Majority Statement

• Daniel K. Inouye

  Senator
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  Majority Statement

  Daniel K. Inouye

              It is appropriate that we hear from all five members of the Federal Communications Commission today on the eve of Superbowl Sunday, since it was the 2004 Super Bowl and its now infamous halftime show that last brought us together. A lot has happened since that hearing, and the Committee appreciates the willingness of the Commission to speak with us today about the state of the communications industry and what we must do as a nation to ensure that the benefits of new communications technologies are shared by all Americans, regardless of income or geography.

              The Commission is charged with acting in the “public interest.”  It is an important mandate, and we look forward to participating in discussions with the Commission as to how we can advance this goal.

              In three years we have seen the mergers of the two largest Bell companies with the two largest long-distance companies.  This was immediately followed by AT&T’s acquisition of BellSouth.  Meanwhile, technology has fueled change, and single-purpose networks have given way to new multi-purpose platforms that can support all measures of applications and services, including voice, video, and email services.

              But the communications revolution does not come without risk.  As public servants, both here in Congress and on the Commission, we must be vigilant in our oversight to ensure that the communications industry evolves in a manner that does not harm consumers.

              Consumers must have confidence that dialing 911 means getting emergency help whether that call is made over a traditional phone line, a wireless phone, or a Voice-over-Internet-Protocol service.  They must be confident that their private, personal information will be protected from abuse.  Further, consumers should be assured of evenhandedness from network operators so that consumers reap the full benefits of competition.

              We must encourage continued innovation in this industry.  I am troubled that other countries are leapfrogging the United States in the deployment of broadband access.  As policymakers, we must ask ourselves whether companies have the right incentives to invest in this technology, and what we can do to keep the United States competitive with the rest of the world.

              While private industry has brought to the marketplace many wonderful innovations that improve our lives at work and home, I want to be certain that the FCC has the tools it needs to carry out its mission of protecting the public interest and consumers.

• John F. Kerry

  Senator
  Read statement

  Majority Statement

  John F. Kerry

  Mr. Chairman, I thank you for holding this hearing. There is such a large variety of issues that impact our communications market -- mergers that are almost incomprehensible in scope; a vastly changing media market;   technological changes that lead to stunning new consumer services.

   

  It is too much to handle in one day.  But I’d like to focus on a couple of key priorities.   

   

  First is broadband deployment.  The Chairman will produce statistics today that paint a portrait of rapid progress in broadband deployment.  Yet it remains the case that many people either do not have access to broadband Internet service or simply cannot afford it. 

   

  It is still too expensive and still too slow for advanced applications.  Despite President Bush’s promise of ubiquitous broadband by 2007 – we remain well short of that goal.  I don’t see much of an Administration strategy at all.  And I am concerned about it.

   

  Senator Smith and I have introduced a bill to make new spectrum available and encourage greater deployment.  Our legislation will enable entrepreneurs to provide affordable, competitive high-speed wireless broadband services in areas that otherwise have no connectivity.  There is a proceeding pending at the FCC, and I am not satisfied with the pace of this measure.  I will seek an explanation from the Chairman. 

   

  I remain concerned about emergency communications.  I am pleased to join the Chairman and Senators Stevens, Smith and Snowe on a $1 billion grant proposal that will enhance our communications.  I thank you for your leadership Mr. Chairman and with your guidance I know we can address this critical need.

   

  Lastly, I am concerned about access to television programming.  I find disheartening the increasing phenomenon of exclusive carriage deals and vertical integration in the media industry that have one result – the business firms get wealthy and consumers have fewer choices – and fewer sports fans having access to their favorite teams. 

   

  I understand Major League Baseball will soon cut an exclusive deal with DirecTV that will eliminate out-of-market baseball packages for Dish and Cable subscribers.  I hope I am wrong, because this is audacious move.  It will mean that out-of-market baseball fans that pay for a premium package to see their team will lose access to those games. 

   

  That is wrong.  Major League Baseball and DirecTV need a reality check – more eyeballs, not fewer, on your games enhances your sport, strengthens fan loyalty and serves the public.  I am interested in the Chairman’s views about this.  I want to look at this entire picture – there are other practices in the industry that are equally disturbing.  We need to take a look at the carriage system to ensure consumers are protected and independent programming is supported.   Thank you Mr. Chairman.

   

   

   

   

Opening Remarks

• The Honorable Deborah Taylor Tate

  Commissioner, Federal Communications Commission

  Chair, Federal-State Joint Board on Universal Service
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• Honorable Michael J. Copps

  Commissioner

  Federal Communications Commission
  Download Statement (18.74 KB)

• The Honorable Kevin J. Martin

  Chairman

  Federal Communications Commission
  Read statement

  Opening Remarks

  The Honorable Kevin J. Martin

  Written Statement

   

  of

   

   

  The Honorable Kevin J. Martin

  Chairman

  Federal Communications Commission

   

   

   

   

   

  Before the

  Committee on Commerce, Science & Transportation

  U.S. Senate

   

   

   

   

  February 1, 2007

  
  

  Good morning Chairman Inouye, Vice Chairman Stevens, Members of the Committee.  Thank you for the opportunity to be here with you today to discuss the state of the telecommunications industry.  I have a brief opening statement and then I look forward to answering any questions you may have.

  I have had the privilege of serving at the Federal Communications Commission for over five years, including almost two years as the agency’s Chairman.  During this period, my colleagues and I, following guidance from this Committee and Congress, have overseen a telecommunications industry undergoing rapid and unprecedented change. 

  These changes have seen the telecommunications industry transition from a period of sharp decline to a time of significant growth.  Companies and consumers alike have finally found the promised land of convergence, ushered in by the broadband revolution.  Telephone calls are now being made using the Internet and cable systems.  Television programs are watched when and where we want them, and they are increasingly available on the Internet.  Cell phones are mini-computers.  They take pictures, play songs and games, send e-mail, and hopefully soon will send and receive emergency messages in times of disaster.  Teens talk to one another over IM, SMS and MySpace, not the telephone.  They ignore the TV and stereo, downloading songs onto MP3 players and watching and posting videos on YouTube instead.  The Internet has become an invaluable tool for educating our children, treating patients, and giving a voice and creative outlet to individuals from all walks of life.  As Time Magazine recognized, 2006 was the year of the individual, thanks in large part to how communications technologies and innovations have empowered us all.

  Faced with such fast-paced technological change, the Commission has tried to make decisions based on a fundamental belief that a robust, competitive marketplace, not regulation, is ultimately the greatest protector of the public interest.  Competition is the best method of delivering the benefits of choice, innovation, and affordability to American consumers.  Competition drives prices down and spurs providers to improve service and create new products. 

  Government, however, still has an important role to play.  The Commission has worked to create a regulatory environment that promotes investment and competition, setting the rules of the road so that players can compete on a level playing-field.  For instance, shortly after I became Chairman, we removed legacy regulations, like tariffs and price controls which discouraged providers from investing in broadband networks. Since then, broadband penetration has increased while the prices of DSL and cable modem services have decreased.

  Government also must act when necessary to achieve broader social goals.  Thus, while I support eliminating economic regulations, I recognize that there are issues that the marketplace alone might not fully address.  For instance, government should ensure that the communications needs of the public safety community are met and that new and improved services are available to all Americans, including people with disabilities, those living in rural areas and on tribal lands, and schools, libraries, and hospitals.  For example, we expanded the ability of the deaf and hard of hearing to communicate with their family, friends and business associates by requiring Video Relay Services (the preferred method of communication) to be offered 24 hours a day, seven days a week, and by recognizing IP Captioned phone service as a form of Telecommunications Relay Service.

  Against this backdrop of unprecedented change, I will give a short overview of the industry and briefly discuss my priorities for the next few years.

  State of the Industry

  I am pleased to report that the state of the communications industry is strong.  As you no doubt remember, in the year 2000, the communications industry began a precipitous and far-reaching decline.  Capital spending by companies followed this market decline, innovation disappeared and companies went out of business taking jobs with them.

  What a difference six years make.  In 2006, the communications industry experienced record growth and, by most measures, almost all sectors have rebounded remarkably.  In 2006, the S&P 500 telecommunications sector was the strongest performing sector, up 32% over the previous year.  Consumers and businesses – big and small – are reaping the rewards of these positive developments.  According to the Telecommunications Industry Association’s latest report, U.S. telecom revenue rose to $923 billion in 2006, representing a 9.3% increase since 2005 – the most growth since 2000.  TIA attributes the growth to the demand for broadband services, which has spurred providers to invest in fiber, IP technology and wireless infrastructure. 

  Americans are reaping the rewards of this revolution  Markets and companies are investing again, job creation in the industry is high, and in almost all cases, vigorous competition – resulting from free-market deregulatory policies – has provided the consumer with more, better and cheaper services to choose from.  Consumers are certainly paying less for more.  In 2005, the price for long distance service was two-thirds of what it was in 2000, wireless phone service was half its 2000 level, and the price for placing an international call was a quarter of what it was in 2000. 

  Telecommunications

  Almost all of today’s innovation is enabled by broadband deployment. Broadband technology is a key driver of economic growth.  The ability to share increasing amounts of information, at greater and greater speeds, increases productivity, facilitates interstate commerce, and helps drive innovation.  But perhaps most important, broadband has the potential to affect almost every aspect of our lives.  It is changing how we communicate with each other, how and where we work, how we educate our children, and how we entertain ourselves.  Broadband deployment has been our top priority at the Commission, and we have begun to see some success as a result of our efforts.

  In 2005, the Commission created a deregulatory environment that fueled private sector investment.  Since then, companies have begun racing to lay fiber to our homes.  From March of 2005 to the end of last year, the number of homes passed by fiber increased from 1.6 million to 6.1 million.

  Just as significant for consumers, the average price of broadband has dropped in the past two years.  The Pew Internet and American Life Project (Pew) found that, from February 2004 to December 2005, the average price for home broadband access fell from $39 per month to $36 per month.  For DSL, monthly bills fell from $38 to $32 (almost 20%), while cable modem users reported no change from $41 during the same period.

  The decline in price was accompanied by an increase in the number of Americans subscribing to high speed connections to the Internet.  Such connections have grown by nearly 600% since 2001.  And according to the Commission’s most recent data, high-speed connections increased by 26% in the first half of 2006 and by 52% for the full year ending June 30, 2006. 

  The independent Pew confirmed this trend, finding that from March 2005 to March 2006, overall broadband adoption increased by 40% – from 60 to 84 million – twice the growth rate of the year before.  The study found that, although overall penetration rates in rural areas still lags behind urban areas, broadband adoption in rural America also grew at approximately the same rate (39%). 

  Perhaps most importantly, the Pew study found that the significant increase in broadband adoption was widespread and cut across all demographics.  According to their independent research:

  ·        broadband adoption grew by almost 70% among middle-income households (those with incomes between $40,000 and $50,000 per year);

  ·        broadband adoption grew by more than 120% among African Americans;

  ·        broadband adoption grew by 70% among those with less than a high school education; and

  ·        broadband adoption grew by 60% among senior citizens. 

  Wireless service is becoming increasingly important as another platform to compete with cable and DSL as a provider of broadband.  The demand for wireless services continues to grow at a rapid rate.  In 1986, there were only 500,000 wireless subscribers generating only $670 million in revenue.  Today there are 219 million subscribers generating $118 billion.  Moreover, wireless rate have continued to decrease, falling 82% since 1996 and 14% from 2005 to 2006.

  The Commission is making available as much spectrum as possible to put the next generation of advanced wireless devices into the hands and homes of consumers.  In September the FCC closed its largest and most successful spectrum auction, raising almost $14 billion.  The spectrum offered was the largest amount of spectrum suitable for deploying wireless broadband ever made available in a single FCC auction.  And we are currently preparing to auction 60 MHz in the 700 MHz band, spectrum that is also well-suited for the provision of wireless broadband. 

  Moreover, the number of consumers who receive their broadband connection through satellite or wireless will continue to increase, as new satellite services are launched, rural wireless Internet service providers continue to grow, and Wi-Fi hotspots continue to sprout up across the country.  Indeed, there are nearly 50,000 Wi-Fi hotspots throughout the United States, more than three times the number of any other country.

  Another potentially innovative means of providing high-speed data communications is Broadband over Powerline (BPL), which uses existing electrical infrastructure to provide broadband services.  BPL is a potentially significant player due to power lines’ ubiquitous reach, allowing it to more easily provide broadband to rural areas.  The United Power Council reports that there currently are at least 38 trial deployments and 7 commercial trials. 

  In sum, the United States is the largest broadband market in the world with over 56 million broadband subscribers according to the Organization for Economic Co-operation and Development (OECD).  I am proud of the progress we have made in broadband deployment by creating an environment that better facilitates infrastructure investment.  I also, however, hear the voice of my colleague Dr. Copps spurring us on to do better.  I agree.

  This Committee explicitly asks how the U.S. compares with other industrialized nations.  The OECD currently ranks the U.S. as 12^th in the world in terms of broadband penetration, behind Korea, the United Kingdom, and even Belgium.  It is important to note that the OECD does not adjust for factors including density, which puts a country as large as ours with sizable rural areas at a significant disadvantage.  For instance, New Jersey has a similar population density as Korea, ranked 4^th, yet has a higher penetration rate (30 subscribers per 100 residents, versus 26 for Korea).  Nevertheless, we all agree that our current standing of 12^th is not good enough.  We must continue to build on our efforts to encourage competition, speed broadband deployment and lower prices for consumers.

  Media

  As is the case with the telecom sector, consumers and companies are benefiting from technological developments and innovation in media.  DVR’s, VOD and HD programming offer them more programming to watch at any given time then ever before.  Thanks largely to new services like these, cable operators’ total revenue grew from $65.7 billion to approximately $73 billion last year.

  While consumers have enormous choice among channels, they have little control over how many channels they are able to buy.  For those who want to receive 100 channels or more, today’s most popular cable packages may be a good value.  But according to Nielson, most viewers watch fewer then two dozen channels.  For them, the deal isn’t as good.

  The cost of basic cable services have gone up at a disproportionate rate – 38% between 2000 and 2005 – when compared against other communications sectors.  The average price of the expanded basic cable package, the standard cable package, almost doubled between 1995 and 2005, increasing by 93%.   The increase in cable prices appears even more dramatic when viewed relative to the prices for a number of other communications services: prices for long distance, international, and wireless telephone service have all decreased dramatically during this same timeframe. 

  Ten years ago the satellite industry was nascent.  Today, Direct Broadcast Satellite (DBS) provides consumers an important competitive choice.  And satellite offerings are sometimes the only multi-channel video option for rural Americans. Between 2000 and 2006, DBS subscribership grew 100% and average revenue per user grew 32%.  Like DBS, satellite radio also has experienced significant growth.  Subscriptions have increased from 1.6 million in 2003 to 13.6 million subscribers in 2006. 

  The transition from analog to digital technology poses both opportunities and challenges for the broadcast sector.  The new and better services that digital technology enables are great for consumers, who will have access to more free news, information and entertainment.  With digital technology, television broadcasters can offer high-definition programming, multiple programming streams, data services, and video over mobile devices.  Radio broadcasters can offer crystal clear sound (even on the AM band), as well as data such as local traffic and weather, stock updates and news, and artist identification.  But many of these business plans are in their infancy, with revenue streams uncertain, while the costs of the transition are large and immediate.  And those costs come at a time of increased competition for advertisers from other media – many of which, unlike broadcasters, have a subscription revenue stream in addition to advertising revenue. 

  Looking Forward

  While we have made significant progress in creating an environment that facilitates investment and ensures the American people realize the full benefits of our world-class communications system, there is more to be done.  I see four areas that deserve particular attention.

  First, we must continue to increase access to communications services.

  I will continue to make broadband deployment the Commission’s top priority.  As I previously touched upon, the ability to share increasing amounts of information – at greater and greater speeds – increases productivity, facilitates interstate commerce, and encourages innovation. 

  We will continue to encourage deployment of broadband from all providers using a variety of technologies.  As wireless technologies become an increasingly important platform for broadband access, it is critical to ensure that there is adequate spectrum available for providing broadband service.  Spectrum auctions will continue to be an important part of our strategy for facilitating the build-out of mobile broadband networks.  We are working to ensure that our upcoming auction of the 700 MHz spectrum meets the needs of both large and small rural companies and proceeds in an efficient, effective and timely manner.

  The Commission is also considering an order that would classify wireless broadband Internet access service as an information service.  This action would eliminate unnecessary regulatory barriers for service providers.  This classification also would clarify any regulatory uncertainty and establish a consistent regulatory framework across broadband platforms, as we have already declared high speed internet access service provided via cable modem service, DSL and BPL to be information services.  This action is particularly timely in light of the recently auctioned AWS-1 spectrum for wireless broadband and our upcoming 700 MHz auction.

  The United States and the Commission have a long history and tradition of making sure that rural areas of the country are connected and have the same opportunities for communications as urban areas.  In the 1996 Act, Congress explicitly required that the Commission ensure that consumers in all regions of the nation have access to services that “…are reasonably comparable to those services provided in urban areas.” Specifically Congress required the Commission to establish Universal Service Fund mechanisms that are “… specific, predictable and sufficient…to preserve and advance universal service.” 

  It is critical that all Americans stay connected to state-of-the art communications services.  The Universal Service Fund is the lifeblood of this goal.  Without this source of funding we cannot continue to meet these commitments.  But this system is in need of reform.  Changes in technology and increases in the number of carriers who are receiving universal service support have placed significant pressure on the stability of the fund.  We should improve the way the Commission administers the fund and reform the collection and disbursement systems.  We need to move to a contribution system that is technologically neutral and a distribution system that is more efficient. 

  The Commission will also do its part to ensure that all Americans, including those who live in the most remote areas of the country, receive first-rate medical care.  We recently took action, through our adoption of a Rural Healthcare Pilot Program, to support the construction of state and regional networks dedicated to health care.  In the first half of 2007, the Commission will be selecting participants for the pilot program, and in 2007 and 2008, the Commission will oversee the program.  The deployment of such a network will create numerous opportunities for delivering telehealth services, including telemedicine applications that have the potential to revolutionize the current healthcare system throughout the nation.  This is particularly true in rural and underserved areas, where distance often separates patients from the medical care they need.  Under the pilot program we adopted, patients anywhere on the network will have greater access to critically needed specialists in a variety of specialties.  

  Second, we must continue to promote real choice for consumers.

  In December of last year, we took steps to implement Section 621 of the Communications Act, which prohibits local authorities from unreasonably refusing to award a competitive franchise.  We will continue to take steps to remove regulatory impediments to the entry of new service providers into the video market by, for instance, ensuring that consumers living in apartment buildings are not denied a choice of cable operators. 

  Competition and choice in the video services market will benefit the consumer by resulting in lower prices, higher quality of services, and generally enhancing the consumers’ experience by giving them greater control over the purchased video programming.  We need to continue our efforts to create a regulatory environment that encourages entry into this market and more choice for consumers.  This includes making sure that competitive providers have access to “must-have” programming that is vertically integrated with a cable operator.

  Promoting competition and choice must be our priority in the voice arena, as well.  We need to continue to ensure that new entrants are able to compete with incumbents for telecommunications services.  For example, new telephone entrants need access to local telephone numbers and the ability to interconnect with incumbents to deliver local calls to them.

  We also need to ensure that existing service providers are not standing in the way of the innovations currently occurring in the consumer electronics space.  Consumers want to be able to walk into a store, buy a new television set or TiVo, take it home, and plug it in as easily as they do with a telephone. 

  Third, we must continue to protect consumers.

  We must always be on alert for companies intentionally or unintentionally harming consumers.  Among the issues the Commission must turn its attention to is the ability of unauthorized users to gain access to callers’ phone records, or pretexting.  The Commission intends to strengthen its privacy rules by requiring providers to adopt additional safeguards to protect customers’ phone record information from unauthorized access and disclosure.  Specifically, the Commission would prohibit providers from releasing call detail information to customers except when the customer provides a password.  Similarly, we propose to modify our current rules to require providers to obtain customer consent before disclosing any of that customer’s phone record information to a provider’s joint venture partner or independent contractor for marketing purposes.

  Recently, concerns about preserving consumers’ access to the content of their choice on the Internet have been voiced at the Commission and Congress.  In its Internet Policy Statement, the Commission stated clearly that access to Internet content is critical and the blocking or restricting consumers’ access to the content of their choice would not be tolerated.  Although we are not aware of current blocking situations, the Commission remains vigilant and stands ready to step in to protect consumers’ access to content on the Internet.  Moreover, to better assess how the marketplace is functioning and address any potential harm to consumers, I have proposed the Commission examine this issue more fully in a formal Notice of Inquiry which is presently pending before my colleagues.  

  Perhaps no other issue before the Commission garners more public interest then our quadrennial review of our media ownership rules.  This attention is understandable given that the media touches almost every aspect of our lives.  We are dependent upon it for our news, our information and our entertainment.  Indeed, the opportunity to express diverse viewpoints lies at the heart of our democracy.  We must make sure that consumers have the benefit of a competitive and diverse media marketplace.  At our public hearings, the Commission has heard a consistent concern that there are too few local and diverse voices in the community.  Certainly, we need to protect localism and diversity in the media.  We must balance concerns about too much consolidation and too little choice, however, with appropriate consideration of the changes and innovation that are taking place in the media marketplace. 

  Critical to our review of our media ownership rules is the collection of objective facts and an open dialog with the public.  We have commissioned multiple economic studies and are engaging in hearings across the country in a range of markets.  The goal of these hearings is to fully and directly involve the American people in this process.  We held our first hearing in Los Angeles, where we focused on the ability of independent television producers to gain access to distribution.  We also held a hearing in Nashville, in which we focused on the concerns of the music industry.  The Commission’s efforts to collect a full public record will continue in the months ahead, with five more hearings, including one specifically focused on localism.

  Fourth and finally, we must enhance public safety.

  The events of September 11, 2001 and the 2005 hurricane season underscored America’s reliance on an effective national telecommunications infrastructure.  Thus, public safety has been and will continue to be one of the Commission’s and my top priorities.  We must make sure that the public has the tools necessary to know when an emergency is coming and to contact first responders.  And we must enable first responders to communicate with each other and to rescue the endangered or injured.  And the public and private sectors must work together so that our communications system can be repaired quickly in the wake of a disaster so that affected people can reach out to locate or reassure one another.  We recently created a Public Safety and Homeland Security Bureau to focus exclusively on this important need. 

  As Chairman Inouye and co-sponsors Senators Stevens, Kerry, Smith, and Snowe of S. 385 obviously recognize, one of the most pressing public safety problems is the need for interoperability within and among public safety systems.  I thank the Chairman for his efforts in this regard, and look forward to any guidance the Congress may provide. 

  The Commission recently asked for comments on creating a nationwide, interoperable broadband network for public safety officials in the 700 MHz band.  In the meantime, technology is available now that could provide a temporary solution to the need for more interoperability.  By adding IP-based technologies to existing public safety network equipment (a so-called “IP patch”) and deploying portable IP-based network equipment where necessary, public safety officials would achieve functional, if not full, interoperability.  If Congress made sufficient funds available now, such functional interoperability for public safety communications systems could be available in selected areas in the near term and throughout most of the nation within four years.

  Conclusion

  As you can see, on the whole, the state of the communications industry is strong, and growing stronger.  Innovation, in all sectors, is back, and competition has enabled consumers to get newer and more innovative technologies and communications services at ever-declining prices. 

  Sadly though, one service has gone the way of the dinosaur.  2006 marked the end of an era, when Western Union discontinued its telegram delivery service, which it began in 1856.

  Thank you for your time and attention today.  I appreciate the opportunity to share with you some of the recent progress the Commission has made.  With that, I would be happy to answer any questions you may have.

• The Honorable Jonathan S. Adelstein

  Administrator

  Rural Utilities Service, U.S. Department of Agriculture
  Read statement

  Opening Remarks

  The Honorable Jonathan S. Adelstein

  Statement

  of

  Commissioner Jonathan S. Adelstein

  Federal Communications Commission

   

  Before the

  Committee on Commerce, Science, and Transportation,

  United STATES Senate

   

  February 1, 2007

   

  Mr. Chairman, Mr. Vice-Chairman, and members of the Committee, as we are in the middle of what passes for deep winter in Washington, I am reminded of what I learned growing up as a fourth-generation South Dakotan.  My great-grandmother homesteaded near the Badlands, and thrived, along with so many other pioneers who were scattered over large distances, by staying connected and pulling for each other.

   

  Today, through vast technological progress, we have the opportunity to connect this country in ways more profound than my great-grandmother could have ever imagined.  It will take the same American spirit to provide for all of our neighbors, not just those in rural, insular and other high-cost areas, but Native Americans, residents of our inner cities, minorities, those with disabilities, non-English speakers, and low-income consumers. 

   

  We must upgrade our communications infrastructure in every corner of this country.  And we must do a better job of making innovative communications technologies more widely available and affordable to everyone.  All of our citizens should have the opportunity to maximize their potential through communications, no matter where they live or what challenges they face.  To promote the communications needs of everyone in this country, we should focus on improving access to broadband services, modernizing universal service, and protecting diversity, competition, and localism in our media. 

   

  Understanding the many facets of the communications landscape requires us to take account of the rapidly-changing marketplace and to reach out to diverse communities.  As a Commissioner, I have traveled to many unique parts of the United States, including Alaska and Hawaii, and I have learned of the distinctive challenges each state faces.  I visited the Gulf Coast of Mississippi shortly after the devastation of Hurricane Katrina.  The enormous damage to the entire region was unforgettable and remains a painful reminder that the communications needs of our public safety and national security communities must remain at the forefront.

   

  One of our central challenges is promoting the widespread deployment of broadband facilities to carry these innovative services.  This must be a national priority.  Even though we have made strides, I am concerned that the U.S. is not keeping pace with our global competitors.  Each year we slip further down the regular rankings of broadband penetration.  This is more than a public relations problem.  Citizens of other countries are simply getting more megabits for less money.  That’s a productivity problem, and our citizens deserve better. 

   

  We must engage in a concerted and coordinated effort to restore our place as the undisputed world leader in telecommunications.  An issue of this importance warrants a comprehensive national strategy to ensure that affordable broadband is available for all Americans.  According to the ITU, the digital opportunity afforded to U.S. citizens is not even near the top, it’s 21^st in the world.  So, it is not a national strategy just to overtake Estonia.  It will mean taking a hard look at our successes and failures, and improving our data collection so that we can better ascertain our current problems and develop responsive solutions.    We must re-double our efforts to encourage broadband development by increasing incentives for investment and promoting competition.  We must also work to preserve the open and neutral character that has been the hallmark of the Internet, maximizing its potential as a tool for economic opportunity, innovation, and so many forms of civic, democratic, and social participation.    

   

  It will also mean being creative and flexible in our approaches.  Some have argued that the reason we have fallen so far in the international broadband rankings is that we are a more rural country than many of those ahead of us.  If that is the case, we should strengthen our efforts to address any rural challenges head-on.  We have got to make broadband truly affordable and accessible to everyone, even if that means communities tapping their own resources to build broadband systems.

   

  The Commission also must do more to stay on top of the latest developments in spectrum technology and policy.  Spectrum is the lifeblood for much of this new communications landscape.  The past several years have seen an explosion of new opportunities for consumers, like Wi-Fi, and more advanced mobile services.  But, we have to be more creative with a term I have coined “spectrum facilitation.”  That means looking at all types of approaches – technical, economic or regulatory – to get spectrum into the hands of operators ready to serving consumers at the most local levels.  Wireless broadband has been a top priority for me while at the Commission.  And I truly believe that our preparation for the upcoming 700 MHz auction is one of the most important undertakings the Commission will conduct in all of the time I have served.

   

  Universal service continues to play a vital role in meeting our commitment to connectivity.  I have worked hard to preserve and advance the universal service programs as Congress intended.  It is vital to keep them on solid footing.  Increasingly, voice, video, and data will flow to homes and businesses over broadband platforms.  In this new world, as voice becomes just one application over broadband networks, we must ensure that universal service evolves to promote advanced services, which is a priority that Congress, and this Committee in particular, made clear. 

   

  As for the media, we should never forget that the airwaves belong to the American people.  It is critical to preserve their access to what the Supreme Court has called the “uninhibited marketplace of ideas.”  First, with our ownership rules, we should do no harm; we should take far greater care than we have in the past before proposing any changes in our media ownership rules.  Further, to make the media landscape look and sound like America, we need to open our airwaves to community-based and minority voices.  And we need to establish public interest obligations on broadcasters as they enter the digital age.

   

  Finally, we are charged by Congress to perform as a law enforcement agency, and we should be rigorous in enforcing all of the laws under our jurisdiction.  We have numerous issues before us regarding consumer complaints about the Do-Not-Call directory and our Junk Fax rules, indecency, payola, video news releases and our sponsorship identification rules.  All of these laws are important, and all allegations of wrongdoing demand our resolute attention.

   

  Congress has charged the Commission with ensuring that the American public stays well-connected and well-protected.  I will do everything in my power to carry out the law to promote these goals.  Thank you for the opportunity to testify.

• The Honorable Robert M. McDowell

  Commissioner

  Federal Communications Commission
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