and
technical rules that the Commission would have to adopt to conduct the
voluntary incentive auctions.
In addition to spectrum, Chairman Wheeler has announced
that the Commission will consider an Order at the January 2014 Commission
meeting to launch trials regarding the ongoing technology transitions.
Technology transitions hold tremendous promise to deliver innovative new
services and opportunities to consumers, and will allow the Commission to
evaluate how best to modernize our policies.
believe that trials, if structured properly, can produce helpful insights into
how best to approach reform, and I will be keeping a keen eye on how the trials
and future reforms affect all consumers.
As has been
noted earlier, the process of reform is where we have the opportunity to
develop an even more efficient agency — one which is better equipped to respond
to the expanding needs of consumers and industry.
with regard to our much-maligned Sunshine rules, I have a particular interest
in potential tailor-made revisions to the way in which we interact. As the
Committee considers the Federal Communications Commission Process Reform Act of
2013 (H.R. 3675), I am pleased that the proposed modifications to the Sunshine
Act would facilitate federal Commissioners’ participation on the federal-state
Joint Boards and the Joint Conference. This is something that the National
Association of Regulatory Utility Commissioners (NARUC) –the national body
representing state commissioners, and I previously have endorsed.
The Joint Boards and Joint Conference have federal and state
representation, and each is involved in the Commission’s policymaking process
with respect to their subject matter focus in the areas of universal service,
jurisdictional separations and advanced services. Under current law, three or
more Commissioners may not participate in a Joint Board or Joint Conference
meeting unless it is open to the public and has been properly noticed.
Currently, federal Commissioners must take turns participating in our in-person
and conference call meetings making it difficult for constructive and efficient
deliberations when it comes to Joint Board Recommended Decisions.
I appreciate the fact that H.R. 3675 has included language to
extend the proposed Sunshine Act exemption to cover these situations.
As you consider FCC process reform, I would also encourage you
to consider looking at the Paperwork Reduction Act (PRA), and how it could be
improved to take into account how agencies now engage with citizens. Like so
many consumers today, agencies are also taking advantage of the technological
For example, the FCC is using its website
to inform consumers and industry of our proceedings, and is providing facts on
communications issues and tips on how consumers can resolve any problems they
may encounter. Yet, to obtain voluntary feedback on our website, its
usefulness, and how it should be improved, the PRA requires OMB approval to do
so. As a result, the Commission cannot be as nimble and responsive to users
without engaging in a lengthy OMB approval process.
COMMISSIONER JESSICA ROSENWORCEL
Democrat, sworn in May 2012
By some measures, communications
technologies account for one-sixth of the economy. No wonder. These are the
networks that carry all aspects of our modern commercial and civic life. They
are changing at a breathtaking pace. Keeping up requires taking a fresh look at
our policies. Informed by the values of the past, we must think boldly about
In the weeks ahead we will do this as we
wrestle with the transition to Internet Protocol and lay the groundwork for
upcoming spectrum auctions, including incentive auctions.
But I think we make a mistake if we focus only on networks themselves.
After all, there is great beauty and power in what we can do with them. Our new
networks can change the ways we connect, create, and conduct commerce. They can
change the ways we learn and the ways we seek security.
In my brief time before you today, this is what I want to talk about—how
the broadband beneath us and the airwaves all around us can improve education
and improve public safety.
First, I want to talk about
the E-Rate program. E-Rate helps connect schools and libraries across the
country to the Internet. It is a byproduct of the Telecommunications Act of
1996. Remember 1996? All of us here probably called the Internet the information
superhighway. It was a long time ago.
In 1996, only 14
percent of public schools were connected to the Internet. Today, that number is
north of 95 percent. That sounds good. It sounds like the job is done. But
nothing could be further from the truth. Because the challenge today is not
connection—it is capacity.
Too many of our E-Rate
schools access the Internet at speeds as low as 3 Megabits. That is too slow
for streaming high-definition video. It is not fast enough for the most
innovative teaching tools. It is not fast enough to prepare the next generation
with the science, technology, engineering, and math—or STEM—skills that are so
essential to compete.
Contrast this with efforts
underway in some of our world neighbors. In South Korea, 100 percent of schools
are connected to high-speed broadband and all schools are converting to digital
textbooks by 2016. Ireland will have all schools connected to 100 Megabits next
year. Finland will have all schools connected to 100 Megabits the year after
that. Meanwhile, in both Turkey and Thailand the government is seeking a vendor
to supply tablet computers to millions of students for a new era of digital
We can wait and see where the status quo
takes us and let other nations lead the way. Or we can choose a future where
all American students have the access to broadband they need to compete, no
matter who they are, where they live, or where they go to school.
I think it is time to compete. I think it is time for E-Rate
2.0. The FCC has a rulemaking proceeding underway to reboot and recharge the
E-Rate program. I think we need to make this a priority. I think we need to
find ways to bring 100 Megabits to all schools in the near term and 1 Gigabit
to all schools in the long term. While we are at it, we must find ways to
reduce the bureaucracy of this program—and make it easier for small and rural
schools to participate.
Second, I want to talk about a
number all of us know by heart, but none of us ever hopes to use. I want to
talk about 9-1-1. In my time at the FCC, I have visited 9-1-1 call centers
across the country. I am always struck by the steely calm of those who answer
the phones and help ensure that help is on the way.
am also struck by how many emergency calls now come in from wireless phones. In
fact, nationwide more than 70 percent of all calls to 9-1-1 are made from
wireless phones. That is over 400,000 calls per day.
you use your wireless phone to call 9-1-1 from outdoors, your location is
reported, sometimes to within 50 meters under FCC location accuracy standards.
But if you use your wireless phone to call 9-1-1 from indoors,
you should cross your fingers, because no FCC location accuracy standards
This is an unacceptable gap in our
communications. It deserves your attention—and ours. Because no matter where
you are when you call 9-1-1, you want first responders to find you. Moreover,
as our networks evolve, and the ways we use them change, we must make sure our
public safety policies keep pace.
In fact, our
approaches to networks—both wired and wireless—need to evolve as markets evolve.
But in our efforts, we must not lose sight of why networks matter. Because they
can do more than connect us, they can strengthen education and enhance our
security—and of course, grow our economy in new and exciting ways.
in May 2012
From making more spectrum available for mobile broadband to
facilitating the nation’s transition to an all-IP future, from modernizing our
media regulations to ensuring that our universal service reforms hasten rather
than impede broadband deployment in rural America, our work is critical to our
nation’s economic future and our people’s quality of life. And we have no time
to waste. That is why the Commission must reform its processes and become more
nimble. We should be an ally rather than an obstacle to the innovators who are
transforming our economy and our society at an ever-increasing rate.
Over the course of the past year, we have made progress in
many areas. But there is much more work to be done. In my testimony this
morning, I will touch on some of the issues I find most pressing.
Perhaps the most important and daunting challenge
the Commission faces is the looming spectrum crunch. We therefore continue to
concentrate on implementing the responsibilities that Congress entrusted to us
in the Middle Class Tax Relief and Job Creation Act of 2012, often called the
Spectrum Act. There, Congress tasked the Commission with, among other things,
getting more spectrum into the commercial marketplace and facilitating the
establishment of a nationwide, interoperable public safety broadband network.
incentive auction is the Commission’s best opportunity to push a large amount
of spectrum well-suited for mobile broadband into the commercial marketplace.
And as the Commission moves forward on incentive auctions, I believe that five
principles should guide our work. First,
we must be faithful to the statute. It is our job to implement this
legislation, not to rewrite it to conform to our policy preferences. Second, we must respect the laws of
physics. Our band plan and approach to repacking must work from an engineering
perspective. Third, we must be fair
to all stakeholders. This is especially important because the incentive auction
will fail unless both broadcasters and wireless carriers choose to participate.
Fourth, we must keep our rules as
simple as possible. The broadcast incentive auction is inherently complicated;
unnecessary complexities are likely to deter participation. And fifth, we need to complete this
proceeding in a reasonable timeframe. Prolonged uncertainty is not good for
broadcasters or wireless carriers.
Speaking of that last
point, I am disappointed that there was not a clear path to holding a
successful incentive auction by the end of 2014. I accordingly support Chairman
Wheeler’s announcement setting the middle of 2015 as our new target and applaud
him for issuing a schedule to meet that goal. It is more important to get the
auction done right than to get it done right now. The Chairman’s measured
approach is particularly appropriate given that we only have one shot. If, for
example, any part of our software were to fail during the incentive
auction—like another government website that shall not be named—the Commission,
by law, wouldn’t get a second bite at the apple. That is why we must take the
time and the steps necessary to subject our software to rigorous testing.
My greatest worry about the incentive auction, however, is not
with the technology. It is about participation. In order for the incentive
auction to be successful, we will need robust participation by broadcasters and
wireless carriers. But right now, I am concerned that the Commission will make
unwise policy choices that will deter participation in both the reverse and
On the reverse auction, the Commission
should not deter broadcaster participation through a complicated “scoring”
scheme. My position on this is simple. Prices paid to broadcasters should be
determined by the market. The Commission should not set them by administrative
fiat. Any attempt to restrict payments to broadcasters will prove to be
penny-wise and pound-foolish. Indeed, without sufficient broadcaster
participation, the entire incentive auction will fail.
on the forward auction, the Commission should not limit carriers’ ability to
participate, such as by setting a spectrum cap or narrowing the spectrum screen
despite the significant competition that exists in the wireless market. The
inevitable effect of such a policy would be less spectrum reallocated for
mobile broadband, less funding for national priorities, and an increased chance
of a failed auction.
Another issue that will impact
participation in the forward auction is the size of the geographic licenses to
be offered. While our NPRM proposed using Economic Areas (or EAs), I am worried
that staying this course would make it too difficult for many small carriers to
participate in the auction, and our goal should be for as many carriers as
possible to bid in the auction, whether they be nationwide, regional, or rural.
I am therefore pleased to see that parties are coming forward with alternative
proposals for license sizes, such as the newly coined “partial economic areas.”
Should these proposals prove to be technically feasible, I believe that they
deserve serious consideration.
Of course, it is
important to remember why it is so vital to hold a successful incentive
auction. It’s not just about making more spectrum available for mobile
broadband, critical as that objective is. A successful incentive auction will
also provide money for key national priorities, such as the First Responder
Network Authority’s (FirstNet’s) build out of a nationwide, interoperable
public safety broadband network; Next Generation 911 implementation; public
safety research; and deficit reduction.
As we move
forward in this proceeding, I look forward to continuing to receive feedback
from Congress, particularly Members of this Subcommittee. Given your key role
in crafting this legislation, it is vital that the Commission keep open the
lines of communication with you. It is also important for us to coordinate
closely with Canada and Mexico to address issues involving border areas. Absent
such coordination, we will have neither a timely nor successful auction.
H Block.—In January,
the Commission will hold its first major spectrum auction in nearly six years
when we auction the H Block, 10 MHz of long-fallow spectrum (1915–1920 MHz and
1995–2000 MHz) identified by Congress in the Spectrum Act. I am pleased that we
did not saddle this spectrum with burdensome and unnecessary conditions.
Instead, we outlined straightforward and flexible rules for H Block licensees.
I hope that this approach will serve as a model for future auctions. If we are
able to garner at least $1.56 billion for this spectrum, which used to be
viewed as almost worthless, I believe that the auction will be an important
success. It will make available 10 MHz of additional spectrum for mobile
broadband. It will provide a substantial down payment to FirstNet for
construction of a nationwide, interoperable public safety broadband network.
And it will demonstrate to the marketplace that the Commission still has both
the will and ability to hold a successful auction.
AWS-3.—The Spectrum Act also directs the
Commission to auction off 25 MHz of spectrum adjacent to AWS-1, 2155–2180 MHz.
This spectrum ideally should be paired with another 25 MHz block adjacent to
AWS-1, 1755–1780 MHz, which is currently occupied by the federal government.
These bands are already internationally harmonized for commercial use, which
means deployment will be swifter and cheaper than other options. A successful
auction of this spectrum would make additional spectrum available for mobile
broadband and provide additional funding for the important national priorities
I have described above.
I am pleased that the federal
government appears to be making progress on a plan to move operations out of
this spectrum and into other bands. For example, the Department of Defense and
the National Association of Broadcasters recently agreed on a proposal to share
broadcast auxiliary service spectrum at 2025–2110 MHz, thus allowing for
certain Department of Defense operations to be relocated from the 1755–1780 MHz
As we go forward, I believe that our goal should
be to clear the 1755–1780 MHz band. If our goal is to incentivize investment in
wireless networks, nothing beats clearing. That’s one reason that the Spectrum
Act puts a thumb on the scale for clearing and allows sharing only if clearing
is “not feasible because of technical or cost constraints.”
5 GHz.—Just as licensed spectrum
is important to a successful spectrum strategy, so too is unlicensed. And that
brings me to one last piece of spectrum I’m excited to discuss: the 5 GHz band.
I thank the Subcommittee for its leadership in identifying and drawing
attention to this important spectrum.
As I testified
before the Subcommittee last December, the 5 GHz band is “tailor made” for the
next generation of Wi-Fi. Its propagation characteristics minimize interference
in the band and the wide, contiguous blocks of 5 GHz spectrum allow for
extremely fast connections, with throughput reaching 1 gigabit per second. The
technical standard to accomplish this, 802.11ac, already exists, and devices
implementing it are already being built. All of this means we can rapidly
realize these benefits: more robust and ubiquitous wireless coverage for
consumers; more manageable networks for providers; a new test bed for
innovative application developers; and other benefits we can’t even conceive
Following the instructions set forth by Congress
in the Spectrum Act, the Commission launched a rulemaking earlier this year to
make available up to 195 MHz of additional spectrum in the 5 GHz band for
unlicensed use. We also made proposals to allow for greater utilization of
those segments of the 5 GHz band already available for unlicensed use.
Now is the time for us to move from offering proposals to
taking action. This past summer, I urged the FCC to move forward with its 5 GHz
proceeding in stages, and I reiterate that call today. For example, the
Commission should move promptly to modify the service rules for the U-NII-1
band. By raising the power limits on the U-NII-1 band and allowing for outdoor
use, we can make this band attractive for commercial Wi-Fi while safeguarding
incumbent users. Likewise, we should act quickly to add 25 MHz to the U-NII-3
band. Among other things, this measure would reduce certification costs for
companies manufacturing devices in this band. Given the growing congestion in
the 2.4 GHz band (which consumers commonly rely upon for Wi-Fi access), we
should not let a few difficult issues involving the 5 GHz band delay us from
making progress on the easier ones.
2- Wireless Infrastructure
barriers to the deployment of wireless infrastructure is another priority for
the Commission. Building next-generation wireless broadband networks can
present business and technical challenges. But complying with the numerous
federal, state, and municipal regulations covering a wide range of physical
infrastructure, from towers to small cells, can make deployment difficult or
even prohibitive. To be sure, some oversight is necessary to ensure sound
engineering and safety. But many procedures simply frustrate, rather than
facilitate, deployment. Making the permitting process expensive and unnecessarily
burdensome ultimately harms consumers who are denied better and cheaper
I am therefore pleased that the
Commission moved forward in September with a Notice of Proposed Rulemaking
seeking comment on a variety of ideas for reducing regulatory barriers to the
construction of wireless infrastructure. In particular, I’d like to highlight
three of them in my testimony this morning.
First, we should make clear that local
moratoria on the approval of new wireless infrastructure violate section 332 of
the Communications Act. The FCC has already put in place a shot clock for
localities to address tower siting permits and other building applications.
Prohibiting moratoria would address the tactic some localities have used to
evade those deadlines by adopting an indefinite “time out” on the approval of
Second, we should modernize our rules to exempt distributed antenna
systems (DAS) and small cells from our environmental processing requirements,
except for rules involving radiofrequency emissions. Given their small size and
appearance, there is no reason to subject DAS and small cells to the same
environmental review as a 200-foot tower. We should similarly update our
historic preservation rules, which add yet more regulatory requirements, in
order to facilitate the deployment of DAS and small cells. It bears noting that
the greater the deployment of wireless infrastructure like this, the less
reliance carriers (and hence consumers) must place on larger, “macro” cell
sites and the less power networks and devices consume.
Third, we should address what happens
when a local government doesn’t comply with our shot clock. Currently, if a
city does not process an application within 150 days, the only remedy is to
file a lawsuit. This increases delay and diverts investments away from
networks. To fix this problem, we should supplement our shot clocks with a
backstop: If a locality doesn’t act on a wireless facilities application by the
end of the time limit, the application should be deemed granted. (As a legal
matter, I believe the FCC has this authority following the Supreme Court’s
decision this past May in City of
Arlington, Texas v. FCC.)
There are also other steps
that the Commission can take to hasten the deployment of wireless
infrastructure. For example, we have sought comment on clarifying the scope and
meaning of section 6409(a) of the Spectrum Act, which prohibits state and local
governments from denying certain collocation requests, and I hope that we make
appropriate clarifications in the near term. Also, we are looking for ways to
expedite the deployment of infrastructure to implement positive train control,
as required by the Rail Safety Improvement Act of 2008.
3- The IP Transition
Today, almost every segment of the communications
industry is competing to offer newer, faster, and better broadband services.
Telecommunications carriers are upgrading DSL with IP-based technology and
fiber. Cable operators have deployed DOCSIS 3.0 to increase bandwidth tenfold.
Satellite providers are offering 12 megabit packages in parts of the country
that never dreamed of such speeds. And millions of Americans—many of whom don’t
subscribe to fixed broadband service at home—now have access to the Internet on
the go using the mobile spectrum the Commission auctioned back in 2006 and
2008. Indeed, according to the State Broadband Initiative of the National
Telecommunications and Information Administration, 98.8 percent of Americans
had access to high-speed broadband as of December 2012. The common thread
knitting all of these changes together is the Internet Protocol (IP), a
near-universal way to route and transmit data.
the results of all this competition? More choices for consumers, and major
challenges to old business models. Thirty years ago, American consumers had
access to one network largely run by one carrier, Ma Bell. Today, Americans are
fleeing the copper network. 33.6 million Americans dropped their copper
landlines over the past four years. About one in seven households with plain
old telephone service over the public-switched telephone network (PSTN) dropped
their service last year alone. And competition is rampant: 99.6 percent of
Americans can choose from at least three wireline competitors, and 92 percent
can choose from 10 or more. The
evidence also shows that consumers are in fact exercising that choice:
Interconnected VoIP providers added 14.6 million subscriptions over the last
four years. Essentially, voice is becoming just another application riding over
Yet the Communications Act was last
amended when the Internet was still in its commercial infancy. And the Act
still places telephone carriers in one silo, wireless providers in another,
satellite operators in a third, and cable companies in a fourth. With the
advent of IP, these legacy divisions no longer reflect the state of technology
nor the dynamic competition that’s now occurring from these unexpected corners.
Indeed, the Commission did not seriously start begin looking at over-the-top
competitors until seven years after Congress passed the 1996 Act—and although
then-Chairman Powell opened the door, we still haven’t walked through it.
None of this is news to the Subcommittee. Just last week,
Committee Chairman Upton and Subcommittee Chairman Walden announced the launch
of a multi-year effort to examine how to modernize the Communications Act to
reflect the realities of a 21st century marketplace. Chairman Upton
called for laws that “make sense for today but are also ready for the
innovations of tomorrow,” and Chairman Walden stated the “goal is to make sure
this critical sector of our economy thrives because of the laws around it, not
in spite of them.” I welcome the Committee’s decision to reexamine and update
the Act, and I stand ready to assist in whatever way I can.
I hope that the Committee’s recognition of the changing marketplace will
encourage the FCC to take action even sooner on the IP Transition. The American
people are ahead of Washington on this issue—they are choosing IP-enabled services
at an amazing rate. Whatever policymakers do, our country’s transition to an
all-IP future will happen. But what
we at the Commission do will have a dramatic impact on the speed and success of
There are signs that we’ve already started
off on the right foot. Two years ago, the FCC’s Technological Advisory Council
under now-Chairman Wheeler’s leadership recommended that we sunset the public
switched telephone network in 2018. In July 2012, I called on the FCC to create
an IP Transition Task Force that would help us take a holistic approach to the
IP Transition and focus our deliberations on a task that so desperately needs
to be done. Last December, Chairman Genachowski created such a task force. Its
labors will begin to bear fruit just next month when we consider an order with
recommendations from the task force on how to conduct a diverse set of
The most important experiment to start
with, in my view, is an All-IP Pilot Program. Such a program would allow
companies to choose a discrete set of wire centers where they could turn off
their old time-division-multiplexed electronics and migrate customers to an
all-IP platform. Moving forward with an All-IP Pilot Program would send a
powerful message to the private sector that we intend to embrace the IP
Transition through a data-driven process. We would signal that we won’t force
carriers to invest in both old and new networks forever. We would move closer
to the day when carriers will be able to focus exclusively on investing in the
networks of tomorrow rather than maintaining the networks of yesterday.
An All-IP Pilot Program is important because predictions are
no substitute for hard facts. A process conducted on paper isn’t as data-driven
as a real-live experiment. To quote Blair Levin, the father of the National
Broadband Plan, an All-IP trial would be “worth a thousand pleadings.”
And conducting a trial run before implementing big changes is
nothing new for the FCC. Before we turned off analog broadcasting,
then-Commissioner Copps had the good idea of testing the concept. That
experiment, which was held in Wilmington, North Carolina, provided valuable
feedback and helped make the nationwide DTV transition a success. Similarly,
the FCC launched a rural healthcare pilot program in 2007. The success of that
pilot led to the creation of the Healthcare Connect Fund this past year. Other
examples abound, ranging from spectrum sharing to VoIP numbering.
What is more, the All-IP Pilot Program isn’t an issue that
divides the left from the right, Republicans from Democrats, or urban America
from rural America. Endorsements range from AT&T to the National Cable and
Telecommunications Association, from Bandwidth.com to Alcatel-Lucent.
Organizations like the NAACP, the National Urban League, the Rainbow PUSH
Coalition, the National Grange, and the National Farmers Union also want a
pilot program. So do advocacy groups like the Minority Media and
Telecommunications Council, the Asian American Federation, the League of United
Latin American Citizens, Women Impacting Public Policy, the U.S. Chamber of
Commerce, and the American Consumer Institute.
should we structure this experiment? Let’s start with some basic principles. One, carrier participation in the All-IP
Pilot Program should be voluntary, and pilot sites should be located in states
that are ready and willing to embrace the IP Transition. Two, tests should ideally be conducted in a variety of places that
represent our country’s diverse geography and population. We’ll learn the most
from the pilot program if there are sites in urban, suburban, and rural
communities. And we have to make sure that low-income and minority communities
are included, because the IP Transition will bring benefits to everyone. Three, no one should be left behind, so
residential customers with fixed telephone service today should continue to
have voice service available to them even when that service is based on IP. And
business customers should know in advance what IP-based services will replace
what they currently have. And four,
we must be able to evaluate the All-IP Pilot Program in order to figure out
what worked and what didn’t. This will help us make the broader IP Transition.
With empirical data in hand, we can reject the rhetoric in favor of reason.
Of course, preparing for the IP Transition does not end with
conducting an All-IP Pilot Program. We also need to take a hard look our
regulations in light of the coming transition, if for no other reason than that
the private sector needs flexibility to make investment decisions based on
consumer demand, not outdated regulatory mandates. Accordingly, I believe four
principles should shape our approach to the transition.
First, we must ensure that vital
consumer protections remain in place. When consumers dial 911, they need to
reach emergency personnel; it shouldn’t matter whether they are using the PSTN,
a VoIP application, or a wireless phone. The same goes for consumer privacy
protections and antifraud measures like our slamming rules. Second, we must not import the broken,
burdensome economic regulations of the PSTN into an all-IP world. No tariffs.
No arcane cost studies. And no hidden subsidies that distort competition to
benefit companies, not consumers. We must also repeal the old-world regulations
such as retail tariffing that no longer make sense in a competitive all-IP
world. While they remain on the books, wholesale expansion to IP may just be
too tempting. Third, we must retain
the ability to combat discrete market failures and protect consumers from
anticompetitive harm. Fourth, we must
respect the metes and bounds of the Communications Act and not overstep our
In truth, the work of the Committee to review
the Communications Act underscores the importance of the FCC embracing the IP
Transition. Over the next two years, if we conduct an All-IP Pilot Program and
take stock of the rules that should stay and those that should go in an all-IP
world, we will be able to inform Congress where we can improve our regulations
ourselves and where we may need legislative direction.
4- The Universal Service Fund
Although the Communications Act of 1934 is not
perfect, it does make an important promise in its very first sentence: Congress
created the Federal Communications Commission to “make available, so far as
possible, to all the people of the United States . . . a rapid, efficient,
Nation-wide, and world-wide wire and radio communication service with adequate
facilities at reasonable charges.”
We at the FCC need to
take this promise seriously. We must recognize that broadband operators in
rural America today face unique challenges. Unlike the urban environment, rural
carriers must carefully plan their infrastructure over a ten- or twenty-year
time scale if they are to recover their costs. Congress recognized this in
section 254 of the Act, embedding the statutory command that universal service
support be “predictable.”
We can argue over the proper
size of the Universal Service Fund, but all of us should be able to agree that
given its size, it should be distributed consistent with the law and common
sense. For example, a constant stream of reforms every year or two cannot give
businesses and investors much certainty. Instead, the Commission needs a
long-term strategy and must sometimes be patient before demanding more from the
Benchmarks.—Take the quantile regression analysis (QRA) benchmarks created
by the Commission in the 2011 Universal
Service Transformation Order and implemented by the Wireline Competition
Bureau in the 2012 Benchmarks Order.
The QRA benchmarks are supposed to create “structural incentives for
rate-of-return companies to operate more efficiently and make prudent
expenditures.” But reality has not caught up with theory. Instead, the QRA
benchmarks have resulted in unpredictability and uncertainty, chilling the
investment climate and impeding the deployment of next-generation technologies
and broadband services to rural Americans. As the Obama Administration’s
Department of Agriculture told the Commission earlier this year, “demand for
[Rural Utility Service] loan funds dropped to roughly 37% of the total amount
of loan funds appropriated by Congress in [fiscal year] 2012.”
Now, I am pleased that the FCC was able to implement some
reforms to the QRA in February in a decision with the punchy nickname of the “Sixth Recon Order.” That order let
carriers balance their capital investments against their operating expenses
(rather than analyzing each—and possibly penalizing carriers for
either—separately). And the Wireline Competition Bureau recently recognized
that implementing a whole new regression model in 2014 would be infeasible
given our slow progress in collecting accurate maps of each carrier’s study
But I still have my doubts about the utility of
the QRA benchmarks as implemented. It is important to remember that they do not
save money for the Universal Service Fund, but merely redistribute support from
one set of carriers to another. The 2014 benchmarks are likely to impact
significantly more carriers than the 2013 benchmarks, all of which are based on
flawed data and inaccurate maps. And rural carriers still cannot know whether
they will be able to recover investments made today since the relevant
benchmarks for those investments won’t be known until 2015. Indeed, if a rural
carrier below the cap chooses to reinvest any additional support it receives in
broadband, it risks pushing itself over the cap in future years, thus
mitigating any benefit from that additional support. In short, the Commission
needs to think long and hard about the QRA benchmarks.
Connect America Fund.—Aside from the
benchmarks, there is much work still to be done to follow up the Universal Service Transformation Order.
For example, that order reoriented the Fund to support broadband, rather than
just telephone service. And yet, the Fund still only supports telephone service
in areas served by rate-of-return carriers. It’s time for the Commission to
start moving forward with a Connect America Fund for rate-of-return carriers.
This step would recognize that line loss in rural America is real and that
direct support for broadband-capable facilities, within the existing budget, is
We’re in a better position to address the
needs of rural America in areas served by price-cap carriers. The Wireline
Competition Bureau, for example, has been doing yeoman’s work in modelling the
costs of deploying a next-generation network. But there’s still more to do. The
FCC decided that reverse auctions for universal service support should occur in
areas where price-cap carriers decline to accept Connect America Fund support,
but the Commission has not yet moved forward on that front since adopting the Universal Service Transformation Order.
I hope we do so soon. No part of rural America should miss the broadband
revolution while waiting for the regulatory dust to settle.
E-Rate.—I am also hopeful that
in the next few months, we will reform the Fund’s schools and libraries
program, better known as E-Rate. Established at the direction of Congress 16 years
ago, the E-Rate program is intended to bring advanced services to schools and
libraries across America. In many ways, the program has been a success.
Internet access in public schools has almost tripled, and speeds have grown
alongside availability. Indeed, a 2010 FCC survey showed that 22 percent of
respondents were “completely” satisfied and another 58 percent were “mostly”
satisfied with the bandwidth they’re getting.
all federal programs, E-Rate has had its share of difficulties. For applicants,
the funding process from start to finish can stretch for years. Additionally,
to navigate arcane steps like Form 470 competitive bidding, Form 471 Program
Integrity Assurance review, and the Form 500 commitment adjustment process,
schools must enlist specialized E-Rate consultants, draining scarce dollars
away from students and technology. For parents, the process is so opaque that
they cannot know ahead of time how much funding their school might receive and
cannot track whether it is actually spent on enriching the education of their
kids. For school boards, the priority system (under which things like paging
and Blackberry services for administrators get prioritized over connecting a
classroom to the Internet) distorts their spending decisions since some
services are discounted by up to 90 percent while others may or may not receive
any discount in a given funding year. And for everyone with a phone line, and
who hence contributes to the program, it’s hard to tell what bang we’re getting
for our universal service buck—there is no meaningful transparency with respect
to E-Rate spending and no real information on the impact of that spending.
There is a better way—one which would focus the E-Rate program
on children. To create a student-centered E-Rate program, we need to
fundamentally rethink how we structure the program. That means starting each
school and library with an upfront allocation of funding so they know how much
they can spend. That means cutting the red tape so that the initial application
is just one page and there’s only one other form needed before funds are
disbursed. That means targeting funding at next-generation technologies like
broadband and Wi-Fi while still letting local schools set their own priorities.
And that means publishing all funding and spending decisions on an easily
accessible, central website so that every parent, every journalist, every
government watchdog, every American can see just how E-Rate funds are being
The student-centered E-Rate program I have outlined
would fulfill E-Rate’s statutory mission of bringing advanced services to
schools and libraries across the country. It would reduce waste, fraud, and
abuse in the program and increase transparency and accountability. And it would
free an extra $1 billion for next-generation services in its first year ($600
million of which is currently spent each year on basic telephone service and
other outdated technologies), all without collecting an extra dime from the
American people. Given the potential savings at hand, it would be premature to
increase the program’s budget at this time—and under no circumstances should we
do so without finding corresponding new savings elsewhere in the Universal
Service Fund. We cannot ask Americans to pay even more in their monthly phone
bills, especially when median household income in this country is lower than it
was in 2007.
landscape has undergone revolutionary change in the last few decades. But the
FCC’s rules have not kept pace with the realities of the marketplace. That is
why, since joining the Commission, I have advocated updating our regulations on
a variety of fronts while at the same time preserving the Commission’s
commitment to the core values of competition, diversity, and localism.
video market has changed dramatically since the Cable Act became law in 1992.
Back then, cable incumbents dominated the multichannel video programming
distributor (MVPD) market with a 95 percent market share. The vast majority of
Americans could not choose among competing MVPDs. There were only about 70
cable programming networks. And over-the-top video providers like Netflix did
Fast forward (a term whose origins betray its
age) to today. Due to the entry of satellite and telecommunications companies
into the video market, almost all Americans now have a choice of three MVPD
providers. Over one-third of Americans can choose among four. The market share
of incumbent cable operators has dropped below 55 percent of video subscribers.
There are now over 500 cable and satellite programming networks. And
over-the-top video providers have entered the market and are transforming the
way that Americans consume content. Right now, for example, Netflix has more
customers than Comcast, the largest cable operator in the country, and more
than every other cable operator in the country combined. Indeed, due to the
prevalence of over-the-top video, more Americans are starting to forego video
bundles offered by MVPDs altogether and instead just rely on a broadband
connection and a broadcast antenna.
revolutionary change, the FCC’s regulatory approach to cable too often remains
mired in the past, and we could use some help from Congress to remedy the
situation. Currently, section 10 of the Communications Act allows the FCC to “forbear
from applying any regulation or provision of the [Communications] Act to a
telecommunications carrier or telecommunications service, or a class of
telecommunications carriers or services.” Over the years, forbearance has
allowed the FCC to remove outdated regulatory burdens from telecommunications
carriers. This, in turn, has encouraged infrastructure investment and broadband
deployment. That’s great, but we currently can’t take these same steps with
respect to laws and regulations aimed at MVPDs.
who believes in regulatory parity, this does not make sense. The video industry
is undergoing the same transformation that we are witnessing in the
telecommunications sector. Technology is turning voice and video into
applications transmitted over the Internet. Former monopoly providers are
facing intense competition as we move to an all-IP world. So I believe that the
FCC should have the same authority to relieve MVPDs from obsolete rules as we
currently have for carriers.
Congress, of course, would
need to determine how best to structure cable forbearance. Would such
forbearance authority extend any provision of the Communications Act or just
those found in the Cable Act? Would any particular provisions of the Act be
exempted from such forbearance authority until certain conditions are met, as
is done in Section 10(d) with respect to telecommunications forbearance? These
are questions that I would encourage you to consider as this Committee
reexamines the Communications Act.
AM Radio.— More than one year ago, I proposed that the Commission
launch an AM Radio Revitalization Initiative. This past October, it became a
reality. It’s been over two decades since we last comprehensively reviewed our
AM radio rules. Over that time, the AM band has struggled. Interference
problems, declining listenership, financial challenges for minority-owned
broadcasters, and other factors have brought the band low. But millions of
Americans—myself included—still rely on and believe in AM radio. So this
initiative is close to my heart.
The Commission’s NPRM
embraced a sensible two-stage strategy for improving AM radio service. First,
we proposed several ways to give AM broadcasters relief in the short term. For
instance, we suggested eliminating the “ratchet rule,” which effectively
prevents AM broadcasters from improving their facilities. We teed up
modifications to the daytime and nighttime community coverage rules for
existing AM stations to better help them reach their listeners. Perhaps most
importantly, we sought public input on letting AM stations apply for new FM
translators. I’m the first to acknowledge that these and other proposals will
not be an immediate panacea for the difficulties confronting the AM band. But
based on the conversations I have had with AM broadcasters across the country
during the past year, I am convinced that they can make a substantial, positive
difference to numerous AM stations. Second, we also invited the American public
and stakeholders to share their proposals for the long-term future of the AM
band. What steps can the Commission take so that there will be a vibrant AM
radio service ten or fifteen years from now?
optimistic that broadcasters, engineers, and anyone else with an interest in AM
radio will participate in our Revitalization Initiative and submit creative
ideas to the Commission. Then, after the comment cycle closes in February, I
hope that the Commission will act quickly to implement an initial set of
reforms to help the AM band.
Quadrennial Review.—The Commission is required by law to review its
media ownership regulations every four years. This cycle’s review began in
September of 2009 as we announced a series of workshops to begin gathering
information from various stakeholders. Now, more than four years later, our
review is still not complete. The time has come for us to launch our next
review, but we have not yet finished the last one. This is unacceptable.
I hope that we will we move forward quickly to bring the
current quadrennial review to a close and make sensible reforms to our rules so
that they reflect the marketplace realities of 2013 rather than those of 1975.
For example, I supported former Chairman Genachowski’s proposal to eliminate
the newspaper-radio and radio-television rule. I also believe that the time has
come to eliminate the newspaper-television cross-ownership rule. In this day
and age, if you want to operate a newspaper, we should be thanking you, not
placing regulatory barriers in your path. I am a realist and understand that
whatever reforms we end up implementing will not go as far as I might prefer.
But I do believe that we should be able to find common ground and move forward
with some sensible reforms.
I continue to have serious
concerns, however, about proposals that are under discussion to make Joint
Sales Agreements (JSAs) and/or Shared Services Agreements (SSAs) attributable
under our local television ownership rule. As broadcasters’ share of the
advertising market has shrunk in the digital age, television stations must be
able to enter into innovative, pro-competitive arrangements in order to operate
efficiently. JSAs and SSAs allow stations to save costs and to provide the
services that we should want television broadcasters to offer.
In my home state, for example, a JSA between two Wichita
stations enabled the Entravision station, a Univision affiliate, to introduce
the only Spanish-language local news in Kansas. Across the border in Joplin,
Missouri, a JSA between Nexstar and Mission Broadcasting not only led to
expanded news programming in that market but also nearly $3.5 million in
capital investment. Some of that money was spent upgrading the stations’
Doppler Radio system, which probably saved lives when a devastating tornado
destroyed much of Joplin in 2011.
For stations in
smaller markets like Wichita and Joplin, the choice isn’t between JSAs or
having both television stations operate independent news departments. Rather,
the real choice is between JSAs and having at most one television station continue
to provide news programming while the other does not. If the FCC effectively
prohibits these agreements, fewer stations in small-town America will offer
news programming, and they will invest less in newsgathering. And the economics
suggest that there likely will be fewer television stations, period.
of our media ownership rules, the Commission moved forward in September with an
NPRM proposing to eliminate the UHF discount portion of our national television
ownership rule. Given the transition from analog to digital television, there
is a strong case for ending the UHF discount; UHF signals are not inferior to
VHF signals in the digital world. Unfortunately, the Commission’s NPRM went
about it the wrong way.
We should not modify the UHF
discount without simultaneously reviewing the national audience cap, which
currently stands at 39 percent. The NPRM recognized the interdependent
relationship between the national audience cap and the UHF discount,
acknowledging that “elimination of the UHF discount would impact the
calculation of nationwide audience reach for broadcast station groups with UHF
stations.” Or, to put the matter succinctly, eliminating the UHF discount would
substantially tighten the national ownership limit. For example, one company
that is now more than 19 percentage points under the cap would be only three
points below the cap if the UHF discount were eliminated.
I was therefore disappointed that we proposed to end the UHF discount
without asking whether it is time to raise the 39 percent cap. Indeed, this
step is long overdue, notwithstanding any
change to the UHF discount. The Commission has not formally addressed the
appropriate level of the national audience cap since its 2002 Biennial Review
Order, and it has been about a decade since the 39 percent cap was established.
As I mentioned earlier, the media landscape is dramatically different today
than it was then. I’ve spoken a lot about the importance of reviewing our rules
to keep pace with changes in technology and the marketplace, and I wish that
the NPRM had addressed the national television rule in a comprehensive manner.
I also had serious concerns about how the NPRM addressed
grandfathering. While I was pleased that the item at least proposed to grandfather
existing combinations that would exceed the 39 percent cap if the UHF discount
were eliminated as well as combinations that would exceed such a cap because of
an application that was currently pending with the Commission, this did not go
far enough. In my view, any combination that is in existence or pending with
the Commission as of the date the UHF discount rule is eliminated should be
grandfathered. Rules should not be effective before they are effective.
Unfortunately, the Commission lost sight of what the NPRM
actually did. It only proposed to eliminate the UHF discount. It did not
actually end the UHF discount. The UHF discount is still law of the land today
and will be every day after until the Commission votes to repeal it. Through
its grandfathering proposal, however, the NPRM effectively told the private
marketplace to behave as if the UHF discount had already been eliminated, thus
treating the rest of the rulemaking process as an empty formality. The
practical results of this “sentence first, verdict afterward” approach will be
to dampen the market for broadcast transactions and depress station values.
finally, over a year ago, I called upon the Commission to modernize its
approach to foreign investment in broadcasting. And the declaratory ruling we
issued at our November meeting takes a solid step in that direction. While I
wished we had gone further, by revising our interpretation of Section 310(b)(4)
of the Communications Act to eliminate the obsolete de facto ban on foreign investment of more than 25 percent in U.S.
broadcast holding companies, and inviting broadcasters to submit information
for case-by-case reviews of potential ownership structures, the declaratory
ruling should invigorate American broadcasting and increase minority ownership.
The Commission recognized earlier this year in its Second Report and Order addressing
foreign ownership of common carriers that foreign investment can be an “important
source of financing . . . innovation, economic growth and job
creation” in the telecommunications sector. The same is true for broadcasters.
And since joining the Commission, I have heard the same message over and over
again when it comes to ownership diversity: The biggest obstacle to minority
ownership in the broadcast industry is the lack of access to capital. That is
why the Minority Media and Telecommunications Council and 30 other national
minority and civil rights organizations told us that permitting additional
foreign investment in the broadcasting industry would be “one of the most
significant steps the Commission could take” “[t]o reverse the decline in
minority broadcast ownership.” With an expanded ability to access capital from
abroad, minority entrepreneurs will have a better chance of being able to enter
into the broadcast industry or expand existing businesses. Indeed, this issue
demonstrates how regulation can serve as a barrier to minority ownership and
how modernizing our rules can promote diversity.
6- Modernizing FCC Processes
Before concluding, I would like to touch on a
subject that affects all areas of the Commission’s work: process reform. This
Subcommittee has been a leader on this issue, and I commend your efforts. The
Federal Communications Commission Consolidated Reporting Act, for example,
would modernize the Commission’s reporting obligations and free up Commission
resources to work on other important projects. It passed the House of
Representatives unanimously this year, and I hope that it is soon enacted into
law. And just this week the bipartisan leadership of the Subcommittee
introduced reforms that would set aright the FCC’s procedures and improve our
The FCC, however, should not and
need not sit still waiting for Congress to act. We should do what we can on our
own to improve our internal processes. Our goal should be clear: The FCC should
be as nimble as the industry that we oversee. All too often, proceedings at the
Commission needlessly drag on for many years. In an oversight hearing last year
before this Subcommittee, for example, two Members—one Republican and one
Democrat—asked about proceedings that had been pending at the Commission for
about a decade. While I am pleased that the agency finally did take action in
those two proceedings in the months following the hearing, it shouldn’t take
inquiries from Congress for the Commission to complete its work. And consumers
shouldn’t have to wait for years for their complaints to be answered.
The good news is that we are making progress on this front.
Commissioners are voting on items more quickly after they are placed on
circulation. The time between the adoption and the release of items has
decreased, and we have reduced the FCC’s backlog. And yet, we still have much
room for improvement.
Since taking office, I have
proposed a variety of reforms to improve the Commission’s performance. We
should streamline our internal processes where possible. For example, let’s
adopt a procedure akin to the U.S. Supreme Court’s certiorari process for handling applications for review. Let’s
speed up our processing of smaller transactions. Let’s establish more internal
deadlines, such as a nine-month deadline for ruling on applications for review
and petitions for reconsideration along with a six-month deadline for handling
waiver requests. And when we adopt industry-wide rules, let’s more frequently
use sunset clauses that require us to eventually revisit the wisdom of (and, if
necessary, revise or repeal) those rules.
reforming our rules, we should become more accountable to the public and to
Congress about how long it takes the Commission to do its work. One way to do
this would be by creating an FCC Dashboard on our website that collects in one
place key performance metrics. Let’s keep track of how many petitions for
reconsideration, applications for review, waiver requests, license renewal
applications, and consumer complaints are pending at the Commission at any
given time. And let’s compare the current statistics in all these categories
against those from a year ago, from five years ago, so everyone can see if we
are headed in the right direction. If we make it easier for others to hold us
accountable for our performance, I’m confident that we would act with more
I am pleased that Chairman Wheeler has made
process reform a priority. He has asked experienced counsel Diane Cornell to
focus specifically on this issue, and I look forward to working with her over
the coming months and years. My emphasis on acting promptly is not just about
good government. It is also about the impact that the FCC’s decisions (or lack
thereof) have on our economy. As the pace of technological change accelerates,
so too must the pace at the Commission. We can’t let regulatory inertia
frustrate technological progress or deter innovation.
Republican, sworn in November 2013
My overall goal while at the Commission is to work with the Chairman
and my fellow Commissioners to make the necessary decisions – decisions that
will help all communications participants, especially consumers, by bringing
greater certainty to the marketplace. To do this, I am digging into the
substance, asking questions, requesting meeting participants to provide facts
and figures, providing feedback early in the process, and making myself
available to vote expeditiously as items are presented. By making prompt
decisions, we also allow entities who disagree to seek reconsideration at the
Commission or through the court system.
I start my time
at the Commission with the same fundamental principle that I had as a staff
member: the Commission was created by Congress, the true people’s
representatives, to implement its laws consistent with the U.S. Constitution. The
Commission does not have the authority to ignore the statute, statutory
deadlines, or to pick and choose which parts it prefers to implement and
enforce. In instances where a statute may be less than perfectly clear or where
Congress has delegated specific authority, the Commission is obligated to
adhere to the intent of the statute and not substitute its viewpoints for those
of the men and women of the United States Congress. If the Commission is
lacking authority it would like to exercise, it should seek out the Members of
this Committee to change the statute. In other words, I was sincere when
swearing an oath to “faithfully discharge the duties of the office” as a
I would like to take this opportunity to
briefly provide my views on a number of select topics that may dominate the
Commission’s time and attention in the coming months and, therefore, deserve
Incentive Auctions – The Commission has the large task of implementing the
Middle Class Tax Relief and Job Creation Act of 2012. Contained within that
legislation is the framework and authority for the Commission to proceed with
the most complex spectrum auction ever attempted. I helped shape and craft the
text of the incentive auction statute, in partnership with the able Republican
and Democratic staff from the House and Senate. It is by no means perfect law
and represents a reasonable compromise on most parts. The Commission’s task is
to entice enough broadcasters to participate, reasonably protect those
broadcasters that choose otherwise, and convince wireless companies to bid on
the spectrum made available. And we must get the process right: a failed
auction helps no one. Therefore, my guiding principle with regard to the
incentive auction is to conduct it as soon as practicable but to focus on
Transition – In my opinion, the phrases “IP transition” and “IP migration”
are misnomers because they imply that communications is moving orderly from old
technologies to IP-based systems. That is simply incorrect. We are in the
middle of an IP technical revolution and it is mostly happening notwithstanding
the FCC. To illustrate: the Commission’s recent local competition report
revealed that, as of December 31, 2012, 43.5 percent of residential wireline
voice connections were VoIP. In response to the call by outside parties,
Chairman Wheeler has proposed a rough outline on how to proceed with trials of
certain aspects of IP technology in order to understand the impact of moving to
IP-based systems. I am very supportive of these efforts, as long as the
Commission does not allow the trials to lead to delay or inaction.
Universal Service –
The Commission is entrusted by statute with overseeing effective and efficient
universal service programs. During my Hill tenure, I worked for a number of
House and Senate Members who represented considerable rural and high-cost
areas, and so I am extremely familiar with the difficulties faced by providers
trying to offer services and rates that are reasonably comparable to those
offered in urban areas. On the other side of the equation, it is important to
remember that funding for these programs comes from American ratepayers, and
thus, the Commission is a steward for their generosity; they pay higher rates
so other Americans can get better services at lower rates. In 2011, the
Commission completed a multi-year effort to reform and transform the high-cost
universal service program, now called Connect America Fund. While I was not at
the Commission at the time, I am supportive of many provisions contained in
that decision. That said, I have heard from a number of entities regarding
concerns about how the Commission’s order has been implemented through
follow-up orders. I am in the process of obtaining the facts and figures to
form an accurate assessment of the concerns and complaints, which may be valid.
In general, I believe that if there are errors in models, assumptions, or data,
the Commission must make the necessary corrections, and do so promptly, but the
general tenants of the universal service reform effort are strong and must be
Ownership – The Commission has failed to comply with the obligations
required by the Telecommunications Act of 1996, which were subsequently amended
by Congress, to review and repeal or modify any of its media ownership rules
that are no longer in the public interest as a result of competition. In fact,
I was involved in the decision to extend the time for review under section 202(h),
based on a claim made by the Commission and some outside parties that the
original two-year review process was too short and prevented thoughtful
inquiries. Sadly, we did not know then that a quadrennial review requirement
would lead to near-complete paralysis, allowing proponents of a static market
to win by default. This is unacceptable; the Commission needs to complete its
2010 review and vote. As stated above, the Commission has no authority to
ignore the statute.
FCC Process Reform – Over my years
working on this Committee and in the Senate, I have worked on a number of
legislative efforts to reform the Commission’s operations and structure. I will
defer to the Congress on legislative changes to alter the workings of the
Commission, but I support the general thrust of the efforts to make the
Commission more effective and efficient and to save taxpayer dollars. Chairman
Wheeler and I – as the new kids on the block, as he likes to say – have had
discussions on ways to improve the overall efficiency of the Commission, and I
am very open to considering ones that can be executed without legislation. I
also look forward to completion of the Chairman’s review on process reform. In
the meantime, I offer myself up as a resource to Members of the Committee on
technical or policy proposals to improve the Commission’s functions.
Distracted Driving – Part of the role of a Federal Communications
Commissioner is to conduct outreach and provide information to the public. I
take this function seriously, and it is why I am choosing to spend some time on
the issue of distracted driving caused by wireless device users. Drivers need
to put their wireless phones down and focus their Eyes On The Drive. Let me be
clear, my view is that the wireless industry is doing yeoman’s work to get out
the message: they are aware of the problem, they are dedicating considerable
resources to finding solutions and education, and they are working hard to
prevent the horrible tragedies caused by texting, viewing, emailing, tweeting,
mapping, posting, among others while driving. It does not appear that more
government regulation would be helpful in this space. Instead, I am talking
with my other Commissioners to find ways to use our voice in non-regulatory,
non-costly ways to educate the public and prevent senseless accidents.