NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 1 UNITED STATES OF AMERICA + + + + + FEDERAL COMMUNICATIONS COMMISSION CONSUMER ADVISORY COMMITTEE + + + + + MEETING + + + + + Friday, July 11, 2003 + + + + + The Committee came to order at 9:00 a.m. in Room TW-C305 of 445 12th Street, S.W., Washington, D.C., Shirley L. Rooker, Chair, presiding. MEMBERS PRESENT: JEFFREY KRAMER AARP BRENDA KELLY-FREY National Association of State Relay Administration LARRY GOLDBERG Media Access Group, WGBH SHIRLEY ROOKER Call for Action SCOTT MARSHALL FDIC, CAC-Designated Federal Officer RICHARD ELLIS Verizon Communications JOY RAGSDALE National Association of State Utility Consumer Advocates VERNON R. JAMES San Carlos Apache Telecommunications Utility, Inc. SUSAN GRANT National Consumers League DAVID HOROWITZ Fight Back Foundation for Consumer Education DIXIE ZIEGLER Hamilton Telephone Company, d/b/a Hamilton Relay Service NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 2 DONALD SNOOP Hometown Online MEMBERS PRESENT: LINDA WEST The Native American Community and others concerned with telecommunications service in rural America MICHAEL DelCASINO AT&T Corp. MIKE DUKE blind or visually impaired persons, licensed radio amateur operators, and management of audio information services for the blind KAREN KIRSCH National Association of Broadcasters RON BARNES Cellular Telecommunication & Internet Association RICHARD MALLARD National Association of Consumer Agency Administrators JOSEPH GORDON League for the Hard of Hearing CLAUDE STOUT Deaf and Hard of Hearing Consumer Action Network MATT BENNETT Alliance for Public Technology CHERYL JOHNSON Affiliated Tribes of N.W. Indians Economic Development Corp. MILTON LITTLE National Urban League DIANE BURSTEIN National Cable Telecommunications Association JIM CONRAN Consumers First, Inc. SUSAN PALMER MAZRUI Cingular Wireless DAVID BRUGGER Brugger Consulting REBECCA LADEW users of speech-to-speech technology BYRON ST. CLAIR National Translator Association DEBRA BERLYN Consumer Policy Consulting MARK PRANGER academia and consumers concerned with telecommunications service in rural America ANNETTE CLECKNER MCI THOMAS ALLIBONE LTC Consulting/Teletruth MARY HENZE BellSouth EUGENE SEAGRIFF Telecommunications Industry NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 3 Association PRESENT: MICHAEL COPPS Commissioner, FCC KEVIN MARTIN Commissioner, FCC KATHLEEN ABERNATHY Commissioner, FCC K. DANE SNOWDEN Chief, Consumer & Governmental Affairs Bureau RICHARD SMITH Acting Chief, Policy Division, CGB GREG GUICE, ESQ. Attorney Advisor, Policy Division, CGB THOMAS CHANDLER Chief, Disability Rights Office, CGB KRIS MONTEITH Deputy Bureau Chief, CGB PAUL SCHROEDER Vice President for Governmental Relations, American Foundation for the Blind DAVID SOLOMON Chief, Enforcement Bureau NICHOLAS MILLER Miller & Van Eaton, P.L.L.C. SCOTT RANDOLPH Director, Federal Regulatory Advocacy, Verizon DAN BRENNER Senior Vice President, Law and Regulatory Policy, National Cable Telecommunications Association JOHN WINDHAUSEN President, Association of Local Telecommunications Services COMM. DAVID SVANDA Michigan Public Service Commission and President, National Association of Regulatory Utility Commissioners JARED CARLSON Acting Chief, Policy Division, WTB NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 4 AGENDA WELCOME AND CALL TO ORDER Shirley L. Rooker, Chair, Consumer Advisory Committee (CAC) MEETING LOGISTICS Scott Marshall, CAC Designated Federal Officer, Consumer & Governmental Affairs Bureau (CGB) INTRODUCTION OF THE CHAIRMAN AND COMMISSIONERS K. Dane Snowden, Chief, Consumer & Governmental Affairs Bureau UPDATE ON THE CONSUMER & GOVERNMENTAL AFFAIRS BUREAU K. Dane Snowden, Chief, CGB UPDATE ON THE TELEPHONE CONSUMER PROTECTION ACT Richard Smith, Acting Chief, Policy Division, CGB ISSUES RELATING TO E-911 SERVICE Greg Guice, Attorney Advisor, Policy Division, Wireless Telecommunications Bureau (WTB) SUMMARY OF ORDER REGARDING HEARING AID COMPATIBILITY Greg Guice, WTB UPDATE ON TRS ORDER AND FURTHER NOTICE OF PROPOSED RULEMAKING Thomas Chandler, Chief, Disability Rights Office, CGB OUTREACH TO INDIAN COUNTRY Kris Monteith, Deputy Bureau Chief, CGB HOMELAND SECURITY AND PEOPLE WITH DISABILITIES Kris Monteith, Deputy Bureau Chief, CGB NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 5 LUNCH PRESENTATION: ACCESSIBLE WIRELESS PHONES FOR THE BLIND Paul W. Schroeder, Vice President for Governmental Relations, American Foundation for the Blind CONSUMER PROTECTION: THE ROLE OF THE ENFORCEMENT BUREAU David Solomon, Chief, Enforcement Bureau PANEL: STATE OF BROADBAND REGULATION Moderator: Larry Goldberg, Chair, CAC Broadband Working Group Scott Randolph, Director - Federal Regulatory Advocacy Verizon (representing ILECs) Daniel L. Brenner, Senior Vice President, Law and Regulatory Policy, National Cable Telecommunications Association (representing cable companies) John Windhausen, President, Association of Local Telecommunications Services (representing CLECs) Nicholas Miller, Esq., Miller & Van Eaton, PLLC (representing local governments) Commissioner David Svanda, Michigan Public Service Commission and President, National Association of Regulatory Utility Commission (representing state governments) UPDATE ON WIRELESS LOCAL NUMBER PORTABILITY Jared Carlson, Acting Chief, Policy Division, WTB COMMENTS FROM THE PUBLIC; WRAP-UP; FUTURE MEETINGS ADJOURNMENT NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 6 P-R-O-C-E-E-D-I-N-G-S1 (9:03 a.m.)2 CHAIR ROOKER: Could everyone take their 3 seats, please. Scott, my little stool is wonderful. 4 Okay, everyone. The time to be nice is over. Take 5 your chairs, please. I have some announcements I need 6 to make. Number one, Cindy Cox who is with BellSouth, 7 unfortunately could not get out of Atlanta last night 8 because of the thunderstorms, so consequently, she's 9 being replaced today by Mary Henze, who's with the 10 Washington Office of BellSouth. Mary, thank you very 11 much for being here to pinch hit for Cindy.12 Also, we have a new member, who is Diane 13 Burstein, who was an alternate last time, and now 14 she's a member. She's with the National Cable 15 Telecommunications Association. And, Diane, welcome. 16 We're pleased to have you here.17 I think the first order of business, why 18 don't we just go around the table and briefly just 19 state your name and your organization. I want this to 20 be very fast, but I think it would be useful for us to 21 put faces with names. So let's just start down here 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 7 at the end with Jeff.1 MR. KRAMER: Thank you, Shirley. I'm Jeff 2 Kramer with AARP.3 MR. GOLDBERG: Larry Goldberg, WGBH Media 4 Access Group.5 CHAIR ROOKER: And I forgot to tell you 6 that I'm Shirley Rooker with Call for Action.7 MR. MARSHALL: I'm Scott Marshall with the 8 FCC.9 MR. ELLIS: Rich Ellis from Verizon.10 MR. JAMES: Good morning. Vernon James 11 with the San Carlos Apache Telecommunications Utility, 12 Incorporated. We call it SCATCOM for short, and I'd 13 like to introduce my alternate that has come with me, 14 Yolanda Jo Lazo. She's here this morning.15 CHAIR ROOKER: Thank you.16 MS. GRANT: Hi. I'm Susan Grant from the 17 National Consumers League. I'm sorry I missed the 18 first meeting, but it was a choice between being here 19 or being in Australia, and Australia won out.20 MR. HOROWITZ: I'm David Horowitz with the 21 Fight Back Foundation for Consumer Education.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 8 MS. ZIEGLER: I'm Dixie Ziegler with 1 Hamilton Relay Services. We're at TRS provider.2 MR. SNOOP: I'm Don Snoop, Hometown On 3 Line.4 MS. WEST: I'm Linda West with Native 5 American and rural America issues.6 MR. DelCASINO: Mike DelCasino, AT&T.7 MR. DUKE: Mike Duke, International 8 Association of Audio Information Services, and also 9 licensed radio amateurs.10 MS. KIRSCH: Good morning. I'm Karen 11 Kirsch from the National Association of Broadcasters.12 MR. MALLARD: Good morning. I'm Ron 13 Mallard with the National Association of Consumer 14 Agency Administrators.15 MR. GORDON: Good morning. I'm Joe Gordon 16 with the League for Hard of Hearing.17 MR. BENNETT: Hi. I'm Matt Bennett with 18 the Alliance for Public Technology.19 MS. JOHNSON: Good morning. I'm Cheryl 20 Johnson, Affiliated Tribes of Northwest Indians.21 MS. BURSTEIN: Good morning. I'm Diane 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 9 Burstein with the National Cable Telecommunications 1 Association.2 MR. CONRAN: I'm Jim Conran, Consumers 3 First.4 MS. MAZRUI: I'm Susan Mazrui, Cingular 5 Wireless.6 MR. BRUGGER: David Brugger, Brugger 7 Consulting.8 MS. LADEW: Rebecca Ladew. I'm here to 9 represent the speech relay users on the committee, and 10 I have a comment. Bob Siegelman has prepared a 11 suggested procedure for recruiting people with speech 12 disabilities as members of State Relay Advisory 13 Committees. If anyone wants a copy, please write Bob 14 at Bob@DOR.CA.gov. Also, Bob would like to 15 congratulate the Texas PUC for starting an extensive 16 speech-to-speech outreach program. Bob applauds Sprint 17 for establishing a call center in Hawaii, and using 18 speech-to-speech CAs who speak Hawaiian dialect; 19 whereas before, all speech-to-speech calls in Hawaii 20 were being transferred to Virginia, and there was a 21 communications barrier between some speech-to-speech 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 10 Cas in Virginia, who sometimes spoke with a southern 1 accent, that the Hawaiian speech-to-speech caller 2 could not sometimes understand. Likewise, the 3 Virginia speech-to-speech Cas could not understand the 4 Hawaiian dialect of the speech-to-speech caller. 5 Thank you.6 MR. ST. CLAIR: I'm Byron St. Clair from 7 the National Translator Association. I guess I should 8 just explain it's not anything to do with languages. 9 Translators repeat TV and FM stations into rural areas 10 that don't get direct reception.11 MS. BERLYN: Good morning. I'm Debra 12 Berlyn with Consumer Policy Consulting.13 MR. PRANGER: Good morning. I'm Mark 14 Pranger from Rogers State University in Oklahoma.15 MS. CLECKNER: Annette Cleckner with MCI 16 Consumer Affairs.17 MR. ALLIBONE: Tom Allibone with LTC 18 Consulting.19 MS. HENZE: Mary Henze with BellSouth, 20 sitting in for Cindy Cox.21 MR. SEAGRIFF: I'm Eugene Seagriff of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 11 Panasonic, representing the Telecommunications 1 Industry Association.2 CHAIR ROOKER: Okay. Well, thank you. We 3 have some other people who joined the panel.4 MR. BARNES: Ron Barnes, CTIA.5 CHAIR ROOKER: Thank you, Ron. Joy.6 MS. RAGSDALE: Joy Ragsdale with NASUCA.7 MS. FREY: Susan Kelly Frey representing 8 the National Association of State Relay 9 Administration.10 CHAIR ROOKER: Did we get everyone? Okay. 11 Well, thank you very much for being here.12 I think the next order of business --13 Scott's going to give us the logistics. Those are the 14 really important things that you need to know.15 MR. MARSHALL: Good morning. Just a word. 16 The rest rooms are right out the doors that you came 17 in down the short corridor and to your left, and 18 telephones are out in that corridor, as well. And 19 this afternoon, I'll be talking about transportation 20 to the airport and such that for those people who need 21 that this afternoon during our break. Thanks for 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 12 coming. Great attendance today.1 CHAIR ROOKER: Yes, it is. It's very 2 impressive. I also would like to thank Verizon for 3 our breakfast and lunch. Also, MCI and Verizon have 4 generously made possible teleconferencing services for 5 some of our working groups, and I'd like to thank 6 them.7 Also, the group chairs and the team 8 leaders have been working hard, and they've given us a 9 great deal of input on today's agenda, and we 10 appreciate that, especially since their last meeting 11 was only in April, which is not the three months we 12 usually have, but it was only two.13 I also like to give particular thanks to 14 Betty Thompson for making so many of the logistical 15 arrangements. And, of course, the person who does all 16 the work, the real work is Scott Marshall. And he 17 just said to me, "Don't say that, Shirley". Well, 18 it's the truth. Exactly.19 MR. MARSHALL: Thank you very much.20 CHAIR ROOKER: I tell him he does all the 21 work so I can look good, because believe me, he puts a 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 13 lot of time in this.1 Our next order of business, I'm very happy 2 to welcome Dane Snowden, who's the Chief of Consumer & 3 Governmental Affairs Bureau. He really doesn't need 4 an introduction since he's spoken to us, I think at 5 every meeting of CAC. And I would just like to 6 personally also thank him for the wonderful support 7 that he's given our group. Things like this group 8 couldn't happen without the support of Dane, so thank 9 you, Dane. Welcome.10 MR. SNOWDEN: Well, good morning and 11 welcome back to the FCC. I must also thank someone 12 who makes me look good all the time, and that's my 13 legal advisor, Amelia Brown, who's over here in the 14 green, who supports CAC, as well. So thank you very 15 much, Amy, and thank you, Shirley, and all of you for 16 coming back.17 I'm not sure how many were here actually 18 last night. I assume most of you were, and you were 19 awakened like I was, and I had a hard time getting 20 back to sleep with the storm that went through 21 Washington, D.C., so I would like to say that I'm glad 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 14 you're here. I got a little worried when I woke up 1 this morning, I guess around 1:00, and didn't really 2 fall back to sleep, or I guess have a sound sleep. 3 And I thought is anybody going to show up for the 4 meeting today, because I thought I was going to 5 oversleep, let alone the rest of you. So we braved 6 the storm. I know there's another one coming which, 7 of course, ruins my golf day, but I will survive.8 Well, welcome back. It is a pleasure to 9 have you all back here this fine summer day. At least 10 the heat is not as bad as it usually is here in 11 Washington since we're on a swamp.12 I want to say a few things to you all this 13 morning. And particularly, I want to say I'm happy to 14 see that the working groups have really gotten a great 15 start. We've seen a lot of advisory groups here at 16 the Commission, and one of the things in particular 17 that we always look to see is how quickly they 18 actually mobilize and start working. And this 19 particular advisory committee wasted no time to get 20 things started.21 We will have some of the commissioners 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 15 coming down to speak with you, as well. Because of 1 the storm last night, some folks are stuck in traffic. 2 Washington, D.C. in a disaster area right now with 3 trees everywhere, but when commissioners come in, I 4 will pause from my remarks, as I just see one coming 5 in now, and I will turn it over to that particular 6 commissioner.7 But before I do that, I would like to 8 embarrass Shirley for a second, and that's something I 9 tend to do. But last month, Shirley was given the 10 Betty Furness Media Service Award presented to Call 11 for Action by the Consumer Federation of America at, 12 what I understand, a fabulous gala event held here in 13 Washington, so congratulations to you, Shirley, and 14 Call for Action for your good work for helping out 15 consumers.16 I see that Commissioner Copps has arrived, 17 so I'm going to pause, and ask Commissioner Copps to 18 please join me at the podium here and make some 19 remarks.20 COMMISSIONER COPPS: Good morning. 21 Welcome to the FCC on this nice Friday morning. We're 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 16 delighted to see you here. I see a lot of old friends 1 around the table, and hope we can make some new ones 2 today too. I'll just a minute or two of your time, 3 because I know you have a very, very busy agenda 4 today, but I just wanted to primarily thank you all 5 for the commitment you make in serving on this 6 committee.7 When I was over at the Commerce Department 8 with the previous Administration, I was responsible 9 for administering all of our industry sector advisory 10 committees at Commerce, and we had I guess 16 or 17 11 sector-specific ones, and then some functional 12 committees too. And I was always impressed by the 13 level of commitment that people serving on those 14 committees made. And I know it's harder and harder to 15 do that, and we're in an era when a lot of offices and 16 organizations are downsized, and it's more and more 17 difficult to get done what you need to get done just 18 to survive on a day-to-day basis, and finding time to 19 serve on a committee like this I know is not easy, but 20 it's merely essential really. We couldn't get along 21 without the kind of input that you give us.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 17 When I was at Commerce -- well, before 1 that when I was out in the private sector, I served on 2 an industry advisory committee on International Trade, 3 and I almost thought when we were negotiating the 4 North American Free Trade Agreement, I wondered what 5 that agreement would look like without the input of 6 outside sources, and just let it to the government to 7 do it by itself would not have been a pretty affair.8 So I want to thank you for your 9 commitment, thank you for your help, and the help you 10 give us makes the work we do a lot more productive and 11 a lot better, I think, than it otherwise would be. 12 This is the first time I've had a chance to meet, I 13 think, with the reconstituted committee. I looked at 14 your agenda today. It's an impressive agenda. I know 15 we no longer have the word "disabilities" in the 16 committee's name, but I trust that that signals no 17 less a priority. And from talking to the people here 18 at the Commission, I believe it does not, so I'm 19 delighted to see us working on that.20 We had just yesterday at this table right 21 up here on one of the disability issues on hearing aid 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 18 compatibility and cell telephones, and I was glad to 1 see us move ahead unanimously on that. And I think we 2 had very productive discussions with a lot of input 3 over the last week especially from outside, and I 4 think that that helped to enhance the quality of the 5 product that we came up with.6 As I told some of you before, the first 7 speech I made when I came to the FCC was to the deaf 8 and the hard of hearing out in South Dakota, and I 9 really appreciated the feel that they gave me for both 10 the challenges that are faced by the disabilities 11 communities, and the opportunities that we have 12 through all of these new technologies to afford 13 opportunity for folks to really become productive 14 members of society. There was so much human talent, 15 and still is, that's going unused, and we've just got 16 to find a way to correct that situation.17 And one of the secrets, well, obviously, 18 you have to have good policy, but we always have to 19 have that outreach. And I think of that in terms of 20 the disabilities communities, I think of it in terms 21 of our Native American citizens. So much of what we 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 19 do here affects all of these groups. It's not just 1 the issues that are entitled, you know, something 2 Native Americans, or something for the hard of 3 hearing. What we do on broadband, what we do on all 4 of these things affects everybody. And resources are 5 stretched thin in these communities. It's hard to 6 cover, so the duty for outreach that we have at the 7 Commission, and that you have as members of this 8 committee to go back and make sure that everybody in 9 these communities knows what's before us is really a 10 pressing one.11 I don't think there's anything much more 12 important now than this broadband that you're going to 13 be talking about today. And I think you have to 14 really step back and look. I'm a little bit troubled, 15 as some of you know, about where we may be going on 16 broadband, on the reclassification of broadband 17 transmission and what it can mean to the disabilities 18 community, what it can mean to rural America. We've 19 really got to take a good close look at this. We have 20 all of these wonderful liberating, dynamic, open 21 technologies, broadband, the Internet and all that. 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 20 If we're heading in the direction of closing that off, 1 then we're messing with something very fundamental to 2 the future of America, and we've got to be awfully 3 darned careful of how we do that, so we need your4 input on that. I'm glad you have a section on 5 broadband coming up today. Spend a lot of time 6 looking at that.7 I could go on, but I'd rather just sit 8 here and listen a little bit as you get started this 9 morning. But again, thank you all for your 10 willingness to serve. Thank you for coming, and my 11 office door is always open. I look forward to seeing 12 all of you when you're in town, those from out of 13 town, and seeing those who live here even on a more 14 regular basis. So thank you very much for coming.15 CHAIR ROOKER: Thank you.16 MR. SNOWDEN: It's always hard to follow 17 Commissioner Copps. He's such a great speaker.18 Touching on some of the things that 19 Commissioner Copps said, I would like to give you all 20 an update on some things that have happened since your 21 last meeting here in April, particularly as it relates 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 21 to outreach.1 One of the things that we're planning to 2 do actually next week is host a summer consumer forum 3 in Reno, Nevada on July 16th, touching on issues such 4 as telemarketing, telephone scams, understanding your 5 phone bills, cell phone service, and the role of the 6 FCC. And this is an example of something we're trying 7 to do, as Commissioner Copps mentioned. It's 8 important that we get out more so that consumers are 9 aware of what we all do here at the FCC, and that we 10 are a resource here at the FCC. And it's not by 11 mistake that we're on the other coast.12 One of my personal frustrations is that I 13 have several friends and family over on the west 14 coast, and they always say we pay out taxes, Dane. 15 How come the federal government is not open when we 16 need it to be open, so what we're doing is trying to 17 bring the federal government to them as much as we 18 can.19 In addition and in conjunction with that 20 summer consumer forum, we will also be hosting an FCC 21 Indian Telecommunications Initiative in Reno with the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 22 Washo Tribe. It's a regional workshop so that we can 1 bring more services and work on our 2 government-to-government relationship, and the 3 responsibility that we have with our Native American 4 colleagues and friends across the country. My Deputy 5 Bureau Chief, Kris Monteith, will be here later today 6 to talk about that and other issues, so you'll hear 7 more about that as the day goes on.8 I want to point out that it is our goal 9 with all of these forums, particularly with the 10 Indian-related forums that we're going to have, 11 designed to make sure that essential telecom issues 12 are covered in the Indian community.13 In addition, we are going to have a very 14 busy next couple of months looking at our calendar. 15 We have the National Conference of State Legislators. 16 Of course, also the National Association of 17 Regulatory Utility Commissioners. Their meetings are 18 coming up, and again, what we're doing is working with 19 our state counterparts, our local counterparts, and 20 our consumer counterparts across the country.21 We will also be making a trip up to the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 23 northwest to meet with the Affiliate Tribes of 1 Northwest Indians, and we're planning to make a trip 2 to Alaska. That's one of the things that we have 3 noticed that, particularly on the tribal area, that 4 our Alaska natives are more short shrift than our west 5 coast consumers. And because it's not often that the 6 federal governments gets out there, so we're going to 7 do that, and make that effort some time later this 8 summer.9 Our goal, as you can imagine, is to cast 10 as wide a net as possible as we go forward so that we 11 can reach out to consumers, and they can have access 12 to the Commission.13 This has also been a very busy regulatory 14 season for the Commission, as I'm sure you've read and 15 heard, and seen debated. One of the items that we're 16 very proud of - actually, we're proud of all of our 17 items I should say - but one in particular that I'm 18 personally proud of is our recent action on the 19 Telephone Consumer Protection Act or telemarketing 20 rules. This is, by all estimates, the most 21 comprehensive consumer protection item the Commission 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 24 has ever done.1 In a short sense, what we have done is we 2 have given the power of managing your telephone calls 3 to you, to the consumer, not to the telemarketer. 4 This is a major change in our country. And as you 5 might imagine, with the Do Not Call Registry going 6 into effect as of October 1st - of course, you can 7 register now. This has gotten a lot of attention. 8 I'm not sure if any paper did not cover this 9 particular issue. Richard Smith, my Acting Chief of 10 the Policy Division in my Bureau will be here to 11 discuss that with you.12 On the disabilities front, as many of you, 13 I'm sure, are aware, we have taken some steps for 14 telecommunications relay services order and further 15 notice, and our goal is quite simple. We amended and 16 added new rules that will improve the overall 17 effectiveness of TRS to ensure that persons with 18 hearing and speech disabilities have access to the 19 telecom network, that it's consistent with the goal of 20 functional equivalency, so we are moving forward. And 21 Tom Chandler from my bureau will be here later today 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 25 to talk about that and many other things, as well.1 And, of course, as Commissioner Copps 2 said, just yesterday we took a major step forward, we 3 like to think, positive, proactive step forward to 4 ensure that more consumers have access to the network 5 by lifting the exemption on our hearing aid 6 compatibility rules. So we are moving forward and 7 making sure more consumers have access to this very, 8 very important network.9 Another issue that, of course, was debated 10 between your last meeting and now was our media 11 ownership or broadcast ownership rules. And I do not 12 plan to go into details about that. It was very hotly 13 debated on both sides. It was probably the most --14 the one issue that we got the most comments on 15 anything we've ever gotten at the Commission. At one 16 point, I think we received over 1 million postcards, 1 17 million plus postcards from consumers alone on this 18 particular issue, so this is something that was very 19 much debated throughout the country, throughout 20 Washington, D.C., and definitely throughout this 21 Commission.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 26 As Commissioner Copps mentioned, outreach 1 is very important. Of course, our regulatory policy 2 is very important, but one of the things I also wanted 3 to mention is important is that we have information 4 for consumers. That is very important. And one of 5 the pieces that we are focusing on is our website, and 6 we're making it, of course, compliant, and we're also 7 making sure it's chock full of information for 8 consumers.9 We launched, in connection with 10 Commissioner Abernathy, who I saw has just arrived, we 11 launched our Parents Place page, which we 12 intentionally did it for the summer months because, of 13 course, that's when students or kids are usually home. 14 They have more idle time. I think we all remember 15 being a child when we didn't have these fancy-dancy 16 computers like the kids have today, but we wanted to 17 make sure that parents had a resource that they could 18 go. They would know exactly what's available out for 19 them, for example, when students are making phone 20 calls, or going on the web. How they can do that in a 21 safe and productive manner, and I was happy that 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 27 Commissioner Abernathy led that charge for the 1 Commission. And we've gotten a lot of good feedback 2 from consumers as we go forward.3 In addition, we launched a National 4 Environmental Policy Act, or Historic Preservation 5 page on our website. And this is important because it 6 contains information about the Commission's 7 responsibility to manage the expansion of 8 communications infrastructure in a way that preserve 9 the country's environmental and historic resources. 10 And this is important not just when we see these 11 beautiful sites across the country, but it's 12 particularly important on our tribal lands as we go 13 forward.14 We, of course, added lots of publications 15 to all of our work, meaning that every time we do a 16 major item, such as the hearing aid compatibility 17 revision that we just did yesterday, or the Telephone 18 Consumer Protection Act, we're creating consumer 19 alerts. We're also creating information for consumers 20 and fact sheets so they can read and understand 21 exactly how the new rules apply to them, and the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 28 positive steps that the Commission is taking.1 We are close to finalizing a broadband 2 booklet, or a fact sheet on that particular subject. 3 And this is very important for us. I know you have it 4 on your agenda today. The reason I say this is very 5 important is because this is the new technology. This 6 is the new cool thing, as the kids say today, that 7 many of you, I'm sure, have already, but not enough 8 Americans have taken advantage of this exciting 9 opportunity. And we want to make sure that we do our 10 part, not only in our regulatory world, but also in 11 the outreach world, that they can understand, 12 consumers can understand what's important, and why 13 this is so critical.14 And, of course, we've been busy in our 15 enforcement area, and we're creating more information 16 so consumers understand how our enforcement bureau 17 works, and how the Commission -- how we treat 18 enforcement issues.19 I know you have a full agenda, and I see 20 Commissioner Abernathy is here. And I would like to 21 ask Commissioner Abernathy to please join me up here. 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 29 And while she's coming, I'd like to extend apologies 1 from Commissioner Adelstein and Chairman Powell, who 2 both had conflicts with today's meeting, but they do 3 send their best wishes to each of you. It's my 4 pleasure now to introduce Commissioner Kathleen 5 Abernathy.6 COMMISSIONER ABERNATHY: Thank you, Dave. 7 It's good to see everybody here again. It's been a 8 while since I've had a chance to come down and say hi, 9 and I don't want to take up too much of your time, 10 because I was looking over your agenda, and you have 11 real work to do. But I did want to tell you once 12 again how important and how much we value the work 13 that you do, how we're very, very pleased that you're 14 willing to take the time and the effort on a Friday in 15 July to come here and help us with so many of these 16 issues that are very, very important.17 I think as Dane mentioned, and I believe 18 Commissioner Copps also mentioned, just the other day 19 we did our order on hearing aid compatibility and what 20 we do with wireless phones, and trying to ensure that 21 there are more wireless phones out there that work 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 30 with all of the different kinds of hearing aids, so 1 that all of the population gets to tap into the vast 2 benefits of wireless phones. Which because very clear 3 to me yesterday, when I had to attend my daughter's 4 parent's day at camp, dressed in a full FCC meeting 5 agenda day outfit, and I'm outside watching tennis, 6 and I get three urgent calls. But the point is, I had 7 to be in touch. I knew that I had to be in touch that 8 day. We're working on some important items, but it 9 also was very important to me personally that I be 10 able to attend her summer camp. And if I hadn't been 11 able to use a wireless phone, that would have been a 12 huge problem for me, and so that's just a small 13 illustration of one day, of why it is so very 14 important that everyone have access to wireless 15 technology.16 I'm pleased that the technology now allows 17 us to push out more phones to more people. I'm 18 anxious to see how that works out. I'm glad we're 19 bringing in a report. I think it's in about three 20 years when we're going to get an update and see do we 21 have the right balance here. Are we getting enough 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 31 phones out in the market? Is there enough 1 information?2 It's a joint effort, and I want to make 3 that clear too, that this wasn't done in isolation. 4 We worked closely with the industry, with both the 5 wireless industry, and the manufacturing industry, as 6 well as the consumer groups. Because, again, this was 7 in an area where we certainly -- we didn't have the 8 expertise here in-house about what decisions to make, 9 and so we relied very heavily on input from so many 10 different parties to figure out how we could move that 11 process forward. So I'm very, very pleased about that 12 proceeding.13 As you know, we've been working on a 14 number of other issues, all in many way, shape or 15 forms related to how do we make consumer lives a 16 little better. The National Do Not Call List, I think 17 we knew there was a lot of consumer frustration out 18 there. I don't think we at all anticipated the level 19 of consumer frustration, which became evident as 20 people were signing up for the Do Not Call List. And, 21 frankly, I've been badgered about this for over a year 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 32 by my husband, so it is -- again, it goes to the 1 benefits of technology, and then there are some 2 downsides associated with technology. And I think it 3 really was a reaction to all of the numerous calls, 4 the hang-up calls, and the frustrations with not being 5 able to control in our own home what we listen to. So 6 I think those are just a couple of examples of the 7 items that we've been working on.8 We're rolling out E-911, another very, 9 very critical safety and security feature that will 10 make a difference for many, many people including -- I 11 mean, once there's location, I seriously start 12 thinking about how do I use it for the rest of my 13 family? You know, it's not that I think that my 14 daughter needs to talk on the phone because, frankly, 15 she doesn't. But I do think that there are times when 16 I will want to be able to locate her, so to the extent 17 that devices come on the market that allow her -- one 18 of the devices they're talking about are these 19 emergency phones where basically I can call her. She 20 can make three outgoing calls I've pre-programmed to, 21 you know, like me, her dad and somebody else, and then 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 33 I can locate her any time.1 Once those devices are on the market, 2 yeah, it's important to me. I think it will be 3 important to a lot of other people at certain price 4 points, so these are all ways in which we can tap into 5 the new technology. At the same time that we're 6 tapping into it, and accessing it in a way to better 7 our lives we, as an agency, have to rely on you to 8 tell us when is it not working right. When are 9 consumers being abused? When are you getting too many 10 unwanted calls? When are you being slammed or crammed 11 on your phone bill? When is it so complex out there 12 as far as figuring out appropriate programming for 13 your children that you throw up your hands in defeat, 14 and we need to do something like the Parents Place on 15 our website.16 So again, thank you for coming today. I'm 17 very, very happy that you were able to take the time, 18 and willing to take the time. I want to sit around 19 for a few minutes and listen, but at the end of the 20 day, it's really going to be up to you and Dane to 21 bring to the Commissioners action items that you think 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 34 we need to pursue. So thank you again.1 MR. SNOWDEN: And I am just at my end. I 2 did want to make a few comments about your agenda. I 3 think this is a very comprehensive agenda, and I 4 applaud those who put it together. Particularly, as I5 know you're going to be talking about the 6 Telemarketing Rules, the TRS item, the E-911, and of 7 course, your broadband panel.8 I did want to highlight David Solomon's 9 presentation, who is the Chief of our Enforcement 10 Bureau. And as you might imagine, in this 11 environment, the Enforcement Bureau plays a very, very 12 vital role to what we do here at the Commission. 13 Without the Commission's strong commitment and his 14 good work to enforcement, the rules that we create are 15 meaningless. So I encourage you to enjoy what David 16 Solomon has to say when he comes down here later this 17 afternoon.18 I should also say that the fact sheets and 19 other things that I was mentioning a moment ago, we 20 have a disk, and some of the fact sheets are in your 21 packet, so all that information is there. And, of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 35 course, all this information is available on our 1 website. So with that, I want to thank Commissioners 2 Copps and Abernathy for joining us. And, of course, I 3 believe Commissioner Martin will be joining us at some 4 point during the day. And again, extend apologies for 5 Commissioner Adelstein and Chairman Powell.6 I see that Richard Smith is here, who will 7 be talking more about some of our consumer policy 8 issues, which is telemarketing. But, Shirley, if 9 you'd like, I could take a few questions, if there are 10 any.11 CHAIR ROOKER: Yes. We would like that, 12 please.13 MR. SNOWDEN: Sure.14 CHAIR ROOKER: Do we have questions for 15 Dane about any of the things that he's discussed? I 16 can't believe this group. They're still asleep.17 MR. SNOWDEN: I will take that as a 18 positive thing, that you don't have any questions for 19 me. Not that you're asleep, the positive thing to 20 have -- yes, sir.21 MR. CONRAN: I won't let you get away. 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 36 I'm Jim Conran from California. Recently, I attended 1 a seminar, and there was a presentation by some high 2 tech companies on how to bypass the telephone network 3 by using the Internet. And I was very concerned -4 one, I thought it was kind of interesting, but I was 5 concerned that many of the funds that rate payers pay 6 into, Universal Service, in my state the relay system 7 for the deal consumers, 911. All these are going to 8 be bypassed if people use the Internet rather than 9 using traditional telephone services. Is the 10 Commission looking at this issue?11 MR. SNOWDEN: We have - as many of you 12 know, we have created or allowed for IP Relay to 13 occur, and that is the first -- I guess, that's 14 probably the first part of our toe that's going into 15 the water to see how it works. We are looking into 16 it. We have not made a decision one way or the other 17 just yet on that particular issue.18 MR. CONRAN: All right. Thank you.19 MR. SNOWDEN: Thank you.20 CHAIR ROOKER: Any other questions? Well, 21 Dane, thank you so much. I need to do a couple of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 37 items of business before I introduce Richard, if 1 that's okay, if you don't mind.2 MR. SNOWDEN: You're the Chair.3 CHAIR ROOKER: All right.4 MR. SNOWDEN: I will follow your lead.5 CHAIR ROOKER: Thank you.6 MR. SNOWDEN: Thank you, and 7 congratulations again on your award.8 CHAIR ROOKER: Thank you very much, Dane. 9 We really enjoy having you here.10 We have -- you've been sent the minutes of 11 the last meeting. And as the Chair, I can certify the 12 correctness of the minutes, but before I do that, I 13 would like to make certain that they are correct, 14 which I think would be a smart thing to do. So does 15 anyone have any changes or corrections that we need to 16 make, or additions to the minutes of the last meeting? 17 Are they okay? All right. Okay. Well, thank you 18 very much.19 Also, I would like to mention a couple of 20 things about developing the agenda. As I indicated, 21 there are quite a bit of -- there was quite a bit of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 38 input from group leaders into the agenda that we have 1 today. But what you need to know is that we really --2 our goal -- and today's presentation, I realize, is 3 really jam-packed with people talking to us. And the 4 reason we're doing that is because we want to provide 5 you with background on the issues that we're going to 6 be dealing with. And we feel that today's agenda will 7 give you a lot of the knowledge to help us deal with 8 some of these issues.9 For the next meeting, we are going to set 10 up time for working groups to meet, which has been one 11 of your requests. But this means that you are going 12 to have to do some work prior to the next meeting, and 13 you have been very busy working. I want to thank 14 everyone.15 If you have ideas for the agenda, we 16 welcome them. You can contact either Scott or me 17 about your ideas, but we really need about six weeks 18 lead-time before the next meeting. The reason for 19 that is so that we can see if the agenda items can be 20 fit in. We can contact the people necessary to make 21 presentations or whatever needs to be done for those 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 39 agenda items. And in addition, the agenda has to be 1 posted in the Federal Register 15 days before the 2 meeting, so we have to have all this put together. So 3 that's why we need a lead-time for new ideas. We 4 cannot decide yesterday that we're going to do 5 something today and add it to the agenda. That just 6 doesn't work, because it has to be posted in the 7 Federal Register. So unfortunately, we have to work 8 within the rules in doing that. So if you have issues 9 for the Committee, there are two things that could be 10 done. You can set up a working group, or you can take 11 the issue to an existing working group, so we want to 12 come out of this with a lot of productive work.13 And by the way, the prior committee in our 14 last -- before we were reincarnated as CAC, we did 15 recommend to the FCC that they establish a Do Not Call 16 Registry. I hope they listened and took our comments 17 into consideration. We're very happy at the action 18 that the FCC has taken. And I think from that, unless 19 any of you have comments about agenda items or 20 anything else, we'll just move into our next 21 presentation. Is that okay? Any questions or 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 40 comments?1 All right. I just learned that I think 2 there's now over 20 million people signed up for the 3 Do Not Call Registry, which I think is just 4 astonishing since it was only put in place what, two 5 weeks ago? So at any rate, the Do Not Call Registry 6 has really hit a nerve with consumers.7 Richard Smith, who is the Acting Chief of 8 the Policy Division within the Consumer and 9 Governmental Affairs Bureau, is going to give us a 10 briefing, and then he will take questions about the 11 TCPA. Richard, welcome. We're glad to have you here 12 with us.13 MR. SMITH: Thank you very much. I' here 14 to discuss what I think is a very popular topic with 15 this group, and that is the Commission's recent order 16 on telemarketing, which Chairman Powell called the 17 most sweeping consumer protection measure ever adopted 18 by the Commission. And my task this morning is to try 19 to summarize what is approximately a 200 page order 20 for you hopefully in the next five to ten minutes, so 21 please bear with me, and I'll try to do that. And I 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 41 would like to take questions primarily this morning, 1 rather than just going through all the rules and 2 regulations.3 Our goal in this proceeding all along has 4 been to provide consumers with options for managing 5 telemarketing calls. And, of course, the primary tool 6 for that is the National Do Not Call Registry. 7 Beginning October the 1st, telemarketers will be 8 prohibited from contacting those consumers who have 9 registered their telephone number on the National 10 Registry by August 31st.11 It's also important to note that there 12 will only be one National Registry. I know there was 13 some confusion initially because the Federal Trade 14 Commission and the FCC had sort of dual rulemakings 15 going on at the same time, and there was a concern 16 that maybe there would be two National Registries, but 17 there will only be one. And that registry will be 18 administered by the FTC. They have acquired the 19 funding for that, and they've hired an entity called 20 AT&T Governmental Solutions to actually handle the 21 administration of the list.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 42 Consumers may register on the list by two 1 means, either over the Internet or from the telephone 2 that they're attempting to register on the list. You 3 have to actually call from the telephone that they 4 want to register. The registrations are limited to 5 residential telephone subscribes, and those do include 6 wireless numbers.7 As was indicated, since the registry was 8 up and running two weeks ago, my understanding is 9 approximately 23 million numbers have now been 10 registered on the list. And the FTC estimates that 11 approximately 60 million numbers will ultimately be on 12 the list. The registrations are valid for five years, 13 and anyone who has registered on the list may, if they 14 so choose, revoke their registration.15 Consumers that have registered on the list 16 will automatically be included in any state 17 administered list. That's a requirement of the TCPA. 18 The list cannot be used for any purpose other than 19 federal and state enforcement of the rules, and will 20 include only the telephone numbers of those who have 21 registered. It will not include names, addresses, or 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 43 any other types of information. I know that's a 1 concern for many people.2 Telemarketers will be able to purchase the 3 list beginning in September. They can do so either by 4 area code, or they can purchase the entire list. The 5 FTC proposed initially, I believe, a $29 fee per area 6 code, and approximately $7,200 to purchase the entire 7 national list. And the telemarketers are required to 8 check that list at least once every three months.9 It's also very important to note that 10 there are, of course, exemptions to the National Do 11 Not Call requirements. These include calls from 12 non-profit organizations, calls from companies that 13 have established business relationships with a 14 consumer who is on the list. One important new caveat 15 on that is that there is a time limitation now on the 16 EBR, and that is 18 months from any purchase or 17 transaction, and 3 months from any inquiry.18 There is also a prior expressed permission 19 that can be acquired from the consumer who is on the 20 list. That must be in writing and signed by the 21 consumer, and include the telephone number to which 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 44 they are providing permission.1 One other new exemption is something 2 called the personal relationship exemption, and that 3 allows the telemarketer that is making the call to 4 call family, friends and acquaintances who may 5 otherwise be on the list. It is important to note 6 that consumers can revoke all of these exemptions 7 except for the non-profit exemption by requesting to 8 be placed on the company-specific list.9 One of the last and more important pieces 10 of this puzzle that's still being sort of put together 11 is the role of the federal agencies and the state 12 governments, and how this is going to work. The FTC 13 and the FCC are currently in the process of putting 14 together a Memorandum of Understanding that will 15 clarify how enforcement will work between the two 16 federal agencies.17 The FCC has much broader authority to 18 regulate telemarketing than the FTC. For example, the 19 FTC has jurisdiction over common carriers, banks, 20 insurance companies, intrastate telemarketing, which 21 all fall outside of the FTC's authority.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 45 The other piece of this, of course, are 1 the numerous state lists. Nothing that we have done 2 in our order would prohibit the states from continuing 3 to administer their own list. We do, however, 4 encourage them to download the numbers that are on 5 their list into the federal list. And ultimately, the 6 goal would be to have one national list.7 One of the more complex and controversial 8 pieces of this are exactly how the state regulations 9 work in conjunction with the federal rules. And in 10 the order - and I'll try to go through this very 11 carefully - what we have said is that any less 12 restrictive state requirements are preempted by the 13 federal rules. For the most part, these include 14 exemptions that are not recognized under the federal 15 rules. Some of the common ones are for insurance 16 companies, real estate agents, newspapers, those types 17 of things, none of which are recognized under the 18 federal rules. Those are all preempted.19 States may continue to enforce consistent 20 regulations in state proceedings. This is where it 21 gets a little more complicated. The TCPA specifically 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 46 allows states to adopt more restrictive requirements 1 for intrastate and state calls, both which originate 2 and terminate within the state, so those are still 3 permissible.4 In terms of more restrictive requirements 5 being placed on interstate, we have not specifically 6 preempted that, but what we have said is that we will 7 look at that very carefully on a case-by-case basis as 8 it's presented to us.9 In addition to the National Do Not Call 10 List, there are a couple of other measures that were 11 taken in the order that may be of interest. The first 12 relates to abandoned calls, and new rules will limit 13 to 3 percent the number of abandoned calls that 14 telemarketers may make to consumers. Within the 15 permissible 3 percent of abandoned calls, the 16 telemarketer will be required to provide a 17 pre-recorded message that indicates who they, a number 18 you can call to be placed on their Do Not Call List, 19 and that the call is for a telemarketing purpose. 20 They will not be allowed to provide any other 21 information other than that.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 47 The abandoned call rules will become 1 effective October the 1st. In addition, we have 2 adopted rules on Caller ID that will require 3 telemarketers to transmit Caller ID. It will also 4 prohibit them from blocking Caller ID information that 5 is sent.6 The Caller ID rules are effective January 7 29th. And last but not least, we have made some 8 important changes to the rules on unsolicited faxes. 9 Most importantly, it is now required to obtain the 10 prior express permission in writing from the recipient 11 before sending an unsolicited fax. They may no longer 12 rely on an established business relationship in the 13 fax context.14 And I think that's plenty to absorb, so if 15 you have any questions, let's start this way.16 MR. KRAMER: Thank you, Richard. On 17 behalf of AARP, I just want to thank the Commission 18 for the great work you've done on this TCPA. It's 19 clear to everyone in the room that unless the 20 Commission acted as it did, the FTC's Do Not Call 21 Registry wouldn't have nearly the impact that it's 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 48 going to have down the road for consumers.1 With that though, certainly our members 2 who are calling in record numbers on this, are excited 3 about it, have high expectations too that their calls 4 -- excuse me, that they're not going to get calls 5 after this goes into effect. How are you guys going 6 to work the enforcement angle on this?7 MR. SMITH: That is a very important 8 concern to us. We realize that consumer expectations 9 are high, and one of the things we'd like to do is 10 certainly to educate them, that they will continue to 11 receive some calls, the EBR, the non-profit 12 organizations, et cetera. I think that's important to 13 make them understand.14 As I said, we are engaging with the 15 Federal Trade Commission and coming up with a 16 Memorandum of Understanding exactly how that will 17 work, and David Solomon can probably talk to you a 18 little more this afternoon about the enforcement 19 process here and how it works.20 I know that we have made it a priority to 21 increase enforcement of the TCPA complaints once the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 49 National Do Not Call List becomes effective in 1 October, and David could probably talk a little more 2 about that.3 CHAIR ROOKER: We'll work our way around 4 the table.5 MS. RAGSDALE: Good morning. Joy Ragsdale 6 of the Office of the People's Council for D.C., 7 representing NASUCA. We're also very pleased, we've 8 received a lot of calls from our constituents about 9 the Do Not Call Registry. I wanted to ask a few 10 questions for clarification.11 In regards to the enforcement, we are not 12 sure who has access to the customer's information. 13 And we were also informed that there was an inter-14 agency education task force that was being created 15 with the FTC and FCC. We wanted to know if that 16 process was indeed taking place. And also, NASUCA has 17 spoken with David Torok, who is the Staff Attorney at 18 the FTC, and also Kris Monteith spoke with us at our 19 mid-year conference in Portland, Oregon this past 20 June, in regards to establishing a partnership with 21 NASUCA and other consumer advocate offices to assist 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 50 the FCC and the FTC in the educational process.1 There are a number of our constituents who 2 cannot or do not access the Internet, so relying on 3 those fact sheets and consumer information alerts on 4 the Internet does not reach all of our population, so 5 we wanted to know how we can get the brochures, and to 6 use them to help the organizations disseminate the 7 information.8 In terms of access to the list, it will be 9 limited to the state and federal law enforcement 10 agencies. In terms of the educational aspect of this, 11 I know that efforts will be made, and I keep kicking 12 these questions to people who are coming up later. 13 Kris will be here, and she probably knows more about 14 what the outreach efforts are than I do at this point.15 MS. RAGSDALE: With regards to the 16 inter-agency consumer education, that's happening. 17 Are you are you aware of that? I believe it's with 18 the Attorney General's Association.19 MR. SMITH: Yes. We consult -- we have 20 been consulting with the Attorney Generals. In fact, 21 we talked to them yesterday at a conference call, and 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 51 we had a conference call with them today, along with 1 the FTC, and so that is all in the works.2 MS. GRANT: I'm Susan Grant from the 3 National Consumers League. The different 4 jurisdictions of the FTC and the FCC are very 5 confusing to consumers. Is there going to be one 6 central place where people can complain about Do Not 7 Call violations, where the complaints can then be 8 parceled out to the appropriate agencies?9 MR. SMITH: That is a very important 10 issue, and it's something that we are working on. 11 Currently, they can file complaints pursuant to the 12 FCC website. And I believe the FTC website will also 13 take complaints. And what I assume will ultimately 14 happen is the complaints will come in, and they will 15 be sort of doled out to the appropriate agency.16 MR. HOROWITZ: Richard, David Horowitz. I 17 have a real concern, and that concern is about the 18 privacy and the security of these lists. Because 19 we're talking about lists that will have 60 million 20 anticipated users who are using the program, and for 21 $7,200 you can buy a complete list.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 52 Now we know there are such things as 1 reverse telephone books that people can get numbers 2 from, take numbers and get addresses, and names, and 3 all that other kind of information. How is this going 4 to be secured in a way that if telemarketers buy the 5 list, that it doesn't become no longer a telemarketing 6 list, but a mail order list. or that other groups just 7 pick up these lists. Are these lists going to be 8 available to anyone who wants to pay the $7,200?9 MR. SMITH: They will only be available, 10 my understanding is, to people who are engaged in 11 telemarketing. And it's also, as I said, it's 12 important to note that the only information on the 13 lists are telephone numbers. There are no names and 14 addresses. And most of those telephone numbers are 15 available in telephone books, which include a lot more 16 information than the National Do Not Call List is 17 going to contain.18 MR. HOROWITZ: But what I'm saying, 19 Richard, that my concern is that yes, you will only 20 have telephone numbers. But in my experience in 21 working with telemarketing companies, which is a long 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 53 time, working I should say against them, rather than 1 with them, is that they have all sorts of means to be 2 able to translate phone numbers or anything else into 3 actual addresses and names. And it's like saying to a 4 pregnant shark, don't have baby sharks, you know, 5 because to have lists like this that are so complete 6 out there with 60 million, or I'm trying to think of 7 the figure, 60 million people on these lists, that 8 somewhere along the line either some widow hacker or 9 some other person who wants to do something really 10 negative gets a hold of these lists, and just uses it 11 basically as a rocket of some kind. And I'm just 12 saying that there ought to be some stipulations about 13 what kind of contracts people have to sign that take 14 these lists, because it's like buying a registry that 15 could be worth literally millions and millions of 16 dollars for marketers.17 MR. SMITH: Well, your concern is noted. 18 Of course, the difficulty is that in creating the Do 19 Not Call List, there has to be a way to make the 20 telemarketers aware of which numbers that they can't 21 call. And that's the only means that we could think 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 54 of.1 MR. HOROWITZ: I'm aware of that. I'm 2 aware of that, but I say that's the real weakness in 3 the program, because by making these lists available 4 to telemarketers, you're making these lists available 5 to anyone basically who wants to use them, no matter 6 what they sign on paper. And I think the enforcement 7 has to, in some legal way, nail these people for 8 taking these lists, and also have some kind of a list 9 for them - a contract to sign - making them aware of 10 the fact if they ever use any of these names, or 11 numbers, or whatever is there, that the penalties 12 could be really too high to mess around with. Because 13 in talking to some telemarketing groups, not to 14 mention any names, to find out how they feel about it, 15 most of them are just, you know, you're taking our 16 jobs away. You're doing this. We'll find another way 17 to get back.18 Well, I'm not saying they will, but having 19 this information around sure makes it tempting for 20 somebody who maybe isn't even a telemarketer to use 21 them maybe for finding website addresses for spamming. 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 55 I mean, I'd love to have a list if I was a spammer of 1 60 million people to turn out onto the Internet, and 2 that's just my concern. I'm wondering if anyone has 3 really looked at that from a legal standpoint.4 MR. SMITH: That is certainly something 5 that we will keep track of. And to the extent that 6 there are abuses, we'll try to take action as 7 necessary.8 MR. HOROWITZ: Well, I'm saying is it 9 going to be done, or isn't it going to be done? 10 That's my question to you.11 MR. SMITH: Well, one of the difficulties 12 with this, of course, is that the Federal Trade 13 Commission is administering the list, so I don't want 14 to speak exactly in terms of what they're doing. But 15 we are aware of that concern, and we certainly will 16 raise it with them.17 MR. HOROWITZ: One other thing, brief. 18 And that is, that in looking at the public's reaction, 19 because we have somewhat of a gauge on what people 20 react to things - like on our website, we've had tens 21 of thousands of requests for people who really want to 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 56 know about the program, which is easy. We just send 1 everyone over to .gov and to the website. But there 2 has to be something that is distributed either state 3 by state, or in some way personally to the person who 4 signs up that really outlines in a simple way how it's 5 used, what the exemptions are, and where they can get 6 more information, you know, not instantly, but at 7 least without -- if they don't have a computer they 8 can't go to the website. There has to be a number 9 available.10 And I think it's really important to sit 11 down and do this before the program goes into effect, 12 so that there is everything written out in simple 13 language, and also bilingually. I don't know how many 14 different languages are concerned here but, you know, 15 nowadays, it's good to have bilingual booklets and 16 pamphlets so that people of other ethnic persuasions 17 can use them. Is there anything going to be done to 18 notify these people, the ones that sign up, some way 19 where they'll be getting a booklet, or one sheet or 20 something that will explain it to them in their 21 language, as well as English.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 57 MR. SMITH: I'm not sure about the 1 languages, but I know if you sign up on the Internet, 2 there's a certain amount of information available to 3 the consumer at the time that they sign up. And also, 4 when they call in, there's a sort of a pre-recorded 5 message that provides some information.6 In the short time that we've had since 7 this has been up and running, we have made every 8 effort to put fact sheets and material on the 9 Internet. And Kris Monteith, who is in charge of some 10 of the outreach will be here shortly, and perhaps you 11 can talk to her a little bit more about some of your 12 ideas.13 MR. HOROWITZ: One final thing; and that 14 is, that the all the phone companies we have here, I 15 was wondering if there might be some commitment that 16 we can get from the major phone companies to have some 17 kind of a slip-in with their bills, or in some way to 18 let the people who are customers, users of the phone 19 system, to give them also hints on how to use the new 20 system, and where they can get information and things 21 like that, because that would really be helpful, 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 58 because you have a draw of an enormous audience also. 1 I hate to be looking at you when I'm doing this, 2 Richard, but --3 MR. SMITH: Let me just add one thing. 4 That is actually in the order. There's a requirement 5 in the TCPA that, I believe it's common carriers that 6 provide local exchange service must notify their 7 customers of the availability of this list. And 8 beginning January the 1st, they will be required to 9 provide an annual notification to their customers how 10 to get on the list.11 CHAIR ROOKER: I have a couple of 12 questions for you. Increasingly, telemarketing is 13 moving off-shore. What about the companies - for 14 example, I just received a telemarketing call recently 15 from India. The reason I knew it was from India is 16 because I asked for a number so I could call them 17 back, and this seems to be occurring. How does this 18 rule impact on companies outside the United States?19 MR. SMITH: We consider that to be a 20 violation of the federal rules, they're actually 21 violating the Do Not Call rules, regardless of where 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 59 the call is originating. In terms of practically how 1 we could enforce that if they are truly an 2 international-based company, and perhaps it would not 3 be possible to enforce, but we do consider it to be a 4 violation.5 CHAIR ROOKER: So if it's a U.S. based 6 company using off-shore telemarketers, then they will 7 definitely have to follow the rules.8 MR. SMITH: Yes, I don't think -- we 9 certainly don't want to allow them to circumvent the 10 rules by simply setting up some off-shore calling.11 CHAIR ROOKER: Okay. And then the other 12 question has to do with the charities. I know that 13 the charities are allowed to continue soliciting. 14 However, there are a lot of organizations that take 15 most of the money, but solicit on behalf of a charity. 16 Will they be able to continue doing that?17 MR. SMITH: I didn't catch what you -- can 18 you repeat it?19 CHAIR ROOKER: There are a lot of 20 organizations that solicit on behalf of a charity that 21 are for-profit companies. Will these for-profit 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 60 companies be allowed to continue soliciting for 1 charities, even though they take most of the money?2 MR. SMITH: That is addressed in the 3 order, and it's a little bit complicated. There are a 4 couple of different scenarios. There is a scenario 5 where a non-profit hires a for-profit telemarketer to 6 telemarket on their behalf. And in that case, they 7 are exempt. If it is a for-profit commercial entity 8 that's providing some of its revenue to a non-profit 9 organization, that would not be an exemption.10 CHAIR ROOKER: Wait a minute. Say that 11 again. It would not be?12 MR. SMITH: It would not be characterized 13 as a non-profit organization subject to the exemption. 14 They will be subject to the rules.15 CHAIR ROOKER: So I mean, like some of the 16 -- they recruit -- I mean, they solicit on behalf of 17 the firemen, for example, and we know that most of 18 that money goes into the pockets of the people doing 19 the recruiting, so they would have to abide by the 20 telemarketing rule?21 MR. SMITH: If they are soliciting on 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 61 behalf of the non-profit organization, they will fall 1 within the exemption.2 CHAIR ROOKER: Oh, they'll be exempt.3 MR. SMITH: If they are selling something, 4 for example, and giving a certain portion of that to a 5 non-profit, they will not.6 CHAIR ROOKER: Okay. Thank you.7 MR. SNOOP: My name is Don Snoop, and one 8 question I do have to follow-up on what Shirley was 9 speaking about, was that elderly people, my parents, 10 my in- laws have this challenge when somebody calls up 11 from the local state police. I'm representing the 12 local state police and I'm doing a fund raiser. How 13 are they to know? Is there anything that we can 14 incorporate into those rules that will allow seniors 15 specifically, because they seem to be the most 16 gullible, and I'm approaching that age also, so I'm 17 not speaking out of turn. But the fact is that, how 18 are they to know that, in fact -- is there going to be 19 some form of credentials required or something of that 20 nature?21 MR. SMITH: I believe, and I'm not an 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 62 expert on this, that there was recently a case in the 1 Supreme Courts that derived - and maybe somebody here 2 knows more about it than I do - from Illinois, from a 3 company that was soliciting on behalf of Viet Nam Vets 4 and keeping most of the money. And that is really 5 more a case of fraud than it is a case of violation of 6 the Do Not Call Rules, and it would fall within the 7 FTC's jurisdiction.8 MR. GOLDBERG: A lot has been made of the 9 exemption for political candidates. Does that fall 10 under the non-profit exemption?11 MR. SMITH: Yes.12 MS. BERLYN: Good morning. Debra Berlyn. 13 I have a question about removing your name from the 14 Do Not Call List. Could you discuss how that happens, 15 and is there some concern that names could be removed 16 without the consumer's permission?17 MR. SMITH: I don't think anyone has done 18 that yet, but the process would be exactly the same. 19 You can do it by the website or the same telephone 20 number you would call to register.21 MS. BERLYN: As a follow-up, is there 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 63 concern that it is easy enough so that others could 1 remove consumers' names?2 MR. SMITH: That is a possibility. It 3 certainly is not fool-proof. You do have to call from 4 the telephone number that you're either registering or 5 revoking, so there's some safety in that.6 CHAIR ROOKER: Susan.7 MS. GRANT: Can I just clarify the 8 question about charities. And this is concerning the 9 FTC's rules. I thought I understood that if it was a 10 for- profit concern soliciting on behalf of a charity, 11 that the for-profit concern would have to abide by the 12 Do Not Call Registry. Is that incorrect?13 MR. SMITH: That is correct in part. If a 14 for-profit is soliciting on behalf of a charity under 15 the FTC's rules, they're not subject to the National 16 Do Not Call List requirements, but they are subject to 17 the company-specific requirements. In other words, if 18 they call someone and the person asked to be placed on 19 their Do Not Call List, they have to honor that. That 20 is not the case under the FCC's rules.21 MS. GRANT: Okay. Thanks.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 64 CHAIR ROOKER: Joy.1 MS. RAGSDALE: Yes. I had a question on 2 the consumer complaint process. It appears that the 3 FCC requires a little bit more information for the 4 consumer to supply in filing a complaint. Not only do 5 they have to give name, telephone number of the 6 company that's called them, but the names of the 7 persons whom they've attempted to resolve their 8 issues, and all the steps that they have gone through. 9 And it does not appear that the FTC requires the 10 consumer to supply an extensive amount of information, 11 like a log that identifies all the steps that they've 12 gone through to resolve the issue. And I'm concerned 13 about the confusion that will cause to the consumer.14 MR. SMITH: One of the major problems in 15 enforcing the telemarketing rules is that there's 16 often very sketchy information about the calls, and so 17 we are certainly encouraging people to provide as much 18 information as possible, but we will certainly operate 19 on what we can get from them.20 MS. RAGSDALE: So if they don't supply all 21 of that information, you will still proceed in trying 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 65 to resolve their complaint?1 MR. SMITH: We will certainly take every 2 effort to investigate it, but certain critical pieces 3 of information have to be provided to us before we can 4 -- for example, who called you, you know, those types 5 of information we just have to have.6 MS. RAGSDALE: But they don't need the 7 name of the representative that they have spoken with.8 MR. SMITH: No, I don't believe that's 9 necessary.10 MS. RAGSDALE: Okay. And from what I 11 understand, David indicated that - and I'm speaking of 12 David Torok from the FTC - not all of the consumer 13 complaints will be investigated. And how will the 14 consumer know whether their complaint is one of the 15 ones that will be resolved?16 MR. SMITH: Well, that again is a very 17 good question, and is of concern to us because, of 18 course, we have only a certain number of staff who 19 look into these, and resolve them. With the adoption 20 of the National Do Not Call List, and this is perhaps 21 a question for David Solomon, I think that efforts 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 66 will be made to increase that staff and investigate 1 those.2 It certainly is unlikely that every single 3 complaint will be investigated and acted upon. What 4 is more likely to happen is that we will look for 5 patterns and practices, and abuses on sort of a 6 general level and act on those.7 MS. RAGSDALE: Okay. And since the 8 complaint process is handled through an IBR system, is 9 there opportunity for the complainant to hit zero if 10 they need to speak to an operator?11 MR. SMITH: That I'm not sure of it, and 12 it might be -- Dane is saying yes, so I assume the 13 answer is yes.14 MS. RAGSDALE: Okay. Thank you.15 MR. SNOOP: A short question, and that is, 16 with the registration, you know, most people have more 17 than one phone number. I mean, it's just kind of a 18 way of life. We have two phones or three phones, or a 19 fax phone, or whatever numbers you have in your home. 20 Are you asking people who register to register all 21 the numbers, or just the numbers that are the basic 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 67 numbers that they use in their household?1 MR. SMITH: That is up to the consumer. 2 The only sort of limitations on this are that if you 3 are registering by phone, you have to call from the 4 phone number that you're registering. So if you have 5 three lines, you're going to have to call from each 6 one of those. My understanding is if you register on 7 the Internet, you can register as many as three 8 numbers.9 MR. SNOOP: Okay. At a time.10 MR. SMITH: Yes.11 CHAIR ROOKER: Okay. Do we have other 12 questions for Richard? Okay. Well, thank you so 13 much. We really appreciate, Richard, for the 14 excellent presentation.15 CHAIR ROOKER: Dane.16 MR. SNOWDEN: I know you all are about to 17 take a break, but we're trying to work on the schedule 18 for Commissioner Martin, so he may be down in a 19 second, but if he doesn't come down, actually he will 20 be down a little later. But I do want to touch on a 21 couple of things that Richard was bringing up, and I 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 68 think Richard did a fantastic job with explaining, as 1 he pointed out, this order that has over 200 pages. 2 And it was a lot of hard work from a very small staff, 3 Richard being one of them, that put this together.4 First, there's a lot of debate about the 5 non-profit issue, and the political calls and things 6 of that nature. We are prohibited by Congress to 7 change that. We cannot touch that, and that is not 8 something that we can say arbitrarily we want to do, 9 or we can't do. What Congress told us to do is to 10 leave it exactly like it is. And for those of us who 11 have to go to the Hill a lot, we do exactly as 12 Congress tells us to do, and I being one of those 13 people. So we will continue to follow that, unless 14 Congress tells us otherwise.15 In terms of the outreach issues that came 16 up, we are - and again, Kris Monteith will be down 17 here a little later, who's my Deputy for Consumer 18 Affairs and Outreach in addition to governmental 19 affairs, but we will continue to make sure that 20 consumers can call the 188-CALL-FCC or 188-TEL-FCC for 21 TTY, and get any information they need on the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 69 telemarketing rules, all the exemptions, all the 1 facts. They can get that no matter if they have 2 access to a computer or they have access to a 3 telephone. Hopefully, you have access to both. If 4 you don't, you only have access to a telephone, you 5 can call and get that information sent directly to 6 you. And that is true for not only our telemarketing 7 rules, but all of -- everything we do here at the FCC.8 So that was directly to you, Mr. Horowitz, so please 9 tell your listeners that they can call 188-CALL-FCC if 10 they don't have access to a telephone.11 In terms of the complaint information, the 12 more information, obviously - and David Solomon will 13 be here, and I'm sure he would echo this - the more 14 information we have in terms of a complaint the 15 better. That's the nature of the beast. If we only 16 have a telephone number or a time, it makes it harder 17 for us to go out and do enforcement action. So we are 18 encouraging, strongly encouraging consumers to provide 19 as much information as they can when they file a 20 complaint because it makes it a lot easier to actually 21 go after the person that you are complaining against.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 70 And it's important to note that the FCC 1 has the prerogative to act against a telemarketer or 2 any other violator of our rule, no matter if it's on 3 one complaint or a trend of complaints. So depending 4 on how egregious the violation is, we can act, or if 5 it's a trend that we're seeing we can act, so it's not 6 just limited to one thing that we receive from one 7 particular consumer.8 But I wanted to clarify some of those 9 things. And we are, as Richard pointed out, and I'll 10 say, the poor guy hasn't gotten any sleep since this 11 thing went into effect on July -- since it went out on 12 July 26th when we made our decision here at the 13 Commission.14 This is brand new. We are still getting 15 through this, and we have -- and I want to pat 16 ourselves on the back a little bit, and I don't 17 usually do this, but Congress gave us until September 18 to get this done, and we are ahead of schedule. We 19 did that intentionally so that we could work on some 20 of the other details before October 1st, so that we 21 could answer some of these questions, we can get the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 71 enforcement issues worked out. And we are well 1 underway to do that, so I am very proud of Richard, 2 and Erica, and Margaret, and all the members of my 3 staff who have put this together to make sure that we 4 got this done for the American consumer. And so we 5 have a lot more work to do.6 This will be a very busy summer for our 7 policy folks, but I know this is an important issue 8 for the American consumer, so I hope that everyone 9 looks at this issue as a giant step forward for the 10 American consumer regarding managing the telephone 11 calls that come to their homes each and every day. So 12 with that, I will turn it back over to you, but I 13 wanted to just bring those few points out.14 CHAIR ROOKER: Thank you, Dane. Thank you 15 very, very much for an excellent presentation.16 We're going to take a 15 minute break, be 17 back just a little bit before 10:30 because we're a 18 little bit early. I can't believe it. Everybody is 19 running on great schedule here. Thank you.20 (Whereupon, the proceedings in the 21 above-entitled matter went off the record at 10:15 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 72 a.m. and went back on the record at 10:33 a.m.)1 CHAIR ROOKER: Back to work, folks. Oh, 2 good, Richard. You're doing so good. You all are 3 getting to be so obedient. By the time this term of 4 office is over, you're going to be right in your 5 chairs at the minute. It's wonderful.6 Oh, yes. Scott is not back yet. He had 7 to go pick up something for us, but you're absolutely 8 right. That was nice of him, wasn't it. And boy, was 9 it ever.10 One person did join us after we made the 11 introductions this morning, so Milton is right there. 12 Would you just introduce yourself so that we'll know 13 who you are?14 MR. LITTLE: Sure. Good morning, 15 everyone. Sorry I'm late. Milton Little, Chief 16 Operating Officer of the National Urban League.17 CHAIR ROOKER: He actually was here right 18 after we did the round of introductions, so you're not 19 that late, Milton. We're glad to have you here. 20 Thank you very, very much.21 Now I think Greg Guice is here. There you 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 73 are. Yes, that's absolutely great. Our next subject 1 is -- actually, Greg is going to cover two subjects. 2 He is an Attorney Advisor with the Policy Division in 3 the Wireless Telecommunications Bureau. He's going to 4 talk about the E-911 Service and, of course, much of 5 the interest in this service grew out of the terrorist 6 attacks, which pointed up some needs for change.7 And then the second thing that he's going 8 to address is the order that was passed yesterday 9 regarding the hearing aid compatibility issue. And 10 this is an issue in which the committee has been very 11 interested. And Greg will continue with information 12 about that after the E-911 discussion. Thank you, 13 Greg. Welcome.14 MR. GUICE: Thank you. Good morning, 15 everyone. Yeah. I'm here to talk to you about the 16 E-911 issues that we're dealing with at the 17 Commission. As some of you may know, at the end of 18 last year we actually began a new proceeding looking 19 at expanding the scope of the E-911 requirements. 20 Currently, wired line services and wireless CMRS 21 services comply with those requirements. And there 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 74 are a number of services that came about after that, 1 or just sort of got overlooked in the process, and so 2 we're revisiting those issues at this time.3 Just for everybody's benefit, Enhanced 911 4 Service allows Public Safety answering points to 5 automatically receive caller's phone numbers and 6 location information. Enhanced 911 provides critical 7 information to the PSAP that they may not otherwise be 8 able to get.9 In the item that we adopted at the end of 10 last year, the Commission proposed using specific 11 criteria to determine whether a particular service or 12 device should be required to provide consumers with 13 Enhanced 911 capabilities. Those criteria sought to 14 base the decision on whether the service or device 15 offered real time two-way voice services that 16 interconnected to the public switch network on either 17 a stand-alone basis, or packaged with other 18 telecommunication services, whether the consumers of 19 those services or devices had a reasonable expectation 20 of having access to 911 service, whether the service 21 competed with traditional CMRS service or with the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 75 wireline local exchange services, and whether or not 1 it was technologically or operationally feasible for 2 those services to provide 911 service.3 What I'll do now is just run through a 4 list of those services and sort of what we thought we 5 would ask about them. Mobile Satellite Services was 6 the first issue teed up. The Commission has been 7 considering Mobile Satellite Service and the need to 8 comply with 911 for some time now.9 Mobile Satellite systems, by their nature, 10 have fewer local interconnection points than 11 terrestrial wireless systems. This technological 12 difference affects the ability of Mobile Satellite 13 Service providers to both locate callers, and to route 14 their emergency calls to the appropriate PSAP. The 15 item, therefore, sought comment on whether or not 16 maybe these services would be better served by using 17 call centers that could then find the local PSAP and 18 route the call there. The item also sought additional 19 information on other enhancements to E-911, that maybe 20 Mobile Satellites could benefit from in their 21 implementation.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 76 The next issue we sought comment on was 1 Telematic Service. Some Telematic Service providers 2 offer their customers the ability to place a 911 call 3 directly if they subscribe to a resold CMRS service, 4 or they offer it through a hot button which is - for 5 those of you who may not know, this is sort of like an 6 On-Star or ATX is another provider of these services, 7 and you sort of hit a button and it goes to an 8 emergency call center.9 If the hot button is used, the request is 10 sent first to an advisor at the Telematics Call 11 Center, who then forwards the call to the appropriate 12 PSAP. The hot button approach may actually have 13 certain benefits, as well as draw- backs, and the 14 item, therefore, sought comment on whether we should 15 craft our rules to take account of this option.16 The item next looked at multi-line 17 telephone systems which have been around for a long 18 time. Multi-line systems include things such as PBXs. 19 Multi-line systems present a challenge in delivering 20 accurate call-back and location information, because 21 the systems may not assign a unique telephone number 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 77 to the outbound call, and because the system itself 1 may not be located at the same physical location as 2 the caller.3 Some states have adopted rules to address 4 these issues, so the further notice sought comment on 5 whether -- on what the appropriate role for the 6 Commission is in this matter in light of such state 7 action.8 Next the item looked at resellers, prepaid 9 calling, and disposable phones. There we are looking 10 at more of an explicit obligation issue. Currently, 11 the underlying facilities-based licensee has a 12 requirement to comply with our rules. And what we 13 sought comment on there is whether we should put a 14 more explicit obligation on the resellers.15 There's also a service known as Automated 16 Maritime Telecommunication Systems. These have 17 traditionally been ship-to-ship and ship-to-shore 18 systems. The Commission relaxed its rules and allows 19 those folks to now offer voice services that connect 20 with the public switch network, so we sought comment 21 on whether, to the extent that they do connect to the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 78 public switch network, if they should have an E-911 1 obligation.2 And then finally, sort of the catchall 3 category, we looked at emerging services and devices. 4 Among these, you know, you can think of things such 5 as voice-over IP. And there we sought, you know, 6 information on -- really it's more like information on 7 what the potential for any of these such devices or 8 services were to provide 911 service, and also what 9 the expectation of consumers might be in using these 10 services. And so that's sort of where we are in the 11 E-911 proceeding. Comments have been filed, so 12 unfortunately we can't say too much at this point. We 13 are reviewing it, and we hope to do something soon in 14 those regards.15 What I'd like to do is maybe take 16 questions on both of these things at the end; that 17 way, it kind of gets me out of this position that I 18 don't like. So next, the hearing aid compatibility 19 proceeding that we did yesterday.20 Yesterday the Commission adopted a report 21 and order requiring wireless manufacturers and service 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 79 providers to make digital wireless phones accessible 1 to the more than 6 million individuals with hearing 2 disabilities that use hearing aids.3 Approximately one in ten Americans, about 4 28 million, have some level of hearing loss, and this 5 proportion increases to one in three among the 6 population over age 65. As the median age of the 7 population continues to rise, the proportion of 8 Americans with hearing loss will likely increase.9 As many of you probably know, hearing aids 10 operate in two modes, acoustic coupling which allows 11 the microphone to receive and amplify sound, and then 12 there's telecoil coupling, which allows the user to 13 avoid unwanted ambient noise by turning off the 14 microphone and receiving only magnetic fields 15 generated by telecoil compatible phones. In the U.S., 16 approximately 25 to 30 percent of all hearing aids 17 contain telecoils, which generally are used by 18 individuals with most profound hearing loss.19 In 1998, Congress passed the Hearing Aid 20 Compatibility Act, and required the Commission to make 21 all essential phones hearing aid compatible. However, 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 80 the statute exempted certain categories of telephones 1 from these requirements; one of those was wireless 2 phones.3 The Commission, based on a petition and 4 the statute itself, began its review of the exemption 5 for wireless phones, and through the record that we 6 developed there, we found that the statutory 7 requirements for lifting the exemption on wireless 8 phones has been met.9 Specifically, the Commission found that 10 continuing the exemption would have an adverse effect 11 on individuals with hearing disabilities, and removing 12 the exemption is in the public interest. In addition, 13 it found that it was both technologically feasible to 14 require compliance, and that the compliance would not 15 increase cost to such an extent that phones could not 16 be successfully marketed. As a result, the order 17 modifies the exemption to impose certain requirements 18 on digital wireless phone manufacturers and service 19 providers.20 The item requires digital phone 21 manufacturers and service providers to take steps to 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 81 reduce the amount of interference emitted from the 1 digital wireless phones, and to provide the internal 2 capability for telecoil coupling.3 Specifically, phones subject to the rules 4 must comply with certain performance levels specified 5 in a technical standard established by the American 6 National Standards Institute, known as ANSI C-6319. 7 Under that standard, covered phones must provide 8 reduced radio frequency or RF emissions, sufficient to 9 meet a U-3 rating, and telecoil coupling sufficient to 10 meeting a U-3T rating.11 These requirements do not go into effect 12 immediately, recognizing that manufacturers have 13 design cycles that they need to work through, and so 14 what we've required is that within two years, each 15 digital wireless phone manufacturer and service 16 provider must make available at least two handsets 17 that comply with the ANSI standard for interference. 18 That's the U-3 rating, with a carve-out on the tier 19 one or nationwide carriers, Sprint, Verizon, those 20 folks. They will be required to provide two models or 21 25 percent of the total number of models offered in a 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 82 given market. I know this is a little bit confusing. 1 It will be clear in the order.2 Within three years, each manufacturer and 3 service provider must make available at least two 4 phones for each air interface that it offers, that 5 provides telecoil coupling at the U-3T rating under 6 the ANSI standard.7 To ensure consumers' continued 8 accessibility and a range of product options, the item 9 does three other things. First, by February 18th, 10 2008, which is when the Analog Sunset Order takes 11 effect, 50 percent of all digital wireless phone 12 models offered by manufacturers or carriers must be 13 compliant with the acoustic coupling or the u-3 14 rating.15 Second, the item encourages manufacturers 16 and providers to offer at least one compliant handset 17 that's lowered price, and one that has sort of the 18 higher end features, that are becoming available.19 And third, the item applies the 20 requirement across all air interfaces offered in order 21 to further expand the service options available to 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 83 individuals with hearing disabilities.1 The order also adopts what's called a 2 notice requirement, which is a carve- out to try to 3 address the concerns of smaller providers and smaller 4 manufacturers, or those with just a smaller presence 5 in the U.S. market. There, if you're a manufacturer 6 or service provider offering two or fewer handsets in 7 a given market, you will be exempt from the 8 requirements that we have adopted. Those who offer 9 three models, they'll have to offer at least one 10 compliant handset. And those who offer four or more 11 will be required to meet the requirements.12 So the consumers will get the information 13 that they need to make an informed decision, 14 manufacturers will be required to label both the 15 packages that the phones come in, as well as put an 16 explanation in the manual, or through a product 17 insert. And to facilitate the matching, the item 18 encourages hearing aid manufacturers to label their 19 products, their pre-customized products according to 20 the ANSI standard for hearing aids.21 Finally, the Commission will engage in a 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 84 comprehensive targeted outreach campaign in 1 coordination with the FDA to ensure that individuals 2 with hearing disabilities are informed of the actions 3 taken in this order, and the availability of hearing 4 aid compatible digital wireless phones.5 And so with that, I'll open up the floor 6 to any questions anyone might have.7 CHAIR ROOKER: All right. Joe. Be sure 8 that you put your hand up again when Joe is about 9 finished so that the people with the microphone - and 10 identify yourself when you start to speak, if you 11 would, please.12 MR. GORDON: Hi. I'm Joe Gordon, the 13 League for Hard of Hearing. And I guess I 14 congratulate you on this big first step of many steps. 15 You just mentioned that dissemination of information 16 about the accessibility of the hearing aid compatible 17 phones will be made to medical community and to 18 schools, and you also say to groups and associations 19 representing individuals with hearing disabilities, 20 and to audiologists. Can you briefly tell me how you 21 -- do you have any -- what your plans are in informing 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 85 the organizations that represent hard of hearing 1 people that wear hearing aids and audiologists. Thank 2 you.3 MR. GUICE: Yes. What we've done is, our 4 Consumer and Governmental Affairs Bureau is actually 5 going to do a targeted mailing, where they have6 information that they're going to disseminate to those 7 groups so that they can get it to their members.8 In addition, I'd mention that CTIA has 9 posted on its website an area where folks could go to 10 see some of these phones that are going to be 11 compliant with the requirement. Also, the Consumer 12 and Governmental Affair Bureau is doing a consumer 13 fact sheet that should be available shortly, detailing 14 sort of these requirements, and we'll be posting that 15 on our website, as well.16 The FDA, as we understand, has a list of 17 audiologists, and so we'll be working with them to get 18 a mailing out to those folks, so that when they meet 19 with their customers, they can explain to them that 20 this is something new that's coming about. I'll be a 21 couple of years. And in talking through the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 86 proceeding, and talking with the Hearing Aid Industry 1 Association, they indicated that what they would be 2 doing is working with the audiologists, as well, to 3 put questions on the questionnaire so that this 4 question comes up when you're doing your 5 pre-screening.6 MR. GORDON: Just one follow-up question. 7 You mention in the order release that 25 percent of 8 hearing aids in the United States have telecoils. 9 And, hopefully, this order will increase that 25 10 percent number, which is extremely low.11 MR. GUICE: Right. I know from this 12 proceeding that telecoils are a lot more popular in 13 Europe as far as use, and hopefully, this item will 14 help that. In addition, what we're also encouraged by 15 is wireless manufacturers have indicated to us that 16 there may be better ways of doing telecoil coupling, 17 so the item is actually going to make an allowance for 18 some of that, with the understanding that telecoil is 19 sort of a standard that they need to go to.20 MR. GORDON: Thank you.21 CHAIR ROOKER: Eugene.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 87 MR. SEAGRIFF: Hi. Eugene Seagriff 1 representing TIA. Greg, thanks very much for your 2 taking the time to speak with us today, and your 3 informative presentation. And actually, your comments 4 cleared up my question, but my question was generated 5 by the HAC press release.6 MR. GUICE: Sure.7 MR. SEAGRIFF: And in the bulleted points 8 labeled under "Specifics of Adopted Report and Order", 9 it says that it's required that within two years, at 10 least two HAC compliant handsets with reduced RF 11 emissions - okay. The concept of "HAC compliant" 12 means, has a telecoil and has volume control based on 13 the HAC Act. So by saying "HAC compliant" there, and 14 then just saying with the reduced emissions, implies 15 that you need to have a telecoil at that point, to 16 your point, when in reality it's the three-year point.17 MR. GUICE: Right. Yeah, actually --18 MR. SEAGRIFF: So when you're looking at 19 that wording --20 MR. GUICE: I guess actually what we're 21 using -- there we're using "HAC compliant" to mean 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 88 something different than our Part-68 requirements, 1 where we're --2 MR. SEAGRIFF: Yeah. And that's going to 3 confuse a lot of people.4 MR. GUICE: Well, that's a great point. 5 Then we should definitely clear that up.6 What we're actually doing is -- the phrase 7 "HAC compliant" in the wireless context is going to 8 refer to a different set of requirements, and that 9 will be the U-3 RF Emission Standard, and the U-3T for 10 telecoil. And as you pointed out, the RF standard 11 comes in in two years, telecoil in three. And I would 12 mention that ANSI's telecoil standard is a little bit 13 higher than the Part-68 requirement, so yeah, that 14 will be -- thank you for bringing that up.15 MR. SEAGRIFF: Perhaps a new term is in 16 order than "HAC compliant".17 MR. GUICE: Yeah. Perhaps we should say 18 WAC or something, wireless --19 CHAIR ROOKER: We have a question here 20 from Susan Mazrui.21 MS. MAZRUI: Hi. I was wondering how you 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 89 came up with the figure for the telecoil, the number 1 of telecoil compatible phones?2 MR. GUICE: Well, in dealing with the3 various interests in the proceeding, the wireless 4 manufacturers, as well as the Consumer Advocacy 5 Groups, I think everybody understood that telecoil is 6 a difficult issue to address. And the HAC Act 7 specifically requires the Commission to take into 8 account that difficulty through a cost - not 9 necessarily a cost benefit analysis, but sort of 10 having recognition of the fact that technologies may 11 require us to delay or wait, or lessen a burden. And 12 so in looking at the way that the various interests 13 came to us and put information on the record, we felt 14 that two was certainly a requirement that was well 15 within reach. And so, I think a number of the 16 manufacturers should be pleased with that. I know 17 that -- I believe that SHHH, in particular, in an ex 18 parte filing to the Commission, mentioned that 19 telecoil was going to be a difficult issue. They 20 realize that it would probably need to be on a 21 different glide path than the RF Emission issue. And 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 90 so what we tried to do in the order is recognize that, 1 so that we can ensure choice.2 And, you know, what may get lost -- two 3 sounds to some like a small number, but if you're a 4 service provider and you offer four different 5 manufacturer's handsets, potentially you would have 6 eight offerings that you could make to the individuals 7 with hearing disabilities. So this is real choice, 8 even though the number itself my seem a little low to 9 other folks.10 MS. MAZRUI: If I can comment back, I 11 would say from the number of users -- I mean, 12 certainly we want to serve our customers, including 13 customers with hearing loss, but I would say the 14 number would seem high when you look at the actual 15 number of users compared to the total population. 16 Although we certainly understand the need and the 17 desire to provide choices.18 MR. GUICE: And I would say to that, I 19 think that in the wireline context, every single phone 20 is telecoil compatible. There's nothing necessarily 21 that the telecoil compatibility does that would affect 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 91 a person who doesn't use the telecoil, or just regular 1 hearing individuals from using that exact same phone. 2 And granted, there are some technological challenges 3 in putting this into such a small device and one that 4 operates in sort of an environment that's very 5 different than a wireline environment. But what I 6 would say is that while 25 to 30 percent of hearing 7 aids are equipped with telecoil and a smaller number 8 of those people actually use the telecoil, I think 9 what we're striving at is really getting customer 10 choice. And, you know, for hearing individuals, we 11 have one manufacturer that offers us 45 choices, so 12 I'm not sure that two is necessarily a bad benchmark.13 CHAIR ROOKER: Do we have any other 14 questions for Greg? If not, Greg, thank you so much 15 for your time. We really appreciate your being here.16 MR. GUICE: Thank you.17 CHAIR ROOKER: Scott Marshall would like 18 to make an announcement.19 MR. MARSHALL: Very quickly, you have a 20 lot of material in your packets, some of which was 21 mentioned by Dane this morning. We have that material 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 92 available on floppy, as well as CD disks, so we want 1 to be sure we get that to the people that need the 2 electronic versions.3 In addition, the press release on the 4 Hearing Aid Compatibility issue, as well as the 5 Consumer Alert are in your packet, as well as an 6 off-the-press fresh, just newly minted handout on 7 broadband. And finally, as you probably know, we 8 invite people from the public to submit comments to 9 the committee on issues on our agenda. And your 10 packet includes some material from the National 11 Emergency Numbering Association regarding the E-911 12 issue. And we have a version of that on disk, as 13 well. Thanks.14 CHAIR ROOKER: Thank you very much, Scott.15 This next subject, the Telephone Relay 16 Service update we're going to be talking about next, 17 should provide excellent background for the working 18 group on this subject. And in fact, it's important 19 that you realize that the Commission has asked this 20 committee for recommendations on TRS. And what we'd 21 like to see happen is that the group, the working 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 93 group, which is headed by Brenda Kelly Frey, make 1 recommendations for action by the Full Committee at 2 our November meeting.3 We've been asked to provide comments 4 regarding the outreach provisions of the order; that 5 is publicizing the order to users of the service, 6 making the public aware of it and, of course, how to 7 pay for it. That's a big question.8 Joining us this morning to discuss this 9 important issue is Tom Chandler. He's the Chief of 10 the Disability Rights Office with the Consumer and 11 Governmental Affairs Bureau. Tom, welcome to CAC.12 MR. CHANDLER: Well, good morning. It's a 13 pleasure to be invited here again to give you an 14 update on our recent TRS orders. I see a lot of 15 familiar faces here, even though I've sort of run in a 16 little late. In the almost one year that I've been 17 working in the Disability Rights Office, it's 18 certainly been a great pleasure to get to know many of 19 you, and talk to many of you, and discuss all the 20 issues that are relevant to the important work that we 21 do.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 94 I think as you can tell, we've had a very 1 busy several months. Hopefully, some of you don't 2 think we've been too busy in the last month or so. 3 And this morning, I'd like to briefly talk about two 4 of the TRS items that we have released in the last 5 month, and that would be the second improved TRS 6 Report and Order, and Notice of Proposed Rulemaking 7 that was released on June 17th, and the TRS Cost 8 Recovery Order setting forth these permanent 9 reimbursement rates for TRS that was released on June 10 30th.11 By way of a little bit of background, 12 which may be unnecessary, but I'll say it anyway. 13 Obviously, one of the major regulatory activities with 14 which the Consumer and Governmental Affairs Bureau and 15 the Disability Rights Office is involved is TRS. I 16 know most of you -- many of you are very knowledgeable 17 about the subject, some of you that might be new to 18 the committee may be less so, so let me just make a 19 few brief pointers.20 TRS, or the Telecommunications Relay 21 Services allows persons with hearing and speech 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 95 disabilities to communicate by telephone with persons 1 without such disabilities. This is done through a 2 communications assistant or CA, who is in a sense a 3 middle person, who's in the middle of the call between 4 the two parties. And on a typical call, the CA 5 receives text typed, for example, by a person with 6 hearing disabilities on a TTY. The CA in the middle 7 voices that text to the hearing person, and listens to 8 what the hearing person says, and types that back to 9 the person with the hearing disability. And that way, 10 you have a two-way conversation with the CA in the 11 middle.12 TRS was enacted as part of Title IV of the 13 Americans with Disabilities Act in 1990. Pursuant to 14 the Act, the Commission issued regulations that 15 provided for the nationwide roll-out of TRS in July of 16 1993. And you don't have to be a math major to figure 17 out that that means we're coming up on the 10th 18 anniversary of TRS which is, in fact, later this month 19 - or at least the 10th anniversary of its availability 20 on a uniform nationwide basis under our regulations. 21 So I think that's a milestone that we can all be proud 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 96 about.1 In enacting Title IV, Congress obviously 2 recognized that persons with speech and hearing 3 disabilities have long experienced various barriers to 4 telecommunication services. And, therefore, the 5 intent of the Act was to further the broader goal of 6 universal service by providing to persons with hearing 7 and speech disabilities functionally equivalent 8 telephone service. And that's sort of the mantra 9 throughout the Act, and the regulations.10 And I always, at this point, digress a 11 little bit just to emphasize, because maybe given my 12 background as a Civil Rights attorney, broader-based, 13 the Title IV and the whole TRS program is part of the 14 Americans with Disabilities Act, which is really a 15 very broad act to end discrimination based on 16 disability generally throughout the country. So you 17 have Title I, that covers employment situations. 18 Title II, which covers discrimination by states and 19 local governments in terms of access. And Title III, 20 which covers public accommodations, which ironically 21 are private entities, such as hotels, restaurants, 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 97 movie theaters, stores and things like that. And then 1 Title IV is the Telecommunications Relay Services, and 2 the Telecom. So I think it's always important to step 3 back every once in a while and realize that Section 4 225, and what we do in TRS is really part of this much 5 broader Act.6 If you read the legislative history, they 7 talk about the importance of access and barriers to 8 telecommunications in the same breath that they talk 9 about the barriers to employment, access to 10 facilities, access to businesses, movie theaters, et 11 cetera.12 Since 1990 or 1983 - I see I have a typo 13 in my own speech - no, 1993. I don't have a typo in 14 my own speech. I have a typo in my brain. TRS 15 obviously originally started out what we now call 16 traditional TRS, which was a TTY or similar device, 17 typing it through the phone lines, going to the other 18 party. Now we obviously have expanded that, and we 19 have other types of TRS, including IP Relay, Internet 20 Protocol, and Video Relay Service. And, of course, 21 all of the action of late has really been in these 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 98 other Internet-based services, IP Relay and BRS. That 1 has made our work both exciting and a challenge, and 2 has raised a lot of interesting issues for a lot of 3 reasons; in part, because you don't necessarily know 4 the geographic location of one leg of the call when 5 it's through the Internet, so it makes the whole 6 intrastate/interstate paradigm on which much of the 7 TRS program is based difficult to figure out. So 8 that's an ongoing challenge.9 How wide-spread has the use of TRS been? 10 Well, my number crunchers tell me that for 2002 and 11 2003, throughout the various forms of TRS, consumers 12 have used almost 40 million minutes of interstate TRS 13 alone, which equals again if you're a math major, 14 which I obviously am not, given I can't even read my 15 own numbers earlier, 27,550 days or over 75 years 16 worth of communication.17 With that background, let me turn to these 18 orders. On June 17th, of course as you now know, we 19 released the Second Improved TRS Order, and the NPRM 20 that went along with it. To briefly summarize the 21 meat of this order, we first required several new 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 99 types of TRS calls, that they be provided on an 1 intrastate and interstate basis, including things that 2 a year ago I didn't know what they were, like two-line 3 voice carryover, two-line hearing carryover, 4 VCO-to-VCO, HCO-to-HCO, and various other 5 permutations. That's all set forth in the order. 6 Most of these things were being provided already, but 7 there are a lot of different forms and spin-offs on 8 sort of the traditional TRS type of call.9 Second of all, we clarified that providers 10 may use any preferred technology that complies or 11 facilitates meeting our mandatory minimum standards, 12 including SS-7 technology, which is sort of this 13 parallel network out there that's used for 14 transmitting call data, and billing information, and 15 ties into providing Caller ID and other services. 16 There was some ambiguity out of our previous orders as 17 to the ability to use SS-7 and things like that.18 In addition, we clarified that in the 19 important area of Emergency TRS Calls, that they be 20 routed to the appropriate Public Safety Answering 21 Point, PSAP, instead of the nearest PSAP, because the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 100 appropriate one is not always geographically the 1 nearest. And we also concluded that 711, the sort of 2 universal three digit dialing access to get to a TRS 3 Center would also be the access number for 4 speech-to-speech, so we would keep having one number 5 that everyone could remember, that could get them 6 access to any of the types of TRS services.7 And finally, we required a bunch of new 8 features, again sort of like the other types of TRS. 9 Most of these have already been provided, things like 10 call release where you can through a CA to connect 11 what actually ends up being a TTY-to-TTY call. But if 12 you're trying to reach somebody and you have to go 13 through a hotel switchboard or something like that, 14 the CA can set up the call and then drop out of the 15 call. Also, other features like three-way calling, 16 and a speed dialing type of functionality.17 Turning to the Notice of Proposed 18 Rulemaking, which may or may not seem a little more 19 exciting than the notice itself, first, of major 20 importance is the proposal that TRS facilities be 21 treated like LEC for purposes of the National Security 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 101 Emergency Preparedness Priority Status under our 1 Telecommunications Service Priority System, and all 2 that gobbledy-gook which I can barely read here, is 3 really making the very important point that currently 4 LEC facilities are covered by our rules and programs 5 to restore communication services in the event of an 6 emergency, but TRS facilities are not. So in the 7 post-911 world that we are unfortunately stuck with, 8 it seems to us extremely important that those who use 9 TRS have the same access to have their 10 telecommunications service restored that the hearing 11 world does in terms of the LEC facilities, so we put 12 the TRS facilities on the same footing as the LEC 13 facilities.14 We also seek comment on a bunch of other 15 matters, such as the encryption of IP Relay calls for 16 security purposes, how 711 emergency calls should be 17 handled over wireless devices. There's obviously a 18 big difference between making wireline versus wireless 19 calls. With the wireless call, there's obviously no 20 necessary correlation between where the person is 21 making the call, and what the phone number is on the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 102 phone that may suggest where it is. So if I take my 1 Virginia cell phone and make a call from California, 2 and it's a 911 call, they may think I'm in Virginia, 3 when really I'm in California, so that presents 4 additional challenges.5 Also, we asked about our Call Setup Rules, 6 and whether they should be sort of specified for the 7 various types of non-traditional TRS calls, such as 8 two- line, HCO, speech-to-speech. Instead of having 9 one rule that applies to all the various types of TRS, 10 whether they should be made more specific.11 And finally, we asked about other 12 important matter, which is eligibility of providers to 13 receive payment from the Interstate TRS Fund. 14 Currently under the rules, the rules certify state 15 programs, but there's nothing to certify providers, so 16 especially with the advent of VRS and new companies 17 coming out and wanting to offer VRS, there's some 18 confusion about how they can do that, and be eligible 19 to be reimbursed for their cost from the Interstate 20 TRS Fund, so we have raised an issue regarding that.21 I think that is one of those issues, 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 103 obviously, where the regs have not kept pace with the 1 technology. And as new things like VRS has come out, 2 I think the regulations just didn't contemplate that, 3 and there might be non-telephone companies coming out 4 wanting to offer the service, and they really have no 5 place to go in terms of being "certified", because 6 there's nothing in the regs about us doing that.7 And finally, in the NPRM is the matter of 8 outreach. And I know that was mentioned earlier, and 9 as was noted earlier, outreach is a matter that we 10 specifically are seeking your assistance on that. And 11 we also realize it's an issue of great importance.12 Stepping back for a minute in the report 13 and order itself, also addresses outreach because that 14 issue was raised in the 2000 TRS order. But we 15 concluded in the report and order that given that the 16 record contained conflicting views about matters 17 relating to outreach, that we really needed to seek 18 additional comments on that. And, therefore, we 19 pushed the issue to the NPRM.20 And so in the order, in the NPRM, we asked 21 for data and other information on what types of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 104 outreach mechanisms may work, who can play what role 1 in outreach? For example, you have the states, you 2 have the providers, you have the Commission. And 3 then, of course you also have the important point of 4 who would fund the outreach, and what should the role 5 of the federal funding be for that.6 I should note and remind us all about 7 outreach, that the rules do already require that the 8 providers take outreach steps to inform and educate 9 the public about TRS, and that some of these costs are 10 submitted by the providers in taking into account and 11 determining the reimbursement rates, the permanent 12 reimbursement rates. But I think we're all aware that 13 there's been some consensus for several years now, 14 that whatever outreach is out there has not been 15 enough, and there's been some interest in really 16 beefing that up, and even having some kind of national 17 program. So that is back on the table, and again, we 18 note that we're specifically asking you guys, the 19 committee, to address this issue and make 20 recommendations to the Commission. And my 21 understanding, of course, now that there's already a 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 105 working group on this, and that's going to happen. So 1 we're happy about that, and excited about that, and 2 really do look forward to hearing your recommendations 3 on this very important issue, and a difficult one in 4 terms of legal and other matters in terms of the role 5 of the FCC, and the Interstate TRS Fund, et cetera.6 Let me note also with regard to this order 7 that shortly it's going to be published in the Federal 8 Register, and then the public will be able to file 9 comments within 30 days, and then there'll be a reply 10 comment period, so we're anxious to obviously have all 11 interested parties weigh-in on all of these issues. 12 Some of these issues, again like the emergency 13 situation and the status of TRS centers, as well as 14 outreach, as well as the certification process for 15 providers seeking money from the Interstate Fund. 16 They're really very important issues, are new issues, 17 and we're anxious and interested to hear what people 18 have to say about those.19 Very briefly, let me turn to the June 30th 20 order on the TRS Cost Recovery. And although that 21 order, like all of our orders, really speaks for 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 106 itself, what I really thought I'd mention is the 1 process that goes into coming up with these 2 reimbursement rates for payments out of the Interstate 3 TRS Fund.4 On May 1st of each year, NECA, which is 5 the Interstate TRS Fund Administrator, they file a 6 proposal with the Commission, which sets forth their 7 proposed reimbursement rates for the various services. 8 These rates are based on cost and usage data that 9 they get from the providers. They basically crunch 10 the numbers, and come up with proposed rates.11 Our rules require that by June 30th, which 12 is, again if you're a math major, which I really 13 should go back to school probably, on that is only 14 about a 60 day window for the Commission to approve or 15 modify these proposed rates. And the regs 16 specifically say that the Commission is to approve or 17 modify these rates, and our rules also make clear that 18 the rates are intended to compensate the providers for 19 the reasonable and fair costs of providing TRS. So 20 accordingly, we review the submission and other data 21 that we may obtain from providers, and also the same 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 107 data used by NECA. And in this case, we found that 1 some adjustments were in order, so we adjusted the 2 proposed rate, at least with regard to VRS.3 And I think with regard to these rates, 4 it's important to remember that this is really an 5 annual exercise, that setting these rates is a 6 process, that the rates necessarily do and have 7 changed from year to year. And that the end gain in 8 this for all of us is to arrive at rates that 9 obviously reflect the reasonable and fair cost of 10 providing these important services.11 So in closing, I'd like to thank you for 12 the opportunity to bring you up-to- date on these 13 orders, and thank you for all your good works, both 14 past, present and future on behalf of all consumers, 15 and particularly, on behalf of those who rely on our 16 TRS services. So with that, thank you, and I don't 17 know if there's time for --18 CHAIR ROOKER: We only have a couple of 19 minutes, but I can tell you, you will definitely be 20 hearing from us. Do we have questions? Does anyone 21 have questions for him? Yes, Claude.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 108 MR. STOUT: (Off mic.) Okay. I'll go back 1 and repeat. I'll go back in reverse now. Now I'll 2 hit the play button. Hello, Tom. We, as consumers, 3 want to thank you for the June 17th decision. We 4 applaud the FCC for moving the TRS functionality ahead 5 for us.6 We, as consumers though, do have some 7 concerns with the June 30th decision; specifically on 8 the VRS rates. We, as consumers, don't have all of 9 our facts together, and we haven't made a final 10 decision ourselves. Am I right in saying that the FCC 11 did receive recommendations from NECA to approve the 12 VRS reimbursement at like $14, but the FCC decided 13 against that and decided on $7.75. But you made that 14 decision based on NECA and other data. You mentioned 15 other data, and so I'm curious what the other data is 16 that you're referring to, other than the 17 recommendations from NECA that you based your 18 decisions on for reimbursement rates for the VRS 19 system.20 MR. CHANDLER: Right. You're correct that 21 NECA's May 1st submission, based on their calculations 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 109 had a rate of 14 some odd dollars, 14 dollars and 1 change for VRS. The information we looked at was not 2 really different information. We got the same 3 underlying cost data that they did, and also, it 4 requested some other supplemental cost data from the 5 various providers.6 We looked at that cost data, and made some 7 adjustments to various parts of it because we - this 8 is all spelled out in the order - because we thought 9 that there were some numbers either that didn't make 10 sense, or that might have been improper, so we 11 excluded certain numbers. But we did the same kind of 12 math starting with the same data. We just adjusted it 13 because we thought various parts, it wasn't correct or 14 wasn't clear. And as we've noted, set out an interim 15 rate at this point because we do plan to keep 16 revisiting the data, and look at it further.17 Part of it was, of course, the 60-day 18 window didn't give us a lot of time. NECA was very 19 helpful in trying to get us the data, as were the 20 providers. It just was a very short window. And I 21 think as a footnote, and the order makes clear, we 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 110 invited -- since the providers were understandably 1 interested in keeping their cost data confidential, we 2 had to address the data and the numbers in the 3 aggregate in the order. And as the footnote says, 4 have invited the providers to come in and talk to us 5 individually if they want to see what adjustments 6 we've made on an interim to their cost data. Some of 7 them have taken us up on that, and we're in the 8 process of having those meetings over the next week or 9 two.10 CHAIR ROOKER: Tom, thank you so much for 11 giving us -- this subject is, of course, something 12 that we're going to be discussing and working on, so 13 thank you ever so much for being here.14 MR. CHANDLER: Thank you.15 CHAIR ROOKER: Our next speaker is 16 responding to a request by the consumer and outreach 17 working group. They wanted more information on the 18 different kinds of outreach to under-served 19 populations by the FCC. And, of course, what we're 20 going to talk about today, Kris Monteith is the Deputy 21 Bureau Chief of the CGB, and she's going to talk about 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 111 outreach to Indian Country, but that's only one aspect 1 that this committee is interested in in terms of 2 outreach to under-served populations.3 And then following that, while we don't 4 have a working group on addressing Homeland Security 5 and people with disabilities, it is a subject that was 6 discussed with the prior committee just after 9/11, 7 and it may be an area where we want to make 8 recommendations. I think we'll have to see about 9 that, so Kris will follow -- that will be her second 10 discussion.11 Please join me in welcoming Kris Monteith. 12 Kris, thank you.13 MS. MONTEITH: Good morning. It's nice to 14 see some old friends, and to meet new ones. And I 15 realize -- thank you very much for that introduction, 16 Shirley. I realize that I am the last speaker between 17 you and lunch, so I will try and be brief, but 18 hopefully informative.19 On the Tribal Outreach, this is an 20 activity that the Commission has had underway for a 21 number of years. And we are involved in a very 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 112 wide-ranging, comprehensive effort aimed at fulfilling 1 the mandate that all Americans have access to quality 2 affordable telecommunications services, including 3 Americans that live on reservations, American Indians 4 and Alaska Native Communities.5 This effort which we have called our 6 "Indian Telecommunications Initiative", takes several 7 different forms. First, we sponsor regional workshops 8 to provide How-To information on telecommunications 9 services and infrastructure development.10 In the past, we have had several big 11 annual conferences to deal with telecommunications 12 issues affecting Native Americans, and what we're 13 doing with our regional workshops is trying to hold on 14 a more frequent basis, a workshop that's smaller, 15 perhaps, in scope, and specifically aimed at 16 attracting folks within a particular region of the 17 country. But hopefully, more hands-on and 18 interactive, so we can really get down to the 19 nitty-gritty of how to do this stuff.20 Our regional workshops acknowledge that 21 tribes are at different stages of economic 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 113 development, and their experience is different and 1 varies. One workshop that we're holding in the very 2 near future, in fact, next Thursday and Friday, will 3 be held in Reno, Nevada, and we're working in 4 cooperation with the Washo Tribe of Nevada and 5 California, to make sure that we address issues that 6 are of concern in that region of the country.7 We have a number of folks that will be 8 coming in and speaking, and one of them is here today, 9 Mr. Vernon James; we're delighted to have 10 participating in that workshop, and I hope it will be 11 very successful.12 The second kind of activity that we engage 13 in is attending and participating in conferences that 14 are sponsored by other organizations, whether it be 15 the National Congress of American Indians, Tribal Tech 16 Workshops that are held by universities, on occasion. 17 We have participated and look forward to 18 participating with the Affiliated Tribes of Northwest 19 Indians, really getting out there and going to 20 conferences of others to try and interact, establish 21 relationships, and get the message out.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 114 We participated also in the National 1 Summit that was held last September in Phoenix, 2 Arizona, which was a very large conference sponsored 3 by the Department of Interior. And DOI had a number 4 of federal agencies that came, and worked with folks 5 that were in attendance at that conference to address 6 different programs that the federal agencies had 7 underway.8 We also meet individually with tribes on a 9 very, you know, one-on-one, person-to-person type of 10 basis. Recently, we met with members of the Tribal 11 Council of the Standing Rock Sioux Tribe, to discuss 12 that tribe's efforts to increase the quality of 13 service on their reservation. We also toured the San 14 Carlos Apache Telecommunications facilities, and the 15 Gila River Telecommunications facilities to learn more 16 about the challenges that tribally-owned telcos face. 17 And those kinds of tours are just incredible for us 18 to take part in. They're such a valuable learning 19 experience for us, and we very much appreciate the 20 hospitality that was offered to us on those tours, 21 very much.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 115 The fourth kind of activity that we engage 1 in is distributing educational materials to Native 2 American tribes and organizations. For example, we've 3 done direct mailings on our enhanced lifeline and 4 linkup programs. We put together publications that 5 are very specifically targeted at the Native American 6 population. One we have called, "Expanding 7 Telecommunications Access in Indian Country." Those 8 kinds of direct outreach types of activities are 9 another activity that we have ongoing.10 So in a nutshell, that just describes some 11 of the types of activities that we engage in as part 12 of our outreach plans and strategy in this particular 13 area. And I'm happy to answer any questions folks may 14 have, or wrap it up and --15 CHAIR ROOKER: Do you want to just go 16 ahead and talk about Homeland Security?17 MS. MONTEITH: Sure.18 CHAIR ROOKER: And then we can leave the 19 questions for the end, if that's okay with you.20 MS. MONTEITH: That's just fine.21 CHAIR ROOKER: Okay.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 116 MS. MONTEITH: I'll change hats and put on 1 my Homeland Security hat. The Commission's Homeland 2 Security Policy Council was established in November of 3 2001 in the aftermath of the September 11th events. 4 The Council's mission is three-fold, it's to protect, 5 it's to restore, and to ensure effective 6 communications during a national emergency, whether it 7 be a national disaster type of emergency, or a 8 terrorist attack, or other threat.9 The Homeland Security Policy Council 10 comprises senior staff from the Commission's bureaus 11 and offices. The Director is the FCC Chief of Staff, 12 Marsha McBride. Each of the bureaus has a senior 13 staff representative, and I'm the representative from 14 the Consumer and Governmental Affairs Bureau. The 15 HSPC's work complements the work of the Commission's 16 bureaus and offices, and the Federal Advisory 17 Committees that the FCC oversees. With respect to 18 Federal Advisory Committees that are sort of 19 specifically targeted at homeland security-related 20 matters, we have two that we have chartered or 21 recharted in recent years. Two principal Federal 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 117 Advisory Committees. The first is the Network 1 Reliability and Interoperability Council, NRIC, and 2 the second is the Media Security and Reliability 3 Council. And these committees work to ensure the 4 sustainability of public telecommunications networks, 5 and to sustain and secure broadcast and multi-channel 6 video programming distribution facilities and services 7 respectively. NREC is focused on Network Security, 8 and MSREC is focused on Media Security.9 The HSPC also works to coordinate federal 10 policy, the FCC's Policy Initiatives. We worked on a 11 broad range of issues, such as promoting E-911, 12 promoting wireless priority access, promoting 13 telecommunications service priority programs, 14 developing sound spectrum policy, promoting public 15 safety interoperability, and promoting the security of 16 satellites and international telecommunication 17 systems.18 Yesterday, Marsha McBride announced that 19 the Commission has undertaken a couple of new programs 20 with respect to Homeland Security. Specifically, we 21 announced the creation of an Office of Homeland 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 118 Security within the Commission's Enforcement Bureau. 1 The new office will provide consolidated support for 2 the Homeland Security and Emergency Preparedness 3 responsibilities, and coordinate again with our two 4 federal advisory committees that are devoted to 5 Homeland Security types of issues, and coordinate with 6 the offices and bureaus, as well as the Homeland 7 Security Policy Council. Jim Daley was named as the 8 Director of that new office.9 The second thing that Marsha did yesterday 10 and which has been released now publicly, it's 11 available on our web, is she released, or the 12 Commission released a Homeland Security Action Plan. 13 And as part of that action plan, the Commission 14 identified a number of key objectives or priorities 15 that together the new office and the Homeland Security 16 Policy Council will focus on.17 The action items were broadly classified 18 under two main objectives. The first objective is to 19 strengthen measures for protecting the nation's 20 communications infrastructure, and facilitate rapid 21 service restoration after disruption. And the second 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 119 objective is to promote access to effective 1 communication services by Public Safety, Public 2 Health, and Emergency Personnel.3 That second objective included an action 4 item that specifically involves this committee, and 5 I'd like to just briefly, if I could, read the action 6 item to you. It states that, "The Commission shall 7 convene a summit of stakeholders, including 8 representatives from the Disabilities Rights 9 organizations, telecommunications relay centers, the 10 Commission's Consumer Advisory Committee, and local 11 and state government advisory committee, and other 12 governmental entities to identify specific 13 communications issues that confront individuals with 14 disabilities, particularly the hard of hearing and 15 deaf individuals during national emergencies or 16 terrorist attacks, and develop a strategy for 17 resolving these issues where possible."18 This is an issue that was brought to the 19 Commission's attention, or has been brought to the 20 Commission's attention on a number of occasions by 21 different groups really. You know, Claude has come in 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 120 and talked to us about this issue. Folks from the 1 Maryland Relay Center and the Virginia Relay Center 2 have come in and talked to us, and so it was something 3 that we thought was very appropriate for inclusion in 4 the newly released action plan.5 We look forward to discussing with you, 6 Shirley, and hopefully you can bring it to the 7 committee's attention, just how we might go about 8 working on this action item and bringing it to a 9 successful resolution. I think it's a very important 10 issue, and I might note that it was the first action 11 item listed under that second objective, so I think in 12 the eyes of the Commission it's a very important 13 issue, as well.14 Then I think a couple of other sort of 15 Homeland Security related items you've already been 16 briefed on. Tom Chandler just spoke to you about the 17 TRS, NPRM and how that tees up the issue of TRS 18 Centers inclusion in the TSP Program, how we might 19 address that issue. And then yesterday, I just would 20 note too that we adopted the wireless HAC report and 21 order, which takes steps to make sure that there's 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 121 compatibility between digital wireless phones and 1 those wearing hearing aids, so I think that was an 2 important step too in making sure that during times of 3 national emergencies, we don't forget those that have 4 disabilities.5 So with that said, I'll make myself 6 available for questions on these issues, or any 7 others. I hear my name was mentioned earlier this 8 morning.9 CHAIR ROOKER: Yes, we have questions. 10 Joy.11 MS. RAGSDALE: Good morning. Joy Ragsdale 12 representing NASUCA.13 MS. MONTEITH: Hi, Joy.14 MS. RAGSDALE: How are you? Just a few 15 questions in regards to your outreach activities and 16 your personal visits. Do you have any reports that 17 detail the specific concerns of the various tribal 18 members you met with that you can disseminate? We 19 felt we could not make recommendations without knowing 20 the efforts the FCC had already made.21 MS. MONTEITH: We have not put together a 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 122 comprehensive report per se, but we do have a number 1 of outreach types of materials that talk about, you 2 know, the various activities that we have undertaken. 3 I know our website, we're trying to include materials 4 on our website too, about either past or future 5 outreach activities. But I like the idea of trying to 6 do something perhaps a little bit more detailed.7 Sometimes we're talking to individual 8 tribes on, you know, a very specific basis, and I do 9 think that we would want to talk to them about sharing 10 information. Not that it's, you know, a secret, but 11 it's not -- they aren't open to the public types of 12 meetings sometimes. But I think it's a great idea of 13 trying to cross-pollenize and share what activities 14 we're undertaking, what the experiences are so we can 15 all benefit from them.16 MS. RAGSDALE: Would it be possible for 17 the individual members of the Consumer Outreach 18 Organization - I believe also Susan Mazrui wanted to 19 -- in modernizing the FCC's sub-working group that 20 we've developed to address the Internet access that 21 the tribal groups have in terms of public 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 123 participation. Is it possible that we can meet on an 1 individual basis?2 MS. MONTEITH: Yeah. We'd be delighted to 3 sit down with you and brief you. And as I said, I do 4 think it's a good idea. We can look at going back 5 into documents and things that we have done in the 6 past, to the extent they're not fully documented in a 7 public way, and make that information available to 8 you.9 CHAIR ROOKER: Vernon.10 MR. JAMES: Good morning. Vernon James 11 with the San Carlos Apache Telecommunications Utility, 12 Incorporated. A mouthful, like I said before, we call 13 it SCATCOM.14 Just to comment, not specifically 15 questions, but comments. During -- well, since the 16 last meeting, I've thought about the working groups 17 and some of the questions that were going back and 18 forth, and some of the comments being made. I saw the 19 need to address those issues and concerns specifically 20 as it relates to the Native American communities, 21 those entities that have special concerns, special 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 124 conditions that need to be addressed.1 The working group with broadband, for 2 example, could not really focus in on conditions that 3 affect Native Americans, as well as rural America, 4 because of geographical concerns, because of 5 geo-political jurisdictions, because of the high cost 6 of infrastructure build-out, just a number of factors 7 that relate to providing basic telecommunication 8 services in those areas. And as a result, I would 9 like to recommend to this group that a working group 10 specifically on rural America and Native Americans be 11 formulated to address these concerns. Or if that is 12 impossible because there is an existing committee, 13 that a subcommittee be formulated to address this 14 issue.15 CHAIR ROOKER: Excellent comment, Vernon. 16 I'll have to check and see what we have in terms of 17 -- we have a lot of working groups, and we'll talk 18 about that. We'll discuss it with you. Thank you 19 very much, very pertinent comments.20 Do we have other questions? Yes, Joy. 21 Joy chairs the Consumer Outreach Complaints, Education 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 125 and Participation Working Group.1 MS. RAGSDALE: Thank you. Just a question 2 on the Homeland Security. Are there consumer fact 3 sheets available that indicates what telephone or 4 telecommunications services will not be available to 5 the consumer on an emergency basis. The day of the 6 9/11 tragedy, of course, all cell phones were 7 inactive, and families were trying to reach -- and we 8 only new our cell phone would not be available because 9 of people with military experience. But on a general 10 background, is that information known to the public?11 MS. MONTEITH: We do have a fact sheet 12 that's called "Communicating During Emergencies", and 13 it does cover really very general, but very important 14 information about how to communicate during an 15 emergency, and what some of the reliability issues are 16 during an emergency. So it's very tip-oriented, you 17 know, trying to give consumers tips on what to do in 18 an emergency, and I'm happy to make that available to 19 you.20 CHAIR ROOKER: Maybe we can make that 21 available to the entire committee.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 126 MS. MONTEITH: Yes.1 CHAIR ROOKER: We could do that if we're 2 doing a mailing, or is it on-line? Can we transmit it 3 electronically?4 MS. MONTEITH: It is on-line. Yes.5 CHAIR ROOKER: Okay.6 MS. MONTEITH: We also put together a 7 package of information, and it -- we just did a, 8 unfortunately, somewhat of a limited publication for 9 yesterday's meeting, but we have put together a 10 package of Homeland Security related materials that we 11 also are happy to make available to this committee.12 CHAIR ROOKER: Do we have other questions 13 for Kris? Yes, Brenda.14 MS. FREY: Brenda Kelly Frey, representing 15 the Relay. Kris, first of all, I want to thank you 16 very much for taking your time to meet with both 17 Clayton Vellen and myself, and Pam Stewart on this 18 very important issue regarding Homeland Security and 19 how it applies to TRS. I just wanted to assure you 20 that we're there ready, willing and able to roll up 21 our sleeves and assist in any way we possibly can, and 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 127 that our working group will be addressing this issue 1 shortly with you additionally. Okay?2 MS. MONTEITH: That's great. Thank you so 3 much.4 MS. FREY: Thank you.5 CHAIR ROOKER: Do we have any other 6 questions? Well, Kris, thank you so much for being 7 with us and bringing us a very informative discussion 8 this morning. It's very important subjects for us. 9 Thank you very, very much.10 MS. MONTEITH: Absolutely. Thank you.11 CHAIR ROOKER: We are very pleased that 12 Commissioner Martin has joined us. Commissioner 13 Martin, welcome. It's nice to see you. The 14 Commission has been so busy that we're honored to have 15 so many people coming in and visiting with us this 16 morning. You all have been really working.17 COMMISSIONER MARTIN: Yes, we have been 18 very busy, and I just wanted to come by and thank you 19 all for all of your work, and say I'm sorry that I 20 missed getting the chance to come by and see you all 21 at your first meeting, your last meeting, and wanted 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 128 to make sure I had the chance to introduce myself, 1 although most of you, or a lot of you at least I've 2 met before. And tell you that how important I think 3 the work is, and how I hope that we'll be able to 4 continue to work together, and I'm anxious to get to 5 spend a little more time with you at some time in the 6 future at some of your other meetings. So I just 7 wanted to make sure I had the chance to come by and 8 say hi.9 CHAIR ROOKER: Well, thank you so much. 10 We appreciate that. You'll be hearing from all of us, 11 I'm sure.12 COMMISSIONER MARTIN: I'm sure. I'm 13 confident. Okay. I mean, I'm happy to actually also 14 -- if anybody has any particular questions about 15 anything, I'm happy to try to answer, but I'm sure 16 you'll get better answers from some of the other folks 17 who are here with some of the other expertise. But I' 18 happy to engage in a dialogue, and you guys were 19 getting ready to take a break, as well, so I was going 20 to try to interact with you, and see if you guys 21 wanted to talk about a few issues that way, as well.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 129 CHAIR ROOKER: Okay. Well, does anyone 1 have any questions? We have a few minutes. Anyone 2 have questions for Commissioner Martin? They're 3 hungry.4 COMMISSIONER MARTIN: I don't blame them. 5 Okay.6 CHAIR ROOKER: Well, thank you very, very 7 much. We really appreciate your taking the time to 8 come in. We'll be looking forward to talk with you 9 again. Thank you.10 COMMISSIONER MARTIN: Thank you.11 CHAIR ROOKER: You're welcome to join us 12 for lunch. It promises to be delicious.13 Just a couple of things that I have to say 14 to you. I really would like to say that this has been 15 a really extraordinary morning. And thank you again, 16 Scott, for all the work in putting this together, and 17 for all the people here who have given their time to 18 us this morning.19 We're going to just have until noon. I 20 want you back at the table. You can pick up your 21 lunch, because we're going to have a former committee 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 130 member here to make a presentation on accessible 1 wireless phones for the blind. Paul Schroeder, who's 2 really been on the cutting edge of this technology is 3 going to be here at 12:00. I don't think you're going 4 to want to miss this presentation, so I encourage you 5 very strongly be back at the table, or you'll have me 6 yelling at you. So anyway, let's take our lunch.7 For those of you who are members of the 8 public and not a member of the committee, I'll have to 9 let Scott tell you where you can go to find lunch.10 MR. MARSHALL: Thank you, Shirley. We 11 have food service available on the courtyard level of 12 our building, which is one level up from this floor. 13 Enjoy.14 CHAIR ROOKER: Okay. Thank you. We'll 15 see you back here at noon.16 (Whereupon, the proceedings in the 17 above-entitled matter went off the record at 11:44 18 a.m. and went back on the record at 12:10 p.m.)19 CHAIR ROOKER: Paul Schroeder is with the 20 American Foundation for the Blind, and he was a valued 21 member of our committee for two years, and we're so 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 131 pleased to welcome him back. Paul, thank you for 1 being here.2 MR. SCHROEDER: Hi. Thanks so much for 3 the invitation to come back. It's nice to be back 4 here and have even less to do than I did when I was 5 here before as a member of the committee. Thank you 6 very much, nice to be able to present to you.7 I want to talk a little bit about the 8 issue of cell phones for people who are blind or 9 visually impaired. I actually do have something I 10 want to demonstrate. It's essential when you 11 demonstrate technology that it be relatively unstable 12 and relatively new in your hands, and so you're not 13 really familiar with it, so it makes the demonstration 14 kind of fun because you never know what's going to 15 happen. It's a lot like getting married or something. 16 And this is my first time with the cell phone, and 17 I've only been married once, so there you go.18 I'm not sure what that says, but in short, 19 we have from the blindness community been very 20 frustrated at a couple of things. And I'm not going 21 to spend a lot of time - in fact, I won't spend any 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 132 time doing any finger pointing, but I do want you to 1 understand the level of frustration among people who 2 are blind or visually impaired with the lack of 3 discernible. And I'm somewhat careful in saying 4 discernible progress, because people -- you know, 5 there are things happening below the surface and 6 behind the scenes, but the lack of discernible 7 progress in accessible cell phones that meet the needs 8 of people who are blind or visually impaired.9 I would argue that if one were to go to 10 almost any -- well, any service provider store and any 11 other consumer product store to buy a cell phone, and 12 ask about something basic like can I gain access 13 independently to the menu systems, can I gain access 14 independently to setting up my own phone book, you 15 would be told no if you are blind or visually 16 impaired, because all of those things depend to one 17 degree or another on being able to see the screen of 18 the phone.19 I'm going to assume that virtually 20 everyone, if not everyone here has a cell phone. I'm 21 going to assume that with a couple of exceptions of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 133 folks in the audience, you have never operated your 1 cell phone without the screen working, or never just 2 for fun covered up your screen to see what you could 3 do with the cell phone. So tell you what, after the 4 presentation, why don't you try that, maybe duct tape 5 over the screen of your phone, but put something under 6 the duct tape so you don't tear your screen off when 7 you take the tape off.8 I know you just talked about Homeland 9 Security, so duct tape seems like an appropriate 10 segue. Duct tape a business card over the screen of 11 your phone and then trying running it and see how you 12 do. That's the mode in which people who are blind or 13 visually impaired are now operating.14 What I often tell my friends and 15 colleagues is the words that we've gotten to know the 16 best when it comes to the cell phone world are the 17 three words "with sighted assistance", because it 18 almost always the case that except for the simple act 19 of turning on and off, and maybe dialing a phone 20 number, virtually nothing can be performed on a cell 21 phone by a blind person, except with sighted 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 134 assistance.1 To try to figure out what's going on in 2 this situation and why we haven't seen the progress 3 that we thought we might since the rules came out in 4 late `99, and became effective, I gather, as of 5 January 2000, so we've had three and a half years. We 6 decided to take a look at cell phones in more detail, 7 try to look at the platforms that are used, try to 8 discover the chip sets that are used, to look at 9 things like battery capacity to the extent that we 10 could understand all of these items. Now you have to 11 be aware of the fact that we are not cell phone 12 engineers at the American Foundation for the Blind, 13 and we are not individuals who are particularly expert 14 in the operating systems of cell phones, so I don't 15 want to even pretend out the outset that this is an 16 expertise that we have.17 We did employ a consultant who's with us 18 today, and if I run into trouble, it's the job of the 19 consultants to bail me out, among other things. So 20 Caesar Equisadi, who is with us today, has done a 21 marvelous job of trying to help us understand better 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 135 what's happening inside of a cell phone, and why we 1 maybe haven't seen particular progress in 2 accessibility. Or turn it around, to understand 3 where, in fact, we might be able to help influence and 4 drive accessibility forward by working more closely 5 with the cell phone industry.6 We began this effort last fall with 7 Caesar. And again, I would say that this really came 8 out of frustration, because what we heard a lot from 9 cell phone manufacturers, and to one degree or 10 another, from many cell phone service providers, is 11 that the kinds of things that you need as blind or 12 visually impaired people simply can't be done yet. 13 And we didn't think that sat very well with the good 14 old, you know, efforts of industry that usually like 15 to solve problems rather than throw them out. So we 16 decided maybe we ought to try to learn a little bit 17 more ourselves so that we can have a more intelligent 18 conversation about exactly what can be done, or why it 19 can't be done.20 What is it that blind folks want? I have 21 brought copies of an article with me. I've asked if 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 136 we could make a couple of additional print copies, 1 because the committee got a little larger than I 2 thought it was, and so we're going to have those 3 copies available afterward.4 This is an article that appeared in this 5 current issue of "Access World", a magazine published 6 by the American Foundation for the Blind. And it is a 7 review of three cell phones. It's not critical why we 8 picked those particular three cell phones. But what 9 is interesting, I think, is to look through the 10 article and get a sense of the kinds of needs that we 11 were reviewing these cell phones for, whether they met 12 particular needs of blind users. And also, to get a 13 sense of where the problems seem to be. We also 14 include in that article a bit of summary from a 15 previous article on another cell phone from a previous 16 edition of "Access World."17 The kinds of things that people who are 18 blind want, I think are not particularly unique. 19 They're exactly what, of course, anyone would want. 20 The ability to be able to actually use the phone. 21 Well, that seems somewhat elemental, but that is, in 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 137 fact, what we want. Well, how do we spec out what 1 that actually means?2 First of all, of course, that means we 3 have to be able to discern principally by touch, but 4 also for those of us with some useable vision, it's 5 helpful to have visual cues. We have to discern what 6 key is which, is which key is what. In other words, 7 we have to be able to find the keys on the phone. We 8 have to be able to distinguish them from each other, 9 and have some idea of their function.10 And as you all know, if you reviewed at 11 all the rules that implement Section 255, and the 12 Accessibility Requirements that were incorporated in 13 those rules from the Access Board, there is a 14 requirement that keys be tactfully identifiable.15 Unfortunately, we have found that the 16 state-of-the-art is mixed in that regard. And to some 17 degree, the state-of-the-art has actually gotten worse 18 in terms of keys being identifiable. So along with 19 duct taping a card over your screen, the other thing 20 I'd suggest is that you hold your phone behind your 21 back and try to find which key is which, and see if 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 138 you can distinguish them. I suspect that -- now for 1 the blind folks you might actually do this because 2 you've already probably optimized your choices of cell 3 phones. But I'm guessing you sighted folks are going 4 to be kind of lost with many of your phones because 5 the keys have gotten to be very close together. 6 They've gotten to be very flat. Somebody described 7 them almost like terra cotta tiles or something. I 8 imagine they look good, but the functionality has 9 declined some.10 The second principal thing, of course, is 11 we need to be able to get the information off of the 12 screen. Cell phones are obviously very screen 13 dependent, very visual display dependent in terms of 14 their functions, and so it's important for people who 15 are blind to be able to know what's on the screen.16 Obviously, there are two things that are 17 important to do. The first and principal one is to 18 make sure that that visual information is available in 19 another mode, the most obvious and really the only 20 workable one for the moment is an auditory mode. In 21 other words, the information on the screen has to be 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 139 able to be spoken by the phone, as well, so that a 1 blind person can navigate it.2 The other access point to cover, of 3 course, with the screen is that the visual display be 4 as customizable as possible for somebody with some 5 usable vision so that, in fact they can rearrange 6 information on the screen, make certain words and 7 icons larger so that they can, in fact, have the most 8 opportunity to see that screen with its limited space. 9 And we recognize that cell phone screens are very 10 limited. Those would be the principal items.11 Now those sound simple enough, but they 12 have proven to be extraordinarily difficult. I've 13 already gone on a little bit about the key design, and 14 it seems to me that we're -- what we thought was 15 relatively straightforward apparently is not as 16 straightforward as we thought, or we have not been 17 able to have the right kind of dialogue with industry 18 on key design. So hopefully, that's something that 19 can happen.20 One of the elements, as you know, is to 21 have a nib on the center of the five key. It's a nice 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 140 orientation device to the key middle of your phone 1 dial, if you will. And even that has proven to be 2 somewhat challenging as we find phones. I bet if you 3 look at your phone, many of you will have nibs around 4 the key. Some of you will have a nib on the key but 5 it's on the corner of the key, so it might even be 6 hard to tell which key it actually is associated with. 7 And then in a couple of instances, we're actually 8 familiar with companies that have painted nibs on 9 their key, which I have to at least give an award for 10 creativity, if not for functionality. So hopefully, 11 we'll start to see some improvement in those areas, as 12 well.13 And it is interesting, because as I start 14 to talk to sighted people about this, many times 15 sighted folks have the same gripes, but they don't 16 recognize that they have any opportunity to really do 17 anything about it. They don't like their key design 18 that much either, because they find it very difficult 19 to dial their phone when they can't look at it, even 20 though they are in instances where they're not 21 supposed to be looking at their phone.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 141 Okay. As for the screen information, how 1 to get that out in audio form has proven to be a bit 2 of a challenge, as well. We've had some discussions 3 with folks in the industry about the right approach to 4 do that, and for us, from our standpoint, the only way 5 to really do that for the foreseeable future is 6 through synthetic text to speech. Now this is a type 7 of access that's been operating in the computer that 8 blind people have been using to access computers for a 9 long time. And I think for a while, the cell phone 10 industry argued - it may be right, it may be wrong, I 11 don't know - that, in fact, the phones -- the phones, 12 of course, are not computers. That's true, but they 13 do function in many ways, and in fact are beginning to 14 look increasingly inside like computers in the way the 15 chipsets are structured, and the way there's operating 16 systems on the phone. So for a while, the industry 17 argued that text speech simply couldn't be 18 accommodated, both for battery strength reasons and 19 for memory capacity reasons, and for reasons having to 20 do with the way the phone interface is actually 21 designed.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 142 That may or may not be true, but certainly 1 over the last year what we have discovered is that's 2 become less true, as we've begun to examine phones and 3 realize a couple of -- three things really that are 4 key. One is that the memory has expanded greatly, so 5 there's a lot more capacity on even the lower end cell 6 phones. The second thing is, phones are incorporating 7 operating systems, so there's much more management 8 capability within the phone for the software that 9 needs to run. And, obviously, one of the reasons for 10 this is that there's a strong interest in having 11 downloadable applications on phones. The third thing 12 is that the text-to-speech engines that we would need 13 in order to provide access through synthetic speech to 14 the text on a screen have gotten to be smaller in 15 terms of their footprint and their demands on memory. 16 And so all of those things combined have led us to 17 the conclusion that certainly we now should be able to 18 have a much better dialogue with industry about how to 19 bring accessibility into the marketplace.20 In the process of doing some of this 21 research, we discovered a couple of things. One is, 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 143 we discovered that there is a phone in Japan that 1 actually has text-to-speech, interestingly enough 2 available, but the Japanese do not have a law that 3 requires accessibility, so we thought this was kind of 4 an interesting thing to discover.5 We then found shortly thereafter, that 6 there was a couple of things happening in Europe with 7 respect to text-to-speech. One is in the high end PDA 8 and cell phone area where software has now been 9 successfully loaded, and is now being sold and 10 distributed, in fact, here in the U.S., as well as in 11 Europe on a high end PDA-type cell phone with software 12 that makes the phone talk.13 We also discovered though that there was a 14 company in Europe making software available on lower 15 capacity phones, or phones that are not PDA and cell 16 phones together. And that, in fact, they were taking 17 advantage of exactly the things I talked about, the 18 increased memory on the phone, the operating systems 19 of the phone, and loading this relatively small 20 footprint from text-to-speech software.21 That's the phone that we actually have 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 144 here. This is a Nokia 3650 phone. I'm not commending 1 this phone, certainly not for blind folks. It has a 2 really funky dial. The buttons are in a circle rather 3 than in the old three by four grid that we've all 4 gotten kind of used to. It's sort of harkening -- I 5 guess it's sort of techno retro in that it's going 6 back to the old dial phones, I guess, but it is cute, 7 and it certainly does get attention when you pull this 8 phone out and show it to people. This phone has a 9 talking feature built in. I will acknowledge to you 10 early-on that this is a demo that I have in my hand, 11 and it's one that I managed to screw up last week, and 12 have spent most of the last ten days trying to figure 13 out how to get it reinvoked.14 We apparently were able to get this back 15 to working this morning, and so -- and it was in 16 somebody else's hand who actually knows, you know, 17 what they're doing as opposed to me, so now I've 18 managed to blow it up again, so while we're talking 19 I'm going to switch it off and bring it back up again. 20 I think it went into rest mode while we were 21 chatting.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 145 The point of this phone is not to say that 1 this is the answer. I'm assuming it's off now. The 2 point of this phone is to suggest that, in fact, 3 simply this; that we have found what we thought to be 4 true is in fact true, that phones can now accommodate 5 text-to-speech. They can, in fact, give access to a 6 fairly robust range of functions with that 7 text-to-speech.8 Not everything is available on this phone 9 in text-to-speech, but the majority of functions are. 10 The main menu is available, setting up contacts is 11 available. Even Caller ID is available through 12 text-to-speech on this phone.13 The other point that I want to make is 14 that this company, actually it's a combination of 15 three entities in Europe that did this work, Code 16 Factory, S- Vox and was funded in large part by the 17 Spanish Organization of the Blind which owns the 18 lottery in Spain so they're really rich. Yeah, it's a 19 cool thing. I don't know how we missed out on that in 20 this country. We kind of screwed up.21 They funded Code Factory and S-Vox to sort 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 146 of do this work, and it is relatively limited in the 1 sense that there are only a few phones that it 2 currently works on. This particular phone, for 3 example, runs on the Symbion Platform. And it's, as I 4 said, a Nokia phone. They do make this available on a 5 Siemen's phone, and on I believe a Sony Erickson 6 phone, as well.7 The other point that I wanted to make 8 though, was that this may have had -- this 9 implementation may or may not have had cooperation 10 from Nokia, for example. Obviously, they're aware of 11 it, and it's not really important for today's 12 discussion to talk about how much cooperation. The 13 point really is to talk about the fact that there 14 hasn't been enough cooperation in making sure that 15 even if we go this third party route for 16 accessibility, even if the right answer is to have 17 third-party downloads for accessibility, that 18 essentially reshape the phone - I'm going to hand this 19 over to Jason to see if he can figure out why we're 20 not coming up. Even if we hand that over to a third 21 party there's got to be much more involvement from 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 147 industry in ensuring that the software is stable, and 1 ensuring that there is a sufficient level of quality 2 for the interaction of the phone and the network.3 It's, of course, in the industry's 4 interest, service provider and manufacturers alike to 5 make sure that that's the case, because obviously you 6 don't want a phone, and industry doesn't want a phone 7 in a customer's hands that is working only part of the 8 time, or that is suspect to this level of instability 9 that we found on this phone.10 I will admit, or at least take 11 responsibility for a lot of it. I tend to blow up any 12 piece of technology that gets in my hands for very 13 long so, you know, likely as not, I'm at least 90 14 percent of the problem. But it is, in fact, true that 15 we have found some instability within this software. 16 It is also a fairly early piece of software.17 I'm going to stop here, I think, and take 18 some questions, and if there are any technical 19 questions, I can certainly refer those over to Caesar. 20 I should also say that we are not aware yet of the 21 full breadth of capabilities for other platforms and 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 148 operating systems in the cell phone industry for 1 adding text-to-speech. And then I want to reserve 2 just a couple of minutes for closing comment.3 CHAIR ROOKER: We have one question here. 4 MR. DUKE: Okay. This is Mike Duke. I 5 saw your presentation on Wednesday in Pittsburgh, and 6 for the rest of you, he said pretty much the same 7 thing there he's saying here. And we are, indeed, 8 very frustrated as folks who do not have access to the 9 screen. And I'd like to point out that that 10 encompasses more than just blindness, so you're 11 looking at - for those of you in the industry - you're 12 looking at additional markets beyond blindness when 13 you make these things work.14 Paul, has anything been done - given voice 15 feedback is the best, and also the most complex, and 16 most desirable option - but has anything been done 17 with trying to have the menus emit beeps, different 18 tones, different pitches from circuitry that's already 19 in the phone. If I could get a menu to beep when I 20 cross through its default mode, much as is done on 21 some amateur radio equipment, that would greatly 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 149 improve my access. It wouldn't necessarily let me 1 know who was in memory channel 47, but it would still 2 let me know where I am on the phone. Has anything 3 been done in those regards?4 MR. SCHROEDER: Thanks, Mike, for the 5 questions, and we're trying to get the audio up on the 6 phone so I can at least demonstrate a couple of the 7 features, and walk it through.8 MR. DUKE: And I have another when you 9 deal with that.10 MR. SCHROEDER: Okay. We have suggested 11 that, as well; that, in fact, there could be a lot 12 more done with creative use of auditory alerts than is 13 currently the case. For the most part, auditory 14 alerts now are used as a compliment to what's on the 15 screen visually, so they're essentially a hey, look at 16 the screen kind of an alert.17 Now there are a couple of exceptions to 18 that. For example, most companies have given you at 19 least some different tones for power on and off, for 20 example. And obviously, you can set some of those 21 alerts to be more constructive from a blind person's 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 150 standpoint, to give you some of what you're 1 suggesting.2 Some companies have gone the route of 3 having the menus be stable so that, in fact, you know 4 where you are in those menus, or give you that option 5 to set them stable so that you can count functions. 6 But, obviously, I would say that none of those are --7 those are helpful as sort of interim step. And for 8 the last three years that might be fine, but it seems 9 to me, if I can, you know, be a little -- express a 10 little frustration for the moment here. Three years 11 after passage of a rule that said, you know, 12 information on the display should be available in 13 another form, it seems to me we ought to have achieved 14 something more than maybe trying to guess at what a 15 tone might mean.16 I'm going to hold this up to the 17 microphone and see if I can get anything out of this 18 phone. The audio connection isn't working to the PA.19 (Phone demonstration.)20 MR. SCHROEDER: Okay. I'm just kind of 21 going through the menu system. I'm going to go into 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 151 calls. Now this is the missed calls.1 (Phone demonstration.)2 MR. SCHROEDER: That's now starting to 3 give you the numbers of the calls, and I haven't 4 taught it to say my name right either. It is 5 Schroeder and not Schroeder. I'm going to come out of 6 the calls menu. Now it is actually possible to set up 7 a contact. I did set up my own on here. However, as 8 any of you know who've done this on your phone, it's 9 extraordinarily tedious to enter, and I'm quite 10 certain that I could not do it and talk to you at the 11 same time, but I just want to go through. That's just 12 a contact list.13 Let me try a quick call on here to see if 14 the ID - you want to get your phone up. I'm going to 15 do a quick call to see if the ID feature is working. 16 Actually, what was happening before is I couldn't get 17 it to ring so, you know, that's a small problem with a 18 phone, probably one that shouldn't be unstable. If it 19 does ring, we should be able to get this to ID either 20 the number or the contact information, if you set up a 21 contact for that person.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 152 Now this gives you the choice to do what a 1 blind person never gets to do, which is to blow off a 2 call intentionally, knowing full well that it's not a 3 number to have interrupt you. And again, I think all 4 of us -- these are pretty basic kinds of functions 5 that any cell phone user would want to be able to have 6 access to. This is why we carry these things after 7 all, of course, is they give us a connection to the 8 world, and they give a world of connection to us, 9 which is almost as good and as bad. And so, if you 10 don't have the ability to manage your incoming calls, 11 for example, and to be able to make some smart choices 12 about what it's going to cost you, it's going to cost 13 you money for one thing in terms of minutes used that 14 you might not have wanted to. But it's also going to 15 cost you time and frustration if you miss a call that 16 you really needed in an important setting, or if you 17 interrupt an important meeting for a call that you 18 thought was coming and it's the wrong one. And so all 19 of these things that I think folks who are sighted 20 pretty much take for granted are things that blind 21 people simply can't do on today's cell phones with 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 153 some limited exceptions, and always with sighted 1 assistance. Other questions?2 CHAIR ROOKER: We have several questions 3 over here, Paul. Susan Grant.4 MS. GRANT: Hi. Susan Grant from the 5 National Consumer's League. Paul, I agree with you 6 that the kinds of things that you need and want are 7 things that we all could use. And you're also not 8 alone in blowing things up, because I think that a lot 9 of us are technically challenged, and things need to 10 be built to deal with that.11 I guess my question is, if the rules 12 aren't being followed, has anybody mounted a legal 13 challenge to try to hold industry's feet to the fire 14 here?15 MR. SCHROEDER: There is. I won't say 16 anything more about it other than to say there's a 17 formal complaint pending here with the Commission on 18 access to cell phones. And that's -- and actually, 19 I'm glad you asked this question because I won't speak 20 about the formal complaint, but I do want to address 21 the fact that not only do we feel like industry has 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 154 not met our needs, but in fact, we feel like the 1 Commission has not met our needs, as well.2 Prior to this formal complaint, several 3 informal complaints were filed. Now I should tell you 4 that not enough informal complaints have been filed. 5 I don't know what it is, but blind people, or maybe 6 all people with disabilities are just way too 7 complacent, and we have allowed for far too long 8 companies, and heard companies tell us well, it can't 9 be done, and we haven't challenged it, and so --10 because we simply said oh, well, they're smart enough 11 to know. They must be right. They wouldn't lie to me 12 about that. And I'm not saying they're lying, but 13 what I am saying is you have to challenge these things 14 in order to find out where the truth really is. And, 15 obviously, Section 255 gives us only access to the 16 Commission in terms of a complaint structure. And if 17 the Commission isn't going to vigorously follow-up on 18 informal complaints, obviously, that leaves us in two 19 places. One is to have to file formal complaints, 20 which I don't think is a good idea. And is never 21 something that we have counseled individuals to do.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 155 One individual, as I said, has filed one 1 because she finally got fed up. The other option is, 2 of course, for us to come to the Commission and really 3 start making a major push to say take this more 4 seriously. You guys have not -- this is something I 5 think we are at a point of needing to say to the 6 Commission, that you guys have not faced up to your 7 responsibilities in addressing this issue.8 Industry may well be correct in saying 9 that none of this is achievable today, other than what 10 I just showed you, in terms of what a third-party is 11 able to do. I find that a little interesting, at 12 least. I mean, so at least something is achievable 13 today if a couple of little companies in Europe funded 14 by a blindness organization in Spain, which may be 15 rich, but it ain't as rich as some of the cell phone 16 manufacturers, I don't think. If they can figure out 17 a way to do it, it strikes me that there ought to be 18 some answers that could be forthcoming from industry. 19 And I would hope that if we don't see some 20 satisfaction fairly soon, that the Commission can and 21 will take a much stronger action, at least in trying 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 156 to get down to the bottom of answering is it 1 achievable, what can be done today, and what can be 2 put in the plans for near future to achieve 3 accessibility? And one of the things I'd love to see 4 this Committee come out with is an action statement to 5 that effect, urging the Commission to take seriously 6 this situation, and at least investigate the informal 7 complaints that come in with some rigor and vigor to 8 determine whether, in fact, there is more that 9 industry can be doing to achieve accessibility.10 CHAIR ROOKER: We have time for one brief 11 question.12 MR. HOROWITZ: Paul, I'm just wondering 13 with all the things that have happened against getting 14 this done. Let me get my microphone here. My name is 15 David Horowitz. I'm with the Fight Back Foundation 16 for Consumer Education.17 I have always been of the thought, if 18 there is a need for something, that the need can be 19 met by the people sometimes who have that need. And 20 have any of the groups that are supportive of you in 21 the blind area come forward and said well, let's 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 157 develop our own phone. Let's get a company and 1 develop our own phone.2 MR. SCHROEDER: Yeah. I mean, we did 3 develop our own phone in Europe. We didn't do it 4 here, but the folks in Europe developed -- I mean, 5 this is a Nokia phone.6 MR. HOROWITZ: I know.7 MR. SCHROEDER: It had very little to do 8 with Nokia.9 MR. HOROWITZ: But why can't -- and I'm 10 saying the --11 MR. SCHROEDER: And those two companies 12 developed it.13 MR. HOROWITZ: Proceeding in the courts or 14 proceeding with complaints can take years, and years, 15 and years. You have there something that has started 16 already, where some technology is existing. Maybe the 17 institute for the blind or some other groups that are 18 involved -- I mean, you seem to be a very well spoken19 person on this issue, about starting a company that 20 develops your own phones.21 Now how big is this market? If you were 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 158 to sell cell phones to the blind community in the 1 United States, how many people do you think would want 2 to have a cell phone? I don't even know how large the 3 market is.4 CHAIR ROOKER: We've got a very brief 5 answer here, Paul.6 MR. SCHROEDER: I'll give you a very brief 7 answer. I don't know how large the market is either. 8 We estimate about 10 million people are blind or 9 visually impaired. But let me answer the question 10 this way and say I don't believe that it's our 11 responsibility to meet the requirements of Section 12 255. I believe it's industry's responsibility. I 13 don't believe that any other consumer has to come up 14 with their own accessible cell phone that they can 15 use.16 No sighted person in this room had to 17 design their own cell phone. They were sold to them 18 over the counter by companies. That's what Section 19 255 is intending to do for people with disabilities, 20 and it seems to me that that's where the 21 responsibilities lies. It lies with industry to 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 159 provide us a product that we can use.1 Having said that, we want to help. We 2 want to have a dialogue. We want to help. If it's 3 this third-party process that makes the most sense,4 let's help work through how to make this the most 5 stable and useful, and accessible environment it can 6 be, and make sure that it works well for blind 7 customers, and that it works well for industry, as 8 well.9 MR. HOROWITZ: Yeah, but you have 10 10 million people. And my feeling is, I think you're 11 right about the government's responsibility here, but 12 while the government -- while they're trying to find 13 out where their responsibility takes them in terms of 14 getting this done, in the meantime, you should go on 15 and try to find the way it can be done so you have 16 something to present to them, and they don't come back 17 and say well, we have to start from scratch.18 MR. SCHROEDER: Point noted, but we do 19 want to have dialogue, and that's the key.20 CHAIR ROOKER: I'm sorry. Paul, thank you 21 so much. You have given us a lot to think about.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 160 We're very honored to have David Solomon 1 as our next speaker. He's the Chief of the 2 Enforcement Bureau, and he's a key person in helping 3 us understand the complaint process, the different 4 levels of complaint, and so on. Please join me in 5 welcoming David Solomon.6 MR. SOLOMON: Good afternoon. Well, I can 7 tell you that I'm really pleased to be here, because 8 we spend a lot of effort and attention on Consumer 9 Protection Enforcement in the Enforcement Bureau, so 10 it's a pleasure to talk with all of you today, and 11 hear some of your ideas, and get hopefully some 12 helpful input.13 Since the creation of the Enforcement 14 Bureau almost four years ago, and particularly under 15 the leadership of Chairman Powell, the FCC has made 16 strong enforcement a very high priority. The statutes 17 and rules that we have only work if we have the 18 commitment and the will to enforce them, and through a 19 variety of actions and in a variety of areas, we think 20 the FCC has made clear that we do have that will and 21 commitment to enforce the relevant statutes and rules.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 161 I like to collect quotes from the Chairman 1 that are helpful for what I do. And one of the quotes 2 that I like the best from Chairman Powell is, he said, 3 "If you cheat, we will hurt you, and hurt you hard", 4 so we use that as one of our informal approaches to 5 things, when it's warranted. Also, I'd just note that 6 the Chairman has suggested various statutory changes 7 that would enhance our enforcement authority even 8 more.9 We've made consumer protection 10 enforcement, as I mentioned, one of our top 11 enforcement priorities, along with competition 12 enforcement and public safety enforcement, which also, 13 although they don't use the word "consumer", 14 ultimately are still about helping consumers.15 We have one division that's devoted 16 entirely to telephone, telecommunications consumer 17 protection enforcement. That's our Telecommunications 18 Consumer's Division. It's headed by Colleen Heitkamp, 19 who's sitting in the back with her Deputy, Kurt 20 Schroeder.21 Now while as I said, only one -- we have 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 162 one division devoted entirely to consumer protection, 1 you think about public safety enforcement, or 2 competition enforcement, that also directly benefits 3 consumers.4 The basic idea of strong enforcement and, 5 you know, this is not particularly subtle, but it's 6 important to emphasize it, is that you punish people, 7 both in some level because it's deserving, but also to 8 deter future violations, because ultimately, what you 9 want to do is push people into compliance with the law 10 so that consumers will get the benefit that either the 11 statute or the rules were designed to do.12 So what I'm going to try to do today is 13 give you an overview of our process, and some of the 14 things we've done in the consumer protection area, and 15 also talk briefly about out competition and public 16 safety enforcement, and how that relates to consumers.17 We have broad authority in the consumer 18 protection area. In addition to the general statutory 19 requirement that carriers have that practices be just 20 and reasonable, there are a number of specific 21 provisions in the Communications Act relating to 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 163 consumer protection. And just to kind of rattle them 1 off, to give you a sense of the breadth of what we do, 2 there's the Americans with Disabilities Act of 1990, 3 Telephone Operator Consumer Services Improvement Act 4 of 1990, the Telephone Consumer Protection Act of 5 1991, the Telephone Disclosure and Dispute Resolution 6 Act of 1992, Cable Television Consumer Protection and 7 Competition Act of 1992. Of course, the `96 8 Telecommunications Act, and the recent Do Not Call 9 Implementation Act earlier this year.10 The basic process we use in the consumer 11 protection area is that we track very closely the 12 informal complaints that the Consumer and Governmental 13 Affairs Bureau gets from consumers. We look at it 14 from a statistical perspective. We go through their 15 complaint data, and we analyze it in various ways, 16 looking for new trend areas, if we seen problems 17 areas, types of complaints from consumers that we 18 haven't seen in the past, as well as just high volume 19 areas, what are the areas where there are major 20 problems with consumers. Then we start looking at 21 some of the complaints, and basically use the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 164 information we get from CGB's informal complaint1 database and those complaints, as well as information 2 we get from the FTC Sentinel database, and the 3 National Consumer Fraud Center database. We use all 4 of that data to sort of target our investigations and 5 look for areas that we want to focus on, and specific 6 companies that we want to focus on.7 Once we've gone through that process, we 8 then begin investigations. Typically, we begin them 9 by issuing a letter of inquiry to the company that's 10 the target, in which we direct them to provide to us 11 various information and often documents to find out 12 more about what's going on.13 In some cases, we start investigations. 14 Through that process, we might have tips from people 15 inside the company, confidential informants, that sort 16 of thing. But typically, we will first get the 17 company's input into what we think is going on. And 18 then if it looks like there is a problem, what we then 19 do is, in a typical case, is start a monetary 20 forfeiture proceeding, which is basically, we issue 21 something called a Notice of Apparent Liability, which 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 165 says it looks like you've done something wrong, 1 violated the law in the following way, and we propose 2 to fine you a certain amount.3 In very egregious cases, we may move in 4 the first instance, in the case of common carriers, to 5 a revocation proceeding. Recently we did that in a 6 couple of cases with long distance carriers where we 7 have hearings before administrative law judges 8 pending.9 Another way that we get information to 10 start our investigations is we work closely with the 11 State Public Utility Commissions and State Attorney 12 Generals to share information, to share priorities. 13 We have monthly calls with each of those groups to 14 share information on consumer protection.15 As I said, we will typically start a 16 forfeiture proceeding, which may end in a forfeiture. 17 It also, in many cases, may end in a consent decree, 18 which basically in those cases, the company agrees to 19 make a voluntary payment to the government, 20 essentially in lieu of a penalty, and will agree to 21 variance compliance measures that, from our 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 166 perspective, show that they've got to demonstrate a 1 commitment to clean up their act, and basically are 2 going to take steps not just to comply with the law, 3 which they're required to do anyway, but to do 4 something more, and to ensure that they're really 5 providing benefits that the various rules and statutes 6 are designed to provide the consumers. So let me give 7 you some examples of the areas we focused on, and some 8 of the things we've done.9 In the slamming area, since the 10 Enforcement Bureau began in 1999, we've taken actions 11 against 17 carriers totaling over $17 million. The 12 most recent one was a $1.2 million forfeiture against 13 a company where we had worked closely with 14 14 different State PUCs building a case against this 15 company.16 In the marketing and advertising area, two 17 years ago we had some joint guidelines that the FCC 18 and the FTC issued in this area. Most recently, we 19 had a revocation hearing just initiated against a 20 carrier that seemed to be basically misleading or 21 fraudulently misleading consumers in the context of a 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 167 Win Back Campaign, so we're now trying that case 1 before an FCC Administrative Law Judge.2 We also fairly recently had a $1 million 3 consent decree with a company involving issues of 4 misleading advertising in the long distance area. We 5 also have had actions in the operator service provider 6 area. This is a requirement that basically operator 7 services provide information to consumers, 8 particularly from locations like pay phones about who 9 the carrier is, and make rate information available. 10 We've had a couple of large proposed forfeitures that 11 we did several months ago. And prior to that, we had 12 several consent decrees with some carriers based on 13 basically a field audit that we did, where we sent 14 people out from our field offices and went to pay 15 phones to see if they were getting the correct kinds 16 of notice.17 In the telemarketing area, we've been 18 aggressively enforcing the Junk Fax Prohibition and 19 other telemarketing rules. One of the major actions 20 we took was a $5.38 million proposed fine against 21 basically the biggest Junk Fax company in the country. 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 168 That was complicated by the fact that a district 1 judge held that the Junk Fax Statute was 2 unconstitutional under the First Amendment, and 3 conjoined us from continuing with this enforcement 4 action. That district judge's action was overturned, 5 and the Circuit Court recently denied rehearing. 6 We're hopeful that the technical legal steps that need 7 to be taken to basically allow us to pursue our 8 enforcement will occur very soon.9 Another area that we've been involved in 10 involves common carrier discontinuance of service. 11 You're required to get FCC approval in most instance 12 before you discontinue common carrier service. And in 13 particular, we have requirements about notification to 14 consumers. In a recent case where we also worked with 15 two states, Vermont and Maine, we designated for 16 hearing a carrier that basically seems to have lied in 17 connection with its application to discontinue 18 service, and questions about whether it did, in fact, 19 provide the right kind of disclosure to consumers. 20 And also, appears to have lied to us or lacked candor 21 in connection with an investigation we were doing 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 169 about slamming.1 Another important area is the disabilities 2 area. We've designated one carrier for again a 3 revocation hearing, a company that seems to have 4 defrauded the Telecommunications Relay Service Fund. 5 In fact, we worked closely with the U.S. Attorney's 6 Office, and they indicted that company for fraud.7 Also, we have pending before us - I can't 8 talk about the details because it's a pending case -9 but we do have pending before us the first formal 10 disabilities complaint involving Section 255, with 11 access to communication services and equipment for 12 persons with disabilities.13 To touch briefly on the broadcast area we 14 also do consumer protection- related activity in that 15 area, as well. We're responsible for Broadcasting 16 Decency Enforcement, and also such requirements as 17 there are statutory provisions about the amount of 18 advertising that can be on children's television 19 programming.20 The main consume -- I want to mention a 21 couple of consumer protection priorities that we're 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 170 going to be devoting a lot of our attention to in the 1 coming months. Obviously, one is implementation of 2 the new National Do Not Call List. The FCC recently 3 adopted rules that compliment the Federal Trade 4 Commission's rules in this area, and that's really 5 going to be a major enforcement priority for us.6 We're going to focus -- to avoid 7 duplication, we're going to focus certainly in the 8 first instance on those entities that are not within 9 the Federal Trade Commission's jurisdiction. For 10 those of you who don't know, the FTC doesn't have 11 jurisdiction over telemarketing practices of certain 12 kinds of companies. Those companies include 13 telecommunications carriers, which obviously is an 14 area of our expertise. And also, banks, insurance 15 companies, and airlines, also they don't cover 16 intrastate telemarketing. And so those are the areas 17 that we're going to focus on in the first instance.18 Enforcement will start October 1st. One 19 of the things that we're happy about is the way the 20 FTC has set up their database, which our rules use 21 their database, as well. We will hopefully avoid some 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 171 of the problems of proof we've had in the past with 1 our own company-specific Do Not Call Lists.2 One of the things about the FTC database 3 is that there will be evidence about the fact that 4 somebody is registered, and when they registered, so 5 you won't get factual issues where somebody says to us 6 I registered on this company's list. I don't remember 7 when it was, but I'm sure I did it, and the company 8 has no record of it.9 As a process matter, we'll follow 10 basically the same kind of approach I was saying 11 before that we use generally, that we're going to 12 track the complaints carefully. We're going to look, 13 particularly in these areas where we're going to focus 14 on, we're going to look for those companies that we 15 see a lot of complaints, or spiking complaints over 16 time, whatever. To the extent there are common 17 carriers involved, we can move right to a forfeiture 18 proceeding. In those instances, our authority is we 19 could fine them up to $120,000 per violation. For 20 others, it's generally up to $11,000 per violation; 21 although, if a broadcaster or cable operator were 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 172 doing telemarketing - I don't know whether they would 1 be, but if they were, the violation there would be 2 higher. It would be $27,500 would be the maximum for 3 a single violation.4 We're going to be looking carefully at 5 people's use of some of the exceptions, established 6 business relationship and the like to make sure that 7 those exceptions aren't being abused. And we're 8 working with the Federal Trade Commission on a 9 Memorandum of Understanding on Enforcement, to 10 coordinate with them to share information to avoid 11 duplication.12 One other major priority that's a new area 13 we're going to be moving into later this year, the 14 Commission's rules on wireless local number 15 portability will take effect in late November, 16 assuming -- there's discussion in Congress about 17 potentially delaying them, but assuming those aren't 18 delayed, that's another area where we're working now 19 on setting up an enforcement plan, and being ready to 20 move seriously into that area.21 Another area I would mention that may be 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 173 of interest is that we're working on a compliance 1 review of the requirements for carriers to publicize 2 the availability of life line and link-up programs in 3 under-served areas, such as tribal lands.4 Let me touch briefly on competition 5 enforcement and public safety enforcement, and then 6 open things up for questions. Basically, competition 7 is a good thing for consumers. It helps consumers get 8 better services at lower prices. Obviously, there are 9 sometimes market failures, which is why we have 10 aggressive consumer protection enforcement. But it 11 also helps consumers that we're aggressively enforcing 12 the competition rules so that, in fact, there is 13 competition.14 So we just -- in the last couple of 15 months, for example, we had a six and a half million 16 dollar consent decree with one of the Bell operating 17 companies, and a consent decree of $5.7 million with 18 another one dealing with premature marketing of long 19 distance service; again, violation of the competition 20 rules, or issues of violation of competition rules 21 that are designed to benefit consumers.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 174 The Commission also recently decided two 1 important formal complaint cases in the local 2 competition area, which confirmed that the Commission 3 has authority sharing it with the states to adjudicate 4 disputes about compliance with the local competition 5 rules. And in one of the cases, the Commission found 6 that the BOC involved had not been providing 7 interconnection service in an appropriate manner. And 8 in the other case, it found that it had failed to 9 provide what's called shared transport service that's 10 important to local competition, in violation of the 11 conditions of its merger order.12 In the public safety area, probably the 13 area with the most direct consumer benefits, that it's 14 gotten a lot of attention, is E-911 Enforcement. 15 We've had several recent enforcement actions in that 16 area. We had $675,000 consent decree with one 17 carrier, a $2 million consent decree with another 18 carrier, a $1.2 million forfeiture for one carrier. 19 Last year we had a $2 million consent decree with a 20 different carrier. And again as I mentioned before in 21 the context of the consumer protection-type issues, 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 175 consent decrees can get you a very serious compliance 1 plan. In these cases where we have consent decrees, 2 there are industry issues about compliance. And now 3 we have specific carriers having agreed to automatic 4 penalties if they don't meet certain benchmarks. And 5 hopefully, that's doing a lot to further stimulate 6 compliance and getting E-911 Service rolled out.7 Some of the other areas where we've been 8 active in public safety enforcement, again in ways 9 that I think give direct benefits to consumers, 10 interference resolution, pirate radio enforcement, 11 lighting of communications towers, enforcement of the 12 Emergency Alert System rules.13 So to sum up, consumer protection is and 14 is going to remain a top priority of the FCC, and of 15 the Enforcement Bureau. And I look forward to 16 answering your questions, and continuing to work with 17 many of you in the future.18 CHAIR ROOKER: I think you're going to 19 have a lot of questions.20 MR. SOLOMON: That's fine.21 CHAIR ROOKER: We're so pleased to have 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 176 you with us. Why don't we just start and work our way 1 around the table. That's probably the fairest way to 2 do it.3 MR. SOLOMON: Okay.4 CHAIR ROOKER: We'll start with Susan.5 MS. GRANT: Hi. Susan Grant, National 6 Consumers League. What percentage of the fines and 7 other kinds of penalties that you seek do you actually 8 collect? What are the impediments to your ability to 9 collect? And are there any circumstances where you 10 actually return money to consumers?11 MR. SOLOMON: Starting with your last 12 point, the way our statute is set up, if we take 13 forfeiture action, we don't have authority to give the 14 money to consumers. Through a formal complaint 15 proceeding, consumers can get damages, so unlike the 16 Federal Trade Commission, we're really not in a 17 position to get money directed back to consumers, 18 unless people file formal complaints for damages.19 As to collectability, I don't have an 20 exact percent. Certainly, in the consent decrees when 21 people have agreed to pay money and take various 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 177 steps, we get all of that money. It depends --1 whether we collect in other situations sort of depends 2 on the area.3 I think in the consumer protection area, 4 one of the things that happens in a lot of cases, and 5 I don't think this is necessarily a bad result, is 6 that the issuance of the forfeiture forces the company 7 out of business, so we don't, in fact, collect. But 8 if they're out of business, and if they're not 9 immediately restarting with sort of the same people 10 under different names, that's a good result, even if 11 we don't get the money. But we do work closely with 12 U.S. Attorney's Offices, and there are some pending 13 cases. Colleen, I think, recently testified in one of 14 those cases, so we do actively work with DOJ to 15 collect the amounts.16 CHAIR ROOKER: Linda, I believe you were 17 next.18 MS. WEST: Linda West.19 CHAIR ROOKER: Stick your hand up so they 20 can find you. Oh, right here.21 MS. WEST: I'm a member of the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 178 Confederated Salish and Kootenai Tribes in Montana. 1 And I've been in contact with other reservations, and 2 did I understand you to say that there are penalties, 3 or there will be penalties in place for the companies 4 that are not doing outreach on the lifeline link-up 5 program to Indian reservations?6 MR. SOLOMON: It's an area we've been 7 working on right now with -- in fact, we've been in 8 touch with some of the Indian groups to identify who 9 are the telephone companies in those areas, so we're 10 not at the stage of being able to say yes, we're 11 imposing penalties. But it is an area where we've 12 definitely decided to look into, and see what's going 13 on, and we're in the process of collecting 14 information.15 MS. WEST: Okay. Because I can testify to 16 the fact that these phone companies are not getting 17 that information out to the Indian people.18 MR. SOLOMON: Well, if when we're done you 19 want to see Colleen or Kurt in the back and tell them 20 the areas and the names of the companies, that would 21 be helpful.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 179 MS. WEST: I'll be glad to. Thank you, 1 sir.2 MR. SOLOMON: And I'm serious. I mean, we 3 want to know that information.4 CHAIR ROOKER: Okay. Mike, I think you're 5 next. Stick your hand up so they can find you for the 6 microphone.7 MR. DUKE: Okay. We have it. I'm Mike 8 Duke from Jackson, Mississippi, and I have to wear my 9 amateur radio hat on this one, just an observation to 10 you. You didn't mention it, but I know it's there.11 About five years ago, you or a predecessor 12 - I'm not sure how long you've been where you are in 13 that division - designated a gentleman named Raleigh 14 Hollingsworth to handle amateur radio rules and 15 regulations enforcement. And I just want to say 16 publicly it has made a tremendous difference in the 17 ability of those of us who tried in the first place to 18 abide by the things we're supposed to, to enjoy the 19 hobby. I hope it continues, and it's really been 20 wonderful to have the enforcement working on our 21 behalf.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 180 MR. SOLOMON: Well, good. I'm pleased to 1 hear that. Raleigh is our special counsel for amateur 2 enforcement, and he does a great job, so I'm glad to 3 hear that.4 CHAIR ROOKER: Joe.5 MR. GORDON: Hi. Joe Gordon, League for 6 the Hard of Hearing. Can you share some violations 7 that you've encountered with the cable industry, 8 whether it's captioning or other type of violation, 9 and the penalties involved? I'd like to hear some 10 encounters you've had with the cable industry.11 MR. SOLMON: Sure. Most of our work in 12 the cable area has been in the technical area. So 13 we've had, for example, we've had forfeitures I know 14 of over $100,000 against cable companies for what's 15 called cable signal leakage, which is basically cable 16 companies send transmissions through their wires. If 17 you don't have coating around the wires that are 18 strong enough, the signals leak out and the bands they 19 use are the aviation bands. So if signals leak from 20 cable companies, you could have interference with 21 aviation, so that's certainly a very serious issue. 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 181 Cable is one area that a fair amount of 1 the enforcement is still handled in the Media Bureau. 2 For example, a big area of cable enforcement involves 3 the Must Carry Rules, where there are issues about 4 broadcast stations, rights to access to cable. I 5 don't think we've had many complaints in the closed 6 captioning area. We have recently been doing some 7 investigations in closed captioning. I don't remember 8 whether it's cable or broadcast, but at this point I 9 don't know whether that's going to lead to a finding 10 of any violations.11 MR. GORDON: Just a fast follow-up 12 question. I would imagine, whether they're right or 13 wrong, that there's been many, many complaints about 14 the lack of closed captioning either to the FCC or to 15 the caption companies, and I think that's an area that 16 should be looked into. And also, the recent 17 regulations of emergency captioning is also another 18 area where there has been, and are many violations.19 I was watching TV last night, and I put 20 the volume down because I didn't want to annoy the 21 people around me. And there was tornado warnings, and 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 182 I didn't see any emergency scrolling. So whether it's 1 closed captioning violations, or emergency violations, 2 I think there are complaints out there.3 MR. SOLOMON: Well, and I agree those are 4 important areas. And we certainly, as I mentioned 5 before, we look carefully, and disabilities is one of 6 the areas that we've made a high priority, so I know 7 we've been looking into some closed captioning issues. 8 And I know also some emergency captioning. Again, 9 sometimes, you know, the complaints don't lead to 10 findings of violations, but that is a very high 11 priority.12 CHAIR ROOKER: David.13 MR. HOROWITZ: This morning when we were 14 listening to Richard Smith, I asked him a question 15 about the enforcement would be of these lists, which 16 are supposed to have as much as 60 million names on it 17 for the people who are signing up for the program. 18 And at this juncture he said well, you know, we'll 19 have to think about it. And my feeling is, when you 20 have lists like that, that are going to be sold for 21 $7,200 a list, that there has to be some enforcement 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 183 built into who gets the list, what do they use the 1 list for, can they sell the list off to some spamster 2 who'll go and look in the other phone books where you 3 could go back and get a telephone number and find out 4 a person's address and all that kind of stuff.5 And has anything been given to how these 6 books are going to be policed when they're sold, and 7 how we're going to be able to know if these books are 8 going to legitimate telemarketers, or they sell them 9 off to others? And what kind of enforcement of that 10 there's going to be?11 MR. SOLOMON: Yeah. I think that's an 12 important area. We do have rules, and the Federal 13 Trade Commission has rules that you can't use the list 14 in those sorts of ways. Having said that, you're 15 absolutely right, that having a rule isn't the end of 16 it. And it's something, you know, as we develop our 17 enforcement plans, as we work with the FTC, it's 18 certainly an important area. And again, I think that, 19 you know, that's the kind of issue, as we track the 20 complaints that will come into us and the FTC and 21 others. If we start seeing complaints about misuse of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 184 the list in those ways, that's something where we can 1 go after these companies under our statute, assuming 2 they're not telecom companies, cable operators or 3 broadcasters, not FCC regulated entities, if the first 4 instance, we have to give them what's called a 5 citation. And that after that, if they violate again, 6 you can fine them. But the citations often are 7 effective for two reasons.8 One, we've done a lot of citations in Junk 9 Faxes, where again we can't move directly to 10 forfeiture. We've issued a couple of hundred 11 citations, and in a vast majority of the cases, at 12 least in that area, where you issue the citations, 13 people honestly didn't know they weren't allowed to 14 use it that way. And they get the citation and, you 15 know, it's a formal-looking document, and they seem to 16 get scared by the prospect that the government is 17 doing something. And then in the smaller number of 18 cases where the companies have continued to do it, we 19 have followed up with forfeiture proceedings. So I 20 think you're absolutely right, that's an area that has 21 to be followed carefully.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 185 MR. HOROWITZ: Will there be something in 1 advance of issuing these lists and selling these lists 2 that will make it absolutely clear that if these lists 3 are used for anything other than what they're intended 4 to, that these enforcement regulations and these 5 penalties will go into effect, and that these 6 companies that buy them sign-off on knowing that 7 that's the risk they're taking by getting these lists?8 MR. SOLOMON: It's certainly in the rules 9 that they can't do it, and I think that's -- you make 10 a good point. It's something we should think about, 11 about whether there should be some sort of additional 12 publicity either by us or the Federal Trade Commission 13 about people understanding that.14 CHAIR ROOKER: Yes. We have another 15 question here. Brenda.16 MS. FREY: Brenda Kelly Frey representing 17 the National State Relay Administration. I have a 18 question about the filing of complaints. I realize 19 that on the website of the FCC, you have an easy way 20 of filing complaints. Is there going to be any easier 21 way to file formal complaints with the FCC? It's 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 186 rather cumbersome right now for my constituents, for 1 consumers. Have you given it any thought?2 MR. SOLOMON: I mean, it's a difficult 3 trade-off. And, I mean, we're always thinking about, 4 you know -- to file a formal complaint, basically you 5 do need a lawyer. It's like a lawsuit. And what the 6 Commission has tried to do is basically kind of 7 maximize the different kinds of avenues that are 8 available to people. So it's very easy to file an 9 informal complaint, and the informal complaints are 10 dealt with in two ways.11 One way, and someone from CGB may have 12 talked to you about this this morning, but an informal 13 complaint against a carrier, it's served on the 14 carrier and they have to respond. And often, I think 15 in a fairly significant number of cases, that does get 16 somebody, you know, their refund or something like 17 that, get them some action.18 We track that information, as I mentioned 19 before, so even if let's say a company is over-billing 20 something and, you know, every time somebody complains 21 they just give them $50 and the people go away, that 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 187 doesn't mean we would be done with it. We would still 1 say okay, the fact that you've resolved these informal 2 complaints has nothing to do with whether we will 3 initiate an enforcement action against you. And we 4 will initiate an enforcement action if we see that 5 kind of pattern.6 The formal complaints really are designed 7 to be like lawsuits. Under the statute, you have a 8 choice of either filing a formal complaint in federal 9 court, or with the FCC. And, I mean, the way it's set 10 up is to have the kind of case that if in the end 11 you're awarding damages, that you have a legal process 12 that basically enables us to build a case.13 But having said that, you know, we do 14 realize that it's difficult. There have been consumer 15 complaints. You know, we probably work somewhat more 16 informally with some of the, you know, consumer 17 advocates to help make sure that they comply with the 18 various procedural rules than we necessarily would 19 with a big carrier that's coming in. You know, 20 there's a formal disabilities complaint. There was a 21 complaint a couple of years in the Do Not Call area by 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 188 a group called Consumer Net that was, you know, 1 litigated through and they won, so it's -- I recognize 2 it's difficult. It's not impossible, and it's a 3 trade-off, and we do try to keep thinking about it.4 CHAIR ROOKER: I'd like to -- do you have 5 a follow-up question, Brenda? I'm just concerned 6 about the, you know, Joe Smith Consumer, you know, 7 filing a formal complaint. And they have the right to 8 do so, but they don't have the money with which to 9 file a formal complaint, get an attorney and so forth.10 MR. SOLOMON: Again, I think it, in some 11 ways -- we try to have avenues for the Joe Smith who, 12 you know, by doing the informal complaint route, he 13 has that route. And under some of the statutes, you 14 know, the TCPA, the Telephone Consumer Protection Act, 15 you know, they have the right to go to state court, as 16 well. But, you know, part of what we have to do, and 17 I know some of you are in government or 18 quasi-government institutions, and part of what we 19 have to do is use very limited resources to try to 20 figure out the best strategy. And from our 21 perspective, I think a lot of attention has been that 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 189 we can sort of get the most bang for the buck if we 1 take, you know, certain resources we have and say 2 we're going to look for the trend. So if there are 20 3 Joe Smiths, than that's more important to sort of, you 4 know, attach staff resources. But I don't mean to at 5 all sort of under-estimate the burden you're talking 6 about. And it is one that, you know, in a perfect 7 world we would figure out a way to devote more 8 resources to that, as well, but we struggle with it.9 CHAIR ROOKER: I have a question. It's 10 not very important, but it's a little bit confusing to 11 consumers. And that's when they call you, and they're 12 told that they can only file an informal complaint. 13 Well, many of them seem to think that that means that 14 they're not really filing a complaint. Whereas, I 15 know that it is, but they -- but in the consumer's 16 mind, the fact that there's an informal and a formal 17 complaint, they all want to file a formal complaint 18 but they can't. So is there any consideration being 19 given to renaming those processes? As I said, this is 20 not of major importance, but in the consumer's mind, I 21 run a consumer hotline, and we refer people to you all 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 190 the time because we feel it's very important that they 1 complain. But they'll come to us and say well, they 2 wouldn't let me file a formal complaint. And we 3 explain to them, you know, what this really means, but 4 maybe we just need to think about making a change to 5 what we call it.6 MR. SOLOMON: Well, that's an interesting 7 idea. We can certainly talk to the Consumer and 8 Governmental Affairs Bureau that runs that website. 9 But maybe there is a way to say, you know, you can 10 file a complaint or you can file a formal complaint or 11 something. I understand what you're saying.12 CHAIR ROOKER: Yeah.13 MR. SOLOMON: People think informal 14 complaints mean it's not really a complaint.15 CHAIR ROOKER: That's exactly right. And 16 while I know that that's not the case, they feel that 17 they've been kind of put down because this is the only 18 thing that they can do. And, you know, they are 19 really angry, and they want blood, and they don't feel 20 like they're getting it, so it's just a suggestion.21 MR. SOLOMON: Yeah. That's interesting. 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 191 I've never heard that, so that's interesting.1 CHAIR ROOKER: Well, it's been something 2 that we've heard quite a bit, because we talk to 3 consumers every single day. And it's kind of 4 interesting. I mean, you know, the first time someone 5 said that to me, I said well, wait a minute. I know 6 you can file a complaint with them. What are you 7 talking about? I had to find out what it was all 8 about. So at any rate, well, I think that -- Ron. 9 Yeah, take one more question, two more questions if 10 they're brief, very brief.11 MR. MALLARD: Ron Mallard, National 12 Association of Consumer Agencies. Just curious as to 13 whether or not you have an opinion, David, on how the 14 FCC might ultimately resolve the issue of providing 15 some kind of complaint resolution mechanism for cable 16 modem services in light of the Commission's decision 17 that cable modem services are information, is an 18 information service and not a cable service.19 MR. SOLOMON: Well, I mean, I think at 20 this point, the Commission didn't impose rules on 21 cable modem service, so there's basically -- there's 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 192 nothing to enforce until there are requirements.1 MR. MALLARD: But there is a decision that 2 has to be made, because right now, local governments 3 are without any authority to act upon complaints about 4 cable modem services.5 MR. SOLOMON: Right.6 MR. MALLARD: So there is a void there in 7 regulatory authority at any level to act upon 8 legitimate complaints about cable modem services. And 9 I was just wondering if you had an opinion as to 10 whether or not the -- your division would support some 11 kind of form of authority being granted to localities 12 to enforce cable modem service complaints as they 13 currently do with cable television-related complaints.14 MR. SOLOMON: Yeah, that's -- I don't want 15 to sound bureaucratic, but that's not really our 16 issue, you know. Our job is to enforce the laws that 17 apply to the FCC. I know what you're talking about, 18 but I don't really have a comment on it.19 CHAIR ROOKER: The last question.20 MR. ALLIBONE: Tom Allibone with LTC 21 Consulting. I've got a question on your Part 42 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 193 rules. Okay. A number of years ago, Part 42 was 1 gutted as part of the Paperwork Reduction Act. And 2 embedded within the Part 42 rules were some very 3 important consumer protection rules concerning 4 preservation of customer phone billing records.5 In the old 42 rules, it used to require 6 the common carrier to retain these records for three 7 years. When the rule was gutted, that rule went out 8 the window, and was modified with a -- I guess a 9 provision that in essence allows the industry to be in 10 charge of chicken coop. And what it basically says is 11 that every common carrier must maintain a master index 12 of records. And within that master index, presumably 13 there would be some type of a, you know, customer 14 billing-type record. And I found that to be true.15 My question is that within the master 16 index of records, which is maintained by the carriers, 17 and is not maintained by the FCC, how do you go about 18 enforcing your Part 42 rules if you don't have access 19 to the information?20 I have filed a number of complaints in 21 this area with the FCC, so it's not a question of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 194 nobody ever bringing it to your attention, because I 1 can assure you, may paper trail is probably about two 2 miles long if you check out my name. So I just would 3 be curious, you know, what you can do or plan to do in 4 that area. Because customer phone bills, to get to 5 the bottom line, is that a lot of phone bills contain 6 hidden billing errors. They can be on the phone bill 7 for a number of years. And I've seen cases where they 8 go back 20 years. Actually, even more, 30 years, so 9 it's not an isolated incident. It's a very serious 10 consumer protection issue.11 MR. SOLOMON: It's certainly hardly for me 12 to answer with the level of detail you're looking for, 13 but all I can really say is that I know when we're 14 doing our investigations, we have a number of tools so 15 that, you know, we are able to get information, 16 documents we need from carriers. I don't know if 17 there's, you know, a specific issue in your specific 18 case where there was a problem, but as a general 19 matter, we're certainly -- you know, we have tools and 20 we're able to get the information we need from the 21 carriers to investigate.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 195 CHAIR ROOKER: Well, thank you so much. 1 As you can see, I think we can go on all afternoon. 2 We'll have to have you back.3 MR. SOLOMON: Thank you.4 CHAIR ROOKER: Thank you very much. WE 5 have some handouts for you. Betty is going to be 6 passing them out, and we have them on disk if you need 7 a disk copy, so we will make those provisions 8 available to you.9 Now our afternoon, what we're calling our 10 marathon panel is - you may think it is too - is a 11 result of the efforts of the broadband working group. 12 And our kudos to Larry Goldberg, who's heading up 13 that group. And the group itself are putting together 14 this panel on what is a very hot topic, one that's 15 being looked at by Wall Street, the media, and a whole 16 host of others. It should be a very lively afternoon. 17 I hope everybody has gotten here, because I know 18 someone was stuck in traffic.19 Just for your planning purposes, we will 20 have a break at 2:15. So don't worry, you're not 21 going to have to sit here until 3:30. And at that 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 196 time, we will be ordering cabs for your 1 transportation, so that you can think about if you 2 want a cab, you'll let us know at 2:15 when we take 3 the break. We'll poll everybody to see who wants 4 transportation, and we'll have it outside the 5 Commission building at 4, a little after 4:00.6 Now Larry is about to get this all set up. 7 Again, thanks, Larry, for your hard work on this, and 8 go to it.9 MR. GOLDBERG: Okay. While we set up 10 here, let me just give a little background. I was 11 originally called the facilitator of the Broadband 12 Working Group, and all I was supposed to do was call 13 together phone calls. That's envolved. But the 14 important thing is that we are all very interested in 15 broadband. There are so many issues that are of 16 concern to so many of us that as the broadband working 17 group began deliberating at what issues we could bring 18 to the Full CAC, it was clear that we needed a lot 19 more information about regulation.20 The words are often used that there isn't 21 a level playing field. We want to know what does that 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 197 mean. It's a complex issue about broadband, and the 1 different providers, and so we felt it would be great 2 to pull together a panel of experts who could really 3 help us understand this complex issue a lot better. 4 Members of the working group suggested some potential 5 panelists. We presented those to Shirley and Scott, 6 and the FCC, and they were all quite enthusiastic 7 about doing this, and so we're here now to learn.8 I want to particularly thank Ron Mallard, 9 and Debra Berlyn, and Rich Ellis and Cindy Cox for 10 helping gather this very distinguished group, this 11 expert group. And I certainly ant to thank the 12 panelists in advance for taking the time to come here 13 and enlighten us.14 We're not going to get to everything that 15 needs to be known about broadband, but I think we're 16 representing a lot of interesting common and divergent 17 opinions here today. And we should get to a lot of 18 really good information. Here's how we hope to spend 19 the next two hours or so.20 Each of the panelists will have from seven 21 to ten minutes to give an opening statement, and the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 198 order of these opening presentations have been chosen 1 at random by our Chairperson, Shirley Rooker, so you 2 know it's an honest selection.3 After the panelists have made their 4 opening statements, two of which have Power Point 5 presentations as part of it, we'll have some Q&A, 6 first from a list of questions that the broadband 7 working group has generated themselves, and then to 8 the rest of the CAC. And then in the middle, or near 9 the middle, as Shirley indicated, there will be a 15 10 minute break.11 So I will give longer introductions to 12 each of the panelists as they begin to speak, but just 13 so we know who they are. Nick Miller, who's caught in 14 -- oh, look at that. Perfect entrance line. From the 15 law firm of Miller & Van Eaton, representing local 16 government, cities and counties.17 MR. MILLER: I apologize.18 MR. GOLDBERG: That's fine. You're just 19 on time. Next is Scott Randolph, who's Director of 20 Federal Regulatory Advocacy at Verizon, representing 21 the Telcos. And Dan Brenner, Senior Vice President of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 199 Law and Regulatory Policy at the National Cable and 1 Telecommunications Association, representing the cable 2 companies. John Windhausen, President of the 3 Association of Local Telecommunications Services, 4 ALTS, representing facilities-based CLECs. And to my 5 left, Commission David Svanda of the Michigan Public 6 Service Commission, representing state government.7 The order of presentations will be Scott 8 Randolph, and then Dan Brenner, then John Windhausen, 9 Nick Miller, and finally David Svanda, so it actually 10 is a nice lineup in that order, as well. So we'll 11 start off with Scott Randolph. I'll tell you a little 12 bit more about him as -- are we ready to go? Working 13 on it.14 I have a few words to vamp here. Scott 15 Randolph is Director of the Federal Regulatory 16 Advocacy for Verizon in Washington, D.C., and he's 17 responsible for directing Verizon's involvement in 18 regulatory proceedings and industry activities related 19 to the broadband and local telephone competition 20 provisions of the `96 Telecom Act.21 Prior to the merger of Bell Atlantic and 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 200 GTE in 2001, he served as Director of Regulatory 1 Matters in GTE's Washington, D.C. office, and before 2 that worked for GTE in Irvine, Texas, with 3 responsibility for tariffs, and video and cable 4 television-related regulatory proceedings.5 Scott began his career in 6 telecommunications with Contel Corporation in Atlanta, 7 Georgia in 1984, and was responsible for implementing 8 the FCC's access charge and accounting rules, and 9 acted as a result of a divestiture of AT&T. He 10 received his Bachelor's Degree in Economics from 11 Georgia State University in Atlanta, Georgia.12 MR. RANDOLPH: Thank you very much for 13 having this opportunity to talk today. What I'd like 14 to start off with first is talk a little bit about 15 what we're doing at Verizon today with respect to 16 broadband. Today at Verizon, we provide digital 17 subscriber line service which many of you are familiar 18 with. It's a high speed always-on access to the 19 Internet over your local telephone line that you can 20 use to access the Internet at the same time that 21 you're talking on the telephone.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 201 Verizon On-Line, which is Verizon's 1 affiliated Internet service provider markets DSL 2 Service and combines it with it's Internet access 3 service to market to consumers. You may have noticed 4 that recently we've reduced some of our pricing, 5 particularly in response to competition. We're now 6 offering a new price for DSL of $29.95.7 Verizon also has a very viable wholesale 8 business in DSL. We offer DSL services to Internet 9 service providers such as AOL, Earthlink and MSN, and 10 they take the DSL functionality and they package it 11 with their own Internet and provide it to consumers 12 under their own brand name, so we have both a retail 13 and a wholesale business at Verizon.14 What are we going to do in the future? 15 Well, in March we announced a very aggressive roll-out 16 of DSL and fiber optic facilities in our network. We 17 hope by the end of the year to have 46 million DSL 18 equipped lines, which means that we'll make broadband 19 available in our serving territories to about 80 20 percent of all of our customers, equip about 1,000 21 additional local switching centers.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 202 We've announced aggressive plans to push 1 fiber optic facilities deeper into neighborhoods, and 2 eventually all the way to the home. And we recently 3 enacted hundreds of Wi-Fi spots in New York City, 4 which essentially allows customers to access the 5 Internet in various downtown locations in Manhattan 6 via their laptops. And we also have some fixed 7 wireless trials underway in Virginia and Maryland, so 8 we have a lot going on at Verizon.9 Just to take a look at what is available 10 to Verizon customers, today about 50 percent of 11 Verizon customers have a choice between their 12 broadband service providers. DSL and cable modem are 13 available to about half of Verizon customers. And in 14 about 31 percent of our serving territory, customers 15 only have a choice of cable, and 11 percent a choice 16 of only DSL, and even in 12 percent some limited 17 choice, even though we have satellite and wireless 18 applications that are out there in some markets. So 19 we're trying to aggressively roll-out new DSL 20 functionality in new areas, and hopefully we'll reduce 21 some of those numbers, and increase that number where 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 203 DSL and cable are both available to consumers.1 If you step back and let's take a look for 2 a second at the national market. Since the FCC has 3 been collecting statistics on broadband since 1999, 4 cable modem providers have outpaced DSL subscription 5 by about two to one almost every year. Today cable 6 modem service is provided to about 65 percent of the 7 broadband market compared to DSL's 32 percent. So 8 clearly you can see that Verizon and the local 9 telephone companies are not the dominant players in 10 the market. Cable is maintaining its advantage.11 But if you kind of step back and broaden 12 the scope a little bit of what this market looks like, 13 and take a look at all of Internet households in the 14 country, about 73 percent, depending upon the studies 15 that you see, of customers today are still using 16 dial-up to access the Internet, so what does that tell 17 you? Well, that tells you that there's still a large 18 market out there for companies like Verizon and 19 companies that Dan, for example, represent, the cable 20 companies.21 A lot of customers may never want to go to 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 204 broadband. They don't use the Internet that often. 1 Maybe they use it just for e-mail and some limited 2 applications. But increasingly we find that customers 3 are getting dissatisfied with dial-up and want more 4 out of their Internet experience, not only with faster 5 speeds, but able to do more with it.6 So how do we compete in this kind of 7 market? Well, to compete in the market, customers 8 like Verizon is going to have to continue to focus 9 more on content, on applications, and on services, not 10 just high speed access, although we are rolling out 11 higher DSL access speeds. And what I mentioned a few 12 minutes ago, the aggressive roll-out of more fiber in 13 our network will allow us to provide Internet access 14 at speeds that no one ever thought of in the past.15 Delivery of those services are going to 16 depend on a number of factors. One, it's going to 17 depend on the ability of Verizon to continue to invest 18 in broadband infrastructure. And second, it's going 19 to be the ability for Verizon to have the flexibility 20 to interact among all the players in what we call the 21 Internet value chain. Let me give you an example of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 205 both of those.1 Today, using current broadband 2 technologies like DSL, cable modem, broadband brings a 3 whole host of services into people's homes, home 4 office applications, access to remote education 5 material, entertainment, healthcare. But tomorrow, 6 the future bandwidth services, the bigger fatter 7 pipes, fiber to the home, the next generation versions 8 of technology are going to give us much more, video 9 conferencing, on-line interactive video games, virtual 10 classrooms, telerobotics used for surgery, video on 11 demand, and that's just only the beginning.12 We also think when we look at the Internet 13 that there is a value chain, and this value chain 14 serves both companies and consumers. And it involves 15 all the different players that are involved in the 16 Internet. We have application software providers like 17 Netscape or Explorer, operating systems like Apple and 18 Windows, network technology providers like LinkSys, 19 and you have access service providers like Comcast and 20 the cable companies, AOL and Verizon, BellSouth, SBC 21 and Qwest. You have web services provided by Yahoo 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 206 and MSN, content provided by companies like ABC News 1 or MSNBC. And those are just only a few examples of 2 the many players that are involved between the actual 3 consumer and the content, and the applications that 4 the consumer accesses on the Internet.5 If you take a look at all of those 6 players, only one player sticks out as a little bit 7 different, and that is the local telephone companies. 8 They're all not regulated in this Internet space. 9 The only regulated entity is the local telephone 10 companies and the provision of DSL service. So what 11 does that mean?12 The regulations that we're subject to 13 today are somewhat complex, and sometimes it's a 14 little bit difficult to explain. But essentially, we 15 are subject to regulations that were designed over a 16 decade ago for a voice network, not a broadband 17 network. If I can give you a couple of examples, the 18 current rules today require that for every broadband 19 service like Yahoo, we have to break apart a separate 20 transmission service away from other enhanced services 21 and offer those in piece parts.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 207 Oftentimes, that requires us to offer the 1 piece parts under separate affiliates. It's sort of 2 like requiring, you know, McDonald's to offer -- you 3 know, to price the price of meat separately than a 4 bun, regulate the price of meat, but allow them to 5 price whatever they want to on the bun. It just 6 doesn't make a lot of sense.7 We also have to file public disclosures 8 announcing plans in advance of where we decide to 9 deploy new services and technologies, which 10 essentially gives competitors advance notice of our 11 plans.12 And finally, we have to obtain approval 13 for new broadband service offerings and prices from 14 the FCC before we actually offer those to consumers. 15 We're required to file tariffs with the Commission, 16 that essentially restricts us in our ability to be 17 able to be flexible to work with consumers. In 18 general, it inhibits the ability to be able to 19 introduce new services and partner with all of those 20 entities that you just saw a few minutes ago over this 21 Internet value chain. None of these rules apply to 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 208 our competitors, which puts them at a significant 1 competitive advantage.2 So what should the FCC do? Well, the FCC 3 has a number of proceedings open looking at what is 4 the proper regulatory treatment of the telephone 5 companies' DSL and broadband services. We think the 6 answer is very simple. Give us the same freedoms that 7 our competitors do, the ones that have 65 percent of 8 the market to our 25 percent of the market. Freedom 9 to partner with individual Internet service providers, 10 content providers, manufacturers across that value 11 chain on a contractual basis rather than via 12 regulatory tariffs. Freedom to offer a wider range of 13 service bundles and packages that consumers want 14 without artificial regulatory constraints that we're 15 currently subject to. And freedom to quickly 16 introduce new services and change prices in response 17 to our competitors without undue delay. If we do 18 that, and if we have that freedom and that 19 flexibility, consumers are going to benefit.20 We'll have greater incentives to invest in 21 the network. We'll have greater flexibility to 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 209 partner with other entities across that Internet value 1 chain, to develop new and innovative services, 2 applications, Whizbang, capabilities that consumers 3 want. And if we're able to be a more potent 4 competitor, then that will translate into better value 5 to the consumer, and better prices. And maybe even 6 we'll see the cable companies reducing their prices 7 for cable modem service.8 So lastly, a word about Verizon's 9 commitment. We're committed to open networks and 10 providing consumers with access to the content that 11 they want, and access to the choice of Internet 12 service providers. A lot of folks have said that if 13 the regulations are lifted on the Bell companies, then 14 we'll restrict consumers' access to certain content, 15 and we'll restrict their choice of Internet service 16 providers. I don't think that that's so.17 It simply doesn't make sense for Verizon 18 as the underdog in this market to block a consumer's 19 access to content, and to restrict their choice on the 20 Internet. We want more content provider to our 21 end-users, whether we provide it, or AOL does, or 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 210 EarthLink or other providers.1 We have a viable wholesale business today. 2 We provide dial-up access to about 400 Internet 3 service providers, and a part of those Internet 4 service providers buy our DSL service and repackage it 5 with their own offerings, under their own brand name. 6 So it's a viable wholesale business today, and want 7 it to be viable wholesale business tomorrow. But the 8 day that we start restricting consumer choice is the 9 day that they leave our networks and they go over to 10 the cable networks, and we lose a customer. So we 11 think a truly competitive market, not one based on 12 regulation, will best ensure that consumers and 13 providers have access to each other across the entire 14 Internet. Thank you.15 MR. GOLDBERG: Dan Brenner, Senior Vice 16 President for Law and Regulatory Policy at the 17 National Cable and Telecommunications Association in 18 Washington, D.C., where he has served since 1992. 19 Previously, he served as Director of the 20 Communications Law Program, and a member of the 21 faculty at UCLA Law School.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 211 Brenner was Senior Legal Advisor to 1 Chairman Mark Fowler of the FCC. He was also Vice 2 Chairman of the U.S. Delegation to the ITO World Radio 3 Conference in Geneva, Switzerland in 1984. He's been 4 a consultant to various organizations, was a senior 5 fellow at the Annenberg Washington Program, and serves 6 on the faculty of Georgetown School of Law. Mr. 7 Brenner has served as a member and Vice Chairman of 8 the Board of Directors of the Corporation for Public 9 Broadcasting from 1986 to 1991. He is a graduate of 10 Stanford University and Stanford Law School and the 11 Senior Executive Program of Stanford's School of 12 business. Thanks for coming.13 MR. BRENNER: Thank you, Larry and the 14 group for inviting me. I think this is a great topic 15 for you guys to talk about, and I hope -- I'll try to 16 keep myself to my time. And, Larry, cut me off if I 17 go long, because I think the question and answers are 18 likely to be the most interesting part of this 19 marathon.20 It might be interesting to step back for 21 just a moment and a lot of people don't know where 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 212 cable modem service came from, as if it was fore 1 ordained as part of a great scheme as the next product 2 for the cable industry, and that's really not what 3 happened.4 The way it's been explained to me, having 5 lived through it at the NCTA is that cable companies 6 in Boston, as it turned out, wanted to develop local 7 area networks for some customers, just provide data 8 transport as a commercial enterprise for an industrial 9 park. And it was a new business for cable. We were 10 developing some prowess with telecommunications, but 11 we hardly were very -- the leader in it. We're still 12 a pretty small player in telecommunication service, 13 but the idea was that as long as we were going to 14 build a LAN, maybe it made sense to have access to 15 what was then called the World Wide Web, and be able 16 to browse, as well as transmit data among offices in 17 an industrial park. And Intel, at least, took the 18 position that the cable modem would never work. Our 19 network could not do this. And some very enterprising 20 engineers working with some cable companies developed 21 a product. And at the beginning, those of you who 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 213 were really adopters, if any of you were of cable 1 modem service, know that it was not the product that 2 you see today.3 It was originally to get cable model 4 service took two engineers the better part of half a 5 day in your home to try to install this thing. 6 Usually have to come back the next day because it 7 didn't work the first day. Over time it's developed 8 so that you can go to a Circuit City, buy a cable 9 modem, call the company, Plug N Play, and you have 10 always-on broadband service. So it's really emerged 11 as a very customer friendly product that's easy to 12 install.13 I think in fairness to Scott's comments 14 about the cable industry, it's worth knowing that the 15 DSL technology, and many of you know this, was around 16 a lot longer than cable modem service. And it sort of 17 sat on the shelf of the phone companies for many years 18 until cable came along and said hey, there's a 19 residential market for broadband. Because as you 20 know, even today the phone companies offer T-1 21 circuits and other -- and ISDN was the product that 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 214 they thought would sell, but it cost a great deal 1 more. And T-1, of course, is still a lot more than 2 any cable modem service. And it was -- I think the 3 cable industry's risked capital and ingenuity that led 4 the -- really roused the phone companies from their 5 slumber and got them into the residential phone 6 service. So that's why you see the competition that's 7 heating up in residential broadband service. And 8 cable leads it in some ways because we were out ahead 9 first.10 Cable has spent since 1996 about $75 11 billion in risk capital, not rate of return capital 12 coming from an embedded phone base, but risk capital 13 to improve our networks. That's about $1,000 per 14 customer to rebuild our networks, not just for modem 15 service, but also to provide digital cable service so 16 that we can compete with DDS, which in the mid-90s 17 sort of took the lead on diversity and quality in 18 video. They had more offerings than the typical cable 19 company did.20 And in 2002 alone, we spent about $215 per 21 customer upgrading our network for that customer. The 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 215 numbers as Scott indicated, show continued growth 1 cable is in over 12 million homes today, but passes 2 nearly 90 million homes. DSL is in front of around 60 3 million homes, and it's adopted by -- a little over 4 six and a half million of those homes take DSL.5 That service is going to grow. Morgan 6 Stanley estimates that broadband will account for 35 7 percent of residential access, so that's down from the 8 70 plus number that Scott indicated, so it's a growing 9 business. And cable continues and wants to complete 10 build-out.11 One of the issues, I think, for 12 policymakers is that at some point reaching certain 13 unserved areas is difficult. We don't -- cable 14 doesn't serve every home, and phone companies, because 15 of at least the current technical limitations of DSL 16 may not be able to reach rural telephone customers, so 17 there are some, I think, policy challenges in reaching 18 the last 10 percent, maybe the last 7 percent of 19 American residences with broadband. Congress has 20 looked at these in terms of different incentive 21 programs.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 216 Let me just make a couple of policy 1 points, and save time for questions and comments. Now 2 cable has taken the view that while this may not be a 3 mason service any more, it's a service that's still 4 growing. It's hardly -- I think the first adopters 5 have adopted it. There are lots of reasons why people 6 don't have broadband in their homes.7 Let me ask, how many people here in the 8 room have residential broadband? It's a large number 9 here but not everyone, and it may be that because you 10 have broadband at your office, or you do mostly e-mail 11 at home, and so that's satisfactory. So there is the 12 challenge, I think, of finding products and services 13 and ways of meeting customers, including price 14 competition that Scott's indicated that phone 15 companies have engaged in some very aggressive pricing 16 right now for their service to try to boost 17 subscription rates, to get people to subscribe, 18 because there is a network effect, as some of you are 19 familiar with that term, with broadband. The more 20 people on the network, the more companies will produce 21 programming for networks, broadband networks.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 217 I think that one way to think about the 1 next era of broadband is, in fact, terms of premium 2 programming. It's hard to believe because there's so 3 much free available on the Internet, and early efforts 4 at pay services on the Internet weren't all that 5 popular. The Wall Street Journal has been struggling 6 to convince people to pay for subscriptions, and I 7 think the restaurant review Zagot switched from a free 8 to a pay model, and is still trying to find its way. 9 But if you think about what happened with cable 10 television in the 70s, the cable industry convinced, 11 because there was good programming, convinced people 12 who were getting plenty of free television to start 13 paying for their television. And today, nearly 70 14 percent of -- more than 70 percent of Americans pay 15 for television, even though there's a substantial 16 amount of free television over the air, including 17 public television, non-commercial television. So 18 there is an ability to convince people.19 And another comment I'd just like to point 20 out, that people pay a lot for water. I see some blue 21 bottles in here that suggests that people are 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 218 convinced that something that's available at the tap, 1 it's still worth paying $1.25 for if presented in an 2 attractive dark bottle.3 Well, this is, after all, a consumer 4 group, so I take it that there's some awareness of the 5 fact that it is available just outside the door. But 6 be that as it may, I think that may happen with 7 broadband too, that there will be services that we 8 can't envision today that people will pay for - and 9 I'm not just talking about pornography or adult 10 websites which have already demonstrated, I think, 11 beyond anyone's -- most people's tolerance that 12 there's a demand for pay adult websites. But other 13 kinds of products and services that we haven't quite 14 been able to see developed because the number of 15 broadband subscribers isn't large enough. So my 16 advice as a policy man would be to keep the government 17 involvement at an absolute minimum. Keep government 18 taxes, and fees, and franchises and franchise fees at 19 a minimum to get this service out, to get a large 20 number of people on the broadband network. And then 21 see the innovative, creative programming things that 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 219 can happen.1 Today we have over 300 programming 2 networks on cable that provide all kinds of programs, 3 some good, some bad, some interest you and some that 4 bore you. But the fact is, there's that fabulous 5 choice that didn't exist in 1975 when there were no 6 satellite delivery program networks, and I think we're 7 all the better for it because we have more choice. So 8 we feel that regulation is a mistake.9 I think the Commission had it exactly 10 right in declaring this an interstate information 11 service, interstate in the sense that there really is 12 not a need for extensive local regulation. Problems 13 on the Internet, whether they're customer service or 14 other kinds of issues can emanate from the local CMTS, 15 the cable tied in, but it may just be as likely 16 happening at some hop somewhere out in the cyberspace, 17 so it's not the traditional local service problem that 18 you have with cable television, where you can 19 generally identify the technical problem somewhere in 20 the local network.21 And I think that people do view this 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 220 product as something that is interstate, indeed, 1 international. And that is, I think, why the 2 Commission was right to declare it to be an interstate 3 service. I look forward to talking about it with my 4 colleagues and with all of you.5 MR. GOLDBERG: Thanks, Dan. It's great to 6 see you and Scott agreeing so much. And again, I'm 7 also glad you asked about how many people here have 8 broadband, because as you can see, quite a few of the 9 members of this committee do. And I think like they 10 say about people who own TIVO, you can pry it out of 11 our cold dead fingers, because once you get broadband, 12 you really want to keep it.13 Again, fortuitously, our next speaker is 14 John Windhausen. John Windhausen is President of the 15 Association of Local Telecommunications Services with 16 nearly 19 years of telecommunications experience in 17 D.C., including on Capitol Hill and at the FCC. As 18 AFCS President, Windhausen speaks on behalf of the 19 CLECs, Competitive Local Exchange Carrier industry, on 20 legal, regulatory and commercial issues.21 From `96 to `99, Mr. Windhausen served as 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 221 General Counsel for the Competition Policy Institute, 1 a non-profit consumer advocacy organization in the 2 energy and telecommunications field. From 1987 to 3 1996, Mr. Windhausen was Senior Counsel and Counsel 4 for the Communication Subcommittee of the U.S. Senate 5 Commerce Committee, working with Senators Hollings, 6 Inouye, and others, and he worked closely on the 7 Telecom Act of `96.8 Prior to his work in the Senate, Mr. 9 Windhausen was a Staff Attorney in the FCC's Common 10 Carrier Bureau from `84 to `87. Mr. Windhausen holds 11 a JD degree from UCLA School of Law, and a Bachelor's 12 Degree in History from Yale. Thanks for coming.13 MR. WINDHAUSEN: Thank you, Larry. Let's 14 see. I have a couple of apologies I'd like to start 15 off with. First, an apology for not being able to 16 present or prepare this Power Point presentation 17 enough in advance to have it transcribed in the right 18 presentation format for everybody. I am going to walk 19 through it on the screen here, I believe, and will 20 talk through each of the slides as they come up. And 21 it has been e-mailed out, and I can make sure that 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 222 it's presented to all of you who need it in a better 1 format.2 Second apology is for my lack of 3 preparation here today. I didn't realize in advance 4 that I might have the chance to sit in what appears to 5 be the FCC Chairman's Chair, and it's so unusual for a 6 CLEC representative to have the authority or power. I 7 don't quite know what to do with this.8 So not having that preparation, I'm just 9 going to proceed through this presentation for you. 10 And if you would bear with me too a little bit at the 11 beginning, because I'm not sure how many of you are 12 familiar with ALTS and who we are, so I'm going to try 13 to walk you through a little bit of who ALTS 14 represents, and what we do, and the platforms that we 15 provide service over.16 But first off, ALTS, as mentioned, the 17 Association for Local Telecommunication Services. We 18 are the leading trade association that represents the 19 facilities-based CLECs, so that means that we are the 20 companies that are building our own separate broadband 21 networks in competition with the telephone companies.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 223 Some of the companies are listed here. I 1 won't read all of them, but KMC Telecom, Allegiance, 2 Focal, Covad, Time Warner, Telecom, Choice One, 3 PacWest are the kinds of companies that we represent. 4 And these are all local companies competing for local 5 service, so that means we represent companies who 6 build their own fiber optic cables. We have DSL 7 companies such as Covad, New Edge Networks, DSL Net. 8 We have fixed wireless companies, and we provide the 9 full suite of voice and broadband services to 10 consumers.11 That means that we do not represent the 12 Bell companies, who are our main competitors. We also 13 do not represent the main long distance companies, so 14 AT&T, MCI and Sprint, for instance, are not members of 15 ALTS. Our focus is on the local market.16 Now a lot of you may be familiar with the 17 fact that the CLEC industry has taken it on the chin 18 over the last few years financially, and a lot of the 19 stories you may have seen in the trade press reflect 20 the fact that a lot of our companies have gone 21 bankrupt in the last couple of years. And the overall 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 224 numbers of competitors has diminished quite 1 significantly.2 Having said that, we are, I think, on the 3 cusp of a revival in the CLEC industry. In the year 4 2002, was the first year that the CLEC industry posted 5 positive EBITDA. That means Earnings Before Interest, 6 Taxes, Depreciation, and Amortization. It's a measure 7 of our future profitability, and it basically means 8 that for the first time in 2002, our companies brought 9 in more revenue than we spent on running our network, 10 so it's a very important milestone toward 11 profitability, and very significant that we're able to 12 achieve that.13 Also, in the first six months of this 14 year, our stock has doubled in value, at least the 15 publicly traded CLECs. So we're very optimistic that 16 the future is bright for our companies, the companies 17 that have survived.18 And lastly, of course, our market share 19 continues to grow. And this is, I think, quite 20 astounding that even though we probably lost about 21 two-thirds of our companies in the number of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 225 companies, our total market share is now up to about 1 13 percent of the local telephone marketplace when 2 measured in terms of revenues.3 Now I'd like to spend a couple of minutes 4 talking about the benefits that we provide to 5 consumers because after all, this is what you all are 6 primarily focused on, and what policymakers should be 7 focused on first and foremost.8 Our companies -- our first benefit is that 9 we offer very significant price discounts to the 10 services that are generally offered by the telephone 11 companies. I used to say 10 to 30 percent discount, 12 and in doing some more research, I found quite a 13 number of examples of our companies offering up to 50 14 percent discounts off the prices that you would have 15 to pay for the Bell Company to receive an equivalent 16 service.17 And let's face it, we don't have the name 18 recognition that the Bell Companies do. If we're 19 going to win market share, and compete well, we have 20 to offer a value to the consumer. And a big part of 21 that value are the lower prices that we can provide, 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 226 and we're very proud of that. We also offer new 1 innovative technologies, which I'll talk about more in 2 a second. And we also do our most -- the most we can 3 to contribute to our community.4 Just spending one more minute on each of 5 those three criteria, there's a lot of text here in 6 this slide, but the basic point is that the Yankee 7 Group has done surveys each of the last couple of 8 years on customer satisfaction, and they found from 9 both of those years that the CLEC industry has 10 out-polled, out-ranked the Bell Companies with regard 11 to their customer service. The prices are cheaper, 12 and also the level of customer service that we provide 13 is superior to that that you can get from the Bell 14 Companies. And there's a big article that was written15 up, I recommend to you, in the Chicago Tribune last 16 month, which detailed the consumer benefits that we 17 provide.18 In terms of broadband innovation, CLECs 19 are often at the forefront of bringing new broadband 20 technologies to the market. We were the first to 21 innovate and provide what's called frame relay 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 227 services, one of the first broadband data services. 1 We were also the first to provide DSL to the market.2 As Dan mentioned, DSL had been sitting on 3 the shelf of the Bell Companies for years. It wasn't 4 until CLEC started to deploy the technology that it 5 really began to take-off in the market. And we're 6 also deployed fixed wireless service.7 A couple of examples here on this slide, 8 PacWest, one of our members, is currently rolling out 9 a new service to triple the speed of dial-up access, 10 and this is going to be particular advantageous for 11 rural areas that don't have typical broadband 12 availability today. They're going to be able to get 13 the equivalent speeds over their dial-up service 14 without having to pay extra cost for it, or without 15 having to upgrade their computers. It's an example of 16 the kinds of innovation that we're able to provide.17 And why are we able to provide that? 18 Well, it's because we use the local loop that we lease 19 from the Bell Company. This pictorial tries to 20 demonstrate how we provide service. We connect our 21 equipment, and the three switches there that are in 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 228 color on this screen are meant to exemplify the 1 intelligence that we put onto what we call the dumb 2 pipe, which is the transmission capability.3 Now I use the word "dumb" not pejoratively 4 towards any particular company. It's just the best 5 way to make the point that the actual transmission 6 technology, whether it's the copper or the fiber, is 7 fairly transparent. It just carries data back and 8 forth. But the more intelligence you put on that 9 pipe, the higher quality service you can provide to 10 the consumer, and that's what our companies specialize 11 in. We come up with the more sophisticated 12 intelligence and data speeds using the dumb pipes 13 provided to us by the phone companies.14 I've provided here a few examples our 15 humanitarian programs. In particular, I'll mention 16 Covad's grant program to Micro Entrepreneurs 17 specializing in helping companies owned by women and 18 minorities, but we have all kinds of these kinds of 19 public service programs that our companies provide.20 Now to face the main question of this 21 panel head-on, you've been asked to consider this 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 229 notice of parody, and Scott has done a good job of 1 framing the issue for you. In terms of parody between 2 the Bell Companies on the one hand, and the cable 3 companies on the other, I respectfully suggest, that 4 should not be the main question that this group 5 focuses on. That's a false premise on which to start 6 this debate.7 The real question is, what's in the best 8 interest of the consumer, not what's in the best 9 interest of two sets of giant companies and 10 industries. And in that score, I think, as I've 11 demonstrated, the participation by our companies, the 12 CLECs, provide an awful lot of benefits to the 13 consumer, and you should -- I would ask that you keep 14 that in mind, the tremendous consumer benefits that we 15 provide.16 But if you do want to talk about parody, 17 well, let's really talk about parody. Let's talk 18 about all the advantages the Bell Companies have over 19 the CLECs, over our competitors. The Bell Companies 20 have access to every city street. They have access to 21 every building. They have access to extremely low 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 230 cost of capital. They have access to loops and 1 transport, and they provision their customers much 2 more quickly than they provide them to us.3 These are all ways in which the Bell 4 Companies have a disparate advantage over the 5 competitive industry. So if you do want to go down 6 that road, we're happy to go down that road, but there 7 are an awful lot of disparities out there in the 8 marketplace that we would ask you to take into 9 consideration.10 The Bell Companies will similarly make the 11 argument that they need to be deregulated in order to 12 promote broadband, and deploy it more widely. If you 13 look at the evidence, however, on investment, it shows 14 a very different story than what you might be led to 15 believe. In fact, investment has been very, very high 16 since 1996, in large part because of the competition 17 that the 1996 Act set in motion. If you look at the 18 CLECs investment, our industry alone has invested $71 19 billion. I think that's comparable to the $75 billion 20 that Dan mentioned from the cable industry. Even 21 though we're a far smaller industry than the cable 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 231 companies in terms of revenues, we're actively 1 building these competitive networks as much as we can.2 And when you look at the Bell Companies' 3 investment levels and track them over a decade, rather 4 than just looking at the last two years, you see that 5 their levels of investment have increased 6 significantly, almost doubled in 2000 over their 7 historic rate of investment through the 1990s. We 8 think this is all because of the competitive forces 9 that were set in motion by the 1996 Act, so there's 10 really a great success story here. The amount of 11 investment has been very significant. The 12 availability of broadband is higher than it's ever 13 been before, and something to be proud of. Up to 83 14 percent of consumers now can choose a broadband 15 provider, if they wish.16 So what the Bell Companies plea for 17 deregulation comes down to is, you should feel sorry 18 for us. And Scott signaled that there are all these 19 players in the broadband marketplace, and they're the 20 only ones that are regulated. But if you look at 21 their financial statistics in the last few years, 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 232 they're doing very, very well. Most folks realize 1 that they now have more long distance customers that 2 they've lost in the local market, and their revenues 3 are very high. Their EBITDA margins are very high, 4 higher than our's, so there's no reason to feel sorry 5 for the Bell Companies.6 So in conclusion, I would ask that you 7 consider that consumers will benefit most from a wide 8 variety of competitors, and including the competition 9 that our CLECs provide in the marketplace. Ideally,10 consumes should want a variety of players offering 11 various technologies, over a variety of platforms.12 Scott mentioned that if they refuse to let 13 us have access to their network, we could go somewhere 14 else. Well, we can't. We might like to go to the 15 cable companies and use their platform, but 16 technologically, it's not available to us. It's not 17 possible. Our only avenue of providing this 18 competition is through leasing the local loop from the 19 Bell Company, and that's how consumers are going to 20 benefit the most. Thank you.21 MR. GOLDBERG: Thank you. I'm glad we're 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 233 finally getting at some of these regulatory issues. 1 And I think maybe what we'll do once we finish all the 2 presentations, be about time for the break, is to 3 offer rebuttal opportunities down the panel so we 4 could answer some of the questions each of you are 5 bringing up.6 Our next speaker is Nick Miller. He's the 7 Managing Partner of Miller & Van Eaton, a law firm 8 that is involved in telecommunications and cable TV 9 law. He served as Communications Counsel to the U.S. 10 Senate, and was special consultant to the White House 11 on telephone deregulation issues. He represents local 12 governments and real estate interest in telecom and 13 cable television matters.14 Mr. Miller is a frequent public advocate15 for the rights and interests of local governments in 16 modern communications. Mr. Miller is also counsel to 17 ALOAP in the cable modem proceedings at the FCC. 18 That's the Alliance of Local Organizations Against 19 Preemption, and it includes the National League of 20 Cities, U.S. Conference of Mayors, National 21 Association of Counties, International Municipal 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 234 Lawyers Association and others.1 Mr. Miller received his law degree in `73, 2 and his undergraduate degree in Economics in 1966, 3 both from the University of Washington. He served 4 with commendations and awards in the U.S. Navy, and 5 his service did include a tour of duty in Viet Nam. 6 Mr. Miller.7 MR. MILLER: Thank you very much. First, 8 I want to say it's an honor to be here. I want to be 9 clear about who I am, and what I'm representing. I am 10 counsel to the National Municipal Local Government 11 Associations in the proceeding at the FCC dealing with 12 the DSL and cable modem issues. The acronym is ALOAP, 13 as Larry indicated, but I bring you greetings from the 14 local elected officials.15 That hat means I am not here speaking on 16 behalf of consumers. I'm here speaking on behalf of 17 folks who care deeply about consumers, but who keep 18 the consumer interest in balance and perspective with 19 other interests that are also in the day-to-day fray 20 that is before every city council. So one of the 21 things I would point out to you is that there are very 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 235 well expressed consumer views that have been filed on 1 all of these matters by very substantial consumer 2 organizations here in Washington, D.C. And I would 3 hope that the committee would take those under 4 advisement and read those with great care. I'm 5 speaking specifically of the comments of the Consumers 6 Union and Consumer Federation of America, and various 7 other organizations, including AARP.8 So with that said, let me explain the 9 point of view of local governments as we look at this 10 issue. One point I think we bring is, we are less 11 concerned about the deployment of technology, and much 12 more concerned about the deployment of services.13 If you want to roll-out fiber optic to the 14 home as quickly as possible, you create an unregulated 15 monopoly. You generate super profits in the 16 marketplace, and guess what? Wall Street will flow 17 money to that result. But the price you pay, is you 18 also give up control of the services market in that 19 process. And so I would ask the committee to keep in 20 mind clearly the question of what is the way that 21 you're going to allot the most, and most competitive, 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 236 and most diverse range of services to consumers? And 1 what is the way in which you will allow consumers to 2 avoid market failures, and to have their voice really 3 heard as they vote with their dollars for and among 4 those services. So it's striking me, for example, and 5 I assume that this is only the first of many of these 6 sessions that the committee will have, that it seems 7 to me that the service providers are a group that 8 ought to be heard from by this committee.9 Local governments see the issue as 10 two-fold. There is a problem now that's created by 11 the fact that cable modem and DSL service is not being 12 rolled out in a competitive market. Even Scott's 13 figures suggest that 50 percent of the homes have only 14 the choice of one provider. And, in fact, I believe 15 that data - and I'll allow him to clarify - I believe 16 that data is based upon zip code availability, not 17 actual homes passed. So in only 50 percent of the zip 18 codes is there two service providers offering service 19 to one home in that zip code. So I would suggest that 20 right now, we are still very much dealing with a 21 monopoly service provider environment. And to step 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 237 back and totally deregulate the behavior of that 1 monopolist in that context is very threatening, and 2 has a lot of implications for how the market will take 3 shape.4 Then there's a second problem. When the 5 market becomes competitive, at this point, no one is 6 talking about more than a duopoly, but let's assume a 7 duopoly isn't fair, it is, in fact a competitive 8 market. You still have the problem of market failure 9 in adopting appropriate rules that give consumers real 10 recourse as individuals when they experience real 11 problems as individuals. And this is where I think 12 the Conference of Mayors and the National League of 13 Cities is quite disturbed at what has happened in this 14 building in the last year.15 On March 15th of 2002, the FCC 16 unilaterally adopted a Declaratory Order that set 17 aside the existing set of regulatory rules that govern 18 all forms of consumer protection with respect to 19 broadband services by declaring that cable modem 20 service was not a cable service and, therefore, was 21 out from under the whole regulatory regime for cable 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 238 franchising. But, in fact, was an interstate 1 information service. They unilaterally attempted to 2 prevent the state regulators and the local regulators 3 from being available to provide recourse to consumers 4 who are having real problems.5 Now that was March of 2002. We are now in 6 July of 2003. We still have no rules in place that 7 give any guidance or any state or local regulator 8 guidance about what kind of remedies are available 9 when a consumer experiences real harm, and real injury 10 in the marketplace. So I would ask this committee to 11 focus on that issue, and come to grips with it 12 relatively quickly.13 Local governments are particularly 14 concerned because, in fact, we had a very elaborate, 15 and we thought pretty efficient set of regulatory 16 remedies out there to protect consumers in our 17 individual markets through the cable franchise 18 process. By declaring that this service is no longer 19 a cable service, the Commission has taken all of those 20 regulatory remedies out from within the grasp of 21 consumers.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 239 Now we do have some staff letters from the 1 FCC that suggest that that decision doesn't completely 2 eliminate local and state consumer protection 3 authority in this area. But what that practically 4 means is that the 35 to 36 hundred local franchise 5 authorities have to adopt new rules and regulations, 6 specifically aimed at the cable modem service. And 7 that the 52 state regulatory commissions have to adopt 8 specific rules aimed at DSL service, trying to get 9 through the legal landmine that the Commission has 10 created with its decision.11 So we are here before the Commission as 12 the National Associations, asking the Commission to 13 pay attention to what Commissioner Copps said in his 14 dissent, when he said, "The Commission was adopting a 15 decision on March 15th that was clearly far beyond the 16 reach of the headlights of the Commission. And was 17 creating an" -- and if I can extrapolate what I 18 believe Commissioner Copps was saying, we have set up19 a situation that's going to replicate the problems 20 that we had with long distance slamming.21 There is not today a place that a consumer 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 240 can take a complaint if they are unhappy with the 1 service that they are getting from their cable model 2 provider, except to the provider itself. There is no 3 other remedy out there.4 Now there are some jurisdictions that are 5 moving forward with expanding their traditional 6 consumer protection relation, and I would encourage 7 you to go home and encourage your local elected 8 officials to take that initiative to fill that gap. 9 But there's a real problem out there, and this group 10 has something to say on that. And I would encourage 11 you, and I would be happy to provide whatever 12 assistance local governments can provide you to 13 understand that problem in more detail.14 I think there's a growing awareness that 15 you cannot have even a competitive market without 16 rules in place that allow investors to understand what 17 the expectations are, that allow consumers to 18 understand what the expectations are, and that 19 provides an unbiased place to adjudicate and resolve 20 disputes.21 The example I like to use is - because I'm 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 241 a real soccer fan - is World Cup Soccer. You know, 1 when the World Cup final game goes onto the playing 2 field, you have the two best, most competitive, 3 perfectly at parody teams competing with each other. 4 If you did not have a set of rules and a referee on 5 that field, you could not have a game. Thank you.6 MR. GOLDBERG: Thank you. As I mentioned, 7 we'll have a chance for some follow-up statements and 8 rebuttals after the break. But finally, we'll now 9 hear from the states.10 David Svanda is a Commissioner with the 11 Michigan Public Service Commission. He's been very 12 active with the National Association of Regulatory 13 Utility Commissioners, NARUC, as the elected 14 President, as an Executive Committee and Board Member, 15 and having held other leadership positions.16 Mr. Svanda is also very familiar with the 17 FCC and its advisory boards as a member of the 18 Commission's Local and State Government Advisory 19 Committee. He served as Director of Administrative 20 Services for Governor John Engler, as Director of the 21 Governor's Northern Michigan office.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 242 Mr. Svanda has a Bachelor of Arts Degree 1 in Political Science and Urban Affairs from Western 2 Illinois University, and a Master's in Public 3 Administration Degree from Maxwell Graduate School at 4 Syracuse University, and he's been involved with 5 elective politics, as well, having run for Congress in 6 1994. Welcome.7 COMMISSIONER SVANDA: Thank you very much, 8 Larry, and Madam Chairman and Members of the 9 Committee. It's an honor and privilege to be here 10 with you. And so early, as you are beginning your 11 service to the FCC and to the communication needs and 12 interests of this country, I understand this is just 13 your second meeting. And so I guess it makes it even 14 more meaningful to be here so soon as you begin your 15 work. I appreciate that.16 In case some of you don't know what NARUC 17 is, just a moment of explanation about it. It is the 18 National Association of State Utility Commissioners. 19 We represent the interests at the national level of 20 the state commissions of all 50 states, plus the 21 District of Columbia, plus the U.S. territories, and 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 243 so we are a constant advocate at the national level in 1 this town, both before Congress and the Administrative 2 Agencies, with regard to a wide range of issues. And 3 those issues do include, as was already mentioned, 4 trying to present a balanced position, which is what 5 state commissions attempt to do back home, and what we 6 work towards in our policy attempts here in 7 Washington.8 We do try to balance consumer interests 9 with those of shareholder interests. We do that on a 10 continuing basis. We attempt to balance the interests 11 of the various consumer classes represented in many12 instances by some of you in this room, but 13 acknowledging that there are vast differences between 14 the needs of each of us as individual consumers of 15 services, and in this instances, network services and 16 our commercial and our industrial types of friends, 17 who also have needs of their own and are very real as 18 they make their contributions to how this country 19 works. And lastly, balancing the needs of individuals 20 as we identify them with the particular sets of needs 21 that they bring to the table.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 244 I tended to focus my thoughts coming into 1 this session on the issue of parody and regulatory 2 parody in particular, thinking that that was the issue 3 that you were tending to struggle with. States sit in 4 a fairly unique position with regard to the question 5 of parody because we're right in the middle of the 6 federal mix that happens to occur around broadband, 7 happens to occur around other telecommunication 8 services. And what I mean by the "federal mix", is 9 that the FCC representing our national government, 10 certainly has interests that flow across state lines, 11 are interstate in nature, don't recognize the 12 differences between the states, but recognize, in 13 fact, that networks, national and international 14 communication systems need to be very free and 15 flowing, so the FCC has a very broad scope.16 The states have a very narrowed scope in 17 relationship to what the FCC does. The states are 18 concerned with what we tend to call principally plain 19 old telephone service. Plain old telephone service is 20 what most of us have grown up with over time, and 21 recognize it as the outgrowth of what used to be just 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 245 old AT&T. And yet, states have a very strong concern 1 for new developments, new technologies, what broadband 2 is doing for us, and what it can do for us. And those 3 interests are because there is a direct relationship 4 between that plain old telephone service, what the new 5 technologies are, what we can expect by way of 6 pricing, what will be delivered by way of service. 7 And it is all interrelated and interconnected.8 As we see the Internet, as we see cellular 9 phones replacing the need for old wireline phones in 10 many instances, we have ways that our kids and 11 grandchildren use to communicate that we maybe never 12 thought of, as a possibility. It all points to the 13 need for better coordination and view.14 And lastly in that regard, we are the 15 entity that in many instances across the country are 16 responsible for the creation of cities, and counties, 17 and townships as creatures of state government. Local 18 governments are responsive to state legislature, state 19 executives, and in some instances, constitutional 20 kinds of provisions. But we recognize - and I will 21 slip to my Michigan Commissionership a little bit -22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 246 recognize the need to coordinate as best we can, being 1 in the middle, the efforts of local governments, our 2 own efforts at the state level, and then what's 3 occurring at the national level, so that we can get to 4 a climate that is conducive to achieving the 5 objectives that we all tend to set out for ourselves.6 Like my panel colleague at the end, Nick, 7 I wanted to talk to you about regulatory parody by 8 talking about a sport game. Instead of soccer, Nick, 9 I wanted to draw out an example of parody for you by 10 talking about the national sport of baseball, and 11 thought this late in the afternoon after you've been 12 flooded with probably technical and legal kinds of 13 presentations all day, thought you might be up for a 14 little baseball.15 But think about a baseball, two baseball 16 teams starting the season out, say this season. Two 17 professional baseball teams at that league and playing 18 at that level. One of those teams has been around for 19 100 years, and has all of the usual kinds of trappings 20 that you would expect from a major league baseball 21 team that's been around that long. And the other one 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 247 is just starting out as a brand new upstart. That 1 brand new upstart, and the old 100 year old team are 2 obviously expected to play by the same rules. Three 3 strikes, four balls, same number of innings played, 4 same number of fielders, all of those kinds of things. 5 The umpires are expected to call them as they see 6 them, the balls and the strikes, and the sliding outs 7 and all of those kinds of things. And it is 8 professional baseball, so it's hard and fast. The 9 pitches are thrown fast, and the short stop to first 10 can be approaching 80 or 90 miles an hour as they whip 11 it over.12 Now the same rules, remember. However, 13 the new team can't quite afford to have gloves or 14 bats, and in not being able to afford gloves and bats, 15 they also ride around in a bus, and so getting to 16 games is a little slower. Now imagine those two 17 teams. When they meet on the playing field, you guys 18 can probably pick the winner. You can probably pick 19 where they will finish at the end of the season in 20 terms of statistics, and where they are in the 21 rankings. And so it's something to be considered when 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 248 discussing parody; playing by the same rules, umpires 1 calling them exactly the same way, but what are the 2 resources that are available, and how can it be 3 deployed in the game strategy and playing it out.4 That is the point of, I guess, my little 5 diversion here, is to point out that in addition to 6 considering regulatory parody, there is a much bigger 7 environment that has to be taken into account. There 8 are other things that also need to be brought into 9 parody at the same time, or relative time as parody in 10 regulation is considered. And that can't be done 11 overnight. It can't be done quickly. It requires 12 transition to get there. It sometimes, in fact, 13 requires planning in order to get there. It requires 14 the players to be trying to achieve the same public 15 interest, and one of the other panelists mentioned 16 what that focus should be. And that's a focus on 17 consumer services, and quality, and pricing that suits 18 the needs of consumers of all types.19 So parody at the regulatory level is 20 dependent on, must be cognizant of the rest of the 21 environment in which regulation is occurring. Access 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 249 to capital parody might be a good thing to also be 1 discussing. Access to the customer might be a good 2 parody issue to be discussing. And so with that said, 3 from the State Public Service Commission perspective, 4 certainly getting to parody is a goal that we should 5 all have tacked up on the wall. It's one where we 6 should be working towards, but one that we cannot in 7 an artificial way move too quickly because we'll have 8 many undesired consequences that would not be 9 productive. The goal is certainly one to endorse. 10 Adding our efforts to achieving it is certainly one 11 that state regulatory folks have an interest in 12 pursuing, but to do it with care and caution.13 In that regard, State Utility Commissions 14 through our research, put together a 2002 survey of 15 what states are doing with regard to broadband 16 regulation. By and large, it is a very light-handed 17 approach, and one that is consistent with how 18 broadband regulatory attitudes generally seem to be; 19 and that is to stay out of the way of a great 20 technology, and let the innovative forces unfold as 21 they will.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 250 There are a few states that have gone a 1 little further than that, and I guess we're all 2 watching for what comes out of the FCC in its final 3 order on tri-annual review, to understand whether or 4 not the state actions will, in fact, remain valid 5 afterwards, or if they will be open and subject to 6 challenge. And there are, I think, a good number of 7 states that have taken the approach - my own State of 8 Michigan is one of these - taken the approach that we 9 want to do everything that we can in our state to 10 incent broadband deployment. So it is not a matter of 11 burdening deployment with regulatory layers, but 12 instead, understanding what the needs are to get 13 broadband deployed in every corner of our state just 14 as quickly as it can be, and serving the needs of our 15 citizens and businesses.16 We have, in Michigan, enacted just last 17 year what some call a model set of statutes that does 18 exactly that, and I'd be happy to talk individually or 19 at a future time with all of you about what's entailed 20 in those provisions.21 Let me close at that point, and I look 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 251 forward to the rest of the conversation.1 MR. GOLDBERG: I appreciate how well 2 everyone here has worked towards explaining these 3 issues, and the sports analogies, I think, are 4 appreciated by some or most. As a Yankee fan living 5 in Boston, I very much appreciate that.6 We'll take a break now, maybe just 10 7 minutes. We'll do our rebuttals right after the 8 break, and maybe we'll enter the game of darts after 9 that. Ten minutes.10 (Whereupon, the proceedings in the 11 above-entitled matter went off the record at 2:28 p.m. 12 and went back on the record at 2:49 p.m.)13 CHAIR ROOKER: Okay. Larry, we're going 14 to turn it back over to you.15 MR. GOLDBERG: Thank you, Shirley.16 CHAIR ROOKER: Do we have anything else 17 that we need? No, we're going to go back to business. 18 Okay. It's your's.19 MR. GOLDBERG: Okay. Well, I promised a 20 couple of minutes for rebuttal or answers to the 21 questions that were raised by the other panelists. So 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 252 why don't we go down and try to take no more than two 1 minutes, because we really do want to get to Q&A by 2 members of the committee. So in the order that we 3 started, Scott.4 MR. RANDOLPH: Okay. Thank you. I'm not 5 really sure who was the incentive to get the telephone 6 companies to roll-out DSL, whether it was the CLECs or 7 the cable companies, but I'll let you guys fight about 8 that. But I would like to say one thing about that.9 DSL is an interim technology. It's not a 10 means to an end. It's not going to get us where we 11 need to be in the broadband networks of the future. 12 We're going to have to be able to make significant 13 investment out there in the network. We're going to 14 have to deploy more fiber to neighborhoods, and even 15 all the way into individual customers' homes.16 In fact, we have a trial going out in a 17 neighborhood called Brambleton out in Loudoun County 18 out here in Virginia, where we are wiring houses 19 directly with fiber. So that's going to take quite an 20 amount of investment, and we're going to have to be 21 able to sell the services and applications and be 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 253 successful in the market out there in order for us to 1 be able to recoup that investment.2 One point that I'll just make that Nick 3 had brought up, regarding my chart being sort of 4 showing that there are 50 percent of the customers in 5 our territory that have no choice. Well, that's not 6 where we want to be, and hopefully by the end of this 7 year, we will reach about 80 percent of our customers 8 with DSL. And as Dan mentioned, cable is available to 9 about 90 percent of the households in the United 10 States, so we're going to get there as far as 11 deployment.12 The question is, how do we compete in this 13 market? And for us to compete in the market, we need 14 to be able to sell the services and applications, and 15 the content that the consumers want. And we can't do 16 that under the current rules. It's impeding us.17 I will say one more thing, just to comment 18 to one of John's remarks regarding the competitive 19 local exchange carriers. Even with the FCC's ruling 20 that they came out with in February, that we're 21 awaiting the order on regarding local competition, the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 254 FCC declined to require us to unbundle our broadband 1 networks and sell it in piece parts to competitive 2 local exchange carriers. But they did preserve the 3 right of the CLECs to continue to have access to 4 loops, so going forward in the future, even as we are 5 putting fiber out there into neighborhoods and to our 6 network, the competitive local exchange carriers will 7 still have access to loops to be able to serve 8 customers.9 We don't think that anything that we are 10 proposing as far as broadband is concerned in the 11 FCC's open broadband proceedings will affect the 12 capability of some of the CLECs to be able to access 13 customers.14 MR. GOLDBERG: Thanks. Dan.15 MR. BRENNER: Yeah. There are just 27 16 quick things.17 (Laughter.)18 MR. BRENNER: I'm kidding with the 27. 19 One thought I had, you know, I was thinking about 20 consumer protection. And I don't think, contrary to 21 some of the views here, that consumer protection turns 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 255 on how many players there are in the market. You can 1 have 100 different car companies, car dealerships, and 2 you still need consumer protection. And you may have 3 one provider of clock repair, and you don't need 4 extensive consumer protection of that.5 I think the key is really not how many 6 players there are in the market, but what is the 7 utility of the regulation. Will the apparatus that 8 you're spending taxpayer money for benefit the 9 customer? And I think you always have to analyze 10 that. And I think that that debate does get lost.11 One of the points Nick made was gee, we've 12 had no consumer regulation since March of `02 to July 13 of `03, and it's going to go on for maybe more months. 14 I don't see that the sky is falling down. What I 15 have seen is that more and more people are taking 16 broadband, more and more people are finding new ways 17 to offer applications of broadband. And that while 18 there have been some consumer complaints, the FCC does 19 log complaints from cable, including broadband, and 20 it's less than 100 complaints nationwide. Ron is 21 disagreeing with that number.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 256 Anyway, at the FCC I'm saying. There may 1 be complaints at the local level, but -- and I'm not 2 saying that it's a complaint-free service, but many 3 of the issues on the Internet are not -- if there are 4 local issues or local billing problems, that are often 5 issues that ought to be settled out, I think, between 6 the customer and the cable company.7 I've said this when any people complain 8 about video service or cable service, if you're not 9 getting what you're paying for, don't pay for it until 10 the cable operator gets a clean good picture into your 11 home, don't pay for the service. And just insist that 12 the cable company deliver a good picture, or come to 13 some settlement as to what the picture is worth. But 14 don't pay for something that you're not getting, and 15 that goes for cable modem service, and it goes for DDS 16 service, and it goes for telephone service from 17 Verizon, and it goes for service from any CLEC 18 company.19 Unfortunately, we don't quite have that 20 relationship with the government, but -- I point to 21 you, David. You withhold tax and see what happens. 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 257 The cable industry, and Nick knows this, did not 1 oppose the definition of cable modem service. In 2 fact, the cable industry went along with that. It was 3 the FCC that changed it, although we didn't oppose the 4 FCC's view of it either. At that point, we were 5 paying a cable franchise fee, or a 5 percent fee. But 6 it's not as if municipal governments are bereft of 7 funds to regulate cable.8 You may not be aware of it, but over $2 9 billion a year come out of your customers or out of 10 consumer's pockets who are cable subscribers to pay 11 for regulation at the local level. That's what the 12 money is supposed to be used for. It's not supposed 13 to be used to balance budgets. Maybe it is being used 14 for balancing budgets in these times of lack of 15 revenues from cities, but the idea was that there 16 would be an adequate fund for regulating cable, and 17 the administrative cost of it. That's a lot of money. 18 It's 10 times the budget of the building we're in, so 19 if there is still an inadequate amount of consumer 20 protection due to lack of funding, I'm suggesting that 21 it's not a funding question.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 258 And finally, we've heard a lot about 1 parody. You may have noticed in my comments that I 2 didn't really address how the telephone company should 3 be regulated, or how CLECs should be regulated. We 4 are not in the business, as a trade association, and I 5 think I'm glad -- it makes my job easier, and I think 6 I feel better about my job. I'm not in the business 7 of telling government how to regulate other 8 industries.9 If the phone companies deserve to be 10 deregulated based on their history, based on their 11 current offerings, based on policy judgments, then so 12 be it. But I don't think that there's any magic to 13 the word "parody." What you want to do is have the 14 right regulation for the right circumstances. If 15 regulation doesn't help and doesn't work, don't impose 16 it because it does impose costs.17 MR. GOLDBERG: Thanks. John.18 MR. WINDHAUSEN: Thanks, Larry. Actually, 19 I'll respond to Scott's comments. Scott, you're 20 indicating that your view of this FCC decision on 21 bundling rules is that it will not harm the CLECs. 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 259 And I certainly hope that's true, but I have a couple 1 of reasons for thinking otherwise.2 First, I think your suggestion is that 3 we'll continue to get access to the loop, so we'll 4 continue to be able to do the -- have access to our 5 current customers and technologies. That's kind of a 6 best case scenario, but think about that. Even in 7 that case, that relegates the CLEC industry to the 8 older technology, and that will not allow us to 9 participate in the broadband future.10 Our companies specialize in broadband 11 deployment. That's one of the big marketing 12 advantages we have had. That's why we've said, we 13 came up with DSL first before they did, frame relay 14 and these other sophisticated broadband services. We 15 don't want to be relegated to the old technologies. 16 We want to participate in the future, as well, and be 17 able to continue to provide these full benefits for 18 the newer generations of technologies. So that's why 19 we think we should be able to get access to all of the 20 network, regardless of the technologies deployed, and 21 we pay for it. We pay a rate for it that compensates 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 260 the Bell Companies, and we're willing to do that.1 Now that's the best case scenario. Even 2 worse, however, is that our big fear is that, as you 3 know, it's very difficult to identify, go into the 4 telephone network and say okay, that piece of 5 equipment is a broadband piece, and that piece of 6 equipment is not. Because actually, the telephone 7 network is so interconnected, and has so many pieces 8 to it, and to get a broadband service may be 9 transmitted over lots of different technologies, so 10 our big fear is that as the Bell Companies say okay, 11 our broadband technologies are exempted from 12 unbundling, that they'll start applying that that 13 could be a huge exemption, which they start taking 14 away our basic rights to the existing facilities in 15 the ground today. And that -- if that interpretation 16 is what happens, that essentially puts us out of 17 business. I mean, and that gets rid of the whole 18 competitive thrust of the Telecommunications Act of 19 1996. Our companies really do then fold up shop and 20 have to go away, if that's how this order ends up 21 being interpreted.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 261 MR. MILLER: Larry, I just want to make 1 two brief points. One is, and this is a personal 2 view, the genius of the U.S. economic system, to me, 3 has always been its use of the rule of law to provide 4 remedy so that third-parties who are total strangers 5 can do business with each other with confidence.6 If you look at the developing world, the 7 single most serious problem they have is that you 8 cannot do business outside the oligargee because 9 there's no remedy, if you are cheated, or if you are 10 lied to, or if the person ignores the contract.11 The genius of this system is we have a 12 rule of law that provides a remedy. If you want to 13 create the most vibrant broadband services 14 environment, you have to simultaneously create a set 15 of rules that provide real remedy to the participants 16 in that marketplace. And let me give you a specific 17 example. I'm a Comcast cable modem subscriber. I 18 love the service. I need the service. Every night my 19 firewall tells me that Comcast has downloaded to my 20 machine a piece of support software that is trying to 21 get through the firewall back to the Comcast server 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 262 and the firewall blocks it, and asks me do I want to 1 permit or block, and I block it every day.2 I cannot find out from Comcast what 3 information they're trying to download from my home 4 computer that all my personal financial information on 5 it. And there's no place I can go with that question. 6 You know, now that means that Comcast -- if I don't 7 find a solution to that problem, there will come a 8 point at which the information on that computer is so 9 sensitive, I will stop using that service in the way 10 that I have become used to using it.11 Now that's a burden on the economy, 12 because there isn't a rule in place that gives me a 13 remedy. And that's what I would ask this group to 14 really focus on, those kinds of very real day-to-day 15 problems. And the fact that -- and let me give you 16 another example.17 Dan made the comment that this is really 18 an interstate world and, therefore, it's really not up 19 to local officials. It's beyond the -- he didn't 20 really say this, but let me extrapolate. The 21 implication to me was, it's beyond the capability of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 263 local officials to deal with it.1 You know, we refinanced -- my wife and I 2 refinanced our house last month. The first payment 3 went off to the mortgage company. The mortgage sells 4 the paper to another mortgage company. I get a notice 5 from the second mortgage company that the first 6 payment is late, with a $150 charge attached.7 Now that's in interstate commerce, because 8 when I called the second mortgage company, it was 9 clear they were in California. But you know what, my 10 remedy is with Maryland State Consumer Protection 11 Office, and I'm prepared to use it if there isn't a 12 fix to it. So the fact that we are an interstate 13 world doesn't mean that we can't adopt rules that are 14 appropriate to deal with a specific problem. And 15 again, that's what I would hope you folks would focus 16 on. Thank you.17 MR. GOLDBERG: Jared.18 MR. CARLSON: I don't have rebuttal for 19 any of these guys. It probably has to do with where 20 I'm sitting. I guess that's how I got isolated clear 21 over here on this side of things too.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 264 (Laughter.)1 MR. CARLSON: I have sat in chairs similar 2 to your's, I guess, in terms of sitting on a committee 3 that's trying to give good advice to the FCC on very 4 critical and important issues to folks that you 5 represent. And I guess rather than spending any time 6 in rebuttal and, in fact, spending much time at all, I 7 guess I just wanted to put out there by way of 8 suggestion to you as you work your way through this 9 issue, as you have your discussions after this panel10 is over. And I think that probably the reason you had 11 us as a panel was to try and build some common 12 understanding of the issue, so that your discussions 13 were more coordinated and efficient.14 And so, I guess I would just add to the 15 mix of the comment, that you consider whatever 16 recommendation you ultimately are able to formulate, 17 consider it in light of assuring that that 18 recommendation takes into account all of the 19 complexities that you've heard from this panel.20 This is not one of those issues that is21 very complex with a simple answer. If it had a simple 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 265 answer, others would probably have already presented 1 it. And so, think very carefully as a group about 2 what recommendation you enter on the record with the 3 FCC, assure that - and I know this is how you live 4 your lives - assure that all of the groups have good 5 representation in terms of the solution that you 6 represent to the FCC, and that you are not inflicting 7 any sort of unintended consequential harm to parties 8 to the record.9 MR. GOLDBERG: Good points. Our working 10 group which, at this point, I assume that MCCA would 11 like to join. You're on. Well, let's hear from the 12 rest of the CAC now, and the members of the working 13 group. WE've heard a lot about parody, whether it's 14 possible, whether it's good, about needs for consumer 15 protection. Does that include such things as rate 16 regulation, must- carry, universal service, those 17 sorts of things. I know lots of people have 18 questions. We'll go right to Ron Mallard.19 MR. MALLARD: Thank you, Larry. First of 20 all, I didn't want to interrupt Dan during his 21 comments, but I was -- and I didn't really disagree 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 266 with 95 percent of what you had to say. I think my 1 only real objection was to the implication that 2 because the FCC had only received 100 complaints, 3 meant that there wasn't a problem, and there wasn't a 4 need for some kind of regulatory action at some level 5 of government. Because we're clearly experiencing 6 great numbers of complaints across the country with 7 cable modem service, and there are no solutions for 8 local governments to handle those kinds of complaints. 9 They're customer -- they're the basic kind of -- they 10 are the very same kind of basic customer service 11 complaints that we experience with cable television 12 services everyday. And it comes from the same 13 providers that provide cable television services, so I 14 would ask the panel - and I'm not posing this question 15 right now - what better authority is there to handle 16 those kinds of local consumer problems than the local 17 government regulatory agencies that have been set up 18 at the local level to do that?19 So anyway, again, it's not the -- as I 20 say, I didn't disagree with most of what you said. I 21 do take issue with the small number of complaints that 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 267 the FCC is having. But let me get on to my question, 1 if I could.2 This is kind of a proposition, and then 3 I'd like some responses from at least three of the 4 panel members. I would argue that local government 5 franchising authorities are really the only practical 6 level of government, the only government provider of 7 consumer complaint investigation and resolution 8 services that can be responsive to legitimate consumer 9 problems. And I would ask first, Mr. Brenner, and 10 then Mr. Svanda, and then Mr. Miller to respond to 11 that allegation, or to that argument, whether you 12 agree with it, or if you don't agree with it, why not.13 MR. BRENNER: Well, I should go first. I 14 mean, I think it sort of relates to my question - I 15 didn't interrupt your presentation, but I do think it 16 relates to the nature of the problem. There are --17 I've been to a call center of a cable company that 18 handles incoming call center problems with data. And, 19 you know, actually in the customer care area of data 20 services, there are Level 1, Level 2, Level 3 type 21 call centers. And Level 1 deals with, you know, maybe 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 268 some of the billing questions, stuff that has nothing 1 to do with the network. Level 2, you know, may get 2 more into the actual connectivity and some of the 3 technical problems. And, you know, Level 3 may be an 4 advanced problem somewhere on the net. I'm having a 5 problem getting to this website. It keeps coming up.6 I don't see that the local government 7 regulator is good at any of those. I think it turns 8 out that every one of those problems has to be 9 addressed, because I think the local government 10 regulator can put pressures. And Nick says in the 11 end, it's a back-stop if the cable operator doesn't 12 answer his phone, and doesn't respond to questions, 13 and doesn't correct a billing problem. It's good to 14 have a backup there. But the problems that are going 15 to get solved in this, what is really an interstate 16 service, are not going to get solved by a local 17 regulator who will simply, you know, then have to call 18 the cable company and say you better answer your 19 phone.20 I think you could put, and the FCC could 21 be charged with setting up those kinds of rules. It's 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 269 part of the inquiry that the Commission is looking at 1 since the March order, as to what is the role of 2 consumer protection in this service. But I just don't 3 know if local government has any expertise on the real 4 problems that confront consumers.5 There's an enormous consumer education 6 issue that needs to be performed by local government. 7 But solving the problems, now they're probably going 8 to get solved either by the cable operator, or by 9 somebody conking the head of the cable operator if 10 they don't answer the phone properly to get the 11 answers.12 MR. MILLER: I want to go back to my home 13 mortgage refinancing example. To me, the regulatory 14 entity that should step up and assume responsibility 15 is the entity that gave the license to that person to 16 be in business. That's who the consumer has a 17 legitimate complaint against, if that licensor is not 18 overseeing the behavior of the licensee. And that's 19 the local government that gave that franchise to that 20 cable operator. I mean, that's why the cable operator 21 enjoys that privileged position in the community. And 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 270 I don't think you can look at a taxpayer, or look at a 1 consumer as a city council member and say you have no 2 responsibility. And it makes no sense to the consumer 3 to say you've been preempted by the federal 4 government, so call the FCC.5 COMMISSIONER SVANDA: I would answer yes, 6 in theory in the perfect world. Now there are 7 practicalities that cause me to probably attach some 8 caveats to that. One is, that the local franchising 9 authority really needs to be in sync with thousands of 10 other local franchising authorities, so that there is 11 a common and recognized set of standards that don't 12 impose business costs on service providers and 13 deliverers that are just unreasonable and crazy, and 14 counterproductive in the way that they might be 15 implemented. So if we can solve that, if we can 16 assure that the local franchising authorities are not 17 playing games and, in fact, are working in the best 18 common interest, then we're working with a good 19 system.20 The local franchising authority in that 21 same vein, should not be in a position to act as a 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 271 barrier to entry. My experience at the state level 1 has shown me some examples where local franchising 2 authorities will act as barriers to entry for one 3 reason or another, will have selected some provider 4 than another provider, and that doesn't add up to very 5 good business plans for a business to do its roll-out 6 either. And so I think with some practical overlays, 7 yes, it doesn't necessarily answer some of the things 8 that transcend wireless and satellite, and some of 9 those kinds of issues. I'm not sure how quite local 10 franchising authority applies, and with that then, 11 would it work on the radios that we have in our 12 vehicles and that sort of thing. Probably not.13 But in general, of course, the closer to 14 home you can drive things, the better off it's going 15 to be. I think even as the FCC explores some of these 16 issues, over time we've talked with them about well, 17 where is the floor of people in this building, the 18 portals building that's going to be answering the 19 phones if they, in fact, start ringing? The local 20 franchising authorities in a particular area may well 21 receive in the course of a month 100,000 calls. And22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 272 if all of those calls were to start coming into the 1 FCC, who's going to answer the phone? And they aren't 2 staffed-up. State Commissions are not staffed-up, so 3 -- and for certain, we can't abruptly change that 4 system. Once again, if a new -- if something new is 5 going to work better, it's going to take some time to 6 get there.7 COMMISSIONER SVANDA: I think there's 8 pretty broad agreement here, actually, on the general 9 point. But I want to sing a refrain you often hear 10 from the local governments, and it's called "unfunded 11 mandates". I think local governments are truly 12 prepared to step-up and do this, but one of the 13 ironies in what the Commission did last March, is they 14 said oh, by the way, not only do you lose regulatory 15 authority, but you lose all your franchise fees 16 associated with cable modem services. So taking Dan's 17 point, that it would be nice to have some source of 18 revenue that could pay for this regulatory authority, 19 it would be nice to have the Commission be consistent 20 about this, and recognize that if we're going to take 21 responsibility and provide real consumer relief, we 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 273 ought to be able to set the tax, rent, and fee policy 1 with respect to cable model services, as well.2 MR. HOROWITZ: I have a foundation which 3 is called the Fight Back Foundation for Consumer 4 Education. We also have a website that's called 5 FightBack.com. I do a lot of media stuff, and as far 6 as you're concerned, Mr. Miller, we can get those 7 problems solved for you in probably 24 hours, without 8 going through the measures that you want to go through 9 with the mortgage company and all that. That's what 10 we do.11 And the reason I'm saying this, is I'm 12 listening to something hear that really, really has 13 met upset, because I'm listening to a bunch of really 14 important people who are out on the street, 15 supposedly, knowing what's going on. And I feel like 16 you're twirling around like you're on a 17 merry-go-round.18 First of all, as far as complaints are 19 concerned, the gentleman from Verizon. Verizon 20 happens to be a monopoly now. It's a monopoly. They 21 joined with a lot of companies. They joined with Bell 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 274 Atlantic, and they joined up with a wonderful company 1 that was called -- in Los Angeles that was called --2 oh, God. They're a wireless company. And if you go 3 to the FCC, the state commission, these guys have been 4 fined millions of dollars for bad customer service, 5 and haven't paid it. All right.6 I have a DSL connection. I started with a 7 company that I call PacHell. And PacHell was PacBell, 8 which became Southwest Bell which, as you know, is a 9 monopoly. It took them seven months to try to find 10 out what the problem was with the DSL line. And the 11 problem was that they were running the wires to my 12 house out of an old set of cables that were not fiber 13 optic cables. And then they told me well, you know 14 something. I hate to tell you this, Mr. Horowitz, but 15 you're at the end of the line.16 I said, "Oh, really? I'm at the end of 17 the line. You mean we don't have fiber optic cable 18 here, as I was told when they installed my DSL? Oh, 19 no. You don't have fiber optic cable there."20 Well, it's very simple. I went to my state 21 agency and complained. These guys immediately came on 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 275 and said well, we'll take care of it. They still have 1 not taken care of it. What they've done is they've 2 refunded every month that it doesn't work. I don't 3 want the refund. I want the service. Okay? And 4 someone said well, just don't pay your bill. Well, 5 you don't pay your bill to a DSL or to one of the 6 monopoly phone companies, you will not have any 7 service. They'll cut your service off.8 Now my DSL has gone from DSHell with the 9 earlier phone company, to DSHell with Southwest Bell. 10 And finally, I got to a point that what I did is I 11 took our internet service provider that feeds all the 12 computers in our office, and I now have a dial-up 13 which is a pain in the ass. But the good thing about 14 it is I have my computer working every day, and I 15 don't have to call DSHell or any of those DSL 16 companies.17 Now with these other remarks that were 18 made, I mean, I'm just absolutely floored by it. You 19 guys would like to have open competition in a 20 marketplace that is a monopoly marketplace. You can't 21 have open competition in a monopoly marketplace 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 276 because you have to go to the local companies that run 1 whatever is there, and make a deal with them to 2 hook-up, so that you can get into the houses and the 3 places where you want to sell your goods. And they're 4 not going to give you a bargain price because you 5 compete with them. They compete with you.6 So then we get back to the -- you know, we 7 always look to government for the reward to go in and 8 save us. Government can't save you in a situation 9 like that. You want the FCC to come up with a set of 10 rules that's going to apply to how you deal with these 11 companies intra and interstate, so that there would be 12 a uniform rate that you could pay for whatever systems 13 you want to put in there. That's part of what they 14 call "free enterprise."15 And, you know, I feel here that you're 16 calling this parody. You want parody. That's the 17 free enterprise system. And to compete in this 18 marketplace, you have to be pretty tough, and you have 19 to be pretty fast on your feet. And when you talk 20 about going and being fast on your feet, and you're 21 dealing with these franchise boards and the local 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 277 municipalities, you're dealing with entities that have 1 picked one provider usually, or maybe two in a market 2 who are going to give you all the service for whatever 3 you watch on television. Now that to me is not fair.4 MR. GOLDBERG: Could you give the guys a 5 chance to answer some of these things?6 MR. HOROWITZ: No, wait. I've got to 7 finish, and I'll be out of here, because this is 8 really bothering me.9 MR. GOLDBERG: We only have 15 minutes.10 MR. HOROWITZ: Let me just say this. That 11 is not fair. It is not fair for a local municipality 12 to decide on what they think would be the company that 13 provides the service in that market. And yet, most of 14 the companies that provide the service in those 15 markets are, guess what, monopoly companies. And what 16 we're facing here is a war with the monopolies.17 Now if you could find a way to defeat the 18 monopolies and have them kick back money so that they 19 could give you a good deal to get into those markets 20 and be professional, that would be great. But by and 21 large, across the United States we get so many -- I 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 278 mean, I can't believe you guys don't go into areas 1 where you could find out what the complaints are 2 really like. Go to the State of California, go to the 3 Public Utilities Commission there, you know, don't 4 depend on the FCC complaints to be able to give you a 5 true picture, because a lot of people do not know that 6 they complain to the FCC. Nor do they have, believe 7 it or not, a computer, nor do they want to be bothered 8 with it.9 We're trying to make it known that the FCC 10 will do things for you. But to say that 100 problems, 11 there's got to be tens of thousands of problems across 12 the country. And I can vouch for that, because we get 13 thousands.14 MR. GOLDBERG: All right. Any one care to 15 respond? Scott.16 MR. RANDOLPH: I'll just say a couple of 17 things, and I'm not sure what your experience was with 18 PacBell, but I can tell you, you know, when we started 19 first rolling out the DSL, and I think Rich can agree 20 with this. We had some real problems, and our service 21 was fairly lousy in a lot of places because it was a 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 279 new technology. The telephone network was not 1 necessarily designed to roll that technology out. 2 There's a lot of old stuff out there on those copper 3 wires that have to be pulled out. And I'm one them 4 too. I work for Verizon, but I have Comcast cable 5 modem because I'm, you know, at the end of a long 6 loop. But that's exactly what we did in March with 7 our announcement, that we were going to go out there 8 and take the step to pull fiber out there, to get out 9 there closer to the neighborhoods, to shorten those 10 loops to be able to provide DSL.11 Let me something about service quality. 12 Our service quality has improved. In fact, it has to 13 improve. We can't compete in this market unless it 14 does, because the cable -- you know, consumers are 15 going to go to cable companies who are going to 16 blanket the country with 90 percent penetration very 17 quickly if we're not able to really deliver on our 18 service.19 MR. HOROWITZ: But, Scott, I can't get 20 Verizon to give me DSL because we don't have fiber 21 optic cable. And it's too expensive to run it down 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 280 the hill where it has to go to.1 MR. BRENNER: Yeah. I mean, the 2 technology of DSL is limited that way. That's why you 3 don't have 100 percent head-to-head competition with 4 the cable and DSL, although they're trying to improve 5 the DSL technology so they can go. It used to be 6 about, you know, a couple of miles from a central 7 office, and if you lived farther than that, you 8 couldn't get DSL. But I would submit that --9 MR. HOROWITZ: I'm two and an eighth miles 10 away from a central office.11 MR. BRENNER: Well, how about an extension 12 of your -- see, I grew up in Southern California, so 13 I know who you are. And they're one of the --14 MR. HOROWITZ: I don't think that has 15 anything to do with it.16 MR. BRENNER: No, it doesn't. But I think 17 -- you know, I grew up watching you, you know. And I 18 think you are somebody who helped elevate the whole 19 idea of consumers understanding their rights. And 20 that's why I feel, as a consumer, I just last night 21 wrote a letter to my plumber, and I cited the Maryland 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 281 Licensing Commission if they don't call me back with 1 my half- installed boiler, you know. But I don't that 2 Licensing Commission is going to do me any good, so 3 I'm not -- you know, I know what you're talking about.4 But I think that, you know, I am -- you 5 know, having worked at the FCC for many years, and as 6 a student of regulation, I'm not sure -- you know, 7 bring -- having the club of regulation sometimes is 8 helpful, but in the end, the consumer needs to be able 9 to get answers. And, I mean, if a company doesn't 10 give me a good answer - and that's why I said, I kind 11 of learned a little bit watching your telecast - you 12 know, you keep going well, let me talk to your 13 supervisor, and you just keep going until you get an 14 answer. Now not every consumer has the patience, or 15 willingness or time to do that.16 I don't think the solution, really having 17 been a regulator, is to go and seek a regulatory 18 solution in every instance. I don't think that's 19 going to solve the consumer problem either. In the 20 end, the companies have to face competition, because 21 if they don't like the cable company, they can say 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 282 goodbye. Call up and get good service from DSL, if 1 they can provide good service, and we lose a customer. 2 We're losing customers every day to DDS because we 3 don't provide -- we're fighting back with a better 4 product and a digital tier, but we were losing 5 customers to DDS because we didn't have the right 6 product. But that is a much better solution than, I 7 feel, going to city councils and having them tell us 8 what programming network should be on, and having 9 regulated that way.10 The market has taught us that we have to 11 improve our service. And I think when you have a 12 monopoly, you need to have regulation if you assume 13 that there's market failure and entry is difficult. 14 The whole point of John Windhausen's --15 MR. HOROWITZ: But wait a second.16 MR. BRENNER: Let me just finish.17 MR. HOROWITZ: Dan, this is important.18 MR. GOLDBERG: We have some other 19 questions.20 MR. HOROWITZ: That's what we have the 21 Telco Act for.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 283 MR. BRENNER: Right. And that's John's 1 organization.2 MR. HOROWITZ: And we still don't have 3 open competition.4 MR. WINDHAUSEN: I will ask, have you 5 tried to call Covad?6 MR. HOROWITZ: Covad?7 MR. WINDHAUSEN: Covad.8 MR. HOROWITZ: Covad went bankrupt, and 9 then I stopped with Covad.10 MR. WINDHAUSEN: No. Covad is back, and 11 going full swing.12 MR. HOROWITZ: They're back?13 MR. WINDHAUSEN: Yeah. They are very 14 active, and I would bet you that they would be able to 15 provide you that DSL service.16 MR. HOROWITZ: I could be surprised.17 MR. GOLDBERG: We have lots of hands. Don 18 had his first, then Vern, and then Joy. Don, go ahead.19 MR. SNOOP: I just wanted to -- David took 20 away a lot of what I was going to say, because he's so 21 eloquent in how he presents things. But basically, I 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 284 disagree with part of what he said, only because I 1 think that the phone industry, the cable industry are 2 getting away from being monopolies. There are 3 competition in both industries right now. DVS has 4 been out there for a while, wireless cell phones are 5 coming in. There's a lot of things going on.6 The entire broadband issue, access to the 7 Worldwide Web, those type of things are becoming an 8 issue that I think two years from now, we're going to 9 look back and say, you know, we were crazy back then 10 trying to regulate this stuff. Because if we allow it 11 to develop, and we're right in the developmental phase 12 right now, I think we have to allow it to develop. I 13 think we have to allow the marketplace.14 The more marketplaces that we have where 15 we have DSL and cable modems both providing that 16 service, and DDS has threatened that they're going to 17 be providing also a satellite delivered service, once 18 we have two or three players in a marketplace, David's 19 point goes away, because now they're going to have 20 more and more people.21 I'm a good example myself. I mean, I used 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 285 to work in the cable industry. I'm now working in the 1 phone industry. I tried to get DSL. My local phone 2 company wouldn't get it. Guess what, I have a cable 3 modem, very happy with it. So there's a lot of things 4 that can happen, and I think we have to allow it to 5 develop.6 MR. GOLDBERG: Vernon.7 MR. JAMES: Vernon James, San Carlos 8 Apache Telecommunications. Thank you.9 I really just want to comment more so than 10 ask questions. I want to make these comments to the 11 panel here, the committee. These are some of the 12 problems that metropolitan and urban areas face. 13 There are greater problems in rural America.14 These problems present itself to rural 15 America based on the fact that you don't have the kind 16 of infrastructure to provide the kinds of services 17 urban and metropolitan markets enjoy. True, there is 18 wireless technology that's coming into play, but 19 wireless isn't the total picture. You can't provide 20 for the hospitals, you can't provide for the schools, 21 you can't provide for the community centers, you can't 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 286 provide for the libraries. Those are services that go 1 untended because the infrastructure to provide those 2 services are too costly.3 DSL has its limitations, so in a rural 4 setting such as a reservation, the only way you're 5 going to get services to a community that has people 6 living spread out, is to buy the local exchange at a 7 cost higher than what is fair. But you've got to have 8 that local exchange to become a real local exchange 9 carrier. When you become that local exchange carrier, 10 LEC as we call it, you then develop the infrastructure 11 to provide the kinds of services.12 In my case, the tribe had to go to the 13 federal government, borrow the kinds of money because 14 they couldn't go to commercial sources, because of the 15 status of the land. So went to the federal 16 government, we borrowed millions to build the kind of 17 infrastructure that is needed to be provide the kinds 18 of services out in our community. With that, the 19 tribe turned around and charged Vernon James here to 20 make sure we pay our loan back, to make sure we make 21 money so that we can improve the infrastructure that 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 287 we just built.1 The problem is insurmountable when it 2 comes to trying to provide the services at a 3 break-even cost. With regulations, services will not 4 come out to rural America, must less reservation. And 5 so when we talk about parodies, let's talk about 6 parodies in rural America. Thank you.7 MR. RANDOLPH: Let me address that comment 8 real quick. And like I said before, Verizon, for 9 example, has some wireless trials right now out in 10 McLean, Virginia and some areas in Maryland, where we 11 actually have employees that are testing the wireless 12 applications that we hope will be effective in the 13 rural areas, and we hope that that will happen 14 eventually.15 One situation we had recently that came to 16 us, we had a small community in the northeast that 17 knew that we were not going to get DSL deployed into 18 that community for some time. They came to us with a 19 proposition. They said look, we will buy the DSL 20 equipment, the D-SLAM equipment, and either you can 21 put it in your office, or we'll put it in City Hall, 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 288 or we'll put it somewhere, but we'll let you maintain 1 it. We'll actually incur the cost, and then in turn, 2 you turn around and provide DSL service to the 3 community at a reduced rate. And we actually thought 4 well, maybe that's a good proposition. Maybe that's 5 something we should try out.6 But unfortunately, under the current rules 7 that we're under at the FCC, it precludes us from 8 being able to work out individual deals with local 9 communities, or colleges and universities, or school 10 districts, or internet service providers, or any 11 customers. And we have to do a one size fits all. So 12 I would say, I mean, loosen the regulations. Give us 13 the opportunity to do more things like that, or at 14 least test the market to see if things like that are 15 viable.16 MR. WINDHAUSEN: Could I make a general 17 comment in response to all three of the last speakers 18 here. The overriding general proposition that I think 19 each of you has raised is that monopolies, in general, 20 do not have good incentives to innovate. And they do 21 not have good incentives to solve customer problems. 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 289 And I think each of the three of you have raised that 1 that's been your experience. But they don't have any 2 market incentive to in usual, because they're not --3 because if you don't have a choice, you don't have 4 anywhere else to go.5 Ideally, the kind of structure you want to 6 create is a more competitive atmosphere, where you 7 have a lot of different companies trying to provide 8 that service and innovate. And as shown by the 9 research that we've seen, that the Yankee Group has 10 seen, is that our CLECs are doing much better job with 11 customer service. You need to make sure that we're 12 able to stay in the marketplace. And the recent 13 policy changes that the FCC has been considering 14 adopting in this tri-annual review, which has not yet 15 been issued, could really spell the death bell of this 16 competition, and you won't get these kind of choices. 17 And in that case, the only thing you're going to have 18 left then is to go back and to deal with these 19 companies, at least with market power, if not 20 monopolies. So I encourage you, if you create more 21 competition, the consumers needs are going to be 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 290 satisfied more quickly.1 MR. BRENNER: I would just add very 2 briefly, that I think in the case of Indian 3 reservations, tribal spaces may be unique in the sense 4 that because of their geographic location, they may 5 need special government attention. And I mentioned in 6 my opening remarks about the problem of unserved 7 areas. It's not just Indian areas, but other areas, 8 which for economic reasons, are not being served.9 But I do have good news on that score. 10 Some cable companies, small cable companies in North 11 Dakota, and in Minnesota too, that I'm familiar with, 12 and very small markets of five, six hundred and 1,500 13 subscribers are rolling out advanced services like14 broadband. So even in very small, what appear to be 15 tiny markets, you can get cable companies to offer 16 that. And I think that will cause phone companies, 17 and maybe CLECs then to come in and try to grab some 18 of that market too. So that's the good news. I think 19 though, in very, very rural areas, that may prove more 20 difficult.21 MR. JAMES: If I might just respond to 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 291 that. Indian tribal lands are not the only rural 1 areas. We're talking about close to 1,000 2 cooperatives who are providing local exchange carrier 3 services in mid-America all the way across the plains, 4 into the areas in the west. And they all go and 5 borrow money.6 The problem that we face is that we get 7 CLECs coming in who want to take advantage of the 8 infrastructure that we built with out sweat, with our 9 blood, and with our tears sometimes. And it makes it 10 harder to repay the loan when CLECs come in.11 CHAIR ROOKER: Down here if you don't 12 mind. Larry, I don't think you saw that we have a 13 question on the other end.14 MR. GOLDBERG: Yeah. Debra was on the 15 working group. She does get a shot, and I know Joy 16 has been trying too. And we're almost at time, so see 17 if you can make them quick.18 MS. BERLYN: I'll be very brief. When I 19 saw the agenda and I saw we had two hours, I thought 20 how are we going to fill up two hours. And now I wish 21 we had another hour, because I do have a couple of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 292 questions. John, thanks for your last remark, because 1 I was going to make the point that a better option, 2 Dan, to not paying your bill is to be able to have 3 alternative providers that you can go to with your 4 business.5 My question, and if we don't have time - I 6 don't think we do. Perhaps it's something that our 7 working group can get the advice of these panelists 8 on, is in light of the eminent tri-annual review 9 order, and the impending broadband wireline 10 proceeding, what issues should this Consumer Advisory 11 Committee consider in terms of the implications of 12 these decisions for consumers? So it's a big 13 question, and it's, I think, something that we want to 14 take to our working group, and then eventually to the 15 CAC. But thank you all. It's been a great panel.16 CHAIR ROOKER: Yeah. I think -- I believe 17 we're out of time, if I see that clock correctly. Is 18 my vision failing me? Is it 3:30? Yes. I really 19 would again like to express my thanks also to all of 20 you for taking the time out of your day. You spent a 21 heck of a chunk of time with us, and we really 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 293 appreciate it. And Larry, you and your group are 1 doing a super job, as our other working groups are 2 doing.We also have a report from Joy Ragsdale and her 3 group that has been passed out to you, so there's lot 4 of things going on here.5 Thank you all very much for being here. 6 I'll give them just a minute to get off the podium. 7 But our next speaker is going to talk about Local 8 Number Portability, which is the ability to take your 9 cell phone number with you when you change carriers. 10 And this is a big issue for a lot of people who are 11 using their cell phones now instead of their home 12 phones. They're using it for their business and 13 everything else. And to give us an update on the 14 status of portability is Jared Carlson, who is the 15 Acting Chief of the Policy Division of the Wireless 16 Telecommunications Bureau. Jared, welcome. We are 17 delighted to have you here. Thank you. Let's give 18 him a welcome.19 You can actually just -- if you want to 20 sit, since I think the podium has been taken, you can 21 just make yourself comfortable there. The podium is 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 294 gone, and that's not you.1 MR. CARLSON: Is this all right? First, I 2 wanted to thank you for letting me have an opportunity 3 to speak on what really is one of my favorite topics, 4 and one of the most interesting things that I've had 5 to work on in my five years or so at the FCC, and 6 that's local number portability. And as you know, I 7 am in the Wireless Bureau, so the focus is on wireless 8 number portability.9 Let me start off with what the bottom line 10 for the Bureau, and I think the whole Commission is, 11 is that we want to right now work with carriers to 12 ensure that porting process goes as smoothly and 13 efficiently for consumers well in advance of the 14 number portability deadline, which is November 24th of 15 this year for wireless carriers.16 Let me start with a little recent history 17 on number portability, specifically, wireless number 18 portability. Last summer in July, the Commission 19 released an order that denied a request for permanent 20 forbearance from our number portability rules, but we 21 did approve a one-year delay in the implementation of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 295 number portability, primarily to avoid the 1 simultaneous implementation of number pooling, which I 2 can talk about if anybody is interested, and number 3 portability.4 And a big win for this Commission and for 5 our consumers, I think, this order was upheld by the 6 D.C. Circuit just last month. And I wanted to read 7 one quote from that order, because I couldn't have 8 said it better myself. The D.C. Circuit said:9 "The simple truth is that having to change 10 phone numbers presents a barrier to switching 11 carriers, even if not a total barrier, since consumers 12 cannot compare and choose between various service 13 plans and options as efficiently."14 And some more recent history, last 15 Thursday, just last Thursday, the Wireless Bureau 16 restated our commitment to ensure a smooth process for 17 consumers in terms of wireless number portability by 18 addressing some of the issues that have been brought 19 forward to us by CTIA, primarily, and also by Verizon 20 Wireless.21 Let me start with a statement, and then 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 296 sort of walk through it, and parse it through so that 1 everybody here knows what is actually going to happen 2 come November 24th, when we start to see wireless 3 number portability.4 I think you probably heard that on 5 November 24th, you'll be able to take your number with 6 you when switching wireless carriers, but what does 7 that really mean? And let me kind of try to break it 8 apart.9 What it means is that wireless customers, 10 and at the very least, certain wireline customers who 11 live in the largest 100 metropolitan statistical 12 areas, will be able to take their numbers with them13 when they switch carriers.14 When you go from a wireless to a wireless 15 carrier, there really is very little question that you 16 will be able to take your number with you. They've 17 already made the investments that they'll need to do. 18 The carriers have to support the technical 19 requirements necessary to handle number portability, 20 and they did so largely when they had to implement 21 number pooling, which is something that's been going 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 297 on for the last year. And I also wanted to just let 1 everybody know that the Commission is standing firm on 2 the November 24th date for wireless number 3 portability.4 When going from wireline to wireless 5 carriers, there is something of a question there that 6 CTIA has raised, and it's fair to say that the whole 7 industry has raised, I think. And that is, that 8 depending on where you live, you may be able to take 9 your wireline number with you to a wireless phone; 10 which is to say, it doesn't mean the Bureau would like 11 to say, you may be able to cut the cord and keep your 12 number with you.13 And the reason why it's not so cut and dry 14 when you're going from wireline to wireless is what we 15 call the rate center problem. And this occurs because 16 you've got wireline carriers who historically have 17 always routed and rated calls through the use of rate 18 centers, which are historically the areas that are 19 served by end offices. And these rate centers are the 20 whole entire paradigm of the wireline world. They 21 control not only how calls are routed, but whether a 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 298 call is local or toll. And while wireless carriers 1 aren't bound to serve customers only on particular 2 wireline rate centers, nonetheless, they do 3 interconnect to the network, and they have to use the 4 paradigm that's out there, the wireline rate center 5 paradigm.6 And they also, as a matter of fact, get 7 telephone numbers, when they do get telephone numbers 8 that are assigned to given wireline rate centers. Now 9 they're able to serve fast suaves of people with those 10 numbers, but they are still, in fact, tied to one 11 particular rate center.12 And in the wireline world, when you're 13 going from an ILEC to a CLEC, or a CLEC to an ILEC and 14 keeping your number with you, number portability is 15 limited by the rate center. The industry standards 16 that are out there that the Commission has blessed, do 17 say that number portability in the wireline world is 18 limited to rate centers.19 And this actually does make some sense, 20 because if you are a home user being served by two 21 companies, and you want to switch between them, then 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 299 almost by definition, they're both going to be located 1 in the same rate center.2 But in the wireless world, CTIA, that's 3 the Cellular Telecommunications and Internet 4 Association, has asked that the Commission, as they 5 would have it, that the Commission confirm that 6 competition demands that wireless carriers are able to 7 port numbers outside of wireline rate centers. And 8 according to CTIA, wireless carriers are only about 9 one out of every eight wireline rate centers, so there 10 really could be some fairly major limitations on 11 porting numbers. It would only be if you wanted to go 12 from wireline to wireless, you would only be able to 13 do so if you happen to be one of those customers lucky 14 enough to be in one of those one out of every eight of 15 those rate centers where wireless carriers and 16 wireline carriers actually overlap.17 The other issue that I wanted to point out 18 is that come November 24th, there will be wireless 19 number portability in the largest 100 metropolitan 20 statistical areas. And the way number portability 21 works is one carrier requests number portability of 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 300 another carrier switch. And for the most part, 1 carriers had to do that for the largest 100 MSAs in 2 February of this year. And in the Bureau, we 3 understand that as far as wireless carriers are 4 concerned, that's happened. Every wireless, or not 5 every wireless carrier, but all of the wireless 6 switches that are out there have received a request 7 for number portability. So there's very little 8 question that in the largest 100 metropolitan 9 statistical areas there will be number portability 10 come November 24th.11 Outside of those largest 100 metropolitan 12 statistical areas, carriers have a maximum of 6 months 13 to comply with a request from another carrier, and 14 those requests can start to come in on November 24th. 15 So what that means is, if there is an area where 16 there are a couple of providers, and one wireless 17 carrier says hey, I think I want to be able to port 18 numbers in because I think I can get customers from 19 this guy coming to me, you can make that request on 20 November 24th. And at most, the other carrier has 6 21 months to comply with that. So by May 24th of 2004, 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 301 you'll probably see number portability in the vast 1 majority of the country, if not everywhere.2 Let me tell you some of the outstanding 3 issues that we have right now. I'll mention some 4 aspects of some of the issues that CTIA, the Cellular 5 Telecommunications and Internet Association has 6 brought up. One is, as I said before, the rate center 7 problem. The Wireless Bureau released that letter 8 last week that I mentioned, that stated that although 9 we're currently grappling with the issue, and 10 determining what the boundaries of wireline to 11 wireless portability are going to be, there isn't any 12 question that if you are in one of those, like CTIA 13 says, one out of every eight rate centers where 14 wireline carriers and wireless carriers are, you will 15 be able to port from your wireline carrier to a 16 wireless carrier.17 Another issue that CTIA has raised and put 18 kind of two different questions to us, has to do with 19 the porting interval. And what the porting interval 20 refers to is the amount of time it takes for a 21 customer to go to a new carrier and say I want to take 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 302 my old number to this new phone, and the amount of 1 time that the network, the telecommunications network 2 actually takes to recognize that that port has 3 occurred.4 If you go from wireless to wireless, this 5 takes place according to industry standards in only 6 two and a half hours. In the wireline world, and this 7 is not only going wireline to wireline, but also 8 wireline to wireless, that period of time is about 9 three days. And there are a couple of issues 10 associated with this.11 One of them is a public safety issue, 12 E-911. And that is, during this period of time, you 13 will be able to call 911 and connect to the nearest 14 Public Safety answering point. However, there might 15 be some problems with that PSAP, Public Safety 16 Answering Point, being able to receive your call-back 17 information, so there would be a period of time when, 18 if for whatever reason they needed to call you back, 19 they may not be able to, because the number that's 20 delivered to them is incorrect, or if they try to 21 call-back that number, it could be the old device that 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 303 actually rings, whether it's wireline or wireless.1 But we did confirm in this letter from 2 last week that as far as that issue is concerned, the 3 Commission's rule already do address situations in 4 which, for whatever reason, a valid call-back number 5 can't be delivered to a PSAP. And what the Commission 6 said is that in such cases, your obligation is to at 7 least get the call to the PSAP, deliver whatever 8 call-back or whatever identifying information you can. 9 But at the very least, get the call to the PSAP. And 10 as I understand it, that shouldn't be a problem, even 11 during the porting interval.12 CTIA has also taken a look at the porting 13 interval from a competitive point of view. They view 14 it as somewhat of an impediment to get people to port 15 from wireline to wireless carriers, the fact that it 16 takes three days might discourage some people to do 17 so. And that is an aspect that the Commission is also 18 considering.19 A couple of other issues I wanted to 20 mention that weren't necessarily brought up by the 21 industry; but nonetheless, that I'd like to talk 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 304 about. One of them is, what Verizon Wireless has 1 termed "business rules". And Verizon Wireless sent us 2 a letter saying that they would like us to state that 3 -- to agree with them, that a wireless carrier can't 4 deny a request for portability from an individual 5 consumer on the basis of an unpaid bill, or an 6 unfulfilled contract. And in our letter from last 7 week, we did state that carriers, and I'm quoting: 8 "Carriers may not refuse to port while attempting to 9 collect fees or settle an account."10 The last point I wanted to mention is 11 about cost recovery, and the flexibility that wireless 12 carriers have. Verizon Wireless, for their part, has 13 said they're not going to charge a fee for customers 14 to port numbers. And if that turned out to be the way 15 that the industry went, I'd be thrilled. However, as 16 if often the case in the wireless world, there aren't 17 that many regulations on this topic. And we do permit 18 wireless carriers to recover their costs, however they 19 see fit, so long as they're just and reasonable, of 20 course. And so you could see various paradigms, I 21 suppose you call it, for recouping their number 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 305 portability costs, whether it's charges on every 1 customer's bill, or charges to port out a number, or 2 charges to port in a number.3 That's really the state of play of things 4 on wireless number portability. And if anybody has 5 any questions, I'm certainly happy to try to answer 6 them.7 CHAIR ROOKER: Do we have any questions 8 for Jared?9 MR. ALLIBONE: Tom Allibone, LTC 10 Consulting. I've been noticing on Verizon phone bills 11 recently, there's been some language that's saying 12 that due to changes, no details, but due to certain 13 changes that the charges that used to be passed 14 between carrier-to-carrier, between Verizon and 15 certain, I guess, cellular carriers are now going to 16 be billed by Verizon.17 MR. CARLSON: They are Verizon land-line, 18 not Verizon wireless.19 MR. ALLIBONE: Yeah. Land-line, but on 20 the land-line bill, it's referring to something 21 happening in the cellular industry. And does this 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 306 have anything to do with that?1 MR. CARLSON: Yes and no. What you're 2 talking about is arrangements that wireline and 3 wireless carriers, that used to be fairly common, now 4 are not quite so common, are called "reverse toll 5 billing" type relationships. And they were 6 established to encourage land-line callers to call 7 wireless phones. And because of the rate center 8 issue, you've got a wireless carrier who might serve a 9 whole huge area, but really is getting numbers from a 10 rate center that's out here. And there's a land-line 11 caller that's here, wanting to call the wireless 12 carrier. I'm sorry - somewhat further away. And 13 there has been a toll associated with that charge, 14 just like there would be if you were making an 15 intralata toll call, you might see a charge on your 16 bill.17 It was somewhat common for wireless 18 carriers and wireline carriers to have agreements, 19 whereby the wireless carrier would basically pick up 20 the tab. The charge still exists. I mean, the 21 wireline carrier was still billing somebody for the 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 307 cost of this toll call because the call had to go a 1 fairly long distance, but the wireless carrier was 2 picking that up.3 It used to be easier to identify which 4 calls were local and which calls were toll, just 5 because you could look at the first three digits of 6 the phone number and figure out what rate center it 7 was in. Once you have number portability, that's not 8 quite so clear any more. You've got the potential for 9 numbers to essentially move from one rate center to 10 another, and that's been cited as a reason why these 11 relationships have been terminated throughout the 12 country.13 And it's interesting, in some places, like 14 I know that California hasn't had reverse toll billing 15 for a number of years, and I'm starting to see more 16 and more inquiries about reverse toll billing in Texas 17 and Tennessee. I just got a lot of inquiries about it 18 in the last couple of months.19 CHAIR ROOKER: All right. Jared, thank 20 you so much. We really appreciate your taking the 21 time to come and visit with us today. Thank you.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 308 MR. CARLSON: Thank you.1 CHAIR ROOKER: It's time for those people 2 who have been waiting patiently here from the public, 3 if you would like to make any comments or ask 4 questions of the committee. We're most interested to 5 hear from you. Do we have anyone? This would be the 6 first time we don't have a public comment.7 Well, then we've got a couple of things 8 that we need to say. There have been some very 9 interesting topics that have come up today, in terms 10 of things that we should be considering as a 11 committee. And I think what we need to do is to look 12 about whether or not they fit into existing working 13 groups, or whether we might need to setup another 14 working group or two. And we will be talking about 15 that. We'll be talking to Vernon about the outreach 16 to the Indian population, and under-served populations 17 as to whether or not we need a working group, or 18 whether it fits within one of the existing ones. So 19 there's a whole lot of things that are going to be 20 going on.21 I also need to remind you to please take 22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 309 off your badges and just leave them. I guess leave 1 them right there by your sign so that we can pick 2 those up and recycle, since recycling is good.3 Now does anybody have any comments or 4 questions, or concerns that we need to address? Yes, 5 Jeff.6 MR. KRAMER: Just very basically. Jeff 7 Kramer here. I like this setup much better than the 8 table in the round.9 CHAIR ROOKER: Oh, you do? The only thing 10 is I can't read people's names, so I have to make sure 11 I know everybody's name.12 MR. KRAMER: Well, I'm just used to having 13 my back to the podium, and having to turn around the 14 whole time.15 CHAIR ROOKER: Well, that's because you're 16 young and agile.17 MR. MARSHALL: I'd like to thank everybody 18 for staying for the duration, as well.19 CHAIR ROOKER: Yes, indeed.20 MR. MARSHALL: It's been a long day.21 CHAIR ROOKER: It's been wonderful.22 NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 310 MR. MARSHALL: And thank you for sticking 1 with us.2 CHAIR ROOKER: Any other questions, or 3 comments, or feedback on today? Well, I do want to 4 thank again our working groups. Thank you. It was 5 good. It was good, wasn't it? And, Scott, again 6 thank you for all your hard work in putting this 7 together. Believe me, he has done a --8 MR. MARSHALL: It was a joint effort, and 9 all the working groups did the work.10 CHAIR ROOKER: But at any rate, thank you 11 all so much. Remember our next meeting is in 12 November, and it's on a Thursday. November the 20th, 13 so put that into your planning schedules. And I hope 14 everyone has a safe journey home, and I hope we don't 15 have any more thunderstorms out there. But anyway, I 16 thank you for your attention here, and being such a 17 good group. We're adjourned.18 (Whereupon, the proceedings went off the 19 record at 3:53 p.m.)20