Thank you. Members will have five legislative days within which to revise and extend the remarks and insert extraneous material into the record. I now recognize myself for opening statement. I'd like to thank Chairman Carr for being here today and for his leadership at the FCC. The Federal Communications Commission was created for the purpose of expanding access to radio, television, and other communication services for all Americans. Methods of communication have changed a lot since the FCC was founded more than 90 years ago. Decades of technological advancements have made long-distance communications much more affordable. In 2023, the total number of wireless connections within the United States reached almost 558 million, or more than 1.6 connections per American. The FCC continues to play an important role in expanding access to new technologies and making communication services more affordable for all Americans.
Since fiscal year 2023, the FCC has received flat funding of 390.2 million. Each year, the commission's appropriation is fully offset by the collection of regulatory fees paid by license holders. Not only is the FCC's appropriation fully offset, but the commission routinely transfers any excess revenue to the Treasury for deficit reduction. The FCC has become a leader in securing our nation's telecommunications infrastructure from national security threats. The Rip and Replace program has provided essential funding to help service providers replace equipment manufactured by companies under the influence of the Chinese Communist Party. Congress has authorized close to $5 billion for these efforts. I look forward to hearing more about that important program and the progress that continues to be made. I'm also encouraged by Chairman Carr's efforts to identify and remove unnecessary regulations that inhibit innovation and economic growth.
Since March of this year, the FCC has been collecting feedback from the public on regulatory changes that will facilitate and encourage investment in modernizing networks, developing infrastructure, and promoting competition. In addition to its deregulation efforts, the FCC has taken concrete steps to streamline agency processes and eliminate wasteful spending. Just last week, the commission announced more than $567 million in expected savings from reduced contract spending. I'm interested to learn more about these efforts, the steps, Chairman Carr, you're going to take to improve the agency's fiscal health, and your priorities more generally for the Federal Communications Commission and how this committee can assist in achieving those goals. I now recognize the ranking member for his opening remarks.
Thank you very much. A timely appearance. The microphone. There you go. You're on now. Thank you very much. Thank you, Mr. Carr, for being with us. We had a good conversation in my office. This probably won't be as cordial as we were. But I'm very concerned. When Donald Trump spoke before the Congress in March, he said this: 'I've stopped all government censorship and brought back free speech in America. It's back,' he said. Now, he also said during the campaign to his supporters, 'I am your retribution.' You may remember that quote that rang in my ears and gave me great concern. The FCC's actions the past few months make it clear just how relevant those comments were.
What was once an independent, impartial agency, not always devoted to keeping Americans connected, has become, in my view, to some degree the speech police, another cudgel in the president's culture war. Since Trump took office, the FCC has gone after private corporations over their DEI practices. Very frankly, in my view, that may be a practice that he can impose on the federal government, but it is not a practice that he can impose, nor should he impose, on the private sector, whatever the views we may hold. The agency, in my opinion, has also targeted NPR, PBS, NBC, ABC, and CBS and other networks apparently who are perceived unfavorably to the president and to his policies. The First Amendment, of course, is not intended to protect the president from the press. It is intended to protect the press against the government. Nor was the FCC established to act in the president's interest, but rather in the public's interest. Now more than ever, the American people are counting on the FCC to focus on its mission under law.
Something we discussed in my office, however, was when he removed FTC commissioners, he did it because, quoting or trying to quote, that the actions of those commissioners were incompatible with the priorities of the administration. Communications technologies that fall under the FCC's purview are fundamental to everything in modern life. They shape our commerce, our education, our national security, our healthcare, and our elections. In an increasingly digital world, the FCC needs to ensure that we don't leave that behind. That means expanding affordable, reliable access to the internet and other crucial technology in both rural and urban areas. I represent urban and rural areas. We made a lot of progress toward closing the digital divide when the Affordable Connectivity Program, funded by the bipartisan infrastructure law legislation I was proud to put on the floor as majority leader. I heard directly from my constituents, Republicans and Democrats and Republican officials. I live in a county with five Republican county commissioners. They all urged me to continue that because of the very positive impact it had on my district and in that rural county in which I live. Regrettably, my colleagues across the aisle allowed that program to expire last year, raising interest costs for the 23 million households that enrolled. I still haven't seen any plan on how we fill that void.
Worse, I've heard rumors that the FCC's spectrum policy involves auctioning off or reducing bands, including the Citizens Broadband Radio Service, which could make it even harder for Americans to get connected. The FCC has a responsibility not only to help Americans access these opportunities, but also to protect them from potential perils. Every day, Americans experience robocalls and internet scam attempts that become more and more sophisticated. Their personal data falls prey to hackers and scammers. Americans need strong and savvy cops on the beat, committed to cybersecurity and privacy. In my view, that is the role of the FCC. Chairman Carr, I thank you for coming in today, as I said, but I want to be clear that I'm worried that the FCC and so many other elements of government that ought to be independent are, in the president's words, not referring to anything that I've referred to, but weaponizing government. The FCC's attacks on the press and the First Amendment are troubling. So, I look forward to hearing your testimony. I will honor the chairman's gavel, but it requires a lot of time to make sure the FCC is doing what the American people expect it to do. Thank you, Mr. Chairman.
Thank you, Mr. Hoyer. Today, we welcome the testimony of the Honorable Brendan Carr, chairman of the Federal Communications Commission. Chairman Carr, without objection, your full written testimony will be entered into the record. With that in mind, we'd ask that you please summarize your opening statement in five minutes.
Thank you, Chairman Joyce, Ranking Member Hoyer, distinguished members of the subcommittee. Thank you for the invitation to testify. And I want to start as someone from Virginia that recognizes the life and legacy of service of Gerry Connolly today. I grew up not far from his district, so I wanted to recognize him at the outset. Since joining the FCC, I've had the privilege of testifying before Congress a number of times, including in front of this subcommittee just last year, but this is my first time appearing before Congress as chairman of the FCC. And there are some new subcommittee members here. So, I want to start with a brief introduction. I first joined the FCC as a staffer back in 2012, and I've had the privilege of serving in a number of different roles since then. From an attorney in the office of general counsel to a legal adviser for a commissioner, general counsel of the FCC, before President Trump nominated me to serve as a commissioner back in 2017.
Over these past dozen years, I've had the honor of working alongside some of the most talented public servants in the federal government. I'm proud of the work they get done for the American people. And speaking of getting things done, it's been a particularly busy time at the FCC. We've hit the ground running, and I'd like to highlight some of the commission's critical work under my leadership so far. To start, we've taken quick action on spectrum. This is important work because getting additional airwaves into the commercial marketplace drives down prices for consumers, increases competition, and advances America's national security. To that end, we launched a new proceeding that looks at freeing up more mid-band spectrum in what's known as the C-band. We started a proceeding to explore creative ways to use the 37 gigahertz band. And we're voting tomorrow on ideas for more intensive use of multiple gigahertz of spectrum in other bands.
Earlier this year, we also kicked off the process for auctioning AWS-3 licenses, and the proceeds of this will be used to help facilitate the Rip and Replace national security program. More broadly, though, it's important that Congress restore the FCC's general spectrum auction authority. U.S. leadership in wireless is about more than connectivity. It's part and parcel of America's geopolitical leadership in national security. Auctioning spectrum is also good for the Treasury, as spectrum auctions raise hundreds of billions of dollars in revenue. Restoring FCC auction authority via a robust pipeline of mid-band spectrum, as President Trump called for just yesterday as part of reconciliation, is one of the most important steps Congress can take in the near term. Apart from spectrum, the FCC's been busy on other fronts, too. We're working to unleash new high-speed infrastructure builds, focusing on boosting America's space economy, launching a massive deregulatory effort, and closing dormant proceedings.
In parallel with all this, we're working to protect consumers. This includes expanding the agency's work to combat illegal robocalls and bolstering our call blocking rules. The FCC is also taking steps to enhance our national security and public safety. At the beginning of my time as chairman, I created a new council on national security within the FCC that leverages all of the agency's authorities and relevant work streams to counter the threats posed by foreign adversaries. The council is already hard at work, including an ongoing investigation into the U.S. operations of businesses that were previously placed on the FCC's covered list due to national security risks. At the same time, the FCC is focused on delivering efficient results. With respect to our current budget, the FCC is operating successfully under a CR of just over $390 million, in addition to additional funding for our spectrum auction programs. On the workforce front, the FCC employed 1,461 full-time employees at the beginning of FY25. And as of the end of last month, the FCC employs 1,383 outside of our Inspector General operations.
As President Trump and Congress finalize the FCC's fee-funded budget for next year, the agency will keep delivering great and efficient results for the American people. We're going to do so by accelerating infrastructure builds, promoting U.S. leadership in wireless, expanding our space economy, eliminating needless regulations, protecting consumers, including additional work on robocalls, and promoting our national security and public safety. While we make progress on this, the FCC is also going to be eliminating waste. We've already started this process and so far found more than $6.7 million in savings for the remainder of FY25. We've reduced the FCC's authorized contract spend by over half a billion dollars. And a lot of the savings come from looking at bloated and duplicative IT contracts. These savings have had real results for the FCC and the agency is on sustainable financial footing. In closing, I want to thank you again for the opportunity to testify. I look forward to your questions.
Thank you, Chairman Carr. I now recognize myself for questions. Following up on that last paragraph or so of your statement, you announced last week that you reduced the authorized contract spending by more than $567 million. Can you explain which type of contracts were reduced or eliminated, and how these potential savings were identified, and if at all, DOGE had played any role in that?
Thank you, Chairman, for the question. Two things there. One, we stood up our own internal DOGE group at the FCC. And one of the things that I tasked them to do was a top-to-bottom review of every single contract the FCC has, and this initial decision of reducing contract ceilings as well as other savings was a product of that. We've also worked in coordination with the official DOGE group as well. The main portion of those savings, again, was IT contracts where we had licenses for services that we didn't need. We cut duplicative services, and so that was the main focus of that initial review. But we continue to work on this effort.
Well, of that $567 million in cost savings, only $27.8 million will be realized over the next two years. When do you expect to realize the remaining $539 million in savings?
Yeah, two things are going on here. One, we're realizing savings, as you noted, the $20 million now. We have additional projections for next year as well. The contract ceiling number is just here's how much we were authorized to spend on different contracts over a number of years into the future. We brought those contract ceilings down to make sure that we're not overspending down the road.
Outside of contracting services, have you identified any other opportunities for the FCC for significant cost savings?
Yeah, there's a lot that we're doing. You know, one, we're taking a look at dormant dockets. So, the FCC, for instance, has over 2,000 proceedings that we're looking at closing that ultimately can save staff time by not having to monitor those dockets. We've closed advisory committees that we don't think are either aligned with our statutory mission or otherwise not critical to our core mission. That's also resulted in savings as well. And principally, we're just refocused on the agency's core mission, and that's connecting more Americans through our work on spectrum, on infrastructure, on national security. We think that's going to pay dividends as well.
Since the creation of the Rip and Replace program, Congress has appropriated $1.9 billion to remove telecommunications equipment that poses serious threats to our national security. However, due to higher than expected program costs, Congress authorized the FCC to borrow an additional $3 billion to cover this shortfall. Can you describe the terms of the FCC's loan from the Treasury and how the commission plans to make the required loan payments?
Yes. So, with respect to Rip and Replace, this is a very significant and important effort. This is the way that we are getting Huawei and ZTE and similar insecure gear out of our networks that had infiltrated it throughout the country. Congress initially appropriated an initial sum of roughly $1.9 billion. The FCC had about a $3 billion shortfall after that. Congress has closed that gap. We've now borrowed funding from the Treasury to complete that process. We will repay Treasury with proceeds from that AWS-3 spectrum auction. In a nutshell, at the end of last year, we were roughly 28% complete with the Rip and Replace program, and we expect to be either complete or essentially fully complete by about a year from now. The work should be completed.
Is the FCC required to make interest payments as part of the borrowing agreement? Will that further constrain your ability to meet the program's objectives?
When Congress passed the legislation last year authorizing us to borrow that additional money, the view of Treasury and the interpretation of the language was that we'd have to use a portion of that money to pay interest for the borrowed money. So that's resulted in a shortfall that impacts one provider that's recently been added into the program.
Do you expect the Treasury loan to cover the remaining Rip and Replace funding needs, or will Congress need to provide additional resources?
Everybody except for that one entity, they are now fully provided for by the legislation from Congress. We just have a shortfall now with one particular provider.
I now recognize the ranking member, Mr. Hoyer, for any questions he may have.
Thank you very much. Let me just pursue the chairman's opening question on the $567 million. As I understand that, what you're saying essentially is $510 million of that is prospective and speculative. Speculative in the sense that it has not been spent or obligated at this point in time. Is that accurate?
Yeah. Again, two things are going on. We've reduced contracts. So let's say we have a contract that authorized a million dollars, we could reduce that to $500,000. That's some protection down the road. In addition to that, we have other sort of hard savings as well, including, as we indicated in a press release, $6.7 million for the remainder of FY25 and anticipating $21 million in 2026. That's the $27.8 million.
Which is approximately 5% of the savings that you're claiming may occur.
Yeah. I mean, to be clear, I don't mean to mislead on the numbers. The numbers speak for themselves. A contract ceiling number, which people can debate the significance of that. That's fine. But we think it's a number that we've shrunk, and so we put that data out there in addition to other data as well. But we're going to continue the process and look for additional savings.
I appreciate that. The point is you can point to $27.8 million in actual cuts at this point in time. Right. Thank you.
You make the statement on the first page, which I appreciate because I represent a lot of federal employees, as this committee knows. 'I have had the honor of working alongside some of the most talented public servants in the federal government.' I appreciate that statement. I think the public does not recognize the talent that you have working for you, and that's unfortunate. Let me ask you something. Of the 78 spots that have been reduced since January, that is from going from the 1,461 down to 1,383, how many of those were reduced as a result of the offer of early retirement?
All of them. Well, let me just walk through this. So the 1,461 number was the start of FY25. On January 20th, the number was 1,448. As of the end of last month, it was 1,383, but you have to add into that number the Inspector General's office, which is roughly 40. So, as of the end of last month, we were roughly 1,426. That delta is explained by natural attrition, some taking voluntary early retirement under programs opened up by my predecessor. Some was the fork in the road. I can provide more details for you on this. The fork in the road in particular had 67 employees. We had 26 employees who took advantage of that early retirement window that was opened by my predecessor, and then separately we had 21 people that took normal retirement, and obviously there was some onboarding as well during that process.
Now that would imply that there were more people. 26 plus 21 is greater than the 78 that I was referring to from the prior number to the January 20th number, the 1,461. So have you hired back some people?
There's been some hiring, for instance, in the office of the chairman. We've staffed up in the chairman's office. There's been some hiring. I can get you the hiring numbers as well if that's helpful.
That would be helpful. Appreciate you submitting those. With respect to the employees, I want to read you something. Let me tell you your response. 'We want the bureaucrats to be traumatically affected when they wake up in the morning. We want them not to want to go to work because they are increasingly viewed as the villains. We want to put them in trauma.' Do you perceive any of your employees as the villains?
Well, Congressman, look, I was attracted and drawn to work at the FCC in 2012. It was my hope to join the FCC's talented workforce. I've worked alongside these people. They've been my mentors. They've been carrying out the FCC's mission, not just since I've been chair, but before that. I think it's an honor and privilege to work alongside them. I know that Chairman Ferguson, who testified here a week ago, said he'd put his FTC staff up against any other agency. I think I would take him up on that offer. I think the FCC's career staff is talented. One thing we have done, though, is we have returned to the office, and that's been a big shift and a big transition, and we've tried to work with the staff as we do that. But when I became chair, we still had roughly 98% of the relevant covered employees working under COVID-era telework, which in some cases was just returning to the office a couple days a pay period. So we tried to flip those numbers a little bit.
I have just 11 seconds left to go. Would I conclude that you think that that statement does not reflect a positive personnel policy?
I'm saying that that's not a statement that I have made. I don't know exactly the source of it, but Mr. Vo made it. But like I said, the FCC's workforce, from my own personal experience, is incredibly talented, and they're the reason why we've had a very productive first 100 days at the agency.
Thank you. I'll take that as a no.
Thank you, Mr. Hoyer. The chair now recognizes the gentleman from Arkansas, Mr. Womack, for his question.
I thank the chairman and welcome Mr. Carr again to the subcommittee, and you and I are going to carry on a conversation that we started last year. If you recall, last year I was discussing the fact that my father, who had been in broadcasting for over 70 years, was in the process of winding things down and retiring. He's now 90, sitting at home watching a lot of television and calling me. He retired, but he also took his stations completely off the air. And there are reasons for that I won't go into here, but it just reminds me of just how important local broadcast stations are. And I can probably speak for everybody on this panel. We all have them, and they perform a valuable service that far too often we're losing today. The coverage of local news, weather, sports, those kinds of things. We've had communities hard hit by major disasters where people would normally tune to their local stations to gather vital information and the like.
Now that you're chairman, and I recall what you said last year, that if we care about these broadcast operations, we should care about the regulatory environment. Now that you're chairman, what can you say about the FCC's approach to making sure that our local industry is healthy and prosperous and worthy of investment?
Yeah, thank you, Congressman, for the question. I think the best way to describe my approach to media regulation is to look to empower the type of local broadcasters that you and your father epitomize. I think there's a lot of concern in the country right now, which we can talk about, about legacy national news media, and there's a lot of distrust there. But there's a tremendous amount of trust when it comes to the local broadcasters, and that's what we need to empower. And I'm very open-minded to that at the FCC, and there's ways forward that we can do that. I'm reminded of a story. I was in a small town, Cody, Wyoming. I visited a local radio station. They had, you know, real journalists, real reporters there providing local news, local information. And a few miles down the road, in Powell, Wyoming, there was a broadcast station that didn't have the opportunity or the scale to do that. And so they had a Dell laptop effectively pumping in music from Chicago. We have rules at the FCC that said the Cody, Wyoming operation could not expand and bring localism to Powell, Wyoming, because of these outdated FCC media ownership rules. That is one thing that I'm very open-minded on and would like to take on in my time as chair is reforming the FCC's media ownership rules. I think that's an effort well spent.
Let's talk budget for just a minute. We got the skinny budget. I didn't see anything from the FCC in there. We've already talked about the buyout options and the projections of, you know, whatever percentage of the workforce is going to go away. And let me just say for the record, I agree with the president's approach in trying to rein in the massive spending that happens in a place like this. But when are we going to see a number, and what can you live with if you're free to tell us here this morning?
Well, thank you. I have no news to break on the timing. Again, currently we're operating under a $390 million CR plus additional funding for the auctions program, and we are on very, you know, stable, comfortable financial footing. Again, we've had a reduction in FCC FTEs, but that has not held us back at all. We've had a very, very busy 100 days, and I'm very comfortable with wherever the number lands as between the president and you here in Congress. We'll be able to deliver on the FCC's mission.
And then finally, you mentioned robocalls. I guess everybody up here has been the recipient of a number of constituent calls regarding robocalls. Why is it so difficult for us to be able to deal with this nuisance that continues to plague our country?
Yeah, this is exceptionally frustrating. This is probably the number one issue that I hear about. We have a very significant workstream at the FCC, and as you heard from Chairman Ferguson at the FTC last week, they're also working on it. We're going to continue to deepen that relationship with them. It's a challenging technical issue. Once you solve one issue in terms of how these calls are coming in, it pops up in another way. So we've been doing a bit of whack-a-mole, but we're also putting in place a better technological system across the board. It's called STIR/SHAKEN. It's a call authentication framework. There's some gaps, including because if you're not on a modern network, that authentication system doesn't work. But we've just sought comment on how do we deal with that when calls traverse old networks as well. And so we're both doing a whack-a-mole approach, but also trying to put in a system-level way of addressing it. And we hear loud and clear that this is what people want us focused on.
Yeah. The challenge we have now is that these operators are using local numbers so that when they show up on caller ID, it looks like a local call. And so the predisposition of the constituent is they want to answer that because it's coming from a local number. But boy, they have figured out ways around our regulatory process, and I know it's a work in progress, but I thank you for being here today.
No, thank you. We'll keep at it.
Thank you, Mr. Womack. The chair now recognizes the gentle lady from Washington, Mrs. Perez Gluzman.
Thank you, Chairman. And thank you, Chairman Carr, for being here today. We were speaking earlier. I know you have young kids. Just curious, how many people in this committee room have a child under three years old? Reggie, a child under three. This is not a representative body, but I will tell you that there's a TV channel. We've talked a lot, people talk a lot about Joe Rogan, you know, his shows, like he has 19.8 million followers or subscribers on YouTube. Cocomelon has 193 million. Think about that scale. And these shows, there's very good data that the attention span, the self-regulation of a child after watching and spending time watching these programs is devastated. This is like teachers are saying that children are coming in less and less able to pay attention and to learn. We've had a lot of conversations about what is or isn't disinformation, but at its core, the question is, can you pay attention to something? Can you follow a thread? Can you learn something worth having? And these shows are profoundly detrimental to our national health and the long-term independence of our country. And so I worry about the regulatory environment and the imbalance between the media that we see online and the media that you would see in public broadcasting, and the disadvantage. And how do we get our way out of this? What are we going to do here?
Yeah, thank you, Congresswoman, for the question. As a parent myself of three relatively young kids, 11, 8, and 5, this is an issue that I've been very concerned about as a parent and very focused on the screen time issues and what it does to attention spans. In terms of the FCC's own regulatory authority, there's a little bit less that we can do there, but one issue that we have focused on is we have a program that funds connectivity and tablets in many cases for schools. And there may be steps that the FCC can take there to make sure that there are appropriate procedures being put in place by the recipients of that funding.
And in the way that we rate like movies or appropriateness, what is considered appropriate and marketable? Is there anything we can do there on what is marketable to children?
I think that's a good question. You know, one issue that Congress is actively debating is updates to sort of child online safety measures. And when you look at, you know, apps in particular, how do we put better protections in place? And that's sort of an active debate in Congress. I've seen a number of bills on that that I'd be happy to support and happy to sort of work on the issue with you on. I think it's the question of what is worth having at the end of the day. Children who can learn, right? What they choose to learn and not what is fed to them.
So I wanted to touch also on an issue, rural broadband access. I get my internet from a radio tower at home. A lot of people I know where I live do. A lot of communities are underserved. I happen to like, you know, that we have a good thing going with the local provider. But how do we more effectively deploy these dollars? What is the FCC doing to ensure these processes to build are simplified and accessible to smaller and local providers?
Thank you for the question. There's a couple things we need to do. One is we need to continue to streamline our permitting and licensing process, including at the local level where things can slow down. The federal government has its role to do as well. It's very difficult to build, particularly on federal lands. But permitting reform is something that I want to work on at the FCC. Also, just freeing up more spectrum. As I indicated, our ability to free up spectrum for next-generation 5G and 6G has lapsed at the FCC. But when you can introduce new spectrum, people can get, and this may be what you're getting, is fixed wireless. So rather than having to have a cable or a fiber provider come to your house, you can get it wirelessly directly from a nearby tower. We've got over 10 million households that are now on the internet that way. And when you get fixed wireless introduced into a community that, for instance, just had cable before, we see something in excess of a 30% reduction in price. So getting more spectrum out there is important. The permitting reform is important. But I also think we need to be technology neutral. There's a very strong preference in some cases for fiber builds. I think fiber is a fantastic technology. I've been in the field. I've spliced fiber myself. I think maybe the lion's share of connections should be fiber. But we need to be open-minded to this next generation of low Earth orbit satellites, to fixed wireless, to 5G. I think when we make sure that all of those tools are available, we can bridge the digital divide faster and in a more cost-effective way.
And what is your view on, you know, when we have these public resources, things that are supposed to be owned and in service of the public, how do we ensure in the long run that these systems can be owned and operated locally?
Well, ultimately, part of this debate is there's broad agreement on the importance and value of an internet connection, and to some extent, then the debate breaks two ways. On the one hand, you can say it's so important that we have to regulate it like a utility because we want to have it. The challenge with that is when it comes to something like the internet that's so dynamic, where we need billions and billions of dollars being invested repeatedly on quick cycles, utility-style regulation is the wrong direction for that, in my view. So we need to have this light regulatory framework that incentivizes billions and billions of dollars to go into it.
It's very kind of you, and I want to apologize on the record because in efforts not to mispronounce your name, I screwed up the order. That's my fault. And next we have the gentle lady from Iowa, Miss Hinson, for questions.
Thank you, Mr. Chairman. Thank you, Chairman Carr, for coming to testify before our committee. And I'm really impressed with the work you've already managed to do in the first, you know, 100-plus days, and really excited about what's to come. And I just want to start off by following up on some of my chairman's questions on the Rip and Replace program. Obviously fully funded last December, and I understand that those funds kind of began flowing at the end of April. Obviously this is really, really important for national security when you talk about the risks that the CCP poses. They're already in our networks, and we know that. You talked about Huawei and ZTE and...
These threats facing many of our small telecoms. And you mentioned you're 28%, I think is the number you said, done here, and you expect to be done about a year from now. Can you just give me kind of an assessment in terms of what you're seeing in securing our networks there? Are there any practical barriers with providers that you're encountering when it comes to implementation here?
Yeah, the largest challenge we had for the longest period of time was the funding shortfall. And since Congress was able to close that, we've moved very quickly to allocate that funding, and at this point I feel like we're on track now to meet all those marks. But to your point, more broadly, the threat posed by foreign adversaries and the CCP in particular is multifaceted. They don't just come at our country through one particular technology vector. And that's why we stood up a new council on national security at the FCC. We can see it through providers that we've kicked out of the networks before, like China Mobile and China Telecom. We see the device layer, as you noted, as well, as well as hacking instances. There's been, you know, wide reporting on the Salt Typhoon cyber intrusion. I think the public reporting has linked that back to China, and so we need to be exceptionally vigilant across every single technology vector right now.
Right. So you mentioned those operations by the CCP, and you know, obviously they're in our equipment, which poses a serious espionage and cybersecurity threat to our networks. So what are you doing to strengthen the communications infrastructure outside of rip and replace? Right. So that's one tactic here, but obviously there needs to be more that we're doing to ensure that our communications are safe and secure in this country.
One of the actions we're taking that we have actually teed up to vote at the commission level tomorrow morning is: there's no piece of electronics that can come into this country without going through the FCC's equipment authorization process. And up to now, that process has been limited to technical reviews: what spectrum does a device operate on, what's its power level. But increasingly, to your point, we're asking for national security checks as part of the devices that are coming in here. We've never actually determined whether individual labs that perform these checks for the US for any device are themselves trustworthy. And so we're adopting a new standard in a vote tomorrow that's going to make sure the labs that do the testing for the devices are not themselves beholden to some sort of foreign adversary. That's another sort of check that we're taking, and there's additional actions that we can continue to take, including adding new entities to our covered list that we're looking at taking.
What are some of the standards you mentioned, that kind of new approach to accreditation, so to speak? What are some of the questions that you're asking of them to certify that they are not beholden to someone else and are safe to be issuing these clarifications for you?
Yeah. Step one is to adopt that standard that they be trustworthy actors, not beholden to a foreign adversary. And the different ways that could play out in application, we've already seen one. So, for instance, when we started this process, we found that Huawei was operating a lab. And so we took action to make sure that Huawei labs are no longer part of the FCC-approved equipment authorization process. So if there's entities like a Huawei lab that we determine has sufficient ties to the PLA or the CCP that are risky connections, then we'll now, for the first time, have the ability to take action.
Is there a master list? I mean, are you compiling with, working with DoD on this? I mean, obviously they have their blacklist of companies and entities that are directly tied to the CCP. Are you reconciling with them to do that?
This is actually a good question because it ties into another item that we're voting on tomorrow morning, which is effectively similar to a House bill called the FACT Act. And what this would do would bring greater transparency. So it would take every single entity that has an FCC authorization or a license or approval that has sufficiently concerning ties back to China, or to a foreign adversary, and it would publicize that list. And so hopefully, if we get that item across the finish line, we will bring more transparency.
We'll publicize that list, tracking the approach that Congress here has taken in FACT Act legislation, and that will shine a spotlight on some of these operations. Yeah. Well, certainly we want to make sure that the congruency is there between agencies. If the blacklist at DoD has a company on it, you certainly should be equally as wary as they are. But I appreciate the work you're doing. Thank you so much, Mr. Chairman. I yield back.
Thank you. Thank you, Mr. Hinson. The chair now recognizes a gentleman from Georgia, Mr. Bishop, for five minutes.
Thank you very much, Mr. Chairman. Welcome, Chairman Carr, on your first appearance as chair. Let me just ask you: if approvals and enforcement actions have been conditioned on private companies' DEI practices, the public deserves to know how much of the agency's time and taxpayer funding is being spent on investigating and challenging these practices, because this means deprioritizing other critical objectives like broadband affordability, tribal broadband, and efficient use of the spectrum. So can you quantify the staff and legal resources, the funds that you've allocated towards investigating and engaging companies on their use of DEI policies? Can you quantify that?
Yeah, thank you, Congressman, for the question. And I can work with the team and see if we have any data available for you. What I can assure you, though, is over these first 100 days, there's been no tradeoffs in terms of pursuing one issue set like this versus rural broadband or other issues.
Would you provide us with that information?
I'll work with the team and see what data we have available.
Okay. Secondly, let me go back. You've been a consistent supporter of the Universal Service Fund throughout your time at FCC, and you know as well as anyone how important the USF is to keep America connected when it comes to rural areas like the ones that I represent. USF is critical to help make the business case for rural broadband investment, to sustain ongoing operations, and to keep the rates for rural Americans more affordable. In your statement with the FCC's report on the future of the Universal Service Fund, you noted the importance of congressional guidance and even additional authority in certain cases with respect to the possible use of USF reform. We now have a Supreme Court case pending that could have significant implications for these programs, and leaders in Congress have been considering possible reforms through individual bills and a broader working group. Consistent with your prior assessment, do you plan to defer making any material changes to the administration of the USF until Congress provides you with direct guidance on reforms to both the contribution mechanism and the distribution programs, and until Congress also gives the FCC additional authority where needed?
Thank you, Congressman, for the question. As you indicated, I've had the chance to travel all across the country, including to Georgia, to Alaska, to everywhere in between. I've seen the great work that America's broadband providers do with the aid of the universal service program. To your point, that program right now has a fundamental challenge to it that's before the Supreme Court. In the main, we are waiting to see how that Supreme Court case plays out. And if there's a potential after that that there may be a need for additional congressional legislation, then we'll come to Congress to address that issue.
Okay. Thank you for that. The USF is increasingly under strain, with the contribution factor nearing 37%, and the cost burden is mostly shouldered by elderly Americans. What steps is the FCC taking to ensure the long-term financial sustainability of the USF-supported programs like E-Rate and Lifeline, especially in light of increased demand and a narrower contribution base? If the FCC is not planning on taking action on this, how should we in Congress reform USF to achieve that imperative?
Yeah, this is a really important question that I think a lot of people don't understand, which is to say we have all these universal service programs that we run out of the FCC. It's roughly $9 billion a year. But the way that $9 billion is funded is by a line item that's added to the monthly traditional telephone bill. And as you indicated, that can skew different directions in terms of the constituents that bear the brunt of that. And that number has now spiked to in excess of 30%.
And it's really stuck in a death spiral. So I do think we need to take some sort of fundamental action to address that spiking level of USF. One option is we're obviously increasingly getting more and more additional technologies that are filtering into the broadband ecosystem, and if we proceed in a technology-neutral way. Now that doesn't mean that we don't have speed and latency thresholds that we set, but a technology-neutral way above and beyond that, that could in the long term help drive some savings at least around the edges.
Okay. Let me quickly, I just have a few seconds. When you used taxpayer dollars to travel to Virginia State University in April of '23 and Jackson State in February of '18, two prominent HBCUs, you gave speeches highlighting the need for workforce policies that would, quote, 'help ensure that all Americans have an opportunity to develop the skills needed to participate in the digital economy,' end of quote. Would you consider that the use of taxpayer dollars to promote DEI efforts? And of course, your usage of the term DEI is intentionally vague so it can be applied selectively based on what is personally or politically expedient.
No, Congressman, I would not define those visits as constituting any form of sort of invidious DEI discrimination.
I didn't say discrimination. I said efforts.
The chair now recognizes Mr. Edwards for his five minutes of questions.
Thank you. Thank you, Mr. Chair. Mr. Carr, thanks for being with us this morning. I went back and looked. There is an inspector general's report that was published in March 2024, and it offers an in-depth analysis of whether the FCC had implemented effective privacy and data protection policies and procedures in accordance with federal laws, regulations, and policies, with a focus on the FCC's implementation of requirements identified in the US Code section on privacy and data protection policies and procedures.
The scope of this privacy and data protection inspection was from fiscal year 2021. The investigation found that the FCC had not implemented technologies to ensure that data privacy protections relating to the use, collection, and disclosure of information were sustained. These privacy data protections should have included activities related to cloud computing, wireless access, public key infrastructure, cryptography, mobile, and voice over IP devices. Personnel from the FCC Office of the Chief Information Officer stated that they had not implemented the use of technologies specific to privacy protection due to higher priorities. Higher priorities. Imagine that. And new agency initiatives that have taken precedence and a lack of expertise in this area. And as a result of those findings, the FCC Inspector General made only two recommendations. One, retain knowledgeable expertise in the FCC IT and privacy staff that would assist in implementing and sustaining the usage of required privacy protections. And then secondly, to implement a baseline of technologies that sustain and do not erode privacy protections relating to the use, collection, and disclosure of information. I know the folks that I represent make it a very high priority that their information be protected, especially in the dangerous world that we live in right now, not only domestically but internationally. And so I'm just curious, would you even be aware of this study, and what actions has or will the FCC take to deliver on these recommendations to improve data privacy as outlined in the IG's report?
Yeah, thank you, Congressman, for the question. Two main points on that. One is a threshold matter. Doing a top-to-bottom review of the FCC's approach to IT has been one of the very first things that we've been doing at the agency. Part of it goes to the contract review, but more generally, we're looking to revamp the agency's approach there. Second, one of the things that we've done right off the bat is to take up some backlog recommendations, including from the inspector general's office, and start to knock out those. I know we've made significant progress on a number of them. I want to go back and make certain that one of the ones we've made progress on is the one that you've flagged. And if not, we're going to put the resources towards doing it expeditiously.
And so I'm really disappointed to see that a previous FCC had said that there were higher priorities. Can you tell me what I can tell my folks back at home in terms of how the FCC is prioritizing their personal data today? Is this a higher priority today than it was back in this inspection?
Yeah, I can assure you that this is a top priority for us, both in terms of the data privacy issues that you raised, but also in terms of the agency's own performance. We need to have the best IT systems. We need to make sure that they are looking to the future and not based on, you know, bespoke, siloed technologies. And this is a very, very important work stream for us at the agency right now.
How many people does the FCC Office of the Chief Information Officer employ?
I'll have to get back to you with the specific number on that.
And would you know if that number has changed as a result of the Trump administration's workforce reduction program?
I don't anticipate there's been any significant change in that particular office, but again, we can get you more of the specifics on it.
And in your written testimony, you mentioned the FCC's mission to eliminate waste and improve efficiency. Many of the savings have come from reviewing and modifying bloated and duplicative IT contracts. What steps did the FCC take to ensure that such changes to IT systems would not result in the compromise of sensitive personal information?
We stood up an entire work group in the FCC that pulled from various technical experts. We've also worked in conjunction with the official DOGE group on some of these efforts. And that's exactly our guide star, is to look at where do we have two contracts that are duplicative, can we consolidate work under one, but there's obviously a baseline level of security and performance that we're not going to compromise on when we're making those types of decisions.
Thank you, Mr. Chair. I'll yield.
Thank you, Mr. Fumaz. The chair now recognizes the gentleman from Maryland, Mr. Ivey, for five minutes of questions.
Thank you, Mr. Chairman. Good morning. Thank you, Chairman Carr. Good morning. Appreciate you being here. I did want to follow up on some of the DEI questions that Congressman Bishop had raised. You were sworn in on, was it January 20th you were sworn in?
Designated. Okay. And did you begin working at the FCC on that date?
I've been there actually, believe it or not, since 2012, straight with no break.
Okay. And then on February 27th, you sent a letter to Verizon, essentially accusing them of invidious discrimination. Do you recall doing that?
Okay. And then you got a letter back from Verizon dated May 15 from their EVP chief legal officer that didn't acknowledge or admit invidious discrimination, but said that it had made some changes to its DEI policies. You recall that?
Okay. And that was May 15th. Then May 16th, you issued a press release with respect to the Verizon Frontier merger. Recall that. All right. That's a yes for the record.
Okay. And then the memorandum order and opinion was released that same day. And that day was when the FCC approved the request with respect to the merger that I guess had been held up in part during this, your determination with respect to the DEI issue. Is that right?
Well, Congressman, with respect to this transaction and all transactions, we run a normal course process at the FCC, and we specifically have rules on our books that deal with EEO, that deal with non-discrimination.
I'll come to that in a second. But the day after you received the letter back from Verizon, the FCC approved the request, right?
All right. And in the order that you issued, well, first of all, in the letter that you sent, you didn't... well, let me ask it this way. Before you sent that letter, essentially alleging invidious discrimination committed by Verizon, had the FCC done any kind of investigation with respect to any complaints of discrimination at Verizon that led you to write that letter?
Well, as a general matter, two things have taken place.
Not a general matter. Did you review any particular allegations against Verizon before you sent this letter?
Again, Congressman, there's two things that we're doing. One is when I started as chair, what we did is we ended the FCC's own promotion...
No, no, no, no. I'm asking if there's a factual basis for the letter that you sent, and if so, was it investigations with respect to complaints against Verizon? Were there any complaints that you reviewed that had been filed with the EEOC alleging discrimination against Verizon? Were there any court cases that you reviewed alleging discrimination against Verizon? Any of those?
One of the things that we've been very clear about, sir...
I only have five minutes. Did you do any of that before you issued this letter?
What I'm saying is we have a standard of non-discrimination. What I've made clear...
I'm asking if you had a factual basis for it. And the reason I'm asking is because when you allege invidious discrimination, and the cases you cited, Supreme Court cases say that you have to have a factual basis to support the claim. And they're very specific about what those factual bases are. For example, suspect classification. Did you have anybody alleging racial discrimination or religious discrimination that you reviewed those matters before you issued this letter?
Those limitations that you're speaking about apply in the context of those types of cases, but that's not the rule that applies at the FCC.
I'm just asking the rule. I'm just asking if you reviewed anything before you sent this letter.
If you look at the letter I got from Verizon, it walks through a number of practices, including practices that I was aware of when I sent that letter.
But none of those actually admit, as you just acknowledged, invidious discrimination, right? In fact, none of them actually deal with any of the suspect classifications like race, for example, that would be the basis for a finding of invidious discrimination. Let me move on real quick. In the order that you issued, in paragraph 33, which is the only one that deals with the DEI issue, it references the letter that you got back from Verizon, but it doesn't state anything about any kind of factual basis that the FCC developed to support the original allegation that you made of invidious discrimination. If you'd had any evidence to that effect, would you have put it in the order?
Well, Congressman, again, I think what you're raising are factual points that are relevant to like a 1983 action.
Will you at least acknowledge that the gentleman answered?
Well, if I get additional time, I'd be happy to. You're asking us if we followed a process and standard that doesn't apply in the context of the FCC. We follow the FCC's processes. The FCC has non-discrimination rules on the books that are not based on...
You can make an allegation of invidious discrimination without having any facts to support the claim?
Yes, under the FCC, that is not true.
The chair recognizes the gentleman from Missouri, Mr. Alford, for his questions. Might be a second round of questions, and you can advance questions at that time.
Thank you. Thank you, Chairman. Chairman Carr, thank you for being here today. I applaud your efforts to hold the media companies that use our public airwaves accountable to the public law, Communications Act of 1934, in particular. The concern that you've raised with CBS's deceptive editing and their interview with Kamala Harris echo what I've seen in my 35 years in the news media, using public airwaves to basically promote an agenda. Companies using public airwaves should be held to the highest standard of journalism and not radical left-wing agendas or play politics. Communications Act of 1934 is very clear on this. Broadcast entities must operate in the public interest, and it's not in the public interest to try to skew an election. I understand the investigation into CBS is ongoing. What can you say about the responsibility, though, in general, of media companies that have a license? What is their responsibility to operate with truth and balance and objectivity?
Yeah, thank you, Congressman, for the question. I think it's important to remember that there's a number of different types of speakers out there. When you have someone that's, you know, exercising free speech rights on the internet, when you have someone on a cable channel, but when it comes to licensed airwaves, to your point, they're differently situated. And the reason why is because when they're authorized to operate on the public's airwaves, that necessarily is a decision to exclude others from being able to speak and use those airwaves. So Congress has decided that they have an obligation to operate in the public interest. And I think over the years, the FCC has walked away from enforcing the public interest obligation. I think one of the key features of public interest that the FCC has articulated over the years is localism. And that gets us back to the conversation of how do we empower local broadcasters to be responsive to the needs of their communities. And there's a lot of controls that the national news media has been imposing on local broadcasters that are concerning to me. So I think that's where we ultimately need to go, is enforce the public interest standard and make sure that local broadcasters are serving the needs of their communities.
How do you do that? Because there's an imbalance in a lot of newsrooms in America. Managers like to recruit people from diverse backgrounds, economically, gender, race. They don't do that when it comes to diversity in thought. And that is part of the problem, where you have a kind of a rarified process where it's really driving an agenda from those in leadership at many of these stations. There's also not a clear delineation in many products, including cable, what is editorial content and what is news content. How do we get... I know there are First Amendment protections at play, that is first and foremost, but also by using the public airwaves, which we own, there's a responsibility there to operate in the public interest with truth and objectivity. How do we get that back on the right track?
Yeah. One of the things I've seen is that, again, you have these national news programmers, principally ABC, NBC, and CBS, over the years at that national level, they've been exercising greater and greater control over the content that those local broadcasters disseminate. And so I think one of the most important things that we can do is re-empower those local broadcasters, make them feel like they have the freedom to respond to the needs of their communities. There's lots of ways the FCC can do that. Media ownership reform may be a part and parcel of it, but I think we need to have those local broadcasters feel more empowered.
Let's talk about the media partnership, the reforms that you feel need to be made in ownership that local media companies have, their availability to expand. Walk us through that. Where are we on that?
You know, the FCC's regulations when it comes to the media space are, you know, decades and decades old. And they may have made sense in a world in which Americans got their news in two ways: once when the newspaper clunked on the front doorstep in the morning, and once at night when you tuned to the rabbit ears. But when you look at the information ecosystem that's out there today, I think it makes sense to take a look at allowing local broadcasters to compete on the same scale and scope that their big tech competitors compete on. And so that's one of the issues that we're looking at. Another issue has to do with these affiliation agreements where the national networks affiliate with local stations. There's been all sorts of controls that are imposed on local operations through those agreements, and that can raise concerns, including, you know, technically what we call as an attribution concern. But these are some of the issues that we need to look at because here's the bottom line: we don't want America's local broadcasters to go the way of newspapers. Newspapers shuttered by the dozen all across the country. We need trusted sources of local news and information. And if we don't get our regulatory structure right, there's a chance that a significant portion of broadcasters could go the way of newspapers.
