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tv   U.S. Senate  CSPAN  July 2, 2013 12:00pm-5:01pm EDT

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contraception and artificial reproduction technologies a given or even a good. . .
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>> and obscures that particularly with donors. you have a mother and a father. no person is born with two mothers or two fathers. it's a fundamental thing. we are talking about the child's rights to know and be graced by and have to care of their parents. we have to -- the only thing we can be talking about is the institution of marriage. just whoever wants to come together in a joint community and care for people. it is valuable as the adoption is in certain cases, there is nothing that can really replace the bond of the mother and father in a child's life. that is one angle to talk about the importance of marriage because there is a real lack at times in a person's life. and the person will always be better off if they have
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parenting to help the role model and the support system and. >> let's go back to the point that you end of may. but the case in the 1980s. obama said he will not lift a hand. he doesn't have to lift a hand to do what was done with the irs and the iris can decide that a catholic school that refuses to accept the notion of same-sex marriage or contraception is not in accord with public policy and i do not get the point to make the pressure so they do not get the same treatment. >> one more question? >> yes, sir.
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>> [inaudible question] >> may be some of the justices would have known how the voting would work on the proposition eight question. >> to clarify, when you say it comes up differently in the dome in case. the doma case, there are justices on the other side of the ideological divide that voted against sending in the way of the trim a speculation exists there. i hate to give the justices the notion that they may or may not
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have meant, other than to say that that was how they interpreted the law. there are a lot of situations where the belief is repeated. it is quite possible. i do think that my own preference would be to force a decision an opportunity to take a stand. but it sure seems like we are headed there. >> if there are no other comments from our panel, please join me in thanking our panel is today. [applause]
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[applause] [inaudible conversations] >> a quick reminder that coming up at 2:00 o'clock eastern, national leaders holding a press conference to call for he will religious exemptions doing with contraception and the health care law and the u.s. conference of catholic bishops at 2:00 o'clock. about 10 minutes from now, live coverage from the alliance for health reform and examining the future of of mental health care in the 2010 health care law impacts assess to that chair. the tv in prime time continues tonight about scientists beginning with richard dawkins discussing the experiences that led him to be an expert on a
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manner. at 9:15 p.m., the autistic brain. thinking across the spectrum. highlighting struggles with autism and the science behind the disorder. finally at 1020 eastern p.m., growing up with a mathematicians daughter. and a number of ceos and other corporate leaders are featured on c-span if they testified at congressional hearings and spoke another public affairs at events and we will show you some of the remarks on topics from the economy to immigration to tax policy and among them microsoft general counsel brad smith. >> we are increasingly grappling with an economic challenge and we are not able to fill all of
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the jobs that we are creatin this helps to tell the story. at a time when unemployment hovers at just below 10% from the mathematical occupations fall to 3.2% and in many cases and subcategories, it has fallen below 2%. unfortunately, the situation is likely to get worse rather than better. the bureau of labor statistics has estimated that this year the economy is going to create over 120,000 jobs, new jobs that will require a bachelors degree in computer science. it we estimate that all of the colleges and universities in the country put together will produce this year only 51,474 degrees. that is why high immigration is of such great importance.
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it is very important things. first, the bill addresses the green card shortage. it eliminates or goes very far to reduce the backlog and it creates a new green card category for advanced degrees. all things are needed. second, the bill has improvements in the numbers of what is available and it ages the wage for h1b employees. it improves portability so that h1b can switch employers. it addresses a number of other issues, and even though we have some lingering questions about the potential language and unintended consequences, we
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recognize that compromise is needed all the way around. we hope to be able to work with this committee and the staff as you go through the details. there is a third thing that this will does. it is of extraordinary importance. it creates a national stem education fund. we systematically underinvested as a country on the education of our own children. there are over 40,000 high schools in america, but this year the number certified is only 2250. senator klobuchar, we are so grateful for the work that you have led it has created the
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model for a national stem education fund in this follows much of that model. i hope that you might improve it even further. raise the fees n some green cards and invest that money in american people so we can provide her own children with educational opportunity they will need to develop the skills in an increasingly competitive world. as a company, microsoft spends more on research and development than any other company in the world. $9.8 billion each year. yet we spend 85% of that money in one country. this country. the united states. our industry has come to washington because we want to keep jobs in america. we want to fill jobs in america. we want to help create more jobs
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in america. we know that in the short run we will need to bring more people from other countries to america. we hope that in the long run some of them will follow in the footsteps of the alexander graham bell's and the great technologists and scientists and entrepreneurs. but we want to do more than that. we think that the country should seize the moment to invest in our own children as well. if we are going to do all of that or any of that, we need your help. thank you. >> we would like to hear about your experience working for a company or if you own your own business. we will take your calls on facebook and twitter tonight at 8:00 p.m. eastern on c-span. >> making the transition from
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journalism to books is exhilarating and g the transitim journalism to books is exhilarating and overwhelming and frightening but wonderful. >> the freedom allows me to really lose yourself and go off on tangents and have enough time to really explore this. >> on saturday, the human justice system. the author will take your calls and e-mails and tweets sunday on booktv on c-span2. >> a few weeks ago the future of wireless communications spoke. this includes other wireless officials who discussed the need for a more broadband spectrum as consumer demand continues to increase and industry expands. this hearing is two hours.
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[inaudible conversations] [inaudible conversations] >> we want to say thank you to all the witnesses for being here. thank you for your preparations. this is the third in our state of hearings, which we are trying to inform members of what is going on in industry the industry and hear from them about what is going on not just in the industry been but around the world and what the trends are. the communication is the focus of today's hearing. we are going to hear from panelists and equipment manufacturers as well as others to analyze and monitor the industry and advocate on behalf of of our customers.
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as we all know, wireless quotations are used more and more. from traditional cell phones that many of us have talked about over the last several years, which is primarily voice imitations, now we see an increase in wireless devices and even things that we are beginning to take for granted. wireless devices like garage door openers and wifi and other activities. licensed or unlicensed, this is becoming ubiquitous and present in today's world. in fact with a smart phone or tablet, someone in this room could have a video chat with a family member. they could turn it on or off to the home entertainment system and even purchased tickets to tonight's washington space talk. i'm looking forward to hearing from a panelist. there are many new developments
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and new services that the industry is providing. we are cognizant and a very appreciative of that and all of the pride in the investment that we see. the many services are being provided. the we obviously are concerned and we understand about the greatly increased need for the use of spectrum. we are interested to know the panelist spots on the spectrum and how this can affect technological innovation. by the administration and congress doing enough and are they doing it in the right way? how can we ensure the spectrum in the public good is being maximized for consumers and businesses and ultimately the taxpayers and the panelists will provide their insights to these questions and many others. i'm pleased to be joined today by senator wicker, the ranking member on the subcommittee and
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we will also have many members talk today. it's a busy day on the senate floor. >> thank you very much, mr. chairman. i am so glad to join you on our third hearing on the state of the unit. union. today the focus is on the state of wireless communications in the united states. there is perhaps no platform for broadband delivery that is so dynamic and rapidly growing in wireless quotations. consumers are turning to wireless technology in droves, making it their primary way of access to internet. last year global and mobile data grew 70%. when it comes to voice services, american consumers are consistently transitioning from traditional landline service to wireless service as their primary means for voice medications. according to a recent cdc study,
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mississippi and arkansas are leading the way in wireless only households with 42.3% of adults and 44.4% of adults in arkansas making the full conversion. that same study is down in the second half of 2011. one in three households had only wireless phones. the rapid migration to wireless raises a number of critical issues for policymakers, many that will be discussed by the witnesses before our panel today. one of the key issues for congress to consider is how to maximize commercial access in order to meet consumer demand for high-speed service and content rich applications. one of the main avenues to achieve this goal is making the 1755 to 1980 megahertz band
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available for commercial service. identified in the national broadband plan for commercial potential when paired with this, the spectrum can be quickly used to expand existing systems, spur innovation and drive economic growth. i understand the wireless industry has been working together to study this issue. that the industry has recently proposed a roadmap for clearing federal systems out of the band. i urge government entities to continue to work together productively and in a quick and conclusive fashion to relocate the operations and free up spectrum for commercial use and ultimately for consumer use. this committee also needs to monitor closely the progress of the incentive auction of wireless broadcast spectrum.
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this is critical to construction of the national public safety broadband network, established in the spectrum at. it would also raise much-needed revenue to achieve success in their is imperative need for it to be widespread with participation in the auction. this is the best way to maximize revenues and also to mandate going forward as congress has mandated. i would like to think i witnesses were testifying today. we look forward to hearing your views on the issues of spectrum availability and the overall state of wireless services in this country. we thank you again for holding this hearing. we thank you for the members of the committee and their interest. >> thank you.
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what we will do is dispense of opening statements and everyone statement will be made part of the record. but we would like to move quickly and we have a very distinguished panel today. we will recognize each one of them for five minutes of opening. we really will appreciate it if you can talk about the subcommittee and give them plenty of time to ask questions. i will go down the list and then open it up. first we have the president and ceo of the wireless association. then we will have mr. stephen bury, the president and ceo of the competitive carriers association. then we will have doug webster, vice president and service provider of video marketing cisco systems and then we will have thomas nagel, senior business development strategy
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service and next we will have the chief economist with us and last but not least we will have the policy counsel for consumer relations. welcome all of you. thank you for being here. >> is that all? sumac yes. >> okay. ranking member, members of the subcommittee, thank you for the opportunity to testify. i just returned from our annual spring show. i really wish you could have joined us. you would have seen a great testament to the state of the wireless industry. it is a vibrant and dynamic ecosystem that is innovative and competitive at every level. it is also an environment in which leadership is a consistent and defining characteristic and perhaps the best indicator of the vibrancy is the investment
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record. you believe that they commit capital to market that are open and competitive, the $30 billion invested in 2012 alone is a very good sign. this investment serves as a catalyst for what we like to call the virtual cycle of wireless investment and innovation. here's what we mean by that. capital expenditures drive the creation of networks capable of supporting greater speed and functionality. those new networks created a demand for new devices which drive the development of new applications and content. that leads to more consumer usage and as that grows, so does the need for more spectrum. this virtuous cycle is spinning at an incredible rate in the united states and is the reason why we are the world's leading leading wireless market.
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we have more than 50% of the world for the subscribers. 50% of the worlds 4-g subscribers. in spite of the fact that the u.s. is home to just 5% of the world's wireless subscribers. the subscribers use sophisticated phones and tablets that run on chips and operating systems are developed by great american companies like qualcomm and apple and google and microsoft. these networks and devices serve as the foundation for a us-based applications industry is creating jobs in transforming the way that we consume information and engage in commerce. along with changing the way that consumers communicate, advanced networks are enabling vertical markets to emerge. intelligent transportation and mobile health services and applications are only possible by the existence of robust broadband capabilities. each of these opportunities
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helps to transform our economy and positive ways. i hope i have demonstrated that there are a lot of great things emanating from the u.s. wireless medications industry and the benefits of those developments are felt throughout the society. success is how hard to achieve and can be harder to maintain. as a result, there is a vital role for congress and other government entities to enact smart policies and help the private sector to continue its hard work and innovation to advance u.s. leadership in this critical industry. without question, the area where policy leadership is most important is access to spectrum. they must keep up with americans demands with mobile broadband. fortunately, congress recognizes this and includes provisions and laster's spectrum act, authorizing the fcc to conduct auctions. although it are moving to implement the legislation, it is critical that the incentive auction process moves forward expeditiously.
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but even if it yields the full 120 megahertz call for a national broadband plan, numerous productions on network traffic clearly indicate that we are going to need more spectrum to keep up with the demand. to address that difference, congress should look to repurpose this. it has worked well before and it can work well again. one thing that is especially important if the 175-52-1780 megahertz spectrum. while that band is used by dod and other agencies, is used for commercial mobile services. it will produce significant economies of scale and scope and make it possible for consumers to use wireless devices outside of north america.
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there is a broad industry support for the spectrum currently available. current law requires them to be licensed by february 2015. it is our hope that the 1755 and can be made available so that the two bands can be auctioned together. pairing the spams together will ultimately maximize value to the industry and consumers and the government of the two bands together to deliver significant revenue to the treasury than an auction of the 2155 p.m. we look forward to achieve this important objective and we thank you for your time today. >> thank you. >> thank you, mr. chairman. thank you for inviting me to testify today about this competition in the industry. i'm here today on behalf of competitive carriers, representing 100 wireless carriers and vendors and suppliers that support this.
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my membership includes many of the members districts and states that are here today. i would like to talk about competition than what is needed to have a competitive industry for years to come. i might differ a little bit from my colleagues. we are at a crossroads. we have two choices. one path leads down a road of competition. without competitive framework, none of us want artificial competition. the virtual cycle may become imperative. at&t and horizon dominate this industry that is already heavily concentrated more so than the auto or banking industries.
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to wireless carriers control 70% of all revenue in this industry compared to the two top automakers controlling the top largest banks and only 20% of the industry revenues. policymakers should focus on free market to create the next generation of competition. and that was my members and one of the main things of the expo was gross. job creation and expansion is very important throughout the nation. and they competitive framework that continues the regulatory regime. there are three things that the sec can do today to help make this happen. first, they should immediately restore enough ability to lower band. enough ability has been fundamental since its inception and has supported devices and
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roaming relationships and that changed when at&t was allowed to carve out a unique plan in the lower 700. mr. chairman, in 2008, following the auction, you said that this will show the way the structured options helps the two big wireless companies with competition in this country. history has proven your concerns to be accurate. yet history need not repeat itself. below are band unlike humpty dumpty can be put back together again. it is now complete and there is an immediate act to restore interoperability, which will allow $2 billion in the spectrum with access to data roaming and especially in rural america and sparking competition in the industry. second it may be more important,
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the access to the spectrum. they must revise their decade old spectrum screen. .. i don't read it that way. nor does attorney general dick
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thornburg who served under five presidents. he wrote the doj,nfcc said the policy is consistent with policy under republican and democratic administrations and the like. i would like to have his letter in the record, mr. chairman. >> without objection. >> incentive auctions should not be the source of additional spectrum. federal holdings, must be reviewed and where possible reallocated for commercial use. i totally agree with mr. largent, that the 1755, 1780, and 1755, 2180 needs to be paired and sold and we ought to do it today. access to networks is critical. transition to all ip networks move forward the bedrock technology-neutral interconnection principles directed by congress in the '96 act must be reaffirmed. mr. chairman, cca and our members stand ready to help you and the committee restore competition for investment,
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innovation, create jobs and expand mobile broadband in rural america. thank you. >> thank you. mr. webster. >> good afternoon, and thank you for the opportunity to appear before you today. mr. chairman and members of the committee, we are in the midst of an absolute avalanche of mobile data. i'm here representing cisco systems the world's leading networking company has unparalleled insight to network data traffic. every year we ad cisco comb through the data looking for emerging trend and share our forecasts and prediction through our annual vision and networking index or vni. in our latest forecast cisco predicts in 2017 mobile data in the united states will be 600 times greater than it was in 2007. think of that. 687 times the volume of mobile data traffic compared to just six years ago. and the breath shows no sign of abating. five years from now there will
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be nine times as much mobile data traffic in the u.s. than there is today. more e-mail, more apps, and especially more video which by 2017 will represent two third of all the mobile data traffic. the question is, are we prepared for this avalanche? can our current network infrastructure handle the massive growth that is coming? the answer of course is no. imagine the washington beltway at rush hour. that's basically the wireless networks today. sometimes open road but frequently congested especially at peak hours. now imagine adding 50% more traffic to the beltway each year for the next five years. a nine fold increase. you would get griping gridlock with major delays, frustration, anger and a major loss of productivity. mr. chairman, that's precisely what will happen if congress and the fcc don't act to address the looming spectrum crunch. now how did we get to this
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point? just a few years ago mobile data traffic was at relatively low levels, the product of a handful of text messages mostly by our teenagers. fast forward to a few years later however, each of us has multiple mobile devices continuously wirelessly connected to the internet. smartphones, tablets, laptops, video streaming devices, smart tvs, and gaming consoles to name just a few. the devices will continue to proliferate. in just a few years we forecast that there will be eight devices for every american. now knot only do we send e-mail and text messages constantly, but we're watching massive amounts of video from our children's first steps to entire feature-length movies on handheld devices of the last week cisco released our latest vni forecast and the hard data shows there is no stopping the growth. we've become attached to our mobile devices on and integrated them into our daily lives. what should policymakers do to
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insure that we have the infrastructure and investment in play to meet these demands? put simply, more licensed and unlicensed spectrum must be allocated for broadband access. to return to our beltway metaphor, adding spectrum will add more lanes for traffic, widen lanes that today are too narrow, and create more on-ramp, offramps and feeder roads to reduce bottlenecks. congress's authorization of voluntary and incentive spectrum auctions in 2010 was a critical first step on the license side of the equation and on behalf of cisco i want to thank you for taking that meaningful action. now thanks to this committee the fcc is studying potential expansion of wi-fi in the five gigahertz band. the fcc is conducting analysis whether additional sharing for commercial purposes is technically feasible. we hope this analysis can be completed as quickly and thoroughly as possible to help increase broadband speed and adoption. this is increasingly important
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given approximately 50% of all data moves over wi-fi and mobile networks and given that wi-fi helps alleviate pressure on the licensed cellular networks. the bottom line is this. the mobile revolution is here. it's changing the way we communicate, the way we analyze data, the way health care, education, government and public safety services are delivered and it's creating new american jobs and economic growth every day. as if you need more reason to act, studies show doubling mobile data results in a half a percent increase in the nation's gross domestic product, growth which is necessary now more than ever. it is imperative that we address the looming spectrum crunch here in the united states and allow providers to invest private dollars in network infrastructure. this will help insures that the united states remains at the cutting-edge and continues to be a global leader when it comes to mobile technologies. thank you, again, for the opportunity to appear today. i look forward to your
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questions. >> thank you. mr. nagel. >> mr. chairman, members of the subcommittee, thank you for the opportunity to testify today. i have been at comcast for over 10 years and one of my primary responsibilities has been the strategic development of comcast's wireless efforts. during that time unlicensed services such as wi-fi have grown from in-home, extension of a wired broadband to a central component of the wire lessee cosystem and an important means of communication during emergencies. i am pleased to talk about the many benefits of wi-fi as well as the policy steps needed to insure that licensed services continue to serve as a platform for innovation, investment and economic growth. comcast operate as wi-fi network that expanded 11-fold in 18 months. from 5,000 access points last year to over 55,000 access points today. we also partnered with other cable operators to build one of
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the country's largest wi-fi networks with over 150,000 access points and many more to come. because of these efforts our customers can use any wi-fi equipped device to enjoy high speed wireless internet service in many locations throughout the country. our experience with wi-fi confirms the important role services play in the ecosystem. con excuse mors use wireless networks, making unlicensed spectrum a key compliment to licensed wireless technologies. in fact the ceo of cisco recently stated that wi-fi will eventually carry 80 to 90% of the growth of cellular networks. various studies confirm unlicensed services contribute tens of billions of dollars in economic value each and every year. importantly our wi-fi network is also proven to be particularly valuable during times of emergency. in the aftermath of hurricane sandy and winter storm nemo and
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the tragic attack at bottoms ton marathon commercial mobile wireless networks were overloaded or at times down completely. in each instance comcast was able to open its wi-fi network to provide free access to anyone with a wi-fi enabled device so people could receive urgent information and establish communications with loved ones. because of rapid expansion of wi-fi enabled devices networks that we operate are invaluable. they allow consumers to stay connected during emergencies regardless of their wireless carrier. in a sense wi-fi has become the inner operable communication standard for consumers. looking ahead we must insure there is sufficient unlicensed spectrum to meet the growing consumer demand. the spectrum used to deliver wi-fi today has become severely congested. especially in densely populated areas. the result is significantly reduced wi-fi performance. if we fail to provide more spectrum for unlicensed services
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we risk falling behind other nations that are preparing for next generation wi-fi. often called gigabit wi-fi because its potential to offer dramatically improved speeds. to address these challenges, policy-makers should begin by removing unnecessary regulatory barriers that prevent more efficient spectrum sharing in the five gigahertz band. current operating rules undermined the ability to fully utilize the spectrum to deliver robust unlicensed services and next generation wi-fi. congress, the administration, the fcc have taken several concrete steps to insure that unlicensed services continue to thrive. comcast commend congress for passing the land mark act in 2012 which took significant steps addressing challenges facing licensed and unlicensed services. including provisions that paved the way for identifying new speck thumb that unlicensed services can share with existing users. additionally we support the fcc's efforts and recently
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initiated five gigahertz proceeding this proceeding will be critical to the development of next generation wi-fi. the five gigahertz band is the next chance for the fcc to advance the administration spectrum sharing policies. under the proposal set for the by the fcc unlicensed services will share the spectrum without causing harmful interference to existing users maximizing the value of spectrum to all americans. as congress considers the state of the wireless ecosystem it must insure this nation has a balanced spectrum policy that promotes licensed and unlicensed uses spectrum. unlicensed services offer enormous economic and social benefits an comcast is prepared to continue to invest to help americans enjoy those benefits. we're committed to working with congress administration and fcc and other stakeholders to reach solutions that will maximize the value of unlicensed services to this nation. thank you for the opportunity to testify today. i look forward to answering your questions. >> thank you, mr. ford. >> thank you, mr. chairman, for
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the invitation. the wireless industry has a institutionalized complaint box at the fcc so there is always a lively debate about various issues going on. i think by far the most important today is the lack of spectrum, lack of sufficient spectrum to satisfy the demand for data over mobile wireless networks and wi-fi networks as well. i've written a lot about the spectrum issue and i'll summarize my testimony which covers those issues in more detail. there are three major questions related to spectrum. one is, how much does the industry need? and i think it is sufficed to say, a lot. at 500 megahertz, what the fcc recommended that is twice what the mobile wireless industry has today. so that is a very significant increase in spectrum.
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it would be interesting to see if we can get near that number in the next couple of decade. the next question is, is given the lack of fallow spectrum where will you get it? >> i think the answer there after initial low-hanging fruit you will pry it from its present owners hand, in some cases from their cold dead hand i suspect. there are three ways in which we can get some spectrum. we have secondary markets in which the industry engages in transactions that doesn't necessarily increase the amount of spectrum for wireless service but just shifts it around into a more efficient configuration. there are two things the fcc could do to improve the secondary market, at least two, which doesn't function all that well today. one is to increase the flexibility of use of spectrum. the ntia would need to be involved with that as well. that way we could move spectrum around without constraints or
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limits how it can be used within, within the bound of reason and technology. and second, for the fcc to quickly approve transfers that do not have demonstrably anticompetitive effects. in some cases these transfers are used to fund pet projects, right or wrong, in the form of voluntary conditions. the other source of spectrum is government. there has been a huge discussion of that lately. most of the reports i've seen on it are not promising in that regard. i think that congress will eventually have to be involved in that process. one recent report by some advisors to the president said we will not, or did not recommend ever, again, giving government spectrum to the private sector through auctions. that is a pretty bold statement i think. the other is the intentive auction which way. we'll see how that works out. that is very complicated process
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with many, many constraints and objectives but we do have some very smart people working on it. so there is hope. the major question i think who gets it? there will be too little, i think spectrum to satisfy everyone. so there's going to be a fight offer who has it, who keeps it and who gets it. we'll going to have debate over licensed and unlicensed spectrum. i think that debate can be solved relatively easy. unlicensed spectrum or low power devices can use spectrum more flexibly than can the broadband networks, mobile broadband networks that need higher quality spectrum under an exclusive license the other question is how spectrum gets distributed among firms. we have, the cost today for spectrum caps, participation limits, by at&t and verizon, in the upcoming auctions. of course people will use the
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government process to advantage themselves when they can. although i do think people also believe that there's valid reasons to do this. and in this regard i think, what i would say, is, we need to make a decision i think in this country as to whether or not we're going to use auctions to allocate spectrum in which the highest bidder wins the spectrum and that is how we do things, which is how we do things in most markets. or we adopt a comparative hearing approach where the government chooses who gets it in an effort to control what the industry looks like, control market structure, control market shares, that sort of thing. and it is just a question of honesty because as an analyst you kind of want to know what the objective is before you start designing rules and analyzing various policies. if we pretend to hold actions among preselected winners, it makes it difficult to really understand what it is that we're doing. making that decision is above my pay grade but i'm just
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suggesting we have some honesty brought to the process in that regard. the, and in that capacity economic theory is very important. when you introduce spectrum exhaust, which is what everybody is talking about right now in wireless, ratedally changes the way competition works. and in one of the papers that is summarized in my testimony is a paper entitled, wireless competition and spectrum exhaust and what you find when an industry faces the exhaustive spectrum, competition in the way we normally think of it, which is a headcount of firms is no longer a valid way to think about the industry because if there's a constraint on capacity, you can't increase output, the role of competition is to increase output. so competition is essentially made impotent in that regard. if you include the assumption of an economy of scale and the use of spectrum so capacity rises faster than the amount of specs trump you get which is an assumption widely accepted, you could have a case where having
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few firms in the industry has lower prices and better quality services than more firms in the industry. that is a very important addition to the analysis. we can't simply think of the way we normally think of competition which is inaccurate itself but in this case it is profoundly inaccurate. the spectrum caps in the past have largely been intended to increase the number of firms, to expand the base of competitors, to add new people to the game. i don't think that's going to happen. we've had people outside the industry win spectrum. they end up going back to the industry to try to use that spectrum, dish-sprint deal. spectrum coselling to verizon in other cases. additional entry is probably under likely under current conditions. we can't think of having a fifth nationwide provider for example. we need to be more worried probably about going from four to three at this point givent
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financial condition of some of the wireless carriers. so the purpose of a spectrum cap is no longer valid. in the spectrum cap theoretically, to my knowledge, never been contemplated as a way to shift market share among various players. i'm probably going over. the clock is still running. the other question on spectrum caps or bidding restrictions relates to revenue. this is a, this auction is intended to raise a lot of revenue for specific purposes. i think the argument that eliminating those with very high demands for spectrum will increase revenue is not really plausible. the theory really doesn't support it. the theory deciding to support that should exclude all incumbents from the auction, not just the major incumbents. history show that nonincumbents have pretty high demand for spectrum. some made significant profits buying it and reselling it. there is some other issues. i know i'm probably, i don't
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think i started on time and people are looking at me funny. there are some other issues. you know, unlocking, inneroperability, those sorts of things that are covered in my report. if you care to read it or if you have any questions about those issues. thank you. >> thank you. oh is that. >> oh is that over. i look over there and it was zero. i thought it was working. i couldn't be through five minutes yet. >> chairman pryor, ranking member wicker and members of the subcommittee. on behalf of consumers union, policy advocate can say arm of "consumer reports" thank you for the opportunity to testify before you today. consumer reports is the world's largest independent, not-for-profit product testing organization with a mission insure a fair and just marketplace for consumers. we appreciate being included in our conversation about wireless. wireless has become an essential part of consumers lives. a growing portion of the population has chosen to cut the cord to replace the land line phones with wireless voice service while many others
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including those in rural areas, low income areas and communities of color rely on the cell phones as their only means of accessing the internet. in light of the growing importance of wireless we would like to highlight a number about practices that unfairly reach into consumer pocketbooks and limit competition and consumer choice. first, we're concerned about charges on consumer wireless bills. we were pleased that the industry and fcc came to voluntary agreement on bill shock, that carriers provide free alerts to consumers as they approach plan limits for data, voice, texting and before they incur international roaming charges. fcc announced all participating carriers are in compliance with voluntary agreement. at "consumer reports" we plan to continue to monitor carrier performance closely to assure these alerts work for everyone as intended. unfortunately we still have a concerns about cramming or placement of unauthorized charges on consumer wireless bills. cramming costs consumers billions of dollars each year. as we have explained in consumer reports these charges often go
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unnoticed because they could be as small as 99 cents or described in a way that makes them sound like legitimate phone related charges. we were is disappointed fcc land line cramming rules did not extend to wireless. cram something just as serious problem for wireless consumers. arguably more so in light of ease it can occur. wireless context, all cramer need to initiate unauthorized charge is customer's active cell phone number. we appreciate the committee continued active pursuit of this concern including letters that chairman rockefeller recently sent to the four major carriers, identifying cramming as a growing threat for wireless consumers. we are concerned about new legal barriers to unlocking cell phones. last fall the library congress phase out long recognized practice of locking phones for use on other networks. with what was once legally protected is subject to criminal prosecution. we're please ad number of members of this committee introduced or cosponsored bills
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to remedy the issue n our views consumers should use mobile devices they purchased pass they see fit. research indicates that consumers agree. according to a nationwide poll by consumers -- "consumer reports" in 2011, a overwhelming 96% of the respondents felt consumers should keep their existing headsets when changing carriers. 88% believe hand-sets should work on any cellular network that they choose. the fcc began a proceeding last year to promote inneroperability among wireless devices. we support efforts that allow consumers to use devices they purchased on any network of their choice. we remain concerned about the structure of traditional contracts and early termination fees which create artificial barriers to competition and consumer choice. these policies lock consumers into contracts and deter new carriers from entering the market when consumers have a hard time switching competitors, carriers are under less pressure to respond to consumer demands. when the cost of expensive
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devices built into carrier contracts a consumer who may not want or need a mobile device may be forced to pay for the device over a long term contract. indeed "consumer reports" found customers able to shop for the best deal on each of these purchases could significantly benefit from lower prices. just recently in march 2013 we reported online that consumers who switched from long-term services to no contract services can save hundreds of dollars an overtwo year period. fifth, we would like to express our continued support for the universal service fund lifeline program. we believe that the program play as key role in expanding benefits of communication service to those who would otherwise be unable to afford them. we remain concerned about any proposals to wireless from the lifeline program. we support the program expansion to broadband. any plan to increase broadband service should not leave behind communities that need them the most.
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freeing up additional spectrum won't be beneficial to consumers unless future spectrum auctions actually promote competition in this market. the two largest providers of wireless services today are positioned to dominate the auctions unless the government puts in place appropriate rules to also give small carriers the opportunity to bid on this important limited resource. consumers will also benefit in the government agrees to set aside sufficient spectrum for unlicensed use. these goals need to be at the forefront of any future policy decisions in order to promote competition and consumer welfare. thank you for the opportunity to testify i and i look forward to your questions. >> thank you. let me if i may, start with mr. webster. you have spent some time in your opening statement talking about wi-fi and how important wi-fi is. are you saying that the wi-fi space can get too crowded? >> well, the wi-fi space actually, certainly can get too crowded, senator. that is why additional spectrum
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is needed in the unlicensed arena just as much as it is in the licensed arena. there are no question technological innovations that can work to minimize some of that crowding but that's not going to be enough. the growth that we are having on our networks across the board, especially in mobility which is really, very much inherently tied to networking growth in general, means that we're going to need additional spectrum to compliment those innovations. >> you mentioned the five gigahertz spectrum? >> yes. >> as a possible place to go? >> that's correct. >> my understanding though, maybe the auto industry is trying to use that for vehicle to vehicle communication, is that right? >> that's correct. in fact, both the auto industry and the telecommunication industries are key customer bases, sectors of cisco systems and we want to work a win-win situation first andt
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making sure that the use of this spectrum by automobiles is absolutely safe. but if there is underutilization of spectrum is there an opportunity to have that spectrum shared by other purposes? that's something that we very much would like to investigate and work with the with the fcc to see if that is an opportunity so it can provide that win-win situation to both sectors. >> mr. nagel, same questions to you. you mentioned wi-fi in your statement. how do we manage this going forward? looks like more and more people want to utilize wi-fi. seems to be more and more prevalent. you talked about flexibility of these devices, et cetera but you think five gigahertz is the way to go? >> i think it's, when you look what is going on in wi-fi, it is really no different across whether licensed or unlicensed the spectrum utilization is significantly increased. even mr. webster had said
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between six years ago and to today the increase is over six hundred%. the spectrum availability has not really increased -- 600%. so you get more and more usage in the wi-fi space. the spectrum is the really real estate. if you build more houses in the real estate it gets crammed and i think that's where we are. the importance of the five gigahertz is twofold. we're already using wi-fi in the five gigahertz space on the high-end. the second part of the five gigahertz, so we can easily digest additional spectrum in the band. the more we put in the band next to our other existing spectrum we can do wider channels. wider channels mean faster and faster services. part of why the five gigahertz band is important to us it allows us not just to add more customers but provide more speed to those same customers. that's one piece. the other piece, when you think about the five gigahertz there are very, very few greenfield
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environments where you can utilize spectrum and, make as much benefit in the five gigahertz that you have today. there is 555 sort of allocated megahertz of spectrum in the five gigahertz band but only 100 is utilized for unlicensed wi-fi. so that is less than 20%. and so what's great about the five gigahertz, it is available. wifi can work in a sharing environment. we understand there are incumbents. we have no desire to interfere with those incumbents. wi-fi about by its very nature is secondary service so it is built so it can share. you mentioned the vehicle to vehicle. i think what is really important, there is no question mr. webster is white. we can solve the sharing problem with that industry. the challenge is when you look at sort of that band, that the timing of how long it will take them to develop a vehicle to vehicle is measured really decades and not years. i think we need to solve some of these problems now. . .
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it areas are smaller side of the spectrum for smaller carriers. they have to be able to bid and had expectation of winning. the good example would be bluegrass cellular, if they solely economic areas which is a large area they would have to
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bid on markets outside lexington, ky all the way to nashville, tenn. in order to get enough spectrum to continue their operations. that is just not doable. making a small carrier bid five million to six million mhz when they will indeed 1.4 is another way of putting them out of business. i will give you a good example. in the 700 megahertz block we were talking about, the sea block which was large nationwide license, only 12 of those, involves $0.76 per pop, the a block which was paid to the economic areas, $1.16, paired in c m as, 734 of them, $2.68 when small carriers could actually bid and win against the largest carriers in the small ariane that is what we have to do with
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multiple competitors in the 600 mhz spectrum option. >> we have been joined by senator thune and that recognize you for an opening statement. >> thank you and senator wicker for having this hearing and that want to have a quick question to follow up. i think we all know from our daily experience how important this issue is to people across the country whether it is a farmer in a field checking real-time commodity prices, college student video chatting with her family back home or executive on the road dealing with a crisis at headquarters the ability to communicate with others and get online without being tendered by a court is no longer a luxury it is a necessity. wireless communication is an essential part of many americans day-to-day lives and i'm glad the subcommittee is exploring the issue day. the private sector will not be able to keep pace with consumer demandhi iing
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exponentially. we must make it a priority to increase availability of spectrum for commercial use both licensed and unlicensed as quickly as possible. one important bloc to open up is the 1755-1780 megahertz band of federal spectrum because when paired with the aid w s 3 block there's a global system of devices that the nation can immediately tap into. i have been working with the assistant secretary of commerce, the department of defense industry officials to find a common-sense solution that balances the need to wireless consumers and the federal government. i hope we can find a way forward that allows the spectrum to be auctioned and cleared in the near future. the recently proposed industry road map may offer a workable path to achieving that goal, getting more spectrum into the marketplace, the value is the best way for federal policymakers to encourage new services and spur competition. some voices including the department of justice are calling the federal
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communications commission to micromanage allocation spectrum among wireless carriers. i stand with chairman upton, chairman walden and other house colleagues and challenge this prospective in a letter back in april. i believe the commission should not pick winners or losers among individual companies instead let all interested participants freely compete against one another in the open market. the fcc began using spectrum options because we recognize the free market is more effective at allocating spectrum than relying on opinions and predictions of an elected bureaucrats. with the u.s. being global leader in 4 g lc connectivity this has been very successful. the commission should focus on maximizing participation in the upcoming incentive options among broadcasters and potential forward bidders. one way to encourage more directly in rural areas during the auction is to offer licenses in a variety of geographic sizes. the fcc should not be distracted by proposals that could lead to less spectrum being made available unless auction
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proceeds being realized and national priorities like deficit-reduction. american consumers including farmers, students and executives are mentioned the earlier are driving the mobile economy and they, not the government should pick who wins in the marketplace. if i might follow up with a question i will direct this to dr. ford. as i mentioned my ultimate concern is for the welfare of the wireless consumers, a concern a lot of my members, fellow members of the committee share. you state clearly in your opening testimony, quote, if incumbent firms are precluded from obtaining more spectrum but together these successful firms are urging the best serving large customer base is their quality of service will suffer and consumers will suffer. could you elaborate on how manipulating spectrum participation may have unintended consequences? >> sure. in many ways. what i was speaking of there is a spectrum allows firms to provides service more cheaply or
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more effectively, better quality, whatever it may be and if you limit terms that are demonstrably more efficient than others, if you deny them access to that resource and keep them from having a lower marginal cost providing service, the consumer doesn't realize the benefit if giving 10 megahertz of spectrum allows a large firm to reduce its marginal costs by $2 or a small firm by $1 you obviously want to get into a large firm with a larger marginal cost reduction and pass that on to a significantly larger customer base so is always the case in these theoretical models of spectrum allocation that you have to think about efficiency, who is winning the auction, to get the specter that usually the most efficient firms will win the auction because of that reason. >> i thank the panel for the
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great testimony today and allow my colleagues on this side to ask questions. >> thank you. senator klobuchar. >> thank you. i thought this would be a good occasion to announce one of our members has been inducted into the wireless hall of fame this fall, senator warner. i thought we could mention that. [applause] >> i am sure he would appreciate that i brought that up. i had some questions. i have been very involved in unlocking issues in some of the cellphone bill of rights for many years here and despite you sitting at the table at the end is shocking, i was really appreciative of the strides he made on behalf of consumers everywhere and could you talk about how this rocking of the cellphones service, you consider a detriment to competition powered can hurt consumers? i see this as a great
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possibility and i'm on the bill to fix the library of congress' decision but i see that more as the band-aid and senator lee and senator. and fallen by have the consumer choice act the goes a step further to as the sec to take action to ensure consumers can unlock their oftentimes very expensive phones when they switch carriers. could you talk about that from a consumer standpoint? >> we appreciate efforts of members of this committee and we support the commerce committee's approach to fix the solution through the fcc. as i mentioned before these devices, some of these devices are extremely perspective, if consumers pay for this extremely expensive device they should be able to use it in the way they wish and that is when it comes down to, getting consumers more choice. often times i believe the wireless industry touts the diverse number of devices and choices available to the consumer but that doesn't really matter if the consumers and able to make a meaningful choice and is not able to do that.
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>> and mr. largent, i know you are getting favor of this decision by the library of congress even though many of you remember that voluntarily unlocked other phones for consumers. can you explain this stand? >> i was going to say there are 600 devices for sale to consumers today, many of those are sold not by carriers such a person can go and buy an unlocked phone today at best buy and put that on the carrier of choice so that ability we support. even the idea that the consumer can unlock the phone they got from at&t or verizon or whatever we support that as well but the reason there is an ets is those phones are typically sold for $99 and they are $700 phones so there has to be an opportunity
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for the carrier to recoup the cost they have and once the oved, then they will freely allow their consumers to unlock their phone and that is the policy of most of our carriers if not all of our carriers today. >> you want to respond to this a little bit. in otherntries they unlk phones quicker and allow the service to be decoupled from the phone. you want to talk about how this could affect rural consumers if they get stuck with a certain phone and certain carrier and they move and i know this from driving this week in rural minnesota that certain carriers in certain areas and others don't. >> thank you for the question and thank you for all but work you do and i testified in favor of continuing the exemption for unlocking phones at the library of congress and not only was it a good pro consumer issue to
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focus on but many rural carriers really don't have access to the iconic phones. getting smart phones and handsets, state of the are, very difficult for small and rural carriers, it is one way of distinguishing themselves in the marketplace and attracting customers. one of our carriers, t mobile at the time testified over two million iphones on the network and didn't sell, didn't have permission to sell the iphone so we think it brings consumer choice and especially in the consumer in an urban suburban area that move to a rural area they ought to be able not only to take the phone but all the content that is in that or whatever other phone they may have, galaxy or android and bring it to the network and utilize it and we think that was the right policy decision to make. >> thank you. i will end with you if you want to respond to me, appreciate
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your work on the important issue you raise in your testimony on wireless service transparency. senator blumenthal and direct working on a bill that would require wireless carriers to give consumers more complete and accurate information. want to comment on a response to the comments that were made here and also on transparency? >> with regard to transparency we've really feel this is the duty of carriers to provide consumers with the tools they need to make meaningful choices all too often, this did not happen and consumers told us this as well. >> do you want to respond to comments about the extent of the devices? >> as i mentioned, the hon. mr. largent said that. >> inducted into the wireless >> i want to point it out.
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>> okay. i can assure you he has been inducted into a hall of fame, we appreciate that. [applause] >> lost my train of thought. i will reiterate, i feel the wireless industry is helped by the fact that there are 600 different devices out there but what difference does that make consumers don't have a meaningful choice among those devices. >> thank you. next, three senators, senator heller, senator warner, senator fisher -- fischer. >> thank you for discussing this issue that is critically important for our economy and i think the witnesses this spending time with us today for everyone in the hearing to show their concern for this issue
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also. i was appreciative of your testimony as you went through the statistics and growth we will see in these areas especially in data traffic and mobile devices we will see by 2017 which of course underscores the need and the understanding that we need more spectrum and it will all go in the hands of wireless providers. and the ftc is working on a spectrum auction house and we are hopeful we can incentivizing of broadcasters, there spectrums for the government auction for wireless services to the highest bidder. hopefully that revenue will be enough to cover and accomplish several goals, when is enough to purchase the spectrum for broadcasters themselves, and
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hopefully enough to reduce the deficit. those are aggressive goals and obviously maximizing the revenue in an auction like this is key. so to you, congressman largent. from the chairman to their ranking member, most of us are talking about revenue and if the government intervened, as suggested by mr. berry, set up rules that limited some and not market to this auction, would that reduce the amount of revenue available? >> undoubtedly it would reduce the amount of revenue that would go to the treasury. >> is there any reason in your opinion there should be conditions on the spectrum auction? >> i personally feel the fewer conditions set on the option, the more robust and more money you get from the option, we have
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seen in the 700 mhz option that was very complicated and created a lot of hoops for companies to jump through in order to bid on that spectrum. what the outcomes were. we are still wrestling with 700 mhz a block that steve mentioned because of that and so i just think if you have a clean option with a lot of spectrum and let people bid on it you will have the best outcome in terms of money to the treasury, funding, being able to pay for the broadcasters to relocate and compensate them for their spectrum. >> trying to keep an eye on this reverse auction portion of this and if we don't provide the right broadcasters to sell their spectrum we are jeopardized in the hole go for first net and bringing more meaningful spectrum to the market. in your opinion is the fcc getting the rivers option right?
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>> that is yet to be seen. i am optimistic. i talked to people at the fcc and there has been a lot of changes over the last month or two so that is the question yet to be answered but i am optimistic, a am hopeful they understand the concerns we have and i think they're trying to address them. at the end of the day i can't give you an affirmative answer but i am hopeful. >> i will give you a chance to respond. to myself and my constituents is important we enjoy in robust competitive wireless market. i believe that leads to innovation and also thinking it lowers the price point for expense of devices ending your testimony you argue for a robust spectrum screen that limits the amount of spectrum a company
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could alone and for rules that ensure competitive carriers you represent that would be able to bid on this spectrum can you give some idea what those rules would look like? >> thank you very much. i would say the 700 mhz spectrum auction is a somewhat good reference. the fewest dollars amount, fewest amount of dollars brought in by the spectrum were the largest size spectrum, not only the largest carriers can bid on it. it is sort of a play in the block game. i don't think we should do that. the charles river associates study which provided last year showed unrestricted options actually can limit the total bidder participation and actually reduce option revenue. as i said in my comments i want at&t and verizon in the same ecosystem as our carriers because if they do that and our carriers are going to bid because they know they have an
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ecosystem they can participate in the won't get full again like they were in the lower 700 mhz and end up not having an ecosystem they could grow and build and have access to devices. if you don't have every option being conducted has some type of restriction i am really afraid if you have an option without recognition that one or two largest carriers should not walk away with the pie than your option rules will essentially be equivalent to let the big dog eat all it wants and i don't think that will bring in the most revenue to the u.s.. this tournament option should cmes brought in almost twice the amount of revenue as did the large aggregated areas and i think we will see that again and the fcc should have a device to bring 70 to the market place. that is what all these carriers one, certainty and if you can have certainty on knowing what you are expected to block away with you will bid more and i think the american taxpayer will
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benefit. >> thank you to all the witnesses. senator warner. >> thank you. thank you for the revelation you made earlier, senator klobuchar. i was in the wireless industry 31 years ago and i will remind the panel, my colleagues, when it started 31 years ago everybody in the industry, everybody on wall street thought it would take 30 years to build a wireless network. at an end of that 30 years you have 30% market infatuation. i made a lot of money because they won't. one point i would make that i want to play off my colleagues's comments because i want to have the most efficient allocation. lord knows we need the revenue but i have to tell you history has shown a fairly blunt
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instrument from 30 years ago breaking in the wireless block into a band and the band, wireline and non wireline and lots of consolidation but i can assure you particularly in rural communities there were large incumbent carriers that did not build out nearly as quickly as some of the startup for smaller companies and there were a whole host of innovations in terms of marketing plans, building plants and other things that removed the industry along. if it had been left to the bell guys, the bell companies, those original projections might have been correct. files and make the appeal to my colleagues. of get to a question in a moment but i want to take this moment with folks here that there is one common theme, we need a lot more spectrum. and mr. ford made a comment some folks in government, i would not
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agree that never should we allow any government spectrum to the commercial use. one of the things we have tried for some time just to get a spectrum inventory and i would urge any of my colleagues who want to join me in this, we don't even know, the government has a disproportionate amount of spectrum, how is being used and we have gone off and then things like public safety allocation of additional spectrum from without any take back opportunities from spectrums that may not be fully utilized to its best effect and we need a road map of where the spectrum is and that gets into areas with intel and others but host of other public functions if we reinforce public safety or others having some skin in the game in terms of spectrum would be a criterion and i want to go to steve, i know everybody else
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falls but i'm trying to put you where the box is because one potential way to try to maximize revenue but also maximize players without undue restrictions because we have got the big two but we also have the next two and small players. how we not just exclude the top two, something that just defaults to t mobile and sprint? but taking the position on the e as, mr. barry's comment is smaller carriers to targeted in a market that might not provide better customer service, better quality service and quicker delivery of that service that an incumbent that might warehouse the spectrum might be a way to kind of get at this. i will be interested to hear your comments on this. >> i would say first of all
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congratulations on your award. >> not as cool as yours. . but i think what you are talking about is number one we don't get involved in the size of licenses because we have a lot of mr. berry's members that our members, we don't get involved in that debate but i would tell you that the more spectrum that you bring to the market, the fewer debates like we're having today will exist because everybody is going to get a chance to supplement their spectrum holdings and that is what we have always pushed, get as much spectrum as possible to the market as soon as you can and then allow these debates we have between steve and myself or our carriers, those go away. >> they should be no distinction
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between that spectrum below or above. >> i would draw the line at three gigahertz and below. that is the specter we are particularly targeting for auctions for wireless carriers. we support the other folks that want to have wi-fi and other services, we support that but in particular the spectrum below three gigahertz is what we're looking at for wireless. >> my time has run out. i can only make one other comment to my colleagues. i know this debate about unlocking phone is important but if you don't have interoperable liddy it doesn't matter if you unlock because if that phone can't be used across systems, one of the things that i hope we can get more consensus on is not lose track of the fact that we would not have a wireless system in america but for the requirement the fcc made 35 years ago and interoperable the.
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mr. chairman. >> senator fisher. >> thank you, mr. chairman. we seem to be having a focus in our conversation on how the government is going to get the most revenue out of this and i guess i would open this of to mr. webster and dr. ford. i'm interested in your opinion as well but first i would like to inject this into the conversation. do you think wireless service is a right of every citizen of this country? if you do, do you believe smaller companies that service people in areas that have difficulty in receiving service or receiving timely upgrades, should the government somehow recognize that right exists and how should be addressed? i would ask mr. webster first and then dr. ford.
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>> we believe broadband is a great enablers for society for education, business, productivity of the economy, the medicine, public safety, better quality of life and all that can be done that can help foster even greater broadband penetration, higher quality broadband and that is something that should very much be pursued. >> if you want to maximize the revenue you need to sell one license. and who pays the most. that is not what we're trying to do. i think senator warner mentioned maximize revenues and the people that get it. it is a playoff between the two. as far as real markets i think it is interesting to think about that problem. i don't know if i have a specific answer but i have been thinking about that, the
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interoperable letitia roaming issue. take roaming for example, the argument for roaming is we have to force larger carriers that are everywhere, nationwide networks to permit smaller companies that don't have a nationwide networks to use their networks because if they don't there's no demand for the service which is essentially saying there's no demand for local wireless service. it is a national market. so to some extent, if we keep forcing, imposing these rules, we are creating entities that don't fit into what the market may really be so that is an interesting problem. it is sort of that way within interoperable diaz well if having a certain market share or operating in certain places is what drives the equipment market, if you are not in that space or you are not big enough that i use the right type of firm to serve this market? can you serve the market each
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issue we? as someone who has worked for an unbundled the elements i am a little bit worried about business plans that hinge on government promises and rules rather than the underlying fundamental economics of the business and i think we're getting into that area a little bit but i can understand why people would say they are not going to get served or something like that but that is a secondary market problem if the larger carriers don't want to serve the markets, why wouldn't they allow someone else to use their spectrum and we need to study carefully what it is about the secondary market that is keeping firms out of it to address many of these problems. >> mr berry, the using some of those ideas are going to help with access into rural areas or do you have other suggestions on how we can improve access?
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>> i don't agree with much of anything of what mr. ford just said. as a rural american you want access to wireless. whether you consider it has a light or not, competitors out there would like it and what we have seen is smaller carriers are willing to build out the most difficult to reach and most costly bill out and service those few customers because that is their business small. the larger carriers, it is barely decimal on their profit sheets and it would be the last place they would build out unless they were billed out requirements in germany they actually did a reverse build out. you had to know about the rural areas first, in germany there are not lot of rural areas compared to the united states, but there are countries in the world that address that. canada has addressed it in the latest 700 mhz, they billed out to rural areas first before you
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get to metropolitan areas. i don't know if that is what we would do but there are ways with government suggestions that you can ensure that every consumer has access to broadband and we did a study year and a half ago that showed in rural america alone out of the 14 states, 19 states that had less than 90% penetration if you were to build out mobile high-speed broadband you would actually increase the median income of every family in that state by as much as 5% and that is the type of growth in world america we would like to see and the type of job promotion. over 110,000 jobs created just in rural america with mobile broadband buildup. those of the types of economies of scale that may not show up in a sly economic study about what we should or shouldn't do. >> can i add one thing that? >> my time is up. >> i was just going to say today, l t e is the 4 g
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technology that wireless is providing and today 90% of people in this country are covered by that network today so we are talking another 10% and this is technology that has just been around less than 18 months so we are rapidly covering the country, the 10% we are talking about now that i think will be covered in the near-term. >> thank you, mr. chair. >> next week to senators are senator johnson and senator nelson. senator johnson. >> thank you, mr. chairman. i love it when people agree on things and it looks like we're all agree we need more spectrum. so going down, anybody wants to chime in, what is the greatest roadblock? what is the number one stumbling block to creating more spectrum? >> i answer two things. one is the respect that the auction that is immediately scheduled to occur in 2014, we have to keep on schedule and that will be a challenge with
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the vacancies at the fcc today. secondly, the additional spectrum that we need to beyond broadcaster spectrum, even with the going back to the broadcast spectrum there's no way to assure how much spectrum will be available because they may not buy into. our companies are working with the broadcasters trying to eraser as many difficulties as we can to free up 120 mhz of spectrum if we can. i don't know if that will be possible. put that one on hold and watch and see. in addition to that, if we get to the 500 megahertz of spectrum called for in the national plan then we have a lot of work left to do and the government is not always willing to part with the spectrum that they have. of all usable spectrum that there is the government owns 70%
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of its own 30%, or somebody else has other than the government, 70% they have so we have to find a mechanism to coerce the government to give up some of their spectrum and that is hard to do because they are sitting on spectrum they were given and there is no reason they have to give it up because they don't get the auction proceeds now. we think they should but they don't get the option proceeds so why voluntarily give up spectrum you have? that will be an issue going forward. >> short answer is government. the government has a lot of specter and we need to free it up. >> government is not that easy to coerce. >> i agree with steve there are two areas to look at. go where the vast majority is, and exceeding amounts of spectrum, they do need to be
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much more efficient and we need to find a way to move about where they are compensated and when you think about it, get new devices, getting new technology. lc e networks are five times more efficient than the 3 jeannette works, maybe i could get five times more efficiency on the spectrum and the other is the broadcasters. 120 mhz would be nice. got to ask yourself, broadcasters all the good they have done, 90% of american people listen to broadcasts over some wireline capability, dish or satellite or cable. 10% to 8% of american people listened to it over the air. what is the economic justification for those two imbalances? $166 billion of new growth in
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the economy if we added 500 megahertz of spectrum, we know where we have to get it. it is a tough decision. >> mr. webster. >> in addition to the comments from the previous week to witnesses there is a hurdle, would be a lack of urgency. this is not necessarily a problem, just coming in the future, starting to get to be immediate issue now and require action and much spectrum as quickly as possible out into the marketplace. the second issue in terms of the voluntary incentive for auction will be the education needs to be driven by the fcc to the broadcasters themselves, specialty in the major metropolitan areas where they have the biggest need for the spectrum. we can't necessarily expect a broadcaster to understand all the nuances of the telecommunications world. it is a big area the sec can contribute to make that option a success. >> mr. nagel.
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>> one thing is the content of incumbency in some of the spectrum brands. if you look at the five did their herds band which is most promising from the standpoint of making large channels to drive faster wi-fi, the idea that i own it and what we need to do is have a new view which is spectrum share. there are people in almost all spectrums. we have to develop this concept, how do we share among ourselves, developed the rules so things like wi-fi which the secondary service work, license and other incumbents. >> mr. ford. >> entitlement to what you have, license which is what everybody said, i have been thinking about the government issue a lot lately and i think the problem is we have a command and control management of spectrum in this country and we need to inject the market not in fiddling with the incentives of the government but inject the market into the management spectrum itself because these problems when you
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start moving money around people get interested in talking to you but now we deal with the sec and the n c i a and maybe congress and get these things done and it is just, and mainly, i don't know if the broadcasters are taking money from the government or the government is taking money from the broadcasters in the spectrum auction but if you get the market involved and management of spectrum, then i think it will move quicker than it is. >> i am over time but i hate to give you the opportunity. >> very quickly. beyond the problem of just freeing the spectrum and get get to market it almost must be built upon quickly. consumers won't be able to benefit from additional spectrum and the city's goals out of time and we probably disagree with dr. ford's analysis that consumers benefit from spectrum going to the largest carriers. economics useful as it may be is an necessarily at the top of
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metrics for consumer welfare. >> just to summarize it is going to require urgency from the federal government and i appreciate your holding this hearing because we have to create a sense of urgency, that type of leadership. thank you. >> senator nelson. >> what happens if we don't release a lot of spectrum? so mr. largent, what i would like to ask is to what degree can you make equipment and systems more each effective if that were the scenario to play out? >> i would rely on the experts on that so i look to a company like qualcomm who builds the efficiency into wireless networks and their ceo said at our show not this year but last year that we are fast approaching the time when we have gotten all of the efficiency out of the market that is available, they don't
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have any new tricks up their sleeve to develop more efficient systems to take advantage of the spectrum we have today. we are going to have to have more spectrum is the bottom line. and one of the results if we don't get more spectrum, i can tell you what you will see happen, my guess, i have never been told this but my guess is you will see higher prices because that is how a carrier or manufacturer deals with inefficiency in the marketplace and a lack of new materials or new spectrum is by raising prices so that is the only way you can monitor or control the usage that is on your system that you have today and that is not the world that we want to see. >> the way congress is operating is not the world by want to see either. and yet we find that it often
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doesn't work. anybody else want to comment on that? >> higher prices and lower quality is what will happen and you find innovative new business plans, comcast with its wi-fi network, people use that model but it won't be what people want. will be an imitation of what people want. >> mr. webster. >> to use my bill when analogy for opening comments if there are nine times more traffic on the beltway in five years there is going to be a great loss of productivity, greater loss of quality of life that would affect the economy and make for a fairly unpleasant experience for us all. the way to solve this question will get more license spectrum available, more unlicensed spectrum, there is a requirement on technology, innovation to continue to improve the efficiency as we have seen with the difference between 3d and 4 g and also a need for a network management appropriate to actually direct a proper supply
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to demand when it is going to be necessary to optimize the experience for all. combination of all four of those. is not either/or, but both/and scenario. >> cisco can do all of it to make it more efficient. >> i wish i could tell you that were the case. we definitely can advance the technology innovation and we can be ardent advocates to promote national broadband for the betterment of this country and all of us around world. thank you. >> did you have a comment on that, mr. berry? >> i was going to say thank you. we are going to have to get better on the technological side. 90% of our capacity has been through technological innovation, not increasing spectrum. over the last 20 years. we are getting to that point, that there has to be significant
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breakthroughs whether it is software defined antennas and radio frequencies, we are always looking but there are five for ten years away and we are on the head on collision and there are other things we can do especially in some areas to enhance the efficiencies of the spectrum that is currently there. last year senator klobuchar and senator snowe introduced legislation that would put some real flexibility in utilizing a news spectrum in those regional markets and hopefully we will start looking at innovative ways to do that. won't stay -- stave off the draconian impact but it will allow us to survive a few more years. thank you. >> let me ask you a quick question. i see we are being joined by another colleague here but let me ask another question about spectrum. we'll talk about how we need more spectrum but is it fair to
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say not every area of the country needs more spectrum? for a lot of areas the country is really in infrastructure limitation more than spectrum limitation although there are clearly some urban areas and congested metropolitan areas that definitely need more spectrum. is that fair to say? >> in our experience every major operator in the developed world is in need of spectrum one way or another. certain developing nations don't necessarily feel the pinch but in the united states there are going to be requirements both licensed and unlicensed. your point we are seeing definite need in the dense metropolitan areas where there is a high concentration of people and devices looking to take advantage of the benefits of that. that is why any and all spectrums available for use would be helpful. >> let me follow upon that if i could. are there ways that we could
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offload the need for specter with our wireless devices? for example, where a wireless device could pick up over the air broadcast television and radio? does that move the needle in the need for spectrum? >> in terms of the overall demand of of what you are very much accurate in that there's going to be a need to of road from the more tightly constrained relations radius specter more cellular radio off to the unlicensed radio spectrum largely through wi-fi and the key is going to be those two technologies working together as seamlessly as possible to have a smooth mobile experience. in terms of broadcasting of pretty air, that is one option to consider, the vast majority of demand now is on demand where broadcasting to many doesn't necessarily work. >> senator rubio.
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>> my first question if you could answer this is about the secondary markets. considering the growing spectrum demand and the amount of time it takes to get spectrum in secondary market transaction is much more important and necessary in order for carriers to acquire spectrum social fcc approval of these transactions be streamlined particular the for smaller transactions? any thoughts on how we should do that? >> anyone could answer. >> i recently read a paper on that, certain aspects of it. certainly, if you have got a capacity problem, spectrum problem and somebody has something they don't need and somebody does, you make the transfer but always these transfers get bound up in the politics of the deal and people see opportunities to impose voluntary conditions and things of that nature. a lot of smaller deals to go through. it is when you start getting as we have been talking about
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today, at&t and verizon and then you run into problems where people are saying too much spectrum concentration. the sec has been a little slow but they approved deals recently without too many conditions on them so there is some health care but the secondary market needs to be figured out and it is not working as well as it should. >> great addition to the secondary market. secondary market is not actually working for the smaller carriers right now because they are always being outbid by largest carriers because spectrum is at a premium need to and if you look at the last two years over less than 1200 license transfers 800 license transfers went to at&t and verizon. in the last year, 300 licensed transfers went to at&t and verizon under one big in the spectrum. we haven't talked about today is
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the efficiency of the spectrum itself and how much more efficient certain spectrum and propagation values are over higher gigahertz spectrum. the secondary market hasn't worked. i would like to see ways to enhance and senator klobuchar's bill would open up secondary markets for the smaller carriers. something i think we should still be exploring. >> my second question and again anyone can answer but i think i know the answer but i know the industry is really focused on the 25 megahertz from 1755 to 1780 but do we have a cost estimate for clearing federal users from the 25 mhz? ken duke we don't the question is why not and that does not hurt by chances of clearing the >> the industry has done a study on that and they use government figures to come up with this result but the result was it was going to cause $4.6 billion to
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moved federal users. >> i should note that steve is correct but if you pair that with the 2155-2180, the entire value of those two parings and you have to sell 2155-2185, 2015 according to direction of congress the value of those two prayers would be $12 billion so there's an opportunity here for us to act and act now and i agree with steve on that. >> my last question is based on the testimony of mr. webster, the testimony you stated, quote, mobility has potential to generate hundreds of thousands more jobs in the federal government to prompt additional specter made available to fuel future mobile broadband growth so my question is what happens if we don't? what happens if we don't act properly? what are the implications for our economy, the fcc don't work together to make more spectrum
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available? >> the implications are we are going to stall a growing, striving sector of the economy, and minimize productivity gains to all different users and in beating communications in the economy ended will start to produce behind the global landscape. if we can't have strong mobile broadband, there will be a number of sectors that very well may change to resign elsewhere. they will go someplace where they can actually get what they need to operate their global businesses. >> thank you. senator blumenthal. >> thank you, mr. chairman. thank you all for being here today and i have a couple questions i hope i won't cover ground that has been covered already from where i followed. let me sort of pick up on a point that mr. berry was making about the differences in
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spectrum, not all spectrum is created equal so to speak and the department of justice recently wrote to the fcc as you know to ask that the fcc weigh in on exactly this issue on how the commission can structure it spectrum policy to encourage competition and promote consumer benefits and doj noted just like in real estate, some spectrum is the equivalent of beachfront policy and others less desirable. my question is since the beach front property so to speak is already 78% of the spectrum below one gigahertz belongs or is controlled by at&t and verizon let me ask mr. berry and mr. largent what can be done to
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put more sensible limits on spectrum consolidation before reviewing mergers? do you think there ought to be limits in reviewing mergers or conducting auctions on approving of this spectrum license transfers should the fcc account for the differences in the quality of spectrum, particularly in low and high frequency spectrum in making those kinds of judgments. >> senator, the ideal situation for carriers to have both high band and low band spectrum, one is better when dealing with concentrated users and another type of spectrum is better to cover broad areas in rural communities, so ideally carriers want to have spectrum both below one gigahertz and above one gigahertz so that is ideally. but i would say we have carriers
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on both sides of this, it is an issue we don't deal with because there is not a unified position within the industry about the direction we should go. >> senator, i have a chart here you might want to look at if you can get a clerk to provide it. it is actually a coverage comparison on the value of spectrum and courtesy goes to verizon for putting this together. they did this for one of their stockholder meetings but it shows there is a significant difference in the value of love and spectrum and high band spectrum. the bill is four or five times as many hours to cover the same amount of spectrum if you have high band versus low band. the 600 mhz spectrum becoming available is absolutely prime real-estate and that is why i think the fcc should do two
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things. they should finish the spectrum proceeding they currently have, identify what is a spectrum amount that is acceptable in every market and put a trigger, a double trigger that says if you are in the market where you are exceeding or about to exceed the spectrum trigger then you ought to be able to testify whether you need the spectrum or not. those two things put in place for the option would probably end up limiting certain markets that at&t and verizon could accumulate over certain spectrum amount and that would go along way to making sure smaller, intermediate sized regional carriers could actually buy the spectrum is a need to continue to be competitive. >> you think there should be some sensible limits or controls? >> i think it will bring certainty to the market and hopefully keep at&t and verizon
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bidding in the market and hopefully have an ecosystem that everybody can participate in so yes, i do believe there should be a gating mechanisms of the one carrier cannot walk away with a high. >> let me shift to text messaging. maybe you can explain, mr. largent, why there is a discrepancy between the low cost of transmitting text messages for the mobile carrier and text messaging rates which seem to be increasing. >> i can tell you that i personally my rates aren't increasing and it is not because i am head of ctia. my wife's rates are not increasing because we have and all you can eat plan. a majority of americans have a plan similar to that where they pay one fee, i think it is -- >> my understanding is most consumers or many of them are paying more for text messaging over the past couple years, carriers have been offering fewer options in text messaging
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plans at higher rates, most carriers compel consumers to choose between a $20 a month and limited text messaging plan or her message rate of $0.20. so the options are fewer. you may have chosen one where the cost incrementally does not rise but for other consumers text messaging costs are increasing and the point is a cost for the carrier are not increasing. >> what i would say the great thing about this industry is there are always ways to get a while -- get around that as well. there are many applications even down low on your vote where there is no cost to text message. this creative competitive innovative industry, there are ways to work around these different issues that consumers have and frankly that is why this industry to me is so exciting and fun to be a part
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of. >> you should talk to the parents, talk to your wife or parents, don't know if you have children, who have to pay their children's cellphone bill. that her message rate if that is the one they choose can add up pretty quickly and the point here is maybe there should be lower costs options for that her message rate. >> there are lower-cost options. they are available so it is just a matter of the consumer finding those out. not like they are hidden. if they look for them they will find them. >> my time is expired but i appreciate you being here, thank you very much. >> senator klobuchar. >> i have no questions by one of those mothers who didn't want to get the unlimited taxing because i didn't want my daughter to unlimited tax and i know what those higher bills are like and thank you and i haven't changed and i hope you will change. the question i had was spectrum.
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we talked a lot about how there was a growing demand for spectrum. we all know that and with this increase discussion about relocating government spectrum users in order to increase spectrum available for commercial, consumer broadband usage, i know commissioner rosen suggested to government agencies to participate in relocation and as i understand it, she has proposed allowing agencies to reclaim a portion of the revenue that would come from offering their spectrum and this would be used to relieve the significant budget pressures facing all federal agencies. could you explain if you envision such a proposal could work? >> it absolutely could work and i support that and i have relayed those comments to the commissioner about that. i think it is a great idea. >> anyone else wants to comment? >> we did that in the 2001-2002
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when we cleared 1710-1745. i was at c t i and we passed legislation that authorized the dod to get reimbursed for the cost of their new capabilities moving to a different size of the spectrum and i agree with steve, mr. largent that it will be helpful and we ought to try it because we need more spec from out of the federal government. >> anyone else? the chair of the next chair 911 caucus and always looking at ways to improve public safety and interoperable lee and the whole aspect that will be helpful and we have got in our state 27% of minnesota living in rural areas but i am 70% around the vehicle accidents occur in rural areas and we know there are a number of reasons for this disturbing fact but could use the little bit about the public
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safety implications of widespread access to wireless networks especially in terms of decrease in response time and could you discuss either of you at the end how your members are working with the fcc on the implementation of text to 911 services with a lot of people are now using text to communicate with 911. >> we are actively working with the fcc to produce -- printers 8911 panel. ..
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>> they are complying with the text 911 bounce back. it may take them a little bit longer, but we are working to see that we can meet the 911 requirements. it is absolutely right. with the capability come the responsibility and i think that they are stepping up to the plate. but they are absolutely right, it would be nice to have applications in the public answering systems comply also. >> thank you. very good. you raise the issue earlier in your testimony. i know that there is a question as to whether the consumers have
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regular billing rather versus wireless billing. i know the fcc is talking about how underreported it is. how is it that everyone is looking at this, i don't think everyone is looking at this very carefully. >> absolutely. we have been alerting everyone with the process of cramming and telling them to look at their bills every single month. the fact is that when a consumer does not anticipate these charges or initiate a request to have these charges, they are not looking for them. so that is specific to the problem. the numbers are not there. the fact of the matter that these are issues and consumers
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have no idea what is happening. >> okay. it is about the issue at hand and we need interoperability to do the unlocking. my question will be the 4-g service and if we have this ability or not. >> this is going to be along time before carriers can be decisive. >> thank you very much. >> thank you. >> senator ayotte? >> thank you, mr. chairman. i wanted to ask you about constituents. i have so many constituents in so many counties that really don't yet have full access to wireless or broadband capacity as of yet that they need it is
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important that we discuss what is going on, especially access in these areas and how do the competitive marketplaces in rule america -- rural america, how can we increase access and the more rural settings. also having a follow-up to mr. berry and the smallest carriers. i would like to hear your thoughts. i'm not a big fan of these structures, yet that i feel that we have these needs in real areas and i would ask the gentleman first from the competitive side what thoughts
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are on rural the developments and how do we -- and count me as someone who doesn't want to count new hampshire is the name that donor -- how does this going to be areas of the country where justice and pay for private companies to provide services. in those cases, if the government can make it happen, we have to come up with a universal service program and like you have noted, that is a fundamental problem with government. the problem would be living in a place and in some places there is an economic place that comes from this area nationwide and
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there is an area that really is not profitable in and of itself. there is just a lot of areas where the government comes to create a business case, it is a problem in some respects. we were sort of looking at the area where a carrier served this area. and that was fine. when competition developed and margins were stolen by the competition and he could not support that internal subsidy, there was probably some very creative ways to do what universal services may keep them from solving a problem. the government doing some similar things, the powers that they share, these sorts of things and i don't think there is muchuion of that and
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i'm not certain of that. partly because there is a system that is supposed to take care of them and people think that is going to do it and it doesn't. and if i if i wanted to, and get a little bit of money and talk to the guy who is going to arrange to build a wireless network on ser towers in north alabama, he couldn't get any help to do that. a very extensive $60,000 if he couldn't get from broadband and, you know, it is the failure of an institution and maybe the institution will always fail. maybe government will have to live with it. >> thank you, senator. the universal service fund, you should be outraged. you share the same position as most of the wireless carriers
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with the universal service fund that takes less than 20% of the fund dollars. the so-called reform was disastrous to wireless carriers and it totally decimated the revenue. 60% increase and a 60% reduction to wireless carriers. your state was stay was on the ones that are really severely hit. i would like to see a program that is technology neutral and gives everyone an opportunity with what they are doing with the mobility fund and i think it was outrageous. the wireless code continues to support this up to 44% of the total fund and there are a few
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things i would like to talk to all about that we are working on to make them better and get them to look at the next phase. you're talking about one of its $300 million and 300 million of it did not want to talk about the last responsibility. we had wireless carriers more than willing to do that. i am sitting there saying that what is the policy we should pursue. we should recognize that in some areas of united states that this will be the most efficient of high-speed mobile broadband and it is a substitute technology. i would love to talk about to you about some of the things that you are working on. hopefully we can make some positive inroads. thank you. >> i would appreciate that.
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my time is up, but i hav couple more questions about life that i would like to submit for the record. i appreciate a he. i'm glad to hear thu are as outraged as i am for new hampshire. thank you. >> thank you for being here. i just have one follow-up question and it is about years ago. on the home telephone system and cramming on bills. you know, i remember with telephone service it was hard. because your typical telephone bill is not the same every month. so sometimes the customer really doesn't know kind of what their average is. they don't even look at it. i assume that is true with a lot of others as well. you can get the packages and the data and all of that.
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but a lot of that depends on month-to-month. the question is do you think that the wireless company should do something proactive, for example maybe send a text to their customers when they can see and verify it. >> yes. we hope that this is an effective way to let consumers in a freeway. you know, we are glad to see that the landmines were put into effect and these are more clearly separating out the charges. we would love to see this in this context as well. i but i do think that that plays an access rule to ensure that people have the choices and the
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tools necessary to make those choices. >> i want to thank the panel. we have kept it for two full hours. that was not our intention, but we have asked a couple of questions. thank you for your participation today. this will conclude the hearing. i would like to say that we will keep the record open for two weeks so we can obtain all the questions and information we need. thank you for your participation. it really helps the subcommittee we are adjourned. [inaudible conversations]
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>> action today regarding the passing of congressman bill gray. president obama releasing a statement saying that his extraordinary leadership on issues from housing to transportation to supporting efforts that end with the apartheid in south africa and communities and country and world, making it a more just place. also an individual that responded saying that bill was a dear friend and trailblazer is the first african-american leader in this way. he served in congress for six terms and he was the first black chairman of the house budget committee. he passed away at the age of 71.
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>> booktv continues tonight with memoirs by and about scientists beginning with richard dawkins at 8:00 p.m. discussing the experiences that led him to be a scientist and an appetite for wonder. at 8:15 p.m., doctor carl hart on a narrow scientist journey of self-discovery. and the autistic brain in the and the science behind the disorder. finally at 10:20 p.m., the author on her life growing up with her famous mathematician father. her book is the martians daughter. over the past two months we have featured a number of ceos and other corporate leaders on c-span as they testified at congressional hearings and spoke at other public affairs events. we will show you their remarksr.
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>> i think the consumer has really demonstrated incredible resilience in an economic environment. the consumers held up relatively well and we also see that in spending this with the credit performance and the write-offs have substantially calmed down and the industry overall. they are very close to historical lows and we are performing 50% better. so i think that that demonstrates some view that the consumer confidence is pretty decent and it has held up pretty
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well. i would not be surprised about the economic recovery in the broad scale, whs relatively slow. i don't have a great deal of confidence that there is going to be any turnaround in the near term. i think that what we have to hope for is that it will stay stable. >> we like to hear from you about your experiences working for a company or if you have earned your own business. we will take your calls as well as your comments on facebook tonight at eight eastern p.m. on c-span. that's from a discussion about innovation and technology in the 21st century with kurt carlson. president of the global research and development company located in silicon valley, california. this is one hour and 10 minutes.
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[applause] >> good evening and thank you for coming. this series includes understanding ecosystem of silicon valley and there are lots of myths that are true and some not so true. one of them is that one of them comes from this. if you think about it and where we would have been and where would facebook and google have been without sli. the reality was that fundamental innovations often come from
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corporations and even funded from the government quite frequently. we have been trying to exploit that ecosystem. we are going to focus on the competing part of it. and we are also going to mostly look forward today to this. going forward to look backwards, initially, we started and we would like to know what generations are profiled and where were you in that revolution. well, i started with mit in
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computer sciences. it was extremely important and patrick newsom had a great hand in this program. he was very decent at the computer programming. >> okay, when you were around when the hackers were in this area, were you focused on? >> well, i was actually on the project management and called many times. yes, i knew some of the hackers, actually. >> i eventually i ended up doing
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an acknowledgment presentation and i got interested in how people mapped problems that they saw into their expertise. so on this idea of reformulation. >> did you go on into this as a career? you actually have this very diverse background. >> yes, it was a little bit more complicated than that. i went to work for gentlemen for research that i was actually doing natural interaction with databases which were very interested in at the time. then we went on in southern california which is part of usc that was any nonprofit laboratory. it was a research laboratory. i went off to start a company
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was it a ai company? >> sort of. was it a success? >> sort of. [laughter] >> did you come from a generation at mit that you were significantly involved in personal computing. what did you think about it when it showed up on the scene in the mid-70s? >> well, when i first came to mit, i saw personal computing coming. everybody did. there were some very funky machines. some are featured in this building. it was pretty hard to take seriously at the beginning.
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they were not very good mentions for a.i. at that time. but that totally changed. >> okay, a little bit further back than that. you grew up in the country and how did you get to mit? >> welcome i drove in the midwest. i'm actually for minnesota. i got very interested in science. these to read all kinds of science books. but i certainly didn't always want to be a computer scientist. in high school i went to her brief time i wanted to be a journalist, of all things. [laughter] >> you got over that quickly, i see. >> i did. [laughter] >> actually i was assigned to interview rock stars in this included jimi hendrix and jefferson airplane. >> who is your favorite?
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>> jimi hendrix. my opportunity to talk to him was right before the show. surrounded by people trying to give me something to play. he was a professional and totally focused. it was very cool. but i discovered that i was a horrible journalist. >> was that after sputnik? on this wondering if that shifter interest in science at all i don't think it did share my interest in science. but i do remember getting very engaged in the laws of robotics. i am not a big science fiction fan. i remember that vividly because i thought it was so cool to think about the implications.
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a number of them are about people trying to understand why they were behaving the way that they were. they had to figure this out and consider in this way. it really got me thinking about the nature of intelligence, which is really what it is about. >> so did you stumble across the foundation's? >> yes. >> it is funny because almost every big data person i've run into a sort of deeply influenced by the foundation of the same thing. >> yes. >> let's skip forward. >> thank you. [laughter] [laughter] >> okay. in running a department, how would you talk about what goes on at stanford versus what goes on where you are?
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>> some things are similar. for let me just start there for a seco things are similar. for let me just start there for a second. one of the things that is incredibly important as there is a culture and mindset of doing big things and changing the world and you saw some of those things in your earlier presentation. people come certainly in the computer science area to add more to that area and that motivates people. >> are you able to do that is we have this classic hothouse period, just recently about groups of people leaving at once. you have a management problem with people being picked in this way? >> oh, we have competitors. [laughter] >> but we don't have all of this. that is in part because we have
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what i think is a unique mix. because we really do real research. because a lot of it is government funding, that means that we were closely working with university researchers so there it is a community of some of the best researchers in the country in computer science. they also have work in the commercial areas, which is a big attractor. >> is that something that is actually spun up in a culture? >> yes yak i would say that when i came, one of the things about me here was the very beginnings of that. the strategy of having the research be used to create things in the commercial world.
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john markoff came about one year after i came. and not really took off with some of the company's. >> you also spent time in this industry and i didn't get a chance to ask about this. the were you there is an architect? >> yes, i ran something called the architectural lab. i was not the architect, but they were working there. the whole idea there was to -- that this was the systems that were getting very complex to be delivered in the same kind of bundle and that is what that was all about. >> was this after? >> this was after the risk era. >> okay. so debunking a myth here. due to the story of how it came to be named?
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>> yes, i do. so when we do spin off its, first of all, as you were saying before, a lot of these things took serious decades in the making. when we see a disruptive opportunity, the entrepreneur is of norwegian heritage in some cases. it is not uncommon but not a common norwegian woman's name. >> okay. >> okay. >> also because you can get the joe maynard. >> okay, that is still a pretty good deal. >> yes. >> have been around long enough that i have been talked about
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this. but basically he was able to say left and right. but it was sparse. and that is why it is such an intuitive force. you can clearly see this. >> it has been amazing. so there is progress certainly in the speech area where right now in speech recognition, if you are on a smart phone, it works really well for a lot of people. but in addition to that, the reasoning part is making tremendous progress. >> one of the things he said to me is that i see syria as a step
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towards inaction. that's a phrase that i hadn't heard, but i am intrigued. give me a sense. >> welcome almost everything that people think about in terms of interaction is about one person talking to a computer or a computational device. that is extremely important. that is what syria is. we are working on these things. but still thinking in terms of one person talking to a device. but as we go to or go more into the era of the big one is computing coming have to think about when you are in a computational space. there is -- if there is another person in that space, in those circumstances there will be interaction between the people that talk to each other. they will also talk to the
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device in the area. >> that seems to touch a little bit on this idea. but it's not the same thing? >> i think it is looking at the future of the ubiquitous computer. i think that ubiquitous computing, the idea of smart environments, i think that is absolutely true. but there hasn't been enough focus in my opinion what happens when people occupy those spaces. >> is also fascinating because we work very hard to make this independent. it actually doesn't care where you are almost all the time. but people think completely different way. we act very differently in different spaces. i think that the world is coming
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in which the computation has a sense of the space. >> within that framework you have also talked about virtual personal assistant. is that an application within an intelligent space? is that what you work on? >> well, it transcends one person talking to a computational device versus many people talking to a computational device. we are working on both of those. >> another company that hasn't got quite as much attention. does tempo use a different set of technologies? what differentiates it? >> some get a huge amount of attention and they completely estimated the estimate that they would have. they are through it now.
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so the idea is to have a conversational interface and the original spinoff was the idea to have people be able to get things done through conversation. when we think about, that is how we do a lot of things. we get things done through conversation by talking to other people. in this case we are talking to a device. then the virtual concept system takes that further to start having even more in-depth conversations about doing complex tasks with education and that sort of thing. tempo is using a different paradigm. instead of the focus being on conversation, the focus is the great insight and they're expressing an intent when you say something and you put
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something on the calendar, you are expressing intent based on that. >> so if we look at the big threats and research these days, there is this world that seems to have taken over everything. as a pull on some of those extra system threats? >> it does both. the cool stuff is happening with the merger of those two things. there is statistical ideas that go on and logic reasoning that goes on. it will automatically find e-mails that are relevant to that reading and find what is relevant to the media and that kind of thing, look up the location for you and the map. there are lots of ideas.
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>> anything to these interfaces are part of the stuff that are in tempo and came out of this project was funded, do you think it is powerful enough? i keep wondering when the computer will disappear entirely in whether these things have kept what it is. how quickly is that? >> i do think it is relevant to what we were talking about before. where right now, what is going up and they don't think about this as a computer, they are not aware of the computation going on and a computational interfaces. >> so there is this long time
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term about this surreal. macro for it's natural. can you see this being crossed over and interacting with personal systems? >> yes. i think that in fact people are too ready to pass over that. because we bring so much to the conversation. we are so willing to read and to what is going on on the other side. we think of this as being more human and capable. so it is really a long time ago and by modern standards primitive technology that people were bringing in so much to the conversation with the things that they thought they were getting back with intelligence.
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>> how profound are the social and economic ones consequences? >> well, the thing to remember is that people are very smart and adaptive and they will get used to this type of conversation and they will know where to put it. >> then the economic aspect of this and i'm probably derelict for not having reported this, but i have seen the vast outsourcing to india and the philippines and i believe that those jobs have already come home to run the data centers. you can measure that and the companies are not always cooperative. so where does that and? >> i certainly don't know where it ends.
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i have heard about the trend. i think this is a very natural thing for technology causes disruptions. >> can you talk about the academic community. to what extent was he a favorite part of this? he was one of the heads for many years. and during that time there was a lot of conflict. >> yes. it was an idea that was created by an individual who is part of the information technology act. and he embraced this to be more and more of research. he wanted to push the edge and
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focus on this. you mentioned the academic community. he was one of the principal investigators. we had 20 plus university subcontractors working on this project. >> let me take one more step into this world. on either side of the university there was sri and if you sort of think about what they were doing, at that point was working on replacing the human brain and i they thought it would take about a decade. and it was in the first
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proposals of 1975. on the other side they were talking about intelligence. there has also been this tension all the way through. so as a designer, how do you think about this now be viewed in some places? >> as soon as you adopt the notion that one of the tools in regards to intellect is something that is also intelligent, than those two things come together. so that is how we work. we work with other people and the system. >> if you had to bet on a consequence of this wave of
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technology, would it be with minimal disruption? >> well again, i think that it will be a smooth transition. i think people are adapting more and more all the time. >> thank you. please come on out. >> okay. >> you are the ceo. since 1998. you are a physicist by training and deeply involved in the development of the hdtv standard and your expertise is in the physical perception in a sense? >> yes, i ran a computer vision
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group and i was actually talking about transactional services. we were way too early and i had my partners and it was way too good. so is it is an interesting situation. >> i started doing homework on what this says, i started looking. i went to the website and here is this organization and the educational research.
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and you are a nonprofit. so my question is what are you? >> well it is a collection of people first and foremost who really want to make a big and positive contribution to society. it is part of the culture of silicon valley, but it's a group of people who literally want to change the world for the better. we talked all the time about important problems as opposed ones that are just interesting. important and not just interesting. it turns out that that is also a good business model. many folks in this room feel this way to motivate people in this includes having a chance to work on a big and important problem. you can also raise money. you also have the time to do
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that. you can also have the best partners. everything that we do is with great partners. so it was the best people from stanford and mit and other areas and they were able to form this after these bigger problems with a very high probability of being successful. >> so in terms of scale, is that a ballpark? >> yes. >> give me a sense. we will give you very different similarities. >> so when we do research, it makes us a little different.
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we do go after these important problems and we do have the best people in the world. that is part of the culture of the place. that is just the way we think about it. we have a formal innovation process that we teach everybody and everybody comes to the door. it was very modest about it, but it was years of work. they are playing the key role in we actually have a process in place to integrate major companies like that. very few companies take innovation as seriously as we do. we have this process that we teach everybody. in%we have this process that we teach everybody. in the process has put some of our partners, we work with the best in silken valley and you put all those pieces together and you begin to get a pretty
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good view of how things work. it is relatively new. is that true? >> well, it has been deepened over the last 14 years. we have cultivated a group of venture capitalists and we have done for with mayfield and we have made friends and we keep going back to this. they like them and they like us. >> are you 80% government? >> yes, government pays for the research. and we commercialize it by forming a partnership with the country or in the case of many of those companies. we are constantly putting together about a dozen companies that spin out every year.
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>> was a sequester mean to you? how serious is this quaestor in terms of this? >> that is not good for anyone in the room. the kind of confusion in washington is not a very helpful thing. our work seems to be going well. many of our groups have had very little impact and others have had more. but the world is a big place even though we are 600 million on this scale of innovation. >> so we have a sort of sri into the silken valley. >> well, that is a good question. we are here tonight. and we show up all over the
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place. we obviously have many friends here and we work with companies in the valley and different things as you said. people often don't know what we do because we are kind of the partner behind commercial entities. so how many people know that these are two of the biggest innovations that created apple. >> i got the sense that you like the term think tank. is that true? [laughter] >> until you get the research, we do lots of fundamental research. we think hard.
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but our folks are really motivated to do the good work that we do. so two years ago we came out with a new drug for lymphoma. to us that is a huge win for something like that and now we are working on various cancers of different types and there is a portfolio of things and the goal is to do great research. but how do you really help and make an impact on the world. it is the sense of achievement that really motivates people. it is why people are here today. how do we get better at this and get the better impact. >> does that make things
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difficult and do you face cherry picking? i know you have set up a mechanism for people to talk about. >> i would say we didn't have our policy, and people do want to see their work in the marketplace. we didn't help them do that, the only thing the big companies could do would be to leave. and they are not interested in that project for good reason. in our case we have a proactive process. so if we have a great idea on what the others did with cable, the first reaction we have is where can we go with this. and we start incubating. we actually have incubated it for three years before it was spun out. unless you do the homework,
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unless we really stick to the fundamentals, you cannot be successful. an incredible percentage of venture capitalism is part of this. but some make money pretty much all the time. the way that i think about it is the really good ones are the ones who stick with the fundamentals. they understand that when you form a company, it is not the olympics in your backyard. you are competing with the global innovation economy where everyone knows what to do, they care about it instantaneously and there is no hiding. so you have to realize the borrowing is up here and you really want to work through these reasons in advance. we always talk about who is the
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best partner and how do we obtain the best things. because we are on the olympics in a way. you can't hide anymore. so some of us think that way. >> did you bring this innovation level? >> some of it was here. i would say that i'm very passionate about teaching innovation and the fundamentals of innovation. one of the things i hope to bring was a systematic process for that so we have workshops to give to our people and we have thousands of senior executives from everyone around the world. all kinds of companies. most companies don't have an innovation process. it's hard to believe given the importance of it. but there is a simple test that you can all do when you go back to the company. which is to ask a middle level
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professional to describe this innovation process and if they can't do so, there isn't one. it is that simple. and you will discover only a handful of companies that really have a thoughtful way to help people think about doing things that matter. a big and important problems. and all the other things that come underneath that. >> her life handling over the last two decades about the decline of research. are you talking about innovation, is her stuff within the framework that you would call basic research? >> welcome well, the goal was always to do better things. so, yes, absolutely. let's stick to the fundamentals of what we need to do and will need to be constantly doing if we want to solve important
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problems of the world. i always say this is the best time in history world to do what we are doing. i'm appalled when we read about the end of innovation and there are no opportunities. it is just so crazy to me. you can talk for 12 hours and never have gone to the end of it. the same thing has happened in medicine. the matter what our politicians say. you can just go down the line on what is happening with education and blended learning. there has never been in my career eight period like this with more huge opportunities and you have to have the right skills to be able to identify those opportunities and to make them come to life.
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>> so you watch education carefully and even benchmarking. what does that mean for education two. >> we are in the 0.1 era. there is still basically repeating of what goes on in the classroom. i was working over the weekend last weekend and we were striping a fellow individual in kathmandu and we were telling them about this in this little village and he was getting all excited because he said, my goodness, i have been struggling so hard. i'm going to have access to the best teachers in the world. he is a really smart guy. for him, it is like welcoming world is not flat. but it's not just that, it's what's going on.
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>> it is where you augment the teacher. so my little joke is about how many scientist is a world need. >> maybe five, i don't know. that isn't what is going to change america. we are going to change america by giving teachers tools that augment their teaching abilities. that is the nexus of everyone in this room who wouldn't be here. you can be an auto mechanic. you are stuck. disadvantaged kids, less than
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50%, if you go to detroit, is less than 25%. can you imagine i? but i always say is if the enemy did not to us, what would you imagine it would be like? but we are doing it ourselves. so this is the global innovation economy and we really need to get them educated. it is so important that we follow what they are doing in this includes thousands of kids across texas and even farther, with her great partners there. we have constituents in bangladesh and others and we are getting the same result in both cases. if you test today, about 50% further algebra and 10% do not.
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we are basically referring to that. and everyone gets through somehow. the reason it works is if you design it you can teach the way that we wrongness. and if you want to learn, you want to do it, you want to have immediate feedback, you want to do it with a mentor, which is incredibly powerful. if you can learn those vegetables really fast and emotional examples, it has been built together and we teach the
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fundamentals using this technology. and it is enough to have this profound impact. >> is a deployed state level? >> we are working our way through this. we had to prove that work with every demographic it is not a smart kid that you worry about. you know, i think that they find a way. you have to prove that it works with the most disadvantaged kids now we are taking the next step. >> so now we have ruled out this
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assessment. >> they have asserted the state of technology. if it is as great as this, it should be as great on a large scale. >> it depends on what you're trying to do. but i do think that the future of this is automated so you know in real time how that stands. you will have a computer system that is part of this as well. i. ..
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>> i don't have any way to judge this particular one, but i think there is technology that's becoming available that's going to make that a reality. >> so let's move a little bit beyond computing. i wanted to delve a little bit into some of the other areas, and i was just wondering if there are, so siri's gotten so much attention. is there anything in the medicine and energy areas, for example, biotech, that has that potential? or, you know, would you call out sort of work that you've done that is on that level? what about energy first, actually? >> well, we work on a number of energy technologies. they tend to be, they're long and hard term.
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so we have low cost silicone, a bunch of things that we're doing. um, here's one the audience might appreciate in the medicine space. um, if any of you have diabetes or some other ailment where you have to take pills or injections often, you know, the problem is that you take the drug, it goes up to a peak. it probably goes above the level you want, so if it goes up too high, you have a side effect from it. then it falls down, and then now it has no therapeutic value. so there are drugs where you have to take them every two hours. well, nobody does that. so we've actually invented a platform technology that'll attach itself to a drug so instead of the drug doing this every time you take it, it actually goes like this. so instead of having to take the drug every two hours, you can take it once a week or so.
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>> how -- what's the mechanism for delivery? >> i'm not at liberty to say that -- [laughter] >> can you say if it's not injected? >> it's really clever. [laughter] >> and fda approval, are you at that stage of applying -- >> we're still working on it. here's the other advantage of it, there are a lot of drugs you can't take today because the side effects are so bad. so we're, by developing this platform, we think we're going to open up hundreds of drugs that haven't been used before for cancer and diabetes and other kinds of diseases that can make that kind of an impact. so it's a big deal. >> i saw that both of you, actually, were at a workshop earlier this week at, or maybe it was last week, at sri on robotics in the work force. and i, you know, bill was pretty optimistic about the transition?
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>> well, so the big issue is, um, you know, are robots going to create more jobs or eliminate more jobs, right? that's one of the big, hot issues. this has always come up. we've always created more jobs. but you never can prove that when you're in the middle of it. so, you know, 20 years ago i was having this debate about knowledge technologies, and i'd say to my friends, well, you know, we've always done it before. here's one way to think about it. so probably all of you have heard about the long pail, you know, so that the idea is here's the number of customers you have in a given company, and over here you have the number of companies. so there's a, let's say in today's world how many customers does facebook have, a billion? let's say they have a billion, okay? so they're the biggest company in the world in terms of customers. and down over here you've got a
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company that has one customer. they'll make additive chocolate sculptures of your friends for you one at a time. [laughter] i wouldn't say that would meet the normal sri criteria, but nevertheless, you get the idea. so there's a distribution of companies. so imagine what's going to happen though. some company's going to be up around five billion, and the number ofni that make smaller numbers of, smaller number of customers is going to go way out there too. and so there's going to be a line between those. now, i'm sure we could name lots of the ones that are going to be the really big ones, and we can have a lot of fun and name a lot of the small ones. but i dare say i have no idea how many there are in the middle. that's where the jobs are. and i don't think ine what they are.
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so i don't know your answer. all i know is i think there's going to be thousands of opportunities in there that we can't even imagine. >> yeah. that's a, i think that's a real answer. so, you know, over the years from time to time sri's been involved in some really edgy technology research. i mean, even parapsychology over the history. and i, actually, some of the edgiest stuff is most interesting. i don't know if you'd call it edgy or just interesting, you're managing now, for example, the hat creek settee observatory. have you found any aliens recently? >> no. [laughter] >> not in space. [laughter] >> that's interesting. >> we didn't take it over for that a purpose. but somebody in the room may be interested, i don't know. what we use it for is we're working on the next generation of satellites. they're called cube sates.
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they're little satellites, they're about this big, and you can put them up with $100,000 satellite. or you can put a bunch of them onto a bigger satellite, and they kind of squirt out into the air. the problem is when they squirt out in the air, you know, let's say ten of these at once, you can't really sort them out fast enough. and so we're using that particular radar rate to be able to track small satellites as they go around the earth. and these small satellites will be used for all kinds of things, for navigation, communication and lots of things, surveillance, agriculture, that sort of thing. >> do you guys have activities and drones? do you design drones? >> we certainly do computer vision sort of things with drones and other things. but, um, to my knowledge, we aren't building drones are we? no. okay. [laughter] >> and you're also, you're also still managing --
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[inaudible] is that right? >> yes, we run air see bow, we run the world's biggest observatory, and that's part of the basic research we do. we do a lot of atmospheric research. we do, you know, upper atmosphere research for lots of reasons. we invented one of the most revolutionary advances in re daughter science -- radar science to be able to see what's going on in the upper atmosphere for global warming and a whole bunch of reasons. we don't know very much what's going up there. and most radars, you know, you see them, they have these big things that move very slowly. you've seen the kind of dishes. like the dish up on stanford hill. they look like that. this one doesn't look like that. 1's just this flat array about 000 small radars in it in an array, and what you do is you change the phase of those 10,000 individual radars, and so depending on how the wave front comes out, you can
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actually sweep the signal through the upper atmosphere. so it's the first time ever we've actually been able to take a dynamic picture like a video picture of what's happening in the upper atmosphere. it's pretty cool. >> for climate modeling? >> climate modeling, navigation, solar flux, you know, the kind of radiation that's coming down from -- we've got ones up toward the north pole primarily right now. >> okay. >> so -- >> so given both of your expertise, yours in displays, you know, one of the hot topics in silicon valley is google glass right now. and -- [laughter] ,one critiques of it. i know it's way too early to say anything about it, but bear with me here. the people who use it, love it. and people who have to talk to people who are wearing google glass hate it. la -- [laughter] which i think is -- i've only put one on once, i have no deep
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experience here. but just in terms of augmented reality and your notion of display, do you expect these things to be ubiquitous? >> oh, yes, i do. i don't know whether they will look like google glass, okay? and i don't know whether they're going to be intrusive enough to have that problem of am i talking to this person or am i not talking to the person. but i'm very confident that we're going to walk around with lots of computational devices that'll help us see things, hear things and connect. >> yeah. i have a pair on tonight, john. i hope it didn't bother you too much. [laughter] >> that's the next generation. [laughter] they work really well. >> they're terrific. >> but in terms of -- well, let me ask you, i've heard that there are limiting factors to even the best augmented reality in terms of sort of the biological aspect. there's something like 15% of the people who put on augmented reality go, no matter how
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perfect they are, they get sick anyway. >> they do. there's -- people have different reactions. and we still basically can only pay attention to one thing at a time which is why it's kind of annoying when somebody has got a display right there, and they're paying attention to it. and you're hoping they'll pay attention to you. but for a lot of things, you know, if you're sitting there in the audience, perfect. >> yep. well, i want to turn to these. actually, before i do, one of the things i learned in doing my background research, there's a carlson's law. [laughter] and as it's stated, it says, it says: in a world where so many people now have access to education and cheap tools of innovation, innovation that happens from the bottom up tends to be chaotic but smart, innovation that happens from the top down tends to be orderly but dumb. [laughter] when did you -- >> i did not coin this. [laughter] >> this is an interpretation of something? >> no, no.
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this -- john has a colleague named tom friedman, and this is what you get if you hang around with reporters. all of a sudden -- [laughter] some of you will recognize the syndrome. it's a very dangerous thing. i was talking with tom, and he loved this idea. it actually means the top-down part adapts slowly. it doesn't quite sound that way, but that's what was meant by it. and tom in his latest book actually would be a whole big -- wrote up a whole big section about this. so you can all complain to tom. [laughter] >> okay. sounds good. so i want to turn to the questions, and it's fitting the first one comes from vince. what things facilitate innovative thinking? what interferes with innovative thinking? >> well, so i'd start off with important problems, number one. if you don't do that, there's no
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hope. you need to have an open environment to where people are constantly sharing ideas and iterating the value proposition. before you start spending a lot of money on technology, you have to be able to make the story. so you need colleagues who about the to iterate with you continuously. obviously, too much bureaucracy stops it cold. it won't work. so it's pretty, i think, pretty obvious things to this audience. things get in the way of your ability to share ideas. i'll tell you a funny story, one of our folks worked for the israeli intelligence service. and when he got put into it, he had no experience and no resources, and they gave them these existential problems to soft, and if they didn't -- solve and if they didn't, you know, hundreds of thousands of people might die.
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they had no experience and no resources. all they could do is basically brainstorm with each other. but they had one advantage. they could go talk to anybody they wanted to, even a four-star general, if he had a piece of information they needed. this fellow came to stanford, got his mba, went to work for a company. discovered that if you needed the piece of information, he'd go up the management chain, then go over and go down the management chain. he put up with that for a couple months, then he said i can't be here. this is ridiculous. if you can't get the information you need fast enough in today's world, you're not going to survivement -- survive. that's a perfect example of you can't let those kind of things get in the way in a world that moves as fast in the global innovation kind where technologies are exponential, where competition is growing near exponentially. you just, you can't put up with that. >> can i just add one thing? that fosters innovation?
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>> yeah. >> really understanding what people are doing, understanding it in the sense of being an alternative to the way you're doing it. and it is amazing how few people catch on to that. >> that's true. >> so it's sort of the opposite of nih, would you say? >> yeah. well, so it's so easy to think of your solution as the way to address that problem. and, of course, you know two or three other colleagues who are doing something like that, only not quite as good. but you don't pay any attention to people who are doing things that also solve that problem in a different way. >> by the way, nih is another one. nih is a you ubiquitous problemr most companies, and it's a killer, right? arrogance is a killer. arrogance kills -- absolute arrogance kills absolutely. [laughter] really, the world's too competitive. you can't afford to be arrogant anymore. if you're not humble, you know, bill didn't tell the story about siri and what he did. you know, not the kind of guy he is, right?
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but it was quite an achievement, you know? [laughter] >> so this is a -- [inaudible] but it's a good question, i think from john. are we gradually when keeping scientists and engineers to maintain our innovation, and if not, what can be done to improve the situation? is there a technology answer at least in part? >> you know, there's only one scarce resource in the world today, and that is really smart, passionate, motivated people. that is it. there aren't enough of those people. the u.s. economy rides on the back of a tiny percentage of people. a lot of them in this room who go out and do miraculous things that create jobs for other people. the fact that we limit those really smart people from coming into the united states is a really beknighted, ridiculous thing to do. i can't imagine. so the answer is, no, we do not have enough of those. [applause]
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i don't have a strong view on that, by the way. [laughter] >> this is a question for curt. how do you see your physics background help with what or doing? any advise for physics students in college? if you had a chance to choose again, would you choose physics again? >> well, everybody should study physics, right? [laughter] >> go into computer science. >> um, i actually think it's very helpful for me in two ways, one of which because it's kind of a broad fundamental background, and because sri does so many different things. it really helps. but the other thing they drive home in physics is to come up with simple, fundamental resolutions. you know, as simple as possible but no simpler. so it does give you a perspective on the world of trying to always figure out how do we come to the essence of this. by the way, this is one of the things we teach everybody at sri. it's one of the innovation
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fundamentals, what's the key insight into that problem that would make it really work? i gave you one about education. those six things that i mentioned. that's the key insight into solving our problem. if you don't have that key insight into that, you'll create like 99% of the educational software out there, you'll create a game. it may be fun, but it doesn't educate. you've got to have, you've got to really have that specter. and i think physicists have that drilled into them. it's just part of the discipline. >> do you find that for a spinout to be successful you must spin out the key participants with it? >> no. >> no. [laughter] >> interesting. >> the, so what we find, as i told you, these ideas are decades in the making. we find these disruptive opportunities, we bring in an entrepreneur. we often -- and especially nowadays, we bring in not just
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the ceo-to-be, but also the vp of engineering or cto-to-be, and they often have a technical team, okay? so our people, most of them, aren't the right people to go and spin out. some of them are and some of them go, and that's fine. but i don't think it's essential at all to have people who created that technology decades ago go. >> do you have people round trip? do people go out and come back? >> we do, indeed. some of them have done several round trips. [laughter] and we're always happy to see them back. >> we're always -- you see, if we were a big company, the team would all have to leave to take the technology with them. but because we actively incubate it, the technology transfer part is taken care of. because, you know, we're all one family working on this to make sense out of it. >> okay. >> here's one hard and one maybe easy. what are the top three innovations/impact the world for an sri -- let me just ask that.
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>> the top three? >> the top three innovations from sri. >> well, i mean, what do you say about the computer mouse, windows hypertext and a bunch of other things? that's got to be up there, right? intuitive surgical is a $27 billion company that started the whole revolution in minimal invasive. i think phil green who did that work is here tonight. that's a pretty big one. i would say going forward the work we're doing in digital education may top everything because of if we don't educate our kids, nothing else matters. it doesn't matter what the government does, it doesn't matter what we do. if half the population can't participate, america's got a huge problem. so there's three. >> yeah. what is the ratio of ph.d.s to your 2500 employees? >> i don't know sri wide. my group's about 50%.
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>> here's another top three question. laugh. [laughter] what are the top three important problems to solve? >> oh. >> i don't know why three. [laughter] that's -- >> well, i've already mentioned education twice. bill? [laughter] want to throw one out? >> um, i think the, you mentioned this issue of putting technology into the world in a way that people can adapt to it. i think that's a really important problem. and i think that's what successful technologies do. >> so i'll mention another one that might surprise you. i actually think it's the way we innovate. we're doing a terrible job at innovation. if you take any measure of innovative performance in the national labs or other labs around the world, you know, people are very frustrated that their ability to actually get things done and make the impact that they want to and they're capable of doing. and we've become convinced
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having thousands of people come to sri is that they haven't figured out a way -- it's vince's question again -- of getting the barriers out of the way. google has a process that's very effective. but most places don't. and i think if we could transform that, we're working with the air force research labs right now and others, i think we could, we could -- well, let me put it this way. when we went through the demming era where we went from gold product quality to high product quality and low cost, that difference was thousands to one. it wasn't a little thing, it was like, oh, my goodness, this really is a completely different world. when i'm being very, very conservative, i say we can improve our output by 100%. i actually think it's more like 500-1000% for innovation as well if we all got together about what really works. >> is there a region of the world that's doing a better job than the united states? is there a region of the world
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that's doing a better job than the u.s.? >> probably not. i mean, silicon valerie's a singularity in -- valley's a singularity in every wray, right? i mean, there's no place like this. with so many brilliant people who spent their lives understanding how to do this. but there are always great people everywhere you go who do know what to do, right? >> this is a democracy question. any plan to work on a version 2.0 voting system, transparent, open sourced with strong end description? [laughter] -- encryption? >> ay, ay, ay. [laughter] we do look at voting systems. it opportunities out to be -- turns out to be a really hard problem. not optimistic at the solution to that soon. >> go ahead. no? affects of patent policy on inno innovation. what is the effect, the current patent policy? >> well, i mean, there are two parts to that, i guess.
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one is the recent changes. first, the file. i think that favors big companies a little more than i would like, but i don't think it's the end of the world. the second is, you know, what's going on with patent litigation right now which has gotten to be a much bigger issue. i'm not sure what we do about that, it's just a fact of life that we all have to put up with. >> okay. >> i don't know how to fix that. >> are okay. i think this is a good question to end on, and they're asking can you describe the innovation in a few words? [laughter] >> yes. yes. yes. so the first thing is you need to have a common vocabulary to describe the process of innovation. go home and try this experiment with your teams. have them write down the definition of innovation, customer value and a value proposition on post-it notes and stick them on the wall. if they don't have reasonable agreement, then you just, your
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organization's going slower than it should. that's number one. do they have, do you have a process where people come together and do ideation in this a serious way on a regular basis? not brainstorming meetings, ones that are really driven on a regular basis with the right people in the room. in our ventures group, we have our venture friends who come every six weeks and spend the better part of the day with us as one of the teams on a regular basis to critique and involve some of the best people in the world to make our eyes -- ideas better. one of the things we make a big deal about is a value proposition. here's a very specific thing you can use now for the rest of your life. a value proposition the way we define it is what's the big, important need, what's the approach to address that need? is it unique, is it defensible? or do the benefits per cost of that particular approach to address that need, that's the
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value of the idea, and why is that better than the competition or the alternatives? so we simply call it nabc. an important need with a unique, compelling approach with spear onbenefits -- superior benefits for cost. just having that simple framework so that every presentation addresses those four questions makes a huge difference. most presentations that you see in universities in particular we make a joke about them, we call them big as. they're all about the approach. so, you know, a typical presentation in most places says what the world needs is a five gigabit-per-second communication system. our approaches were going to build the five-gigabit-per-second system. the benefits are you will have a five gigabit per second -- [laughter] and there's no competition because ours goes at five, and
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the other one goes at 4.9999. [laughter] so you can see that ours is a lot better. [laughter] so, you know, it sounds like a joke, and it kind of is a joke, but those of you who listen to lots of public presentations will recognize the truth of that. so having a language and metrics and standard processes makes a huge difference. >> thank you both. you're right, i could have spent two hours talking to bill just about ai probably. [applause] >> booktv in prime time continues tonight with memoirs by and about scientists. beginning with richard dawkins at 8 eastern discussing the experiences that led him to be a scientist in "an appetite for wonder." at 8:15, dr. carl hart on high price, a neuroscientist's
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journey of self-discovery. then at 9:15, temple gran din's the autistic brain which highlights her struggles with autism and the science behind the disorder. and finally at 10:20 eastern, marina von neumann whitman in "the martian's daughter." booktv in prime time begins at 8 p.m. eastern here on c-span2. >> over on c-span3 watch american history tv in prime time tonight as we continue to mark the 150th anniversary of the battle of gettysburg. by touring the battlefield monuments that commemorate the fighting on july 2, 1863. historians harold holzer, james mcpherson and john -- [inaudible] discuss the fighting on the second and third days of the battle. at 9:30 eastern we switch gears with a look at american culture and society in the 1920s including prohibition, al capone, the motion picture industry and the 1925 scopes
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trial. american history tv tonight in prime time starting at 8 eastern on c-span3. over the past few months, we've featured a number of ceos and other corporate leaders on c-span as they testified at congressional hearings and spoke at other public affairs events. tonight we'll show you some of their remarks on topics ranging from the economy to immigrationing and tax policy. among them, microsoft general counsel brad smith. >> microsoft and across the technology sector. we are increasingly grappling with a significant economic challenge. we are not able to fill all the jobs that we are creating. the numbers help tell the story. at a time when unemployment nationally hovers just below 8%, the unemployment rate in the computer and mathematical occupation has fallen to 3.2%.
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and in many states and in many subcategories it has fallen below 2%. .. >> the bill you're considering does three very important things. first, it addresses the green card shortage. it eliminates or goes very far to reduce the backlog. it eliminates the per country
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cap, and it creates a new green card category for advanced stem degrees, all things that are needed. second, in the h-1b area, the bill quite rightly i believe has improvements in the number of h-1bs that are available, but it accompanies this with changes to ensure that american workers are protected. it raises the wage floor for h-1b employees. it improves portability so h-1b employees can switch employers. it addresses a number of other issues. and even though we have some lingering questions about potential language and potential unintended consequences, we recognize that compromise is needed all around and we hope to be able to work with this committee and its staff, as you go through the details. there's a third thing this bill does that is of extraordinary importance. and that's this.
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it creates a national s.t.e.m. education fund. the reason we have such a shortage of high skilled labor is because we've systematically underinvested as a country in the education of our own children. consider this. there are over 42000 high schools in america, but this year the number certified to teach the advanced placement course in computer science is only 2250. senator klobuchar, we are very grateful to the work that you and senator hatch led to really create the i scored proposal, the i-squared act. it creates the model for a national s.t.e.m. education fund, and this bill follows much of that model i hope you might improved even further. raise the fees on these is. raise the fees on some green cards and invests that money in
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the american people so we can provide our own children with educational opportunities they will need to develop the skills to compete in an increasingly competitive world. as a company, microsoft spends more on research and development than any other company in the world. $9.8 billion this year, and yet we spend 85% of that money in one country, this country, the united states. our industry has come to washington because we want to keep jobs in america. we want to fill jobs in america, and we want to help create more jobs in america. we know that in the short run we wanted to bring more people from other countries to america, and we hope that in the long run some of them will fall in the footsteps of the alexander graham bell's and albert einstein's and andy groves,
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great technologists and scientists and entrepreneurs. but we want to do more than that. we think the country should seize the moment to invest in our own children as well. and if we're going to do all of that, if we're going to do any of that, we need your help your thank you. >> and we want to hear from you about your experiences working for a company or if you run your own business. what is your message to corporate america lacks we will take your calls as want your comments on facebook and twitter. that's tonight at eight eastern over onn. >> with an increasing number of people owning smart phones, social media platforms have become a critical tool for quickly disseminating information in emergency. recent examples of a hurricane sandi, the boston bombings and the oklahoma tornadoes. recently a house homeland security subcommittee look into this subject here from google
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and other technology industry representatives. it's an hour and 15 minutes. >> chairwoman brooks, ranking member payne, and members of the subcommittee, thank you for the opportunity to appear before you today and for your interest in the importance of fairness-based technology and disaster prepared his come response and recovery. my name is matthew step, i'm vice president of the social impact, part of google were use information and technology to address global challenges. and make a lasting impact. we have learned the people counted in that when there's emergency. we want open to the right information is there when people need. and the first of this year alone millions around the world have been affected by natural disasters. two weeks ago we witnessed the devastating power of tornadoes raging across oklahoma. our hearts go out to all individuals affected by these disasters. our goal is to make it easier to give people the information they need when they need it most. we do this by organizing emergency alerts, news updates and missing person information, building tools, to enable better
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collaboration among respond and those affected by christ. providing updated satellite imagery and donate digital organizations that are on the ground helping provide direct relief. as a result of our work we learned a number of lessons about this space. the first is that people want to find critical information through familiar technology. so we collected relevant information and make it available on google tools where it is most effective are quintessential phone numbers and links at the top of our search results and place links on the homepage. we create maps from a source and provide tools to help people connect with loved ones in the aftermath of disaster. we're able to do this through technology all around us and more and more things with mobile devices. via smartphones were able to send our users critical notifications that are relevant to them in the real-time based on their location and the conditions around them. one of our services public works compiled authority of emergency information across google properties based on your location or search greater for days before the sandy storm hit
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the east coast users who typed in terms like sandy, hurricane, high wind, into google search started seeing an official national weather service warning containing a link to more information including maps, news and how to stay safe. recently through a partnership with the national center for missing and exploited children, we started publishing and partners using the same public alerts platform. when you receive a message on the phone about shelter just went missing in your neighborhood, the first thing you with your search for more information which we can help you find. we also build crisis maps which compiled authority to emergency information from multiple sources into one single map for people no longer had to search across many websites. following the ultimate tornadoes our team launched a crisis map that included red cross shelters, traffic alerts and storm reports, and other information. a second lesson is that crowd sourcing can enhance both quality and timeliness of critical information. anyone can use google mapping services to create their own
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maps and host their own content and data but because the open-source anyone can deploy the update and improve our tools. we have learned during some disasters authoritative sources may not have as much of information as into those on the ground to. for example, to filling stations of gasoline? a group of student volunteers called stations in new jersey to check whether their open-ended gas available. within a few days they had data from more than 1000 different stations which were fed into her sandi crisis map automatically. the department of energy ended up referencing this information to a third lesson is that critical information is available, should be open and online formats to open adjective formats which are open before a disaster. this is critical. in the past, google had to gather emergency information from websites in unstructured and difficult to audit formats such as text in pdf, and translate them into open standards. when data is not in open formats
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many steps required to share it and each extra step can keep critical information getting to people in a timely manner. this is why we advocate using an open secure and common standards so everyone has a consistent way to receive and share alerting information and create usual fashion use of these relations of the country. the government can help by ensuring that important emergency information is available in open interoperable formats. we commend the white house for the recent executive order requiring the federal government data to meet available and open formats by default but we also welcome steps congress is taking to increase access to government data. would've agencies with emergency information in particular begin adopting these standards and licensing terms as soon as possible. it's through open data were able to develop alerts and other products like more open is your data we could display more consistent and more actionable alerts covering things like power outages and road closures or where there are floods but we could also send evacuation instruction to different people
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based on their location. we still have a long way to go but way to go but with a 40 work alongside emergency release or decisions and governments to help people find information they are looking for current disaster. thank you very much for your time. i'm happy to answer any questions you may have. >> thank you, mr. stepka. the chair now recognizes mr. payne for five minutes for an opening statement. >> chairwoman brooks, ranking member payne, and members of the subcommittee, thank you for the opportunity to speak with you today. minus jason payne and only the philanthropy engineering came at palantir technologies. it's a software company. we build data integration and analysis software for the governmental private and public sectors. and the contents of emergency preparedness, response, and recovery, our technology on laptops and smartphones leverages one of the most scarce resources during disaster. information. to help our partners with the right physical resources to the right places as soon as possible. above here is a screenshot of
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our technology displayed on the 10th of an emergency operation center in oklahoma city. this fusion that you're seeing here of public data, of governmental dictum of social data and mobile data allows users to build a common picture to improve the efficacy of response efforts. one of our partners in oklahoma city, direct relief, is a nonprofit that donates over $300 million in medicine every day. day. they use palantir to integrate information from their own databases with social data, public data from fina, dhs, cdc, noaa, and even google trends to conduct meteorological, social form of the, supply chain and health risk analyses of communities throughout this nation. in the context of string whether relief, this knowledge enables direct lift to reposition supplies and medicine at federally qualified health centers before storms hit eric analyze real-time weather data during the storm, and donate
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additional medical supplies where they are needed most in the wake of a storm. another palantir party, team rubicon, is a group of veterans engaged in disaster relief. they use palantir two tied we understand operational environment during disaster response. after hurricane sandy, team rubicon use palantir mobile to clean up over 1000 structures in the rockaways. fusing surveys collected with palantir mobile along with public 311 data and even handwritten request for help collecting in a church parking lot, several hundred and rubicon members were able to harness a report 14,000 volunteers. which is a tremendous resource that is often been underutilized in disaster scenarios. those volunteers off into into social media posts removed sand, salt water and sheet rock from homes damaged by sandy before molded set in, thus keeping people in their homes. that large-scale success was possible because of social
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media, the veteran leadership of team rubicon and the knowledge that palantir technologies facility. as a result of our successes, palantir has made a commitment to action with the clinton global initiative to scale our cutting edge technology capability to more disaster focus organizations. part of this commitment or deployment that you see here in oklahoma city with direct relief and team rubicon tell people get back on their feet after the devastating tornadoes. most importantly it's using all of this data to build a common picture that allows organizations to better communicate to more efficiently and more effectively help those on the ground that need it most. so we have learned a few important lessons that apply to share with the committee. first, opened it is more important than formal exchange models. in the context of emergency response we believe that holding out for perfect gets in the way of good enough. we encourage governmental organizations to adopt a silicon valley approach to data interoperability, to put it out in a publicly available, robust,
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standardize, ma secured, well documented interface and let other organizations come up with ways to leverage that data. we applaud noaa and the census bureau for others taking this approach. second, internet and clout technology such as social me are useless without connectivity. lastly we would like to highlight the need for a more robust conversation about data access, sharing, and retention to ensure that the privacy and civil liberties of those affected by the emergencies and disasters are respected at all times. we believe that sensitive information such as names, dates of birth, addresses, phone numbers and certain medical information should be shared with only those with need to know that information, even within an organization. when large skillet emergency strikes, thousand of thousands of folks that seek to help those
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most will but there are also a few bad actors out there that seek to profit from those that are vulnerable. technology can make a radical difference to help those with good intentions but it can also empower those with ill so we highly recommend you look closely at how data is shared, leveraged and utilize and make sure it is used for proper purposes. new technology enables a new era of disaster response. we are humbled to be a part of that transformation and look forward to more work in the future to help those affected by disaster get back on their feet. this completes my prepared statement. thank you again for the opportunity to join you here today. >> thanthank you, mr. payne. the chair now recognizes mr. beckmann for five minutes for an open statement. >> chairwoman brooks, ranking member payne, and members of the subcommittee, thank you for calling this damaging. it's a pleasure to appear before you today to discuss how the internet and social media are transforming how americans prepare, respond and recover when disaster strikes. my name is michael beckerman, i'm president and ceo of the
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internet association, a trade organization comprised of the world's leading in a cup is that our members have been a forefront of efforts to leverage new technology, communication platforms to inform the public before, during and after a disaster. today i will just highlight a few examples for my written test and that i submitted for the record but as you can see on the screen, the rise of social media, crowd sourcing and the sheer economy has revolutionized how we interact with our friends, family, fellow citizens and government. communicating during a disaster is not an interactive conversation. millions of mind converge to solve problems, seek out answers and disseminate vital information. the convergence of social networks in mobile is still the old response playbook out the window. the earthquake that rocked haiti in january 2010 served as an example of the opportunity social media and global technology provide to support the great work of our disaster response professionals. a few hours after the earthquake, a man who was
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trapped with one of the people under a class building at port-au-prince manage to send a photograph of the wreckage from his phone to a cousin in chicago. the cousin didn't we is a photograph to @redcross and first responders in haiti were able to rescue them. in previous disasters of these victims may not have been rescued in time. applying the lessons learned from haiti, a protocol has begun to emerge. facebook's disaster relief page which has created an haiti earthquake is now used anytime a disaster strikes. the american red cross it's facebook pages over a quarter million people following them to learn about disasters can have a can donate both blood and money and get information real-time. beyond the destination of disaster information and donations, the red cross is also established a social media command center. this allows them to better serve those who need help, spot trends in real-time, and it is that the public's needs. that not only connects people with food, water, shelter, but
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also helps provide emotional support when they need it most. when a tornado devastated tuscaloosa in 2011, a local school system went online and posted a request for volunteers to help clean up their school. amazingly, 80 people showed up in less than 30 minutes. this response typifies the unmatched power of social media. you would be hard-pressed to make these phone calls in 30 minutes, let alone have an outpouring of 80 people show up that quickly. and just last fall, when hurricane sandy ravaged the coastline of my home state of new jersey, people took to the internet to document their experience. in fact, fema encourage people to quote let loved ones know you're okay by sending a text message or updating your social network. and it to him a reckless story coming out of hurricane sandy, a woman noticed a facebook post showing the badly hit south seaside park, and she number 93 old grandmother was there trapped and she sent a message to this page, and as a result of
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grandmother was evacuated and save. one of the internet association member companies airbnb sprang into action following the hurricane as well. as you may know, airbnb as an online marketplace that helps find housing accommodations. with more than 100,000 people still homeless, a week after cindy, airbnb partnered with the city of new york to connect those without shelter to people who had asked his base but as you can see on the screen, nearly 1500 airbnb members opened their homes for free to provide shelter to people in need. and, finally, just last month, in oakland, social media supplemented the traditional means spreading the message to take shelter. in the immediate aftermath of the turner, theme again encouraged survivors to update their social networks to let loved ones know the whereabouts of families could be reconnected. social media has also changed the way american citizens respond to tragedy. the city of moore, oklahoma, as you see on the screen, uses its facebook page to inform citizens on ways they can help.
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social media platforms like flickr and instagram about people from all of the country and all over the world to see both the wreckage and the hope in real time. seeing these unfiltered images in real-time helps tell the story in ways that traditional media never could. and allows people to feel connected, giving them an even greater desire to help. the internet has served as a remarkable tool to save lives, facilitate philanthropic relief efforts, and improve disaster response of this. that there is always work to be done. responded to this challenge will require a collaborative effort, among government agencies can first responders, technology companies and the general public it is our pledge that the internet association will do our part working with her companies to consider these conversations between government and technology companies to help harness the power of social media and strengthen our nation's emergency preparedness for the 21st century. thank you. >> thank you, mr. beckmann.
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the chair now recognizes mr. cardenas for five minutes for an opening statement. >> chairwoman brooks, ranking member payne, and members of the subcommittee, thank you for the opportunity to appear before you today. my name is george carden us. i'm vice president of asset management and centralized services for public service, electric and gas company, which is new jersey's largest utility, best known as pse&g. pse&g service territory includes all of new jersey's major urban areas. we serve some 2.2 million electric customers, and 1.8 million gas customers. this really is, come together to be about 70% of the population of new jersey. superstorm sandy hit new jersey hard. in our service territory, it took down 48,000 trees which impacted our distribution system. it destroyed 2400 utility poles, many of them are snapped like toothpicks. drove walls of water into 29th of our switching and
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substations, and damaged our gas lines and meters. over 40,000 of our gas customers were impacted, and almost 2 million of our electric customers lost power. restoration efforts were impeded by a forceful nor'easter that hit a week later. the impact of instruction and the complexity of the work to restore service made communications of all kinds a key component of the sandy recovery effort. before i discuss our social media expense can let me also note the importance of smart grid technology which enables utilities to obtain critical information that can help pin point problems and automate restoration of smart grid technology enhances our ability to communicate with our own system. it can dramatically shorten the time it takes to restore service in the aftermath of a storm, and can prevent outages from becoming widespread. that's why in new jersey we have proposed $450 million investment in smart grid technology as part of our energy strong proposal.
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which will harden our system against these types of extraordinary weather events, those with experience over the recent past. turning to social me, we used the militants what are the days before the storm to communicate about safety and to help people prepare. and after the storm passed we used them to explain the historic amount of damage and the huge effort that would take to rebuild the we use twitter to advise on the daily location of our giant tents and generators which allowed customers to charge electronic equipment, get a free ice, water and food. we explained the importance of reporting outages, and damaged equipment, and the correct method to do so so we can take action. we educated the public about what we were doing to get power to refiners, hospitals, schools, businesses and homes. while we have historically used social media, only during business hours and with a small group of employees, we quickly staffed up for 17 days operator are twitter feeds 15 hours a
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day, seven days a week. we sent more than 9000 messages and saw some 90,000 directed at us. at one point during the storm we sent so many tweets that we exceeded our daily allowances. for our utility contacts, we reached the leadership of twitter to expand our capacity. that's a lesson learned for the next storm. ultimately, we added over 47,000 followers during the time of the storm. when we exited the storm we had the largest following of any utility in the united states. our innovative use of social media has been notice outside the company. in a recent report, jd power and associates cited our industry-leading communicacommunica tions success. falling sand, the utility customer service nonprofit see as weak gave pse&g an award for our use of social media during the storm. here are some of our key
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takeaways lessons learned. mobile technology as a game changer. more than half of americans have a smart phone, and more and more people, in almost every age demographic, are active on social media. people have an increasing an insatiable need to be connected. even more so in times of emergency. they want to be heard. they want to be validated. you want to help and influence us. the number of people on social media spikes in times of disaster. people flock to twitter and facebook and the like because they are searching for immediate information that they can get the traditional broadcast channels. engaging influencers is critical. it's just as important to grow the influence of your online community as it is to grow its size. connecting with people have credibility in the local communities is critical to an organizations ability to spread its message. the public respects and rewards consistent, transparent
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interaction and cooperation between the private sector and community leaders. during steady, we used twitter to amplify messages from municipal and state officials, police departments, office of emergency management, and social service agencies. helping get valuable information right away to those who needed it. tone matters. it does matter a lot. people respect a social media effort that is continuously empathetic, authentic and helpful. public notes of appreciation matter, too, especially to the fiercely proud people who work in the utility industry. we regard ourselves as first responders, and supportive messages can go a long way with a weary employee base in need of a boost. in closing, sandy hit home, hit home how important it is to continue to improve our ability to communicate in an increasingly 24/7, connected and cyber savvy world. to that end i want to thank
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congressman payne for working with us on a national research councils study that will help our industry use digital information to improve reliability and resiliency, and help us understand our vulnerabilities to cyber attack. thank you again for the opportunity to share our experience. >> thank you, mr. cardenas. before i begin to ask questions and before the rest of the penalty against us questions, i would like to mention that in the spirit of this hearing last week i as well as the members of my team and staff from homeland security participated in last friday's weekly smem, social media emergency management chat, on twitter. and solicited questions from those participants on a weekly basis, folks participate in this manner. and i appreciate all the wonderful insights. i'm not sure if this has been done in congress before to solicit these types of questions
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but since this is the people's house i'm happy to be submitting some of these questions that came from this chat last friday. i should also note that during that chat i was asked to express their appreciation for the work that your companies and your association are doing to support emergency managers. they truly appreciate it and they wanted to make sure that we think the private sector for all of the work they're doing to support their work. i would like to start at first of all with mr. stepka. thank you for speaking with us today. and certainly, i know, and gestured with his all the positive things that google is doing to assist survivors and responders during hurricane sandy in particular but i'm very curious what kind of feedback you have received particularly from the user's of your products, whether it's crisis maps, people find, a book alerts come and what kind of changes have you made? because this is obviously an
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evolving process and i'm curious what you've heard from the users. >> sure. one thing we look at for feedback is just how much things are being used, intentionally our products have been used a lot to quit over 15 visits to the sandy pages alone. .. >> organizations have information from their sources which are author at a timive. we have the idea of crowd sources, gathering information directly and putting that information on our products like
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on a map. the example i gave was around tool stations in new jersey. that information came from users and put on a website and on our mappings so people could see where the stations were that had fuel. the advantages of crowd sours lets people on the ground to participate and provide information and a way to do that with good feedback and people can correct the data they find errors to ensure the data is accurate. >> thank you. just to follow up. with respect to the maps, you receive data feeds from sources like you said, fema, red cross, and others. have you experienced, 5 enyou mentioned in your testimony, have you experienced interoperatability issues in associating those on your map, have you had the issue, and way have you done to address the issues or what have fema and red cross, who we hope to talk to in
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the next discussion, what should we share with them >> >> yes. over the years, we have massaging of data, a lot of work initially ad hoc because we want the information there as quickly as possible. it slows things down quite a bit. we work a lot to get data in the readable format. the way to integrate it, and anybody can use the information on it with the data we have. we have these standards and motivations behind, like, for example, alerts, we have a comment alert protocol adopted by a lot of organizations. i know in particular usgs is doing it for earthquakes, for example. as much as possible to get information in the standard formats to integrate. once in the formats, it's not a problem to integrate, and when
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it's not readable, there's a lot of hand holding and manual work, frankly. >> how might you suggest we educate everyone about the need for the open format? >> i think it'll come up probably in amazing zoo in terms of funding to ensure resources are to writing standards and requires government organizations take the data they have and take the effort to change it so it can be made available to the secure protocol. i think that requires some resources. >> thank you. vf briefly, the work you are doing, support disaster relief efforts which is truly impressive. i have a similar question as a result of lessons learned from hurricane sandy? i know you shared them with us, but with respect to the users of your technology.
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>> what we saw in hurricane sandy, open 311 data, open governments embracing data pushing out nonurgent requests from the community to make that publicly availably. before hurricane sandy, something reflected the heat map of the population density of new york city by and large, and afterwards, there were discreet areas completely gone from requests for help because they lost connectivity. the first lesson is the absolute importance of empowering people to have ways to share the message to communicate directly with individuals. at the ped of the day, a car battery will power an iphone orandroid phone 150 times, but how do you make the link up so the device stays hot or active days after the storm? that's one lesson. that said, technology can be used and built to work in areas
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where there's not that connectivity. second lesson is the more data you infuse, the better cohesive picture you can build. here, one of the great things that happened after hurricane sandy is noah released good high resolution overhead images of the impacted area over the coastline and made that data publicly available. tools like going the maps or geographic capabilities, we see where there's sand in the streets, where there's broken down cars, destroyeded buildings, ect., and use that to allocate resources to help those people affected by that and get back on their feet. >> thank you very much. my time is now up. i now recognize ranking member of the subcommittee, gentleman from new jersey, m. payne, my questions. >> thank you, mam chair.
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most companies have a presence on social media, but they've been a trail blazer in that regards. what diff repuates -- diff renneuates others in the industry? >> the key difference is real people are speaking with real people. our employees live in the service territories, experiencing the same thing our customers were. we were very transparent. our people on latest information that knew about our challenges, that knew about time lines to restore certain communities. they did the best they could up front when we had individual responses. later on, they turned to more. geographically em compassing messages. we were empathetic. i think we were very well
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connected to each of those who sent us a tweet and we did our very, very best to get timely, very real information out to the public, and -- >> have government entities responsible for the disaster relief reached out to pseng to ask them their exper today in developing best practices? >> we have as a a slate of yesterday, we had a meeting with other utilities, other endties to share among with us our best practices and our successes both in government throughout the storm, whether it be the municipal mayors, the government sources, the congressmen's offices, we work with them all the time to get their messages and our messages out to ensure we reenforce each other and have people well-informed. >> thank you, sir. now, i want the 10th district in
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new jersey which was greatly impacted. you had a strong presence in the area. elaborate what you did in the state and for the residents of new jersey. >> sure. i think the most relevant thing we did is through the crisis map, gave people warning about where the storm was moving and how it's going and shelter information. i think issues about gas stations as well was in new jersey as well. that was probably one of the responses we did. we worked through the tools providing people with information. >> what can we do in the region to prepare for the next crisis? >> i think we have to learn about getting data in advance available in the open formats. i think it's important. there's always more information we can get. i think it's interesting about
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the fuel information, the longer term time to recover from the storm is important to figure out ways to get that data in advance. at the same time, with crowd sources, we have to find the right balance of getting good information and making sure it's accurate. >> thank you. how do you feel -- how can the federal, state, and local governments and first responders best leverage the social media data, integration of tools available on the internet and disaster preparedness and response activities moving forward? >> one of the most important things is the open line of communication between the technology companies and the government, and that ae peers to be happening. social media and the interpret helps before the storm like we've seen in the hurricanes and tornadoes with advanced warnings to send messages out to let people know there's a shelter in place or evacuate during the
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disaster as we've seen with responding to people to get realtime help, then after disaster to make sure that relief and volunteers and money and blood and things like that get to communities that need it most. >> and this should be an ongoing conversation. >> absolutely. >> waiting for the next disaster to hap; correct? >> that's correct. >> you've identified develop of policies to prevent sensitive information from falling into the wrong hands and bad actors. how do you envision policies developed and should they be directed or voluntary? >> many statuses are good
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examples that fall under hipa law. the important thing is that an organization does not know what's happening to the data that they are sharing. them making the decision to share the data becomes a very difficult decision to make. if it's all or nothing, too often the answer has to be nothing, but if there's ability to technologically drive subsets of data, remove personally identifiable information, ect., that can empower that organization or that individual to make the decision of yes. at the end of the day, those vulnerable in disaster are those most vulnerable before the disaster, and also it's systemic health concerns and that sort of thing knowing who the people are, where they are are useful for first responders to ensure there's the correct medications and correct resources that they need, but redacting that information or removing that information after the disaster is something that i think would make it much more likely for
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there to be yes to share that information. >> thank you. >> madam chair, i yield back. >> thank you very much. the chair recognizes other members of the subcommittee for questions they wish to ask the witnesses, and in accordance with the committee rules and practice, i recognize members presence by the start of the hearing by seniority and those coming in later will be recognized in the order of arrival, and at this time, the chair now recognizes the gentleman from new york, mr. king, former chair of the homeland security committee, for questions. >> thank you, madam chair. thank you for holding the hearing which isit certainly haa real significance. showing m. payne for the outstanding job done in new jersey. unfortunately, we didn't have the same experience in new york. i'm not trying to drag you into the cross-border dispute here,
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but we have $8 billion in damage, and that's hopeless. what we could not cope with was total lack of communication between the consumers and the public utilities power authority. it was, again, almost impossible to get information, get answers, and, again, almost a toe tam breakdown in communication. from what mr. payne said and your testimony today, it's clear they were making substantial use of social media, and i know you work in new jersey, but making efforts to reach beyond new jersey sharing your experience with other utilities throughout the country? >> absolutely. we've met with conson, lipa, members from connecticut to share our best practices. we've shown them what we did, how we were able to, in realtime, ramp up, train our employees to respond on twitter.
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it's become a brand new technology that grows every day, changes every day so you have to stay ahead and we chose to embrace it and to be very transparent. i think that's the one thing we told the other utilities. please, provide information you have, and that's important in that it be done with people who can speak with people, not to people because everybody's kind of on the same boat here, and we're all trying to help each other so we have met with utilities in the surrounding states. >> can you tell us if they have been listening to you? >> i think -- >> i'm not trying -- >> only time will tell, and i ensure they will. i think the energy industry, the utilities, tend to share information. we just hope that everybody takes it on in a very timely manner. >> thank you. once again, mr. payne, he gets a break in new york -- i mean, new jersey, and we in new york try to catch up.
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anyway, don, thank you for bringing the witness today. let me ask, really, i guess expanding on the testimony with the chairwoman, could you describe the partnerships that you established with first responders and government agencies as google rolls out the crisis response? also, if you could, again, emphasize what you did with sandy and how that applies to the future? >> sure. i think the red cross is a key partnership we work with closely, especially for resources with recovery, and the city of new york, we were engaged as well. we created crisis maps for the city of new york and special data available for them for evacuation routes and things like that, affected areas, and, affect, noaa as wefl weather information, and working with the cap standard for aerts. that was very helpful for, like, when storms are coming, and we relay that to the users.
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with sandy, those partnerships were in place already so we were able to respond more effectively. >> you had relationships on long island with nassau county, sussex county, or the management? >> i'd have to get back to you on that. >> if not, i'll contact the county executives. listens to the testimony and the way it was described, it's vital. >> okay. >> with what we all caught with sandy. i yield back, madam chair, thank you very much. >> thank you. the chair now recognizes the gentle lady from new york, ms. clark. >> thank you, madam chairwoman and to mr. payne and distinguished panelists. i wanted to follow through on the train of thought here because what we saw with the sandy event was a unique con confluence of conditioning.
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as a new yorker, what concerns me is the way the mobile phone degrades rapidly in those environments. you couple that with a water event so that, perhaps, mr. payne's idea of using a car battery becomes a nonstarter, and then the going down of the grid. now, you know, we have no way of communicating, and so i'd be interested in sort of getting a sense of other ways that we can, perhaps, taps into the technology world beyond the affected environment to bring relief as rapidly as possible to those environments. has there been any discussion about satellite technology, and how that, in some way, can be of
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assistance, and then finally, just a description of your partnership with new york responses and agencies around such an event such as sandy. now, i spoke about a natural disaster, but in the event of a terrorist attack, which we've experienced in new york city, the same scenario plays out once everyone starts getting on their mobile phones at the same time. it becomes, you know, if you can get through to someone here, you're lucky, and it seems to go out in circles. the closer you are, the harder it is, but after a while, there's a cascading effect. can you sort of share with me your thoughts on that because that was a major concern, for many days, quite frankly, after the event in new york city. >> first part of the question about the usefulness of mobile
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phones in a crisis. is it a problem? of course, there's no power. the first thing you need to have, and there are, i think, creative of ideas to get around that issue, and they are on different grids. they have their own power sources separately. the idea of satellite and other technologies is something we've done a lot of internal discussions around. what technologies are useful in the backup system and the situations. a lot of them have advantages and disadvantages that they look into more deeply in making investments overall, and we don't have anything now in place for that. i do think, i mean, all tools are limited by the effects we don'tnectivity, you can't get them. what we should focus on immediately is being cost effective and getting people prepared beforehand. a cool thing with a storm like sandy, you see it coming, unlike a tornado. with a situation like that, you know it's coming, we can give people more certainty, ideas, and instruction to how to deal with it so they can evacuate
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early or get supplies ready for the emergency. that's something we could do better at, and we are looking at that closely. the second question i think you're asking around terrorist events and that sort of thing, the most we do is focus on natural disasters, and a terrorist attack, we helped with the boston bombing, we turned on the person finder so people found out where the level was in the cries is and after the crisis because there was a lot of chaos right there. in general, there's a different set of res and important to listen carefully, and the bad actor in play, and there's lessons in motivations and how that he engauge in the event and how do we make sure we be careful how we respond. >> is there a system for ngos, folks on response, to used voice called the wireless priority service that is over a decade old with no allocations for data
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to change that to allow folks to use data would reduce congestion on networks allowing people to be effective on communicating. the first net initiative looking long term is something that i think can really help. it's a nationwide 500 megahertz worth of spectrum allocation for specific transmission in emergency response. my understanding how is that it's only allocated for official government agencies. if there's the system that could be allocated for individuals at fema shelters, red cross shelters, or ngos to do quick communications to check in with loved ones, that goes a long way to empower people to communicate in wide scale disasters. >> thank you very much. i thank you for your response.
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>> thank you. the chair now recognizes the gentleman from pennsylvania, mr. perry for five minutes. >> thank you, madam chair. i appreciate the testimony. i'm interested in prevention of things we've seen happen and wondering what you see as the federal government's role, and particularly, in cases if we use the bombing at the marathon and the facebook postings in advance of that. how should -- how do you see that that should be -- should it be monitored in the first place? how should it be monitored, what would the triggers be? should that information go to law enforcement? who should send it? i think there's a lot of questions there because i think there's some expectation that this stuff is open source that it no longer bears the same privacy concerns that maybe your e-mail would once you post on facebook. is that true?
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if that is available, should or should we not be using that to safeguard our communities and i'll just like to have a continuing dialogue. i guess anybody who would like to answer. >> sure. it's a very important question to get it right and take it very seriously. i think in general, all the public information that's available on social media i think can be a source, i think for law enforcement to look for potentially bad actors, and i think they can do that. in general, posted publicly that can be reviewedded by law enforcement without any need to get s&ped or working with google or other technology companies, they do that directly. i think, you know, pretty much i think the most important thing to think about with that is this is in a free society that's hard balance to figure out tow to deal with the information out there that many small number of people who are bad actors are lost in the noise, i think,
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unless you look for them specifically. >> from our perspective, privacy is important. they take the user seriously in dallass, and there's tools online, but we feel law enforcement should use the same due process that applies to the digital world. >> so in that case where there are, have been, or were postings, whose responsibility is to to monitor? how would they find in the huge universe of postings, how would they find that in the timely -- whoever "they" are, first of all, who do you say? who are the "they"? department of law enforcement, department of defense? the cia? who is it that would do it? is it you folks? how would they go about finding
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the needle in a hay stack on a continual basis if you have thoughts on that. >> what we can do, is youtube, when people post -- violating the terms of service like in hate speech or terrorist activity, if they have the information, we take it down. we do rely on users to help us in that sense. i think, again, like i mentioned before, if there's public postings, there's law enforcement to look at the public postings. if they are not public, they go through the normal process to get access to information, same as any other subpoena process. >> so you take it down, it falls within the criteria you find objectionable. the company policies. do you file a report in the instances of the facebook postings or videos in particular? should there be an obligation? was there an obligation other than taking it down because, of course, that dupt help law enforcement or alert citizens or
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the authorities to what might be impending. what should the protocol be there? >> yeah, specifically, on youtube users flagged, if there's a terrorist activity or basically a bomb-making type thing, it's taken down. i don't know whether we inform law enforcement about that, i'll get back to you. >> thank you, madam chair, i yield back. >> thank you. at this time, i recognize the gentleman from mississippi for five minutes. >> thank you, mad, and i thank the witnesses here in answering our questions. i represent the mississippi's fourth congressional district spanning the entire mississippi gulf coast who was hit hard in hurricane katrina in 2005, almost eight years ago. feels like a long time, very long time, but the remnantings of the storm are present with us every day, and we are still recovering.
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facebook was still in infantly -- in its infancy relatively speaking, almost nonexistent to many people, twitter was nonexistent. the first iphone didn't come out for another year. last year, hurricane sandy hit the northeast and millions of people were on social media sharing information, watching live twitter feeds, checking up on loved ones. in a few short years, social media has exploded, and i think most of the questions have been answered. we talked about lessons learned, but if any of you on this panel have the experience, can you compare the technologies that we have during hurricane katrina, the lessons we learned that brought us up to the successful information sharing that we had there in hurricane sandy and we'll just go left to right. >> surement i -- sure. i think the biggest change is mobile phone technology, a major change, that people have access to, communications, especially
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wherever they are and also if the main lines go down. second course, of course, is social media. makes a difference. people are more connected in that sense and more outlets and ways of contacting authoritative organizations as well as each other telling family members they are okay, that sort of thing. >> i believe one of the biggest fundmental differences social media's provided is the efficiency of the supply and demand of those who want to help and those who need help. what we saw in hurricane sandy, we had a couple hundred people in total harnessing volunteers from the community, and those, by using technology requests for help, all sorts of data, were tasked to remove sand from parking lots and playgrounds ect., and that being quickly after the disaster, folks' houses had the material removed that prevented mold from growing
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in the houses and the houses being destroyed. looking ahead, i believe that we'll see an ever-increased ability to harness more good will and more help from individuals in the surrounding areas to help people get back on their feet. that's the best sort of siren of social media. >> >> thank you. you explained the differences perfectly by the fact that facebook had been only a year in existence, twitter didn't exist, there were no iphones so during hurricane katrina in 2005, only half the interpret users used online sources to find news, and, today, that's obviously much higher. only 25% used online sources to check in on loved ones letting people know they were all right and thicks like that, and, obviously, today, we heard from the rest of the panel, from the members, that that number's much higher, after katrina, 13 million people went online to
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donate, and today, that number's higher. social media helps people, and i think it could have been a benefit during hurricane katrina as well. >> all right. well, i definitely agree with everything you've said. i can tell you just the other day we had a severe weather event, and my phone went off, and i didn't apply for the app. it was the phone service just notifying us that we're about to hit severe weather on the mississippi gulf coast, and i was grateful for that. as we've seen in the tornadoes that have recently happened and tornadoes in my district and across the country, it does aloe people from all across the united states to help in some form or fashion even if it's donations or having people come out, help fill sandbags, remove mold. that's a phac tan tick -- fantastic, and the final question is, what suggestions or tips do you have for americans, the users of the technology, the social media, during a disaster? what tips would you provide for
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anybody? >> i think the first tip i give i think is good to have a plan in advance of an emergency. every family should know how to contact each other, whatever means they want to do it whether electronic or other ways. preparation is the best thing for everyone. during this, power is essential. you know, water, other resources to have ready and power connectivity, i think, is important to have access to communication. >> for us, from the utility perspective, don't take for granted that we know you don't have power. it's good to know that information because, you know, maybe two blocks from you, right, people may mote have power, you may get power, they don't have power. please, be accurate. you don't have power? let us know. it may be you have a problem that's only localized to your block or your service. provide information. the more the better.
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>> well, thank you, madam chair, it was a very informative hearing. >> thank you. i have a couple questions, kinding following up on that a little bit. how can our emergency management officials monitor and validate the information that they received or the power companies, how can you or do you monitor and validate? we learned this in the fcm chat on twitter last week, those officials shared with us how can the private sector help the emergency managers and first responders first efficiently co, validate, and share information posted by the public in the disaster? any suggestions as to how your experiences and work inform, and i'll start with you. >> during the storm, and right now, realtime, we have people op twitter, on facebook, and information that is posted is sharedded, not only with us, but back with municipal officials,
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state officials, and i think that's critical to have that partnership between the public and the private sector, and that it is a two-way street. they come to us with information. we go to them. during events, many times there's information posted and working with that municipal official, you correct the information. you can provide. it's not -- there's not going to be out in three weeks, may be three days, and that kind of said to people to be on the right page as to what they have to plan for, and many of these events are realtime, so that realtime information is critical. >> thank you. i agree. the information can be imperfect in the crisis, and i think collaborating among agencies and organizations is critical as well as public, the public can help validate information. i think the crowd sources idea makes sense, and there's -- in
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this context, but we have to think about where it's appropriate and how to act on it when we need to validate information before you act on it or corroborate information elsewhere. >> there's a risk of data obesity as we grow with significant amounts of information streams coming on in the future, and i think robust data fusion capabilities of the data analysis capabilities can empower that analyst to tease through the information that is relevant to them. that is against other sources and use social media as part of the holistic approach to information to make resource allocation decisions. >> with respect to the work that you've all been doing, just last week, fema released 20 # 13 national preparedness report which did identify the need to mature the role of the public-private partnerships as a new national area for improvement, and this was also
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highlighted during our twitter chat last week, and based on the incredible work that your companies are doing, what has your actual interaction been with federal, state, and local governments, and has fema reached out to you all specifically, and have you worked with fema, and, you know, i'll ask initially, i'm sure, you worked with them -- or, yes. >> yes. i worked with fema talking about how to getter work together to better support efforts so i think we'll do that more as well. every level of government is a different situation. we worked with the city of new york in crisis. we look for ways to reach out to government organizations, hard to reach out for all of them, and it's important to go back to standard that it doesn't require we have relationships with every single organization, every level of government. we all agree op certain
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interactions, secure data, that takes care a lot of the interactions. >> i think the relationship highlights the importance of open data. fema does a great job with certain data sources they publicly release making them available to organizations like google, ourselves, and other response organizations can leverage that information. we certainly welcome the opportunity to engage them to see on both sides how we could improve the relationship. we -- during hurricane sandy, we worked with the office of executive management in new york city. i think we did a fantastic job interfacing with the dozens of organizations to help as much as possible, and i think that was a success story of a governmental social sector interaction, and it's something we take a very strong commitment to open the technologies in with and with all the work we've done, be it flood, tornado, or hurricane, ensuring that all the data
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generated by mobile devices, integrated, etc, was made available to relevant authorities to ensure they had access to all the information that they, you know, other than personally identifiable information, that was removed. >> thank you. would ask the ranking member, gentleman from new jersey, for my further questions? >> yes, ma'am, thank you, madam chair. i've had a great deal of interest in smart grid technology and have had conversations with your company officials as well in reference to it, and in your testimony, we explainedded smart grid technology enables utility companies to pin point problems and restore service more quickly. how does the smart grid technology differ from 20th century technology? >> well, equipment in a smart network talks to the components of that system.
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it can recon figure automatically the way a neighborhood is fed. it relies not on human beings doing individual specks, information between these components can automatically restore services in many cases, and in addition to that, it provides efficiencies with setting up of a circuit you're going to work on remotely so that you don't have to send people to each piece of equipment put in a way people can work on it. for instance, we had 4,000 people who came to help us out, and we have to, every morning, send them out to do work. it took us a long time to make it safe, and with a smart grid, with a supervisory control, and information system, we could do that remotely and gain efficiencies in the actual time
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in leveraging that resource to get the restoration done. they are quantum leaps ahead of what we had 10 years ago, 20 years ago. terrorist the way we go and where we -- it's the way we go and where we are hoping to make very large investments in. >> so that's basically how a smart grid technology would improve in disasters? >> it does it both ways, with the efficiencies of people to restore service, as well as the automated restoration associated with reconfiguring the way the grid is fed. >> thank you. in your testimony, you note that, you know, affordable high speed internet access, you know, is necessary to be for disasters, nearly a hundred million americans do not have access to broadband, and
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one-third do not have access to internet, and, you know, i discussed that a bit yesterday when we were in my office, so from your perspective, how does the digital divide undermine disaster response efforts, and how would you address the problem? >> i think it's a very important issue. i think in addition to crisis response, we also look at the issue in general, trying to provide better internet access to people around the world actually. as you know, we launched an effort to bring high speed internet access starting in kansas city, austin, and provo, and i think the main thing, in general, this is very important. obviously, we need to have a way to provide internet access to everybody as well as high speed car battery seth in -- access in their home, and there's lots of advantages of being connected, not just in a crisis. i think it's a challenge that we're doing in general and focusing a lot of resources on. there's a couple challenges in
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which are urban environments against role environments, and rural environments are hard to reach using fiber, for example, and usually a wireless technology is probably more efficient so we've experimented working with the fcc on a different technology which provides potentially the ability to provide access to people using the tv white spaces r which is a low band frequency bandwidth to be used in rural parts of the world. >> thank you. madam chair, i yield back the balance and would like to thank the witnesses for their testimony. >> thank you, i have a question that others might want to chime in, but what are, in following up, what are some things that the federal government should do in forming partnerships with the private sector to take advantage of the new technologies, and i might ask whether or not you're
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aware you represent a number of associations -- or, i'm sorry, a number of companies, and incredibly innovative companies. are there any new technologies we can be anticipating that can be used that you can talk with us with respect to social media for emergency and disasters, but how can we better connect up the federal government with these new technologies? >> well, i'd say the hearing today is a great start, opening the dialogue so, you know, thank you for having the hearing. the most important thing is for private sector, our companies, and the federal government to have an open dialogue and talk. the technology evolving, and as we go through each one of these unfortunate situations, lessons are learned, and federal government gets better and companies get better, and public gets better understanding how to use the technology. crowd sources is a very powerful tool, both during disaster to help bring volunteers and after disaster to bring money and volunteers and rebuild, and so, you know, we just ask that the
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federal government, and they've been doing a great job so far, keep an open dialogue with our companies and share data where they can, and we'll educate the public on how they can use the technology. >> do you believe the federal government is improving its use of social media for emergency alerts and prepareness or what is your opinion on that? >> absolutely improving every time, and as we've seen from protocols from fema, they use social media to send out alerts to shelter in place or evacuate, and that's a great start. >> any others on the panel who'd like to comment on about how we, you know, work even wetter together and any emerging technologies? >> everything you said as well. i think it's very helpful to work collaboratively on these ideas. the technology is evolving, and i think working together on open formats for data to be shared in a secure way is appropriate,
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using crowd sources in the appropriate way as well is a very important thing in this context. i think the data, i'm encouraged by what i mentioned what the white house did previously on data standards, and that moves in the right direction. >> okay. mr. payne? >> to echo other panelists, we are moving in the right direction. i'm heartened by the open initiatives and open data standards that the white house pto's done a fantastic job on pushing news standards making formats the norm. one final offer is nonprofit data, and today nonprofit is publicly available, but as a scanned piece of paper, they can want read well, and it takes hundreds of thousands of man hours to rewrite the data base that exists with information that is supposed to be public data, and so in new budget
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proposals, the ability for that to be electronic information and thus, many, many easier for technology information to leverage that data. you know, there's 1 #.4 nonprofit organizations in america today, and having the ability to engage them in a disaster or on an emergency would have a lot of benefit to those on the ground, and not that open data could go a long way towards that engagement. >> thank you. any thoughts you might have? >> i'll give you one example of the collaboration in how we're going to be able to help. ..
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to locate and identify equipment that has been damaged will continue to be critical. that i am hoping a will be able to see in the next nine to 12 months. >> thank you. thank you very much. >> madam chair, i ask unanimous consent to submit testimony in the business emergency operations center alliance in new jersey into the record. >> pardon? >> thank you. without objection that will be admitted. at this time i would like tap asked if there is anything for closing he would like to say before i close out? okay. thank you very much. would very much like to thank
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this panel for their very valuable testimony. i think we learned a lot. we started a very important discussion. what i think is happening with the emergency managers, with -- whether it is municipal or state or federal officials, your company's a paving the way. you have created new technologies. i'm looking at the back of this actual hearing room, a picture from september 11th. and what the technologies they you all discussed, whether it was people finder, you know, whether it is the map and capabilities that would have been so critical during that terrific time in our country's history. and so we truly have come up very long wait. and as i talk about the hard to see technologies and knowing what is coming, i think we can't even imagine, as was just shared with us, the possibilities of what your company's and the innovators and engineers and inventors in your company's a creating. we just ask that you continue to
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share those with government, with the public sector, with the volunteers. it's amazing to me than 14,000 volunteers, you know, come together quickly, but that we already had a team of veterans in place to help mobilize and that were trained. and so it is a wonderful marriage of the government and the military and our veterans and that. burying a pool of volunteers to really begin recovery and save lot of lives and homes and property, but most importantly save lives. that's what i think your testimony here today has also shown. i think we absolutely have some challenges. you know, everyone needs to be mindful. some of those challenges -- sadly the few bad actors that do come up, the privacy issues that we need to be mindful of, but i do think -- and the connectivity he talked about without power. none of this works.
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we need to continue to explore and advance and partner between the public and private sectors. want to thank you for your time. then maybe questions submitted by others commander look forward to working with you in the future. we plan on having another hearing in the future with government officials, fema and red cross and some others. and we look for to try to ensure that all of the innovation that you are creating and the way in which you'll want to contribute in emergency preparedness, we thank you very much. thank you. this meeting is adjourned. >> book tv and prime time continues tonight with memoirs by and about scientists beginning with
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>> over the past few months we featured a number of ceos and other corporate leaders on c-span as they testified at congressional hearings and spoken of a public appearance events. tonight we will show you some of their remarks on topics ranging from the economy to immigration and tax policy. among them, american express ceo. >> what i would say are a few key things. number one, i think the consumer has really demonstrated
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incredible resilience in a very challenging economic environment the question for all of us is how long will that last, but the consumers held up relatively well. i think you also see that in spending, the credit performance , which though way it operates, it has substantially come down. to the industry overall bearish close to historical lows. we are performing 50 percent better than the major bank card issuers. so i think that that demonstrates some view that the consumer health is pretty decent consumer confidence has held up pretty well. but frankly -- frankly, i have been of the view not surprisingly that the economic recovery as i look at it in the broad scale is going to be relatively slow. i don't have a great deal of confidence that there will be
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any turnaround in the near term. at think what we have to hope for is that it will stay stable. >> check out our facebook page where we are asking you, that you were, what is your message to corporate america. post your comments. and tonight along with reading some of your comments we will take your phone calls and tweets about your experiences working for companies are running your own business. all begins at 8:00 eastern tonight over on c-span. last week, newly acting irs commissioner said his agency's 30 day review has found a diverse range of groups that were targeted for extra scrutiny by the irs tax-exempt office. in a report released last week the irs says it was suspending the use of the so-called blue list that organized applications by group name. in the weeks since the revelations in the targeting a number of high-ranking irs
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officials have been replaced and the woman in charge of the tax-exempt organizations office is now on administrative leave. this house ways and means committee hearing from thursday is just over three hours. >> first, americans have a right to know that the money washington takes is well spent. second, americans deserve an efficient and effective government that works for them. our duty as the oversight and government reform committee is to protect these rights. our solemn obligation is to hold government accountable to taxpayers because taxpayers have a right to know what they get from the government. it is our job to work tires -- tirelessly in partnership with says and what starts to deliver the facts to the american people and bring genuine reform to the federal bureaucracy. a few days ago the acting irs commissioner, daniel werfel, issued a 30 day assessment on his plan of action for the future of the irs.
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the report stated that in many instances across the irs we had efficient and effective management or effective management that is leading positive organizational performance. unfortunately, we are here today because failures within the irs are not isolated to just tax-exempt divisions. the revelation that a company called strong castle was able to acquire more than 500 million in potential contracts or and contracts with potential sales with no previous track record completely undermines the address narrative that just one branch or department within the irs failed the american people. our report, we believe, shows a cozy relationship between strong castles president, and the irs deputy director for amerasian technology, acquisitions, greg rose men.
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and it is the heart of this issue, included then the -- included our report are exchanges of text messages that we believe are shockingly inappropriate and in some cases offensive. furthermore, the fact that mr. braulo castillo was able to successfully manipulate the system -- and we are not alleging a crime. but successfully manipulate the system to acquire contracts expose is staggering vulnerability in the irs acquisition process and jeopardize this billions of taxpayer dollars in this situation. quite frankly, we are not sure that we have a criminal element here, that we have criminal violations. will we are sure of this that the intent of congress and in
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that stated intent of this and each administration before has been thwarted. the intention of, without a doubt, that disabled military veterans receive preference flies in the face of a small injury in 1984 while attending the military academy prep school, one so minor that it had no effect on college football participation for years to follow. and it took 27 years to conveniently ask to have this put in as a disability, not because of the true disability or inability to perform a job, but, in fact, in order to qualify for preference statement additionally, the use of hubs zones and in this case one that was a legacy hubs on that actually the verizon center and the other parts of washington d.c. are moving out of into
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thriving areas, the use of that in order to gain a contract and then creating absolutely no jobs with in that district that would be directly related to or in support of this $500 million contract. our investigation is still in its infancy. today we are working with the ig and hope to work with others within the irs to end this problem. as we speak, many of these contracts continue to be enforced. perhaps that is the most distressing, the ira's officials immediate -- pcs me, initially denied and then repeated their denial that there was a problem. it failed to take action after this was brought to their attention, and the irs is still allowing $266 million contract with strong castle to stand.
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the action by their inspector general when he was notified of these allegations almost a year ago was a lack of urgency that the american taxpayers deserve. in our evaluation we find no value added performed by strong castle. i repeat, no value-added performed by strong castle, although profits flowed to that company over and above the full payment to the company's you actually provide the irs with the services. no hearing related to the irs would be complete without mentioning that under obamacare the task of the irs to employment at least 47 new provisions, including 18 new taxes expected to raise $1 trillion of the next decade, and the hiring of thousands of new employees, the need for computer systems to work and work accurately begs the question of, can we afford to
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implement obamacare if we cannot get the systems and controls in place for existing requirements. just this year the irs request to nearly 500 million, the same amount of money they plan to award it to strong castle to enforce a obamacare, including 2,000 new full-time police. we are not trying to say that one is interchangeable with the other, but it is very clear that this is a lot of money, and it's a lot of money that could, for a fraction, two or three or 4% savings cannot be passed on to the american people. often on this day is we applaud, appropriately, federal workers. now want to take a moment to make it clear, the vast majority of people involved in contacting with the federal work force take contacting seriously.
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they scrutinize the contracts and most often try to get the best value for the taxpayer. because the best value is not always the lowest price, this is a difficult job and it requires absolute integrity. if we do not have full confidence in our procurement integrity the most use those price. the lowest price is not always the best lawyer for the taxpayer , but the analytics of the lowest price verses lowest value depends on an independent non cozy relationships between the contracting officers and their superiors and the contractor. this committee has, over the years, applauded and will continue to applaud that most contracts have that characteristic. they're not always awarded the way contractors like, but they are based on best value to the taxpayer. in this case, at least for this
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chair and our draft report, we don't believe that occurred, and that's the reason we're continuing her investigation. i would now like to recognize and thank the ranking member for being my full partner in this investigation. >> thank you very much, mr. chairman. i want to a first of all thank you for calling this hearing. it is command the, a very important year in. and it is interesting, this hearing is to examine allegations against a company named strong castle


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