By Paul Barbagallo
The new five-member Federal Communications Commission appeared before the
House Energy and Commerce Communications and Technology committee for the first
time July 10, and heard plenty of criticism of the agency's regulatory agenda
under FCC Chairman Julius Genachowski.
The hearing featured the first appearances of FCC commissioners Jessica
Rosenworcel and Ajit Pai before the panel since they were sworn in May 14.
It was also the first occasion that the subcommittee could question five FCC
commissioners at the same time since Republican Commissioner Meredith Attwell
Baker left the agency last May.
As expected, lawmakers focused their concern on the FCC's plans to hold
voluntary “incentive auctions” of spectrum, the agency's reform of the Universal
Service Fund and intercarrier competition systems, and an order proposed in June
by Genachowski that would suspend petitions for “special access” pricing
flexibility while the agency develops new rules.
Republican members of the committee in particular questioned why the FCC has
decided to keep open a rulemaking docket that was opened in 2010 to reclassify
broadband internet service as a basic utility subject to strict, telephone
Genachowski told the panel that while no one at the FCC has been working on
the docket, it remains open and would be “unusual” to close it.
In an effort to adopt net neutrality rules, Genachowski in 2010 proposed
reclassifying broadband under a part of the original Communications Act known as
Under the act, the FCC has limited authority over “information services,”
which broadband is now classified as, but has vast powers to regulate telephone
utilities and “common carriers.” As part of his original plan, dubbed the “Third
Way,” the commission would have reclassified high-speed internet service under
the more-stringent title, but only the “transmission” component--not rates or
content. But after the industry vehemently protested, Genachowski decided to
scrap the plan.
To Republican Commissioner Robert McDowell, keeping the “Title II” docket
open while the Obama administration is actively urging other countries to
refrain from top-down governmental regulations of the internet and its
functions, would be “hypocritical.”
Republican Commissioner Pai said leaving the docket open would only “chill
Genachowski disagreed, suggesting that the docket was opened to consider
legal options for enacting net neutrality rules, which requires companies
providing internet service to treat all sources of data equally.
On whether he will close the docket, Genachowski said he has “no plans” to do
“I believe very strongly in internet freedom,” Genachowski said.
Genachowski will likely keep the Title II docket open until at least the U.S.
Court of Appeals for the District of Columbia rules on appeals of the FCC's net
If the court hands down an unfavorable ruling, the FCC will be forced to
consider new legal alternatives, and classifying broadband internet service
under Title II would place net neutrality regulations on more solid legal
When asked about one the FCC's top priorities for 2012--incentive
auctions--Genachowski expressed optimism that broadcasters will ultimately
release some of their spectrum back to the government in exchange for a share of
The FCC, in its National Broadband Plan released in March 2010, set a goal of
reclaiming as much as 120 MHz of broadcast TV spectrum, which would then be
auctioned off to mobile internet providers led by Verizon Wireless and AT&T
The Temporary Payroll Tax Cut Continuation Act of 2012 (H.R. 3630) stipulates
that about $15 billion of the $30 billion extension in unemployment benefits
will be paid for with the proceeds of incentive auctions. However, nothing in
the measure will force TV broadcasters to relinquish their airwaves.
Though hopeful, Genachowski and the other FCC commissioners acknowledged that
incentive auctions will be merely a part of a larger strategy to free up
spectrum for commercial broadband networks.
“I can't believe incentive auctions alone will meet our wireless needs,” said
Democratic Commissioner Rosenworcel.
Genachowski declined to speculate whether the FCC will be able to complete
the incentive-auction process within three years, but said the agency will begin
issuing notices in the fall.
Going forward, Genachowski said the FCC will share all useful and relevant
information with Congress and the public.
Commenting on broader issue of spectrum policy reform, Robert McDowell said
the FCC should try to increase the time it takes to review and approve
secondary-market transactions, which will put spectrum in the hands of companies
that need it more quickly.
McDowell also said President Obama should consider issuing an executive order
urging federal government agencies to give back spectrum for a future
Rep. Cliff Stearns (R-Fla.), which is sponsoring a bill to require the
Department of Defense to move off of spectrum in the 1755-1780 band, noted that
the federal government currently occupies 60 percent of the “best” licensed
spectrum in the United States, much of it used ineffectively.
A committee working group is currently looking into the matter.
Pai added that the FCC should move quickly to approve new rules to allow for
more “flexible, terrestrial” use of spectrum reserved mainly for satellites.
In March, the FCC voted to begin writing rules that would allow DISH Network
Corp. to use recently acquired airwaves--40 MHz--for both satellite and
Pai also said that the FCC should encourage greater use of unlicensed
spectrum “where appropriate.”
One issue that attracted significant attention at the hearing was the FCC's
special access order.
That the order would, among other things, suspend all petitions for “special
access” pricing flexibility while the agency collects more data and drafts new
In many areas throughout the United States, only one telecom carrier
maintains the high-capacity fiber-optic lines--special access--that provide huge
volumes of phone and internet connections to businesses. For years, wireless
carriers led by Sprint Nextel Corp. and T-Mobile USA, and other smaller market
players such as XO Communications and Level 3 Communications, have alleged that
AT&T Inc., Verizon Communications Inc., and Qwest Corp. charge too much to
lease capacity on their lines.
These companies rely on special access connections to provide broadband
services to business customers. The lines, also known as DS1s or DS3s, allow
Sprint and other companies to backhaul their customers' voice and data traffic
from a cell site to the communications network.
But AT&T and Verizon argue that their rates have actually decreased, and
in some markets cable operators also offer such services.
Genachowski said he expects action on the order in the “very near
Rep. Anna Eshoo (D-Calif.), ranking member of the subcommittee, said the FCC
should overhaul the rules governing special access services, and make data
According to Genachowski, there is enough to data to show that the market is
not working, but not enough to safely guide the FCC.
“When the communications ecosystem fails to protect consumers, the FCC must
play a vital role,” said Democratic FCC Commissioner Mignon Clyburn, commenting
broadly on the FCC's role as a 21st Century regulator.
Though not garnering lengthy discussion, all five FCC commissioners, when
asked by Rep. Ed Markey (D-Mass.), agreed that there should be an online privacy
“Bill of Rights” for children 15 and under.
The FCC plays an important role in the ongoing debate on Capitol Hill about
online privacy, as the agency retains jurisdiction over companies that provide
For more information on the hearing, including the FCC commissioners'
prepared testimony, visit http://energycommerce.house.gov/hearings/hearingdetail.aspx?NewsID=9666.