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tv   The Communicators  CSPAN  April 8, 2013 8:00am-8:30am EDT

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>> a speech by vice president biden on the administration's efforts to expand export or opportunities for american companies. and then at 9 a.m. eastern, we're life with this -- we're live with the carnegie international nuclear policy conference. >> congress returns from spring recess this week to a full schedule of hearings on the budget and testimony from some of the president's nominees for cabinet and other key positions. the senate's back today at 2 p.m. eastern. on the agenda there, a judicial
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nomination and a couple of non-cabinet level nominations. harry reid announced gun alleges debate is possible by week's end. the house returns tomorrow to consider a handful of suspension wills. on wednesday a bill with small hydropower projects and thursday a bill to limit the actions of the national labor relations board. live coverage of the house starts tuesday at 2 p.m. eastern. >> host: the need for speed is the name of the short book, and it's a new framework for telecommunications policy for the 21st century according to the authors, robert luiten and hal singer. mr. litan, if we could start with you. if you would, assess the current status of broadband in the u.s. >> guest: um, it's doing pretty well, but it could do a lot better. we have a high degree of penetration of what the fcc
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defines as minimally-acceptable broadband which is something called four megabits per second, and a megabits is a million bits per second. and we measure the speed of broadband by the number of bits that can go per second. and the faster you can go, the more stuff you can watch. the less jitter you have on youtube or whatever site you're on. and clearly the faster you go you can watch movies, and the main objective that hal and i argue in the book which, actually, i think is uncontestable because while the book, i think, is controversial to some degree, there's no question about what the ultimate objective of broadband policy in this country should be, and that is to get with faster. we need faster broadband. >> host: what are the benefits of faster besides less jiggle on your tv? >> guest: okay. well, you get new uses. think about streaming video. you probably can't watch streaming video at the four
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megabit level, but you can at the 10 or 20 or 30 megabit level. and we're talking about telemedicine uses, uses in energy, all kinds of business uses which are only possible in terms of analyzing data, the so-called cloud where all this stuff is supposed to reside and data needs to be analyzed. all that stuff requires a lot faster speed, and what we talk about in our book is how to get there. >> host: hal singer, co-author. has u.s. regulatory policy helped to spread and strengthen broadband in the u.s.? >> guest: i think not. what we argue is u.s. policy has likely gotten in the way. not horribly so, but at the margin it's just not helping, so an example we bring up is this net neutrality fight that played itself out, culminated in an order by the fcc in december of 2010 in which the fcc decided
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that it was not going to allow network providers to enter into contracts with web sites for priority delivery. we're familiar with the concept of priority delivery when it comes to things like fedex or getting a package to your house the next day. but here they decided it was just too dangerous in their minds to allow a network provider like comcast or at&t or verizon to enter into such contracts. and what bob and i argue in the book is that there is a way, we think, to achieve a were bettere which is namely to allow the contracting and to police any abuses for discrimination is what the likely concern is on an after-the-fact, case-by-case basis. >> host: well, besides the net neutrality of the data caps, is there another structural policy that stood in the way of advancing broadband? >> guest: i think the next one, it's hard to rank these, but the next one i think is a big
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impediment is wireless technologies are really poised to take over. and we saw it already happen with voice in the last decade, and the same thing is happening now with data. and the problem, the biggest obstacle in the way of wireless is the spectrum in the air, the licenses that are needed for wireless to compete. and the fcc has been very slow at finding new spectrum and then auctioning it to wireless providers. so i would say that that probably would be my number two complaint. >> host: robert litan, when you talk about broadband in your book, "the need for speed," are you talking about wired and wireless? >> guest: yes, we are, and that is critical when you said the word "and." because the fcc, actually, is structured the way things used to be. it's got a wired division, and it's got a wireless division. and, in fact, it issues an annual report that's required by congress on the state of wireless. and the hidden assumption or the
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implicit assumption behind that congressional direction is that the wireless market is somehow separate from the wired market. but, in fact, in the world of broadband, these two have increasingly converged, and the perfect example is think of the tablets that we all or a lot of us now have. you can down load on your tablet through a wireless technology something that is basically indistinguishable from what you would get on a pc. finish and because of this convergence between wired and wireless, the market for broadband is a lot more competitive than people think. we have major fixed providers or broadband like verizon, at&t and comcast and time warner and cable companies, and at the same time we have wireless companies, some of them are the same telcos, but we have others like pcs and also t-mobile, and these guys are all competing against each other. and what's changed in this world is radically increased competition.
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we are not in the old days where we only had just one pipe to the house and only one type of content. broadband has allowed a con very generals of -- convergence of those bits. and that has has changed the entire industry. >> host: you talk about silos. >> guest: and still does. and, in fact, one of the points hal and i stress in the book is we need a new recognition by congress and the fcc that we've got to get rid of these silos. and that's not all. in addition to getting rid of this notion that everything is siloed, once you realize that there's a lot more competition in this space than there used to be 20, 30 years ago, the fcc doesn't have as much to do. and its duties and functions need to be scaled back. >> host: hal -- go ahead. >> guest: i just wanted to weigh in. we are critical of the way the fcc is doing things, but it's not meant to be an attack on what they're doing, right? the instructions, as bob just pointed out, come from congress.
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write me a report on competition in the wireless market. well, this directive came over a decade ago, and they're still doing it. and so i just want withed to be very clear that, you know, if you tell an agency to devote certain resources to writing a report about a market that no longer exists on its own because broadband income basses wireless, wire line, satellite, google has gotten into the game, you get a report that may not be all that useful for policymakers. so we want to make sure that the notion that the fcc is just going to fix itself, it needs to kind of wake up, i think that's fanciful. i think the direction is going to have to come from congress with a recognition of the new landscape. >> host: well, hal singer, one of the policy proposals that you put in the need for speed is curb the fcc's merger authority over wireless transitions. why is that important? >> guest: it's actually a little broader than that. wireless is probably one of the most critical areas over which
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they have merger authority, but they're also overseeing mergers in the cable space, you know, the fcc weighed in on the comcast/nbc merger. the problem that we have here is that there's a budgetary problem. why are two agencies doing duplicative merger reviews. but a second problem that we see is that, um, once all of the antitrust issues are taken care of by either the federal trade commission or the department of justice, the question is what really is the fcc doing in the second duplicative review? and we see, unfortunately, some bad things happening. again, there's no bad actors or or -- actors here, it's just how the system's set up. the fcc is in the position to give things away to competitors who complain the loudest about a particular merger. economists have a fancy word for this, rent seeking. so long as you vest the agency with that kind of power to move
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around millions or billions of dollars to special interests, they're going to get hordes and hordes of lobbyists walking the halls of the agency looking for handouts. we think on net this is not a good thing for society, and i want to be careful here. we're not in favor of more anti-competitive mergers going through, right? any anti--competitive mergers should be ferreted out by the antitrust agencies. and the final point i want to make is the fcc does have some special skills and expertise in assessing these mergers, so we don't think that they shouldn't have a seat at the table in a merger review, they just shouldn't have a supplemental vote. >> host: did you want to add something to thatsome. >> guest: well, other than the fact in a former life i was a prosecutor at the antitrust division of justice department, we worked with a lot of agencies in a very cooperative man per. but hal is right. of course i agree with him, we
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wrote the book together. we don't need two votes when one will do. and the other thing i just want to say is while this idea may have been easily dismissed let's say five or ten years ago, i don't have to tell anyone in this audience that we are in a new world of budget austerity in washington and, of course, in the states and localities. and i think that makes it incumbent on all policymakers to go back to first principles and ask why are we having two agencies do the same thing in any sphere of activity? and let's start with communications. >> host: robert litan, in your career you mentioned the justice department, but you've also worked as an economist for both presidents carter and clinton. if people were to pick up "the need for speed," they might interpret this as a call to deregulate the communications industry. is that fair? >> guest: i think that's fair. but times change, you know?
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it was john maynard keynes, famous economist who many democrats like to cite, who basically said something to the effect that, you know, when the facts change, what do you do, sir? and the facts have changed in communications. and 30 years ago when we had monopoly telephone company and we had a monopoly, let's say, in cable in particular markets or whatever and there were these silos, sure, there was a case then for more regulation. but in a world in which we have now had convergence and a lot more competition, there's less need for regulation. by the way, i'm proud to say that i worked for president carter in the late 1970s when president carter was the leader -- many people have forgotten this -- in deregulating the airline industry and the trucking industry. and the reason he did it is because they were competitive. there was no longer a need for price and entry control. well, guess what? the communications industry has reached that kind of state, and
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so it is no longer, in my view, a democratic or republican thing or hearsy for a democrat to say we ought to deregulate. and democrats have been in the vanguard in the past to deregulate when it's appropriate to do so. >> host: to be fair, we have other ideas and policies that might be offensive to the other side of the aisle as well. something that i care about passionately and i think bob does too is the notion of stopping discrimination. but where we depart with what i affectionately rearrefer to as e net tysons, is how do you do that? if you allow a platform owner to vertically integrate and buy up content the way that some big cable operators are doing, it could create incentives for discriminatory behavior. and in that instance where we part with the nettysons is
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blocking all types of vertical integration, we think that's too radical, too harsh. but we are sympathetic with the problems, and what we advocate instead is a regime in which a complaining party could come forward to the fcc and say, hey, we're not being treated fairly, and we want our day in front of a judge. and so we're very explicit on the types of protections that we would put in place. so i am comfortable with the notion of deregulation, but i don't want you to think we want to just end the fcc's role entirely. >> host: well -- >> guest: i was just going to add one thing when hal talks about this. there is already a process at the fcc for having what are called law judges determine discrimination in context outside of broadband, and what we argue in many our book is they ought to use the same concept in the case of discrimination where broadband is involved. without having to go to a federal court.
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and by the way, clogging up the courts which are already clogged up. this is a useful role for an administrative agency because they can be quicker, more efficient and get to a result with the expertise that's necessary to do so. >> guest: as the market changes and we break apart these silos and recognize that we have myriad technologies that are offering broadband, right? fiber, cable, wireless, satellite. we think that the emphasis should move away from what economists call horizontal issues, the kind of competition that's going on between, say, the telcos and cable companies, and instead focus on vertical issues, that is the kind of fights that go on between, say, an independent programmer and a distributer. we think that's where the action will be. the fcc already has a very nice process in place to adjudicate these sorts of disputes in the video programming space, and we think it is strange that in december of 2010 under the current and departing chairman that they took a different
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approach which was to, basically, prevent any sort of contracting and just pose what economists call a structural separation between the content owners and the network openers. >> host: hal singer, there are two openings on the fcc potentially, very soon two new nominees or two new appointees. who would you like to see on there? >> guest: i was worried i was going to get out there. i don't have any favorites, but i think the theme of the book that i'd want to stress is that so long as you don't change the system, um, you could put in the most magnanimous philosopher-king on earth, and he or she would still be subjected to the same sort of lobbying and rent-seeking activity that the current commissioners are exposed to. so i fear that just getting the right commissioner, um, isn't going to do the trick. now, there are certain attributes that bob and i would like to see in the commissioner, for example. we'd like him to recognize this
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intermodal competition between wireless and wiring because that would cause a complete rethink of how they treat broadband policy. but other than that i think just getting the commissioner right is not going to do the trick. >> host: mr. litan? >> guest: well, same thing, except i want to make sure -- like hal does -- we need somebody in there who realizes the world has changed. and so while hal is right to be pessimistic that the structure of the system is not conducive to having somebody go up to congress and say, hey, narrow my jurisdiction and really get rid of some of my staff, i mean, that's typically not the way things work, nonetheless, there are people that do such things. and so i wouldn't want to -- i wouldn't mind having someone who voluntarily goes to congress and says change our mission. because the world has changed. by the way, there are examples, believe it or not, people forget, of agencies that go out
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of existence or have their jurisdictions narrowed in my lifetime, right? civil aeronautics board, gone. the interstate commerce commission, enormously narrowed, all right? we got rid of a lot of regulation. there's something called the resolution trust corporation which got rid of all that distressed real estate during the savings and loan crisis. we actually can do this. with the right people and the right philosophy, they can go and make the case and say, look, we ought to be doing these kinds of resolutions in this vertical context that hal talks about. that's our expertise. we can provide advice to the justice department, but we don't need all this other stuff. of. >> guest: i think it is a bit far fetch today think some chairman is going to say take away my discretion. that's kind to have currency of power if d.c. to give one example of this, right now when the fcc auction spectrum to wireless carriers, um, they have the discretion to
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put certain restrictions on the licenses in such a way as to make it unpalatable for certain bidders to enter the auction. and the effect of that is to, basically, steer the spectrum to a favored constituency. and what i would like is when that lobbyist comes into the commissioner's office and says, um, i want you to put a restriction so it's only valuable for my business plan, i'd like to commissioner to be able to say, you know what? i just can't do that. i'd love to help you out, but that discretion has been taken away from me. and until congress does that, i think those conversations are always going to go the wrong way. >> host: hal singer is currently the managing director of navigant economics. what is that? >> guest: it's the economics arm of a larger company called navigant consulting, and we specialize in litigation consulting, economic white papers and the like. >> host: what's your background? >> guest: oh, my background. i cut my thies at the securities and exchange commission many years ago.
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i have a ph.d. in economics, and when i'm not doing navigant stuff, i'm typically writing. >> host: robert litan currently director of research at bloomberg government which is -- >> guest: a subsidiary of bloomberg llp, maybe not a competitor of c-span, but we have our own tv station, but that's not all, of course. michael bloomberg started a fabulous career after solomon brothers and built an enormous business around the bloomberg terminal, and now bloomberg is in many, many businesses. one of of which is bloomberg government which was started about two and a half years ago which is an information service for pay that provides economic analysis of the business impact of government decisions. we also have information for clients that want to know a lot about congress and know about executive branch agencies, government contracts and so forth. >> host: robert litan, wherever
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we have members of congress on this program discussing communications issues, they or we often bring up the 1996 telecom act and whether or not it needs to be updated. >> guest: yeah. well, our book is an implicit endorsement of that proposition. we're arguing for, in effect, a new framework for the fcc and a new statute that, in effect, calls for a narrowing of the scope of the fcc and something that is along the lines of the limit that is we've talked about in this program. so if that's what the telecommunications act of 2013 or 2014 would be, we'd be happy with that. of just do you foresee -- >> host: do you foresee a telecommunications act of 2013 or 20141234. >> guest: not yet. in part because of lots of partisan controversy over virtually,. but i think there is growing recognition, and these things take time because you have a '96 act which took many, many years. we broke up a, the and, the in
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1984, and it was 12 years later we got a telecom act because it was in part recognized at that point that the telephone companies were competing or wanted to compete head to head with cable companies, and that act, among other things, allowed that. there are a lot of other things that led to that act, but it took the years. and i think -- 12 years. and i think we're sort of in this period right now where people are realizing that the world has changed, but it takes a while before you actually get legislation that will, in effect, make it possible to go to the next stage. i think eventually we will get to a stage or at least i hope that we're talking about in this book but maybe not in 2013 or 2014. of. >> host: "the need for speed" was published by the brookings institute. hal singer, the universal service fund is a function that is still in place. is it necessary today? >> guest: um, we think it's necessary. the good news is that the set of
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homes that are not served at least by broadband is shrinking yearly to the point now where it's when you overlay the wireless network on top of the wire line network, we're talking about 2-5 million homes that are not yet served by broadband. so it's not to say that there's not a problem anymore. i don't mean to diminish it. but the market has done an impressive job at providing ubiquitous coverage. bob and i suggest some tweaks to the program. we suggest, for example, that reverse auctions are used rather than just writing a check to actually conduct an auction and have different suppliers of all technologies including wireless and satellite to bid for the opportunity to serve those few remaining home that are not yet served. >> guest: but bid in a reverse way. normally you want to pay the highest price. this this would be a reverse in
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which the bidders would say give us the least amount of subsidy, and whoever asks for the least amount of money gets the subsidy. and that's much better, because the market-determined way of handing out money rather than the fcc just handing out and say, hey, you telephone, we'll give you a thousand dollars a line. >> guest: one point on this. universal service is important. when you read the broadband progress report of the fcc, you can tell that they are singularly focused on this problem. and it is an important problem. we want to get to 100% coverage. that would be the ideal. but it shouldn't be the overarching policy driver for the fcc in our humble opinion. there are other important problems like competition, right? so the reports seem to take no interest in looking at how many distinct providers are serving a given swath of homes in the u.s. it's all about, you know, if at least one is there, we're happy. and that's an important consideration. bob and i are trying to refocus the debate and say look at how
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many, for example, wire line providers are serving a given area. and we know that cable, basically, has the entire country covered and the telcos -- verizon and at&t -- have about half. so that leaves another half of the country that are beholden to a single wire line provider of high-speed internet access. now, of course, that's not counting the wireless when you put the wireless on top to have the satellite, there is no such thing as monopoly any longer. but we still think it would be an important policy objective of the fcc to think about how do we incentivize the telcos to push their or network out -- their network out further so that it covers up 100% of the country? but we don't see the fcc thinking in those terms. >> host: but at the same time you say that wireless is competing with wire line. >> guest: yes. and we'd just like more wire line investment. and there has been a lot since 2005 on an annualized basis. we've done work at bloomberg
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government to quantify that roughly a 45% increase has taken place in broadband. but we still have the situation that hal talked about in half the country. we only have one wire line, namely a cable provider, in the wire line business, and we have economic ed that shows when you have at least -- evidence that shows when you have at least two competitors in addition to the wireless, you get cheaper service. and a lot of people watching this show i know complain about their bills whether they're subscribing to a telco or cable, they want a cheaper bill. the best way is to get more competition. so we want competition not only for its own sake, we want it because of the lower prices it delivers and also because it will induce faster technological change. we'll get that speed that we talked about in our title, we'll get faster speeds and more competition than we have. >> guest: one thing that stands in the way, for example, of the telcos pushing out their network, unlike the cable companies, the telcos are beholden to a special tax, and
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this is sometimes called the legacy regulations. two separate networks, a copper network for our grandparents who insist on having a copper land line telephone and a broadband network. and the problem with that is that this is a diversion of their resources. and it's not any kind of trivial diversion, it's a significant diversion. if they were freed from those obligations, they would have billions of dollars to go back and invest and expand in their broadband networks. so one of the policies that bob and i advocate is freeing up those, the telcos from those legacy regulations. we offer a whole bunch of things, but we think that's an important one that would get competition going. >> host: published by the brookings institution, the need for speed: a new framework for telecommunications policy for the 21st century. robert litan and hal singer are the co-authors. gentlemen, thanks for being on "the communicators." >> guest: thanks for having us. >> guest: thank you very much. >> c-span, created by america's cable companies in 1979, brought
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to you as a public it was by your television provider. >> coming up next, vice president biden speaks at the export import bank's annual conference to call for a new agenda to make american products more competitive overseas. after that live coverage of this year's cash any international nuclear policy conference on disarmament and nuclear energy issues. and later, the senate's back to consider nominations for the u.s. circuit court and noncabinet-level positions. live gavel-to-gavel coverage at 2 p.m. eastern. >> later today president obama will be at the university of hartford in connecticut to continue his push for federal gun laws following last december's shootings at sandy hook elementary school in newtown, connecticut. this past week connecticut's governor signed a new law. it requires universal background checks on all gun buyers, and it
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expands the state's ban on assault weapons. the u.s. senate is expected to take up gun legislation as early as week. you can see the president's speech later today at 5:45 p.m. eastern over on c-span. >> they had a very political marriage much like john and abigail, and so she would lobby in the halls of congress. now, she was always very careful to say my husband believes this, and my husband advocates that. but she herself was doing the pitch. and one of her husband's opponents said he hoped that if james were ever elected president, she would take up housekeeping like a normal woman. and she said if james and i are ever elected, i will neither keep house, nor make butter. >> tonight one of the most politically active and influential first ladies,


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