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Released: May 13, 2011









MAY 13, 2011

Thank you, Chairman Walden and Ranking Member Eshoo, for inviting me to join you
As you know, Congress created the FCC in 1934, almost 77 years ago. In that year, Babe
Ruth signed a contract for an "eye-popping" $35,000 a year. Donald Duck made his movie debut.
The average new house cost less than $6,000. The entire federal budget was only $6.5 billion.
And a gallon of gas cost 10 cents. How times have changed. Although a few amendments have
been made to the laws the Commission operates under since then, many of the regulatory legacies
from 1934 remain in place. The technologies we take for granted in today's communications
marketplace were unimaginable to even the most creative of science fiction writers when existing
mandates were written.
Against this backdrop, it is fitting for this Committee to examine ways to reform the FCC
to make it more efficient and relevant to modern realities. I operate under the philosophy that
Congress should tell us what to do, and not the other way around. Given your solicitation of
suggestions, however, I will start by raising several possible statutory changes to improve the FCC
before moving on to possible procedural reforms.
Twenty-first Century consumers want to have the freedom to enjoy their favorite
applications and content when and where they choose. Whether such material arrives over coaxial
cable, copper wires, fiber or radio waves is of little consequence to most consumers so long as the
market's supply of products and services satisfies demand. Legacy statutory constructs, however,
have created market distorting legal stovepipes based on the regulatory history of particular
delivery platforms. While consumers demand that functionalities and technologies converge,
regulators and business people alike are forced to make decisions based on whether a business
model fits into Titles I, II, III, VI, or none of the above. As Congress contemplates FCC reform, it

may want to consider adopting an approach that is more focused on preventing concentrations and
abuses of market power that result in consumer harm.
Other statutory changes could include modernizing the Sunshine in Government Act to
increase our efficiency and spirit of collaboration while preserving openness and transparency.
Furthermore, ideas from outside the Commission also deserve serious consideration. For
instance, Randy May, President of the Free State Foundation, has called for building on the
deregulatory bent of Sections 10 and 11 from the Telecommunications Act of 1996 by adding an
evidentiary presumption during periodic regulatory reviews that would enhance the likelihood of
the Commission reaching a deregulatory decision.
Additionally, various statutory provisions require the Commission to file annual reports on
various topics; such as, the Wireless Competition Report,1 Satellite Competition Report,2 Section
706 Report,3 and Video Competition Report.4 As you would imagine, preparation of each is a
monumental and costly undertaking. I would respectfully propose that, rather than requiring that
the Commission submit these reports annually, Congress might consider amending the Act to
require biennial submissions. For example, filing each sometime within the first quarter of odd-
numbered years would allow each incoming Congress to have fresh data at hand for any possible
legislative considerations. Moreover, this amendment would remove the Commission from what
sometimes seems like perpetual reporting mode.

1 See The Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-66, Title VI, 6002(b), amending the
Communications Act of 1934 and codified at 47 U.S.C. 332(c).
2 See Pub. L. No. 109-34, 119 Stat. 377 (2005), which amended the Communications Satellite Act of 1962 and is
codified at 47 U.S.C. 703.
3 See 47 U.S.C. 1302(b) (2010). Section 706 of the Telecommunications Act of 1996, Pub. L. No. 104-104, 706,
110 Stat. 56, 153 (the Act), as amended in relevant part by the Broadband Data Improvement Act, Pub. L. No. 110-
385, 122 Stat. 4096 (2008), codified in Title 47, Chapter 12 of the United States Code. See 47 U.S.C. 1301 et seq.
4 See Pub. L. No. 102-385, 106 Stat 1460 (1992). Congress imposed an annual reporting requirement on the
Commission in the Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act") as a
means of obtaining information on "the status of competition in the market for the delivery of video programming."
See also 47 U.S.C. 548(g).

With respect to procedural ideas, almost two and a half years ago, I sent to my colleague
then Acting Chairman Mike Copps, a public letter detailing some ideas to improve our agency's
effectiveness. He and I agree on many reform ideas, such as modernization of the cumbersome
and outdated "Sunshine" laws that prevent more than two of us from discussing Commission
business outside of a public meeting (as noted above). Shortly thereafter, in July of 2009, after
Julius Genachowski became a Commission colleague as well, I sent him an updated letter with
additional ideas and suggestions within existing statutory constructs. Time does not allow me to
enumerate all of them, so I have attached both letters to this testimony, and I respectfully request
that they be made part of the record.
I am delighted to report that some reforms have already been implemented. For example,
many stale or ill-advised Commission action items awaiting votes contained on what we call the
"circulation list" have been weeded out. A portion of the backlog of the 1.4 million broadcast
indecency complaints that were defective on their face has been dismissed. Several of those
complaints were older than some of my children, by the way. The FCC now relies more on
electronic internal communications rather than paper deliveries. That seems fitting given our
agency's mission and name. And a beta version of a new website has been launched. I encourage
anyone with an interest in communications issues to take it for a test drive and post your
constructive suggestions and comments.
Going forward, I'm hopeful that other FCC reform suggestions will be carried out as well.
I have long called for a full and public operational, financial and ethics audit of
everything connected to the FCC, including the Universal Service Administrative
Company (USAC). The erroneous payment rate in the High Cost Fund alone has
been far too high, and we may need to make fundamental changes to fix the

problem. Only after a thorough due diligence review, however, will we have the
information needed to make an accurate diagnosis.
Chairman Genachowski has made good progress on ensuring that notices of
proposed rulemaking contain actual proposed rules. I applaud his efforts. I would
encourage improving the process further by codifying

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