>> up next on c-span 2, quallcom ceo paul jacobs talks about the wireless spectrum on "the communicators."

>> this week on "the communicators," a discussion of a train paul jacobs, chief executive officer of quallcom. >> host: paul jacobs, what does quallcom do? >> guest: we make the chips and technology for cell phones. so many of the phones that youa have of the third generation, if you've heard that terminology, that has quallcom technology inside it. many of those also has a chip, much like you might get intel been inside a pc. >> host: superblock stories, android, android, ipaq users, what exactly does your chip do inside those funds? >> guest: it does a lot these days. it started out as just radio communications between the device you are carrying with you and the network. but now that the phones have so much capability in with added

graphics in there and the microprocessor that doesc computations are inerrant and cameras and video and audio in games about these kinds of things have been put into those chips as well. >> host: where those chips manufactured? >> guest: predominantly they're manufactured anda taiwa. were fabulous manufacture co. we designed the chips not only in# san diego or california, but those designs are sent off to asia, predominately taiwan and they're manufactured there. and that we work with the device manufacturers around the world. that was interesting though is our direct revenues and 95% outside the united states because most of the handset manufacturers are now outside the united states. >> host: how many employees does qualcomm have? how they are located in the u.s.? >> guest: with 16,000 employees worldwide and about 13,000 of them are in the united

states. >> host: are all of the manufacturing outside the u.s.? >> guest: there really isn't much manufacturing the chips anymore in the united states. >> host: because of the cost? >> guest: there are policies that don't promote the building of those factories in the united states. the problem is the whole supply chain really is built up in asia now. there are some fascinating data meristem coming, so we expect to one of our suppliers will be building in new york, but it will take a while before the come to. >> host: how long have you been ceo? >> guest: i was ceo five years ago basically. >> host: your father under the company, correct, irwin jacobs? >> guest: yes. he is on our board of directors now but i took over is chairman about a year ago also. so he's another director, an influential director and a good guy to talk to, but i run the company now. >> host: also join us on the connecticut or cystic is guest

reporter paul kirby was senior editor with telecommunications reports. >> thank you. talking about policy issues, you can see an obama administration say they want to identify 500 megahertz of spectrum over the next 10 years. how difficult do you think i will be a martha specter needed? >> guest: 500 megahertz is a lot to go get. you know, some of the things they're talking about to try and get large chunks of spectrum are things like incentive option to get the broadcasters to move off. we have some experience with ourselves because we bought spectrum in one of the spectrum auction here than before the digital tv transaction happened we were able to invent some broadcasters to turn their systems often lead us start broadcasting our system. so i hope for that. some of the other spectrum will be more difficult getting it away from certain governmental users will be difficult. although we have ideas for how you might be sharing aspect during. so anything we can determine

that will open up the use of spectrum, whether it's what's called unpaired commenting and it's only one directional because most systems have to be two directional or used with some other licensee that has a primary access to that. we're trying to build technologies that satisfy all those things. the reason why it's important if there's ever been no smartphones are so popular now. people are using a lot of data on them. there was a step is to that in a few years for going to see more data used in one month than was used in one year in 2008. i think it was 2014 compared to 2008. so we are tremendous demand. at&t has seen a gym and triple or more. it's growing exponentially and people want access to all these things on their phone, videos, games and all sorts of access to the internet. so when hbo to provide that and more spectrum is needed. >> is 500 enough before the

broadband and cannot see t.i. said we need a hundred over six years in the broadband said 500 over 10. is it one of those things by the time you get to the point, they'll just need more? >> guest: my guess is there will always be demand for more and more. it is a scarce resource and as people -- is more and more popular for people to use their phones in these ways. as we look out into the future, we're going to see wireless technology embedded into other things, so used for health care or as here talking about used in education. we believe that wireless is going to be embedded into all the things that are around you and the environment, for things like marc rich and other applications. and so, there's going to be more and more wireless devices that communicate. to be a continuing spectrum. >> the part of the plan is to plan is to get 120 megahertz voluntarily for broadcasters. at the fcc's authorization from congress, for something called

incentive option. how difficult will it be to get that in the timeframe that reasonable to get back and get it cleared for the large industry? >> guest: the only experience i can go back to is the digital tv transition with the fact that money could be generated for the treasury actually caused us to get over some objection that had been brought up at that time by the broadcasters. i think in the end things worked out pretty well. the digital tv transition was fairly smoothly. so as long as incentives, many matches for the treasury but also broadcasters i think mobile to get through that in a reasonable timeframe. but given what going on in congress, you don't know. politics can intrude. >> host: paul jacobsen talked about the incentive options to get to that magical 500 megahertz, how much of that will be through incentive options? >> guest: i heard chairman jenna chose to say today about 300 megahertz at the

broadcasters are occupying right now. so if that's the case back into a fairly long way there. >> the plan would have -- part of that spectrum they will continue to occupy into the broadband plan. 120 megahertz account of the broadcasters but it might use incentive options for satellite people as well. as of tonight at 90 megahertz used. it would be to use and satellite spectrum to get to incentive options. >> guest: the interesting thing will be the dynamic that gets created when there's a market system and then you see who really wants to participate to the broadcasters to want to be over the year because as we know most people are getting their content through cable or satellite today. and so, we'll see how that goes. and if the guys can put their local content out on those other systems and they're guaranteed to get to do that, do they really want to raise the electricity to run the towers and are they really reaching now much more that a subscriber

base. when redoing the clearing for our flow system, we found that people really willing to make that trade-off. >> host: now, but can the chips and smart phones be more efficient to use spectrum more efficiently as well? >> guest: yeah, that's an area we've been working on very, very hard. it's really the genesis of our company as we were responding to a request by the industry to get 10 times better over the analog system is remember those systems. the problem is that we've done a lot of tricks in what's called digital communication theory to get these radios more and more efficient. the resort of running out for some of the tricks. what you're starting to see now in the labs as people are going towards what's called wider bandwidth systems, so they're using more and more of the spectrum we been talking about to get down to the device and you can understand that's also a difficult thing to clear. there is one other trick that the pharisees, which as we can get the network and the devices closer to each other. it's the reason why in some cases your wireless land will

run faster. how do you get the cellular network to be closer? you have to make it easier to deploy themselves in a can a have good connectivity to those pieces of the network that might be in your house and in your office. we're starting to see the beginnings of that. some of the operators are selling little boxes that cost them to cells, the little tiny sulfate for the cellular network. this would be an evolution of that going forward that would increase speed. and we've seen things like 10 times improvement when we do this kind of a network rollout. that's something we haven't seen 10 times in a long, long time. this really is an interesting new way to look at it. >> host: paul jacobs, either enough ideas and new technology coming to prevent a spectrum crisis, a brown out? >> guest: i'm not sure. i think were in a little bit of a brown out situation right now for some users. it's going to be a lot of different things have to come together. i don't think there's one silver

bullet. there's an issue that is a critical issue associated with a mentality debate, which is the question of whether application developers are using the spectrum of the bandwidth efficiently. because today to them however much they use, it doesn't really cost them anything. and so you might look at, for example, a cellular operators trained to be very efficient using 50 times less capacity to run a voip service than just an internet voice over ip provider might. and yet under strict net neutrality you might say both of those services have to go through impeding. it probably needs to have some kind of method to push back to the application developers today try and be a little bit more efficient, too. and that will also help. >> host: your advice to the fcc on that because he is? >> guest: there are various pieces to it. we believe people ought to have access to whatever they want on the internet. we think there needs to be some mechanism so the consumer can understand whether they're using

up a lot of bandwidth for the application for a little. my analogy is like a card cage. i might know how much data i can use as my gas gauge, so i know how much i have left. and then i might have a thing that tells them instantaneous mileage by much spectrum i'm using at a given time. the question is can we make that simple for people because you really can't complicated phone. people don't react well when that is complicated. the notion is can we put in some transparency to the consumer and put in some measures so that will cause the application developers to be more efficient. and then allow the operators to praise the way that they want so they can have different tiers of pricing. they can have different qualities of service. he may use up your quality of service at a bucket at some point in that things will degrade. i really will only impact the people who are using real large amounts of spectrum. so that's the way i look at net

neutrality. >> host: used that in a speech in washington the wireless provider should not be subject to the same rules as wireline, but as a practical matter some limited rules better than the uncertainty of what may come down than the fcc on wireless providers. does that help the industry is to have something rather than a lot more down the road? >> guest: the only issue is a lot of the net neutrality mindset has come from the fact we had a lot of fiber buildout through the internet. so it looks like every pitch is kind of free. and it really is them. i mean, they're for you to a point in some sense but would have to lay the next fiber and dig up ground and do those things, they become very expensive. so that's the fixed internet. on the wireless internet were already at the situation. spectrum authority constrained. so you have to treat it in somewhere that takes acknowledgment of the fact it's difficult to get more spectrum and we avoid this issue a second

earlier with the application developers might not optimize as much as they should or could. >> how do incentivize those applications to useless spectrums? some carriers have said they're the ones who basically agreed a lot of those applications. they have invented because we set both have a spectrum crisis, so, you know, rework your applications. so how do you provide the incentive to application developers? >> guest: the problem is they go application by application will be very difficult. what you need to do is get some transparency to the consumers so they can see their bucket of minutes is being used up at a more or less rate by a given application. they will see that -- >> bcg, this application is going to take up too much. it's not worth my money so to speak. let's get you might have to quickly. >> guest: we think that's one mechanism that can do it. their other mechanisms that are dynamic like that. you can use an analogy to the

electric grid where you have stickers on your refrigerator that says this one is expected to use so much over this period of time. i think it would be better if there was dynamic, but maybe something more static could be done, too. >> host: this is c-span "the communicators" program. our guest is gpl of the qualcomm corporation, paul jacobs. paul kirby is with "telecommunications reports." his argus reporter. >> they announced that qualcomm has announced there'll be internet report still shut down the service is entirely. you said you've been having talks with various entities. can you give us an update of flo tv and what happens if flo tv will happen with media flow because it is the same -- >> guest: what we've done is we've said is dr. direct consumer sales. we were building with a partner,

a small tv device. it didn't affect the sales through wireless operators. if you have it on your phone, that's still operating. overlooking that going forward is a couple of different possibilities to restructure so it works a little bit better from an economic standpoint. one may be just a field to another party and there are a wide range of interested partied they are. the other possibility is to stop doing what they're doing in terms of being a content aggregator and the service provider, but run it as a pipe. and we've had discussions with media companies were interested in doing things like downloadf magazines and newspapers and have those be live all the time. had conversations with deviceg manufacturers who want to be able to download updates to their software in a very simplef and easy fashion.bcfb so they're a number of companies out there interested in thebf capabilities that's really going to come down to is the right

economic decision for both theff consumers that have used theff service and obviously will take care of those if anything changes, but also the shareholders of qualcomm. >> i like to say tv is a paid killer for mobile. why is this not been morebcc successful? is it a lack of devices you have for the service?ff >> guest: i think it was a broad range of thing.ff we found through watching howbbb people use a service that theref were certain things they really liked a lot and were willing tof watch an iphone and something to the were.ff so live sports was very good.ffg breaking news was very good.bfff but apathetic tv wasn't verygfff good. and so what we think is that th@ model will change.d@ people still have lifestreamdddd bbntent.dddddddddfcffffffbfbfffb and they may be done over thebb cellular network.bbgbb

they may be cited voted for afcc buyer.faffff the richest inb a number ofbbbbb different ways those thingsbbf could happen. but i do believe strongly we will still have mobilebc tv. it just may be a different form if we don't find the right solution for you flow. is being attacked company.ffbff do you find washington understand your need?ffgffbcfffc where we have very positive interactions, you know, despiteb term option and dtvcb

transition -- digital tvb transition, all those things are good and we were able to interact well. for hopeful on these high skilled immigration things they will get solved, hopeful on steg education, on basic research funding for basic research, all these kinds of issues that are so important to us. one area we are very concerned about is tax policy. qualcomm generates 95% of its revenues offshore. now we have two businesses. our licensing businesses operates was called on short so it's subject to the present tax, butter chip business is not sure. u.s. companies have about $1.4 trillion of so-called usher money. and if you can imagine they will get brought back into the u.s. economy directly, that would be a private sector stimulus. the problem is getting outscored writing getting it so it can be brought in. it's very difficult. we continue to talk about it. so we've been what was

established before. we're building the fact jury in conjunction with some partners. the factories going into taiwan. if you talk to policymakers sometimes they think it's because his labor costs. the labor costs are very, very low percentage of the cost of building these displays. what it is is the concept building. we can't bring that money back to the united states without incurring 40% haircut. so if we build the factory in taiwan, and this is happen to many, many, many manufacturing businesses in the united states. you build that out of the united states with a 100 cents on the dollar. rebate united states and pay 60 cents on the dollar. if tax audit instigate change but it's been very difficult. >> host: this qualcomm maintain a washington-based office and ceo and chairman, how much time do you spend focused on policies that are created out

here? >> guest: we have a washington office and we've had one for quite a long time. i am up spending more and more of my time in washington actually. i commend for the business roundtable meetings as an example. operably maybe once or twice a quarter in addition to that. so i'm here fairly frequently. >> host: just a mean on policy issues? >> with the new congress coming in next year, do you expect -- and a lot of people expected to be bipartisan, but we don't think republicans have more control over change. in fact a lot of things haven't gone through. this year there's been legislation on spectrum tory next year. incentive options people are still waiting for. the republicans have more control, what will that mean, good or bad for wireless classics >> guest: that's hard for me to handicap that one. but i think that we will see this move ahead no matter what happens in the elections because

the incentives are really in the right place in the sense that they can provide it to the treasury. it can provide money to the incumbents and it's something that everybody recognizes we really need. i mean, everybody's lineages that their phone sometimes can't get access to the comment at the speed they want. so when a personal level, people get it. the constituents get it. so if there's money that can be generated, i think those are pretty good reasons for legislation to move forward. >> host: paul jacobs, the white house is known for its focus and enthusiasm about technology. what have you found -- what did you find in the bush administration and what are you finding in the obama administration? >> guest: was interesting as we deal not with the sec and the fcc commissioners are always interested in technology so we always find good reception there. and this administration it's been only a little different because now i'm the ceo and chairman and i have a high level

of access vb than previously. and so i do find people are very interested. one of the areas that they are really understanding is the fact that we have these intangible exports in terms of intellectual property, whether it's newtek elegy and patton are the designs of chips. and people are starting to understand now that it's actually a critical component of the economic well-being of the united states. so we are getting more traction with those concepts and i think that's been an evolutionary process over time. like i said i've been personally involved with it in the last five years. >> host: you mention education. in washington education conference. can you give us a sense are explained to the viewer how you've always been involved. a vaccine initiative that looks into things like education and health care and other things and reach out and look for ways wireless can help. can you give us a sense of what you've done there? >> guest: short, the company was founded by my father and

other people who are professors. so they came out of academia. our hearts are very close to education. we need a lot of very educated workers because we are using many people who have engineering degrees as an example so s.t.e.m. education is important to us. we've done a lot of donations into roughly $100 million of donations over the last years at various levels. some are directly to research projects universities, but others are for things like training teachers in stem education or incentivizing ex-employees that were in science and engineering fields to go back into the schools to train people. we're very excited right now about using wireless as an enabling type one sheet to improve education, to give children the ability -- or students the ability to be connect it to the curriculum, to each other and to that 24/7

outside the boundaries of the classroom walls. we have a very good examples of a program like this that we funded called project cannot, where we had students in an algebra class when they were given smartphones they scored 30% higher on the standardized tests. the reason was they could interact with each other. they could use the technology outside of the school. the story was told at the conference today by one of the people involved that the kids were actually explaining blogs to each other how they would explain different problems are the kids who learn from each other. any think about the fact they can get feedback from the students, from parents, from teachers and a pretty low stress way because they're just communicating over the phone much the same way we all text message. then you can also imagine that you can keep track of how learning is going. the teacher may be able to see students that are doing better, responding better to a

particular program or students responded less well. in the end was going to happen and we'll talk about these tablet devices and so forth, i think were going to see the text book sort of transformed. it will be a living thing. it will be adapted to the person using it. it will have more multimedia and for the 50 pounds of paper printed on a book that a kid carries on their back. so this whole notion that things are going to become much more live -- and it's going to be much more like what the kids do outside of school because it is kind of strange. there was a survey done that the kids that back in time when they go to the school because they don't have access to a lot of the things they have outside of school. if you can get more engaged with the children by using some of these technologies and you can improve their outcomes, that's going to be a big win, particularly as were more and more focused on the economy and the united states and the world in general. >> host: there's a policy angle to that. theosophy developed a private program that would allow the

refund to be used on school grounds. in a similar kind of help propel that. >> guest: yeah, ray. so we're very focused on that pilot and hoping to see the program grow. we are concerned that will have the same equivalent thing is the digital divide, local divide. now it's nice because mobile phones are less expensive things and therefore it seems likely that the cost aspect can be managed a little bit better. but having programs like e-rate to help out is a key component to closing any potential mobile device. >> host: paul jacobs, back to the spectrum for a moment. what is your level of support or not support for the d block public safety spectrum, setting aside? >> guest: well, we like the idea that public safety should have access to spectrum. were the ones with the league better than the last auction on the d block. we decided because of

constraints that were put on it, we didn't want to take it and go above the minimum bid them as though it didn't end up getting sold. so i think camino is a very delicate process. beauty to make sure the incentives are there so systems get built out. i personally believe having it done by commercial operators is better. you can amortized across a caused a much wider range -- much larger business i should say. they have of the field personnel. they've made investments in the various kinds of technologies. and if you can give the public safety the ability to use the system when they're needed and when they're not needed, they can be used for commercial use, that seems to be compromised. >> host: so access, not devotion? >> guest: yeah, i think that will work well. also it will give public safety providers or users access to more commercial equipment. as long as for the right range, which it is, the equipment that is built for you to use, you

know, a tablet, they can use the same tablet and lower the cost for them as well. i think that's going to be a really critical thing. >> in washington lately the issues have been very intensive of the d block. qualcomm has been very involved in some of the makers. it's the idea, although you said your personal viewpoint regardless of how it turns out your chips will probably be in whatever equipment is being used, particularly the public safety folks, even if they get their spectrum that they want to try to use commercial devices in your chips will be in there. is that a fair statement? nubian chips of anything so it's not necessarily an issue. you got to stick your neck out on one side or the other. >> host: is going to reasonable fashion so we don't really need to inject ourselves so deeply. the other piece about the chips as we make the multinode so they can run on various different technologies as well because there's been that debate. as the government need