coming up, "the communicators" talks with consumer electronics association president gary shapiro on the need for more broadcast spectrum to meet the demands from wireless devices. >> this week on "the communicators," our guest is gary shapiro, the president and ceo of the consumer electronics association. >> host: well, we've invited gary shapiro, president and ceo of the consumer electronics association, to be on "the communicators" with us to discuss several different issues. we want to get his impressions from the recent consumer electronics show held in will have, we also -- las vegas, we also want to talk about some of the policy issues facing his industry and we also want to

discuss his new book, "the comeback: how innovation will restore the american dream." gary shapiro, if we could start with the consumer electronics show. what were some of the innovative or new technology telecommunications products that were on display out in vegas? >> guest: well, first, peter, thanks for having me. coming back from the international ces which really marks the beginning of the innovation or technology year for the world it just gives you cause for optimism because, look, at that show we had 2700 different companies introducing some 20,000 new products in about 1.6 million feet of exhibit space. with all those products out there, there's a huge, huge array of great things. i mean, ford used the opportunity, the ceo, to give a speech and introduce the ford's first-ever electric car, and it only requires a three-hour charge which is a major breakthrough. that you don't think of as consumer electronics, but yet

increasingly cars are consumer electronics products. the way we look at it there's three screens. the big television screen we saw a lot there with 3d and connection to the internet, the little screen which is a smart smartphone, and there are so many p developments there, but a lot of action was with that middle screen. it started out as the e-book, went to the ipad and now it's called the tablet category. 80 new tablets were introduced. >> host: how quickly do the products introduced at ces make it to the marketplace if they make it at all? >> guest: that's a good point. the fact is of those 20,000 new introductions, probably less than half will ever get to the marketplace because you're trying to see if you can sell them to retailers. we have 7 press there. we wanted to see if -- 7,000 press there. investors are being sought. really with 140,000 people gathered in one area, it's a confluence, and can there's a lot of experimenting going on. certainly, a lot of the products

are get to market, and they can get in to market anywhere from a month or two to a year. >> host: now, one of the aspects of the consumer electronics show is the policy aspect, and a lot of policymakers, members of congress, members of the fcc are out there. what is your message, what is the takeaway that you want them to have? >> guest: well, the truth is we have great government guests out there, and we're so thrilled that especially the people focused on technology like the fcc are out there in force. the first message, believe it or not, that i want them to have is i want our government to help us host the 30,000 international guests we have. of we're the only country in the world that the is a little bit arrogant toward our international visitor, and yet they're helping us meet our national goal of exporting. think about it, 80% of our companies are small business showing product at the show. if they want to export, they use our show. otherwise, they'd have to travel to shows abroad.

we're the biggest show of any type in the americas, but we need our government official to help us host. and, frankly, our own ethics laws prohibit most of the hosting which is unfortunate. what we want them to see is the diversity, the excitement, the innovation that we have many this industry. we are the future. we're the engine that's pulling along american jobs and the economy. there's so much going on in technology that is optimistic and positive that we want policymakers to feel it. there's two types of policymakers we see in washington, those who have been to our show and those who haven't. those who have been understand the interaction, the importance of the major issues like trade and innovation, and those that have not been to the show, frankly, we're just another industry to them and, you know, part of the cacophony of washington. >> host: i want to introduce as well paul kirby, senior editor of telecommunications reports, who is joining our conversation. we'll turn it over to him in just a minute, but i want to

read one sentence from your book "the comeback." you write that industry has been hurt by the well-meaning efforts of the federal government to help the economy. >> guest: absolutely. i think ivan of verizon gave a very seminal speech a few months ago when he said with the challenges our government is not exactly helping business. when you, when you use the phrase greed in conjunction with the word business almost all the time and you demonize business as has happened for the past two years -- because of a few bad apples -- it sends the wrong message to the public, and can it's a matter of leadership. and if you have policies, look, we've had two unwinnable wars, stimulus packages, corporate bailouts, medicaid, medicare, social security, cash for clunkers, all we've done is spent. we have totally spent so much money, and any business person knows that is totally unsustainable, and the next generation is going -- all they're going to be doing is

paying interest on that debt. so you have leadership that's demonizing business, and you have spending which is crippling our future. you have a major problem ahead of you, and the business community, i think it's fair to say, is concerned about that. >> host: why is the president of the consumer electronics association taking on some of the issues you just listed? >> guest: because, frankly, our board has decided as a strategy saying the only thing that matters to our future and our future health as an innovation economy is the health of the united states' economy in the next 5-10 years. and there's deep concern about the future of the u.s. economy in the next 5-10 years because of our own government's policies. so if that's the only thing that matters is the health of the u.s. economy and we're concerned about the actions our government is taking, that's why i'm out there and visible on these issues. this suspect just one person speaking -- isn't just one person speaking, i'm speaking on behalf of our industry. i'm sure they're out there with 2,000 corporate members, but i only hear support from corporate america for what we're saying

and doing. >> host: paul kirby. >> host: to look at a couple policy issues, the obama administration and the fcc, they want to reallocate or rather free up 500 megahertz of of spectrum over the next decade, some being used by tv stations, by the department of defense. how difficult do you think it's going to be for them to reach their goal? >> guest: well, first of all, in this area they're doing absolutely the right thing because we need new spectrum to have wireless broadband competition. the challenge we're facing today and a lot of people are experiencing it at las vegas at our shows is you are having dropped calls, you can't get access to the internet in a credit environment. that is the future that's coming for the rest of the country. so the fcc, the administration, the nta and republicans -- this is a bipartisan effort -- have together made a decision looking at the future and said, we have a major spectrum challenge. we're having all this video using by netflix and youtube and all this traffic over the

internet is clogging it up, and just a few projections down the road say, wow, we have a serious problem. so they've taken some spectrum from the government, they're looking at spectrum from other sources including broadcasters and saying we have to repurpose this spectrum and make it available for wireless broadband competition. and that's important. it's not just one wireless broadband company. it's just not broadband. it's competition between cable and satellite, fiber, even power line companies can now provide broadband. that's all, in a sense, a lot of that is wired, but wireless competition we need as well. and then the consumer wins. prices are lower, and there's a tremendous amount out there in terms of background. >> host: you said broadcasters are squatting on america's broadband future. there's expectinged to be a big fight. how difficult will it be to get broadcast spectrum? >> guest: well, certainly the broadcasters are a phenomenal political lobby, and they have

terrified members of congress with their power to use their broadcast signal in a way which demonizes members of congress. but i think everyone recognizes this point. when broadcasters were first loaned the spectrum, and it is a loan. they do not own the spectrum, it is borrowed. they had 100% of the population covered. you know, when i was a kid we had three or four channels, and that was it. now broadcasters, basically, are going as a primary source in less than 10% of american homes. america's using cable, they're using satellite. and they're also, frankly, using increasingly the internet as a primary source of broadband. so you have to say is it worth it to take up all the beachfront property for, basically, one type of ship? what broadcasters have done is, you know, right now the signal on cable and satellite is much more important than the local signal. they'll still have that, and they've also preserved their future by investing with us in this a type of technology which allows them to be received

locally over the internet. so broadcasters see the writing on the wall, and i think the fcc in their broadband report which was a unanimous, bipartisan report said, you know, we're going to give broadcasters money for this spectrum even though they don't own it and through what are called voluntary incentive spectrum auctions. so they'll be offered the opportunity to bid out, to get money for something they don't even really own. i think that's quite a deal for them. >> host: how difficult will it be? the legislation introduced last year was bipartisan on this set of options. how difficult do you think it will be to get this legislation through i? because this whole plan to be voluntary rests on those incentive auctions, otherwise broadcasters won't agree to anything. >> guest: well, it is bipartisan, it will be bipartisan. i think it's a question of making it a national priority, leadership from the administration. there will be support behind it. it may be broadcasters will certainly try to get more and

more as a percentage of that revenue because the government has to get a percent, and there's going to be a battle over that percentage, and the broadcasters are going to come out swinging and saying this is bad. but ultimately, there will be a resolution, i'm convinced, in the next two years. >> host: and what about the technical issues of it? even if you had the legislation there's a lot of technical with repacking channels. a lot of it's done in the wiewdz -- down in the weeds, but will it technically work to make this plan happen? >> guest: look, i'm very proud of how we transitioned as a nation for digital television. that required repackaging. that required industries getting together. that was much more complex than taking a little bit of broadcast spectrum and repurposing it for wireless. >> host: now, gary shapiro, in "the comeback, "you write it's time to require broadcasters to return at least half of their present spectrum by 2015.

why 2015? >> guest: i'm a big believer that deadlines allow action. you have to have deadlines for almost anything you do. i learned in writing a book that our deadline was the consumer electronics show, and that pushed me. meetings are wasted sometimes, but they're deadlines for action. our dtv transition was delayed a couple times, but the deadline was very important, and that's what senator mccain and others pushed that through. so that's why you need a deadline. 2020 is certainly way too late because we can't afford to be a nation without broadband internet service. we're already behind the rest of the world and by most measures of broadband, so we really need to get there. it's important for our education future, our innovationing future. all those new devices that are ready to be unleashed here, we don't want the u.s. to be second rate and behind the rest of the world. >> host: on the other side, though, is the efficient use of spectrum. is it the -- isn't the onus on

your member companies to be more efficient in their use of spectrum and how they develop their products? >> guest: well, certainly there's been great increases in what technology can do, but there are absolute bounds of physics. while increasingly companies are doing things and there are breakthroughs that are occurring, it seems we're pressing up against how much you can cut that signal and splice it and splice it to almost the subatomic level and say we can't do more. when you have intel and microsoft saying this is absolutely critical to our future, i believe them. >> host: so at what point is there going to be a spectrum crisis if no action is taken? >> guest: i think we're on the verge of a spectrum crisis in some major u.s. cities today. the great excitement about the announcement of verizon with apple was the fact that a lot of the at&t apple people were frustrated because the at&t service was perceived as a little bit difficult in some areas of the country. so this will give a choice, and

there's certainly a lot more to go in that area. but the challenge is not just the service, the challenge is we're moving to full-motion video in everything we do, and if you want everyone to get it with not only youtube and netflix but all the other services that are about to come or coming, we need the spectrum. >> host: this is c-span's "communicators" program, our guest is gary shapiro. joining in our conversation, paul kirby, senior editor of "telecommunications reports." >> host: you mentioned fewer than 10% of americans get their tv from over the area. do they have a right to continue to do that? some people have said reallocate all the tv spectrum, and those people can move to cable or satellite. do those people have a right? >> guest: well, certainly there's nothing in the united states constitution about that, and one of our dangers as a country is people now think they have all sorts of rights that perhaps they really didn't have like a right to unemployment compensation for two years, a right for health care which are nowhere in our founding

documents. the point of the comeback is we have to prioritize and say what really americans are entitled to. no american should die from a lack of health care, certainly, but is an american going to die because they don't have a free over the air television signal? hardly. we did not support the $2 billion that the american government gave for the dtv transition because we didn't think the a good use of money. we had bigger issues like the fact they're signing mortgages they shouldn't be entering. this was or five years ago -- four or five years ago. you have radio, you have newspapers, you have neighbors, all sorts of things. definitely there should be some type of service, but when it came down to the dtv transition, it's certainly clear in retrospect that those billions of dollars spent were pretty much wasted because, as i said, it was nothing. americans didn't complain, it wasn't a big deal. there's research which shows we can give every american free basic cable or satellite service, and it would be cheaper this terms of getting the

spectrum back than anything we're talking about now with giving the broadcasters money. so that over the air spectrum could be better used in over ways. >> host: one other issue that you address in "the comeback "is immigration reform. and you call for these measures to be taken by the federal government; saws and -- visas and citizenship for gifted students: >> host: how important is immigration reform to your industries? >> guest: it's very important. the one that i would really stress which maybe is not on that list is what we're doing this our educational system. we have most of the ph.d.s are being granted to math and science are to people from outside the u.s. we have the best universities in the country, and what we do is we educate these people, and then we kick them out when they get their degree. they should be getting a green

card. those other things are just basic -- we have immigration problems. i'm really not getting involved with the big, great problem, the fact that we have illegal immigrants here. i don't even talk about that. what i'm saying is forward thinking, of course, english should be our official language. of course we should do some of those things. they make sense. canada gives anyone who's creating jobs a lot of money. we have bipartisan proposals that coffer some of those things in congress. we have to think smart. around the world, when i used to go around the world to my counterparts running electronics associations were giving us a hard time. we were getting the best and the brightest. since september september 11th,t has almost changed. we've become hostile. we need those people. many of our great companies were founded by immigrants. we're an immigrant culture, that's what makes us so great. we have this great mosaic of people. we challenge the status quo. we have the first amendment which encourages innovative thinking. this is america's special sauce,

we have to preserve that as part of our national strategy. >> host: english as the official language, whysome. >> guest: because i think a country should have a common culture and language. what this book is, what "the comeback" is about is, basically, it's a strategic plan for the united states. i originally did the analysis that any business does, a swat analysis, strengths, weaknesses, opportunities and threats. every business does this. industry should have swot, and we should certainly do it as a country, and we should agree on it. a basic element is you have to be able to communicate. let's face it, the immigrants who came here, our forefathers, they learned english. i'm married to an immigrant, my in-laws are immigrants, they learned english. now, look, my wife is insisting my child learns polish and chinese, but i respect that. it's not only good to learn languages because it helps you communicate, it also gets your brain differently. the rest of the world is

learning different language. americans should, too, but i think we need one basic language, and that's english. >> host: you said the u.s. has finalized a free trade agreement in four years, why do you think this is the case, and what needs to be done to kind of spur u.s. policymakers? >> guest: one of the most dangerous things that i see is the arrogance of america's separating ourselves from the rest of the world. canada, south america, europe, asia, they're furiously entering free trade agreements. the president, correctly, wants to double exports. we can't pay other countries to export our countries. you asked why we haven't in the last four years? for four years we've had a speaker of the house i of representatives that was far left, and the unions were very much in sync, and the unions in the united states incorrectly are hurting our country by basically saying, democrats you may not pass free trade agreements. it's horrible, it's destructive, and it's wrong, and it's just killing our economy.

>> host: another issue, policy issue that also involves broadcasters, the question is, should congress pass legislation that would mandate cell phones have fm chips in it? nab is pushing for that, your association and other tech groups say no. why do you think that's a bad idea, and are you going to fight back nab on that? >> guest: this is about radio stations who want to play music without paying and the broadcasters, and the music industry says you must pay, everybody else pays. and there's arguments on both sides. the broadcasters were a little bit clever. they want to block legislation, so they brought us in and say we'll agree to pay a provider if you agree an fm chip be added to every smartphone. and we said wait a second, that's absurd. that's like requiring a horse be put in front of every car when a car was introduced over 100

years ago. that's a very bad policy. there's no support in the congress for that. but there is, i think, support because i think the music industry is right. broadcasters should pay. and the way to do that and the way i think this will ultimately come down is for all new music after a certain date broadcasters will have to have permission to play it. and, or they could be paid to play it. so radio broadcasters can make more revenue, and certainly if musicians don't want their work played, they have the right to say don't. and that unveils the argument that radio's a great promotional video for music. >> host: i want to return to international issues. doesn't telecommunications technology basically erase geographical borders? >> guest: you know, that's a great point. and in the book i've gotten great responses, it's doing really well on amazon and barnes & noble, but my older son said, dads, your book's irrelevant, you're so focused on the united

states. the internet has made it so it really doesn't matter. i disagree. i think the countries and geography still has a purpose. i think america is the best country in the world. i believe in american exceptionalism. we have such great things here, we have a history of democracy and creativity and entrepreneurship, and we let companies and people fail. so there's still a geographic purpose. certainly, the internet has made it difficult to regular late. even europe has different concepts of privacy than we do. why is it america has all the best internet companies in the world? why are we the most creative with our motion picture industry? we have experimentation and a system of laws and a genetically great innovative culture. i want to preserve that, and i believe we're sending kids to iraq and afghanistan. our parents fought in world war ii. we have to honor them. we have to fight to preserve our country and its future, and that's what "the comeback" is about, and that's why i'm passionate about it. >> host: is there a consumer electronics association for the

e.u., japan, china, brazil, etc. >> absolutely. i have counterparts from around the world. i just spent last week hosting and meeting with 6 different associations -- 26 different associations from around the world. we share a common view of the importance of free trade and a lot of other big issues that are coming. but, of course, we're competitive in the ways that we want each of our -- our organization only has u.s. companies or companies that are a subsidiary of a foreign company. we each have our way of competing, and everyone believes in many their own country. >> host: this is what you write about broadband: >> host: why is it that way, in your view? >> guest: well, because we really haven't focused on broadband as we we should. we don't have enough competition, we haven't freed up enough spectrum. in part, we've made it difficult for the telephone companies and others to compete. the cable industry's been the best at broadband.

they were very strategic as an industry. they said we're, in a sense, losing our entertainment audience to other media, and we're going to go after broadband as a revenue source, and they were brilliant about it. i think we have to foster that competition between different providers of broadband and wireless. so i want to look forward, i don't want to look backward, but by measures of broadband we're clearly not doing as well as we should. >> host: should not the cable companies if they were brilliant and forward-thinking be rewarded for that brilliance and forward-ness? >> guest: i think they were many a sense that they are competing with customers, and they get, i believe, more revenue from broadband than they do from other services, or definitely growing. certainly, i have broadband through a cable service. i'm paying for that. it's something which is, it's a good pipe to the home. there's a lot of good arguments for it. >> host: you have new technology, important to new technologies broadcasters would say we're going to have these

mobile devices. what's your reaction to their argument that, guess what? we're going to use our spectrum for not just over-the-air tv, we're going to use it for other stuff? >> guest: you know, that's possible. mobile tv is a technology which is out there waiting to see what happens with it, certainly qualcomm tried it, and it department work. it has worked in other cultures where people are more used to watching tv on the go. in a lot of ways what has become popular is internet on the go. so we'll see. certainly, if broadcasters really get behind it which they haven't and really promote it, it could make a difference. i don't think you need all the spectrum for that. i think that's a matter of slicing and dicing the spectrum which i think we're perfectly capable of doing. >> host: gary shapiro, there seems to be a brouhaha over net management, network management between the house republicans and the fcc. what's your view on that? >> guest: well, there's no question that from an entrepreneurial point of view what's making us great is anyone

can start an internet service, and they could make a fortune. and we do house every major internet company started in the united states, and it was because they were carried by everyone. at the same time, there's no history of discrimination against these things, so nothing bad has really happened yet. and that's what part of the disagreement is between the republicans and democrats. but my view is if we have competition and if we get this spectrum and we have all sorts of different -- if you have as an american consumer five different choices of broadband, the net neutrality fades away as an issue. if you can get out of your contract and you know the terms -- i shouldn't say get out of your contract, if you know what the terms are and you can switch if terms change, the net neutrality doesn't matter that much as an issue when you look out 5-so year -- 5-10 years. lobbyists on both sides that are not working for companies or associations directly, i think people who get advertising, it was the most lobbied, money-spent issue in washington

over the last four years except, perhaps, health care. the fcc did a compromise thing, and certainly the republicans are looking for a reason to call the fcc on it. i want to move to the future, and the future is spectrum. >> host: speaking of spectrum, another nice spectrum block is called the d block which public safety wants. does your association have a view on whether that should be reauctioned to provide that spectrum to companies out there? >> guest: well, certainly our view there's a balance between essentially three types of spectrum, and everyone has to get a little bit. the public safety community, what's more important than that? they have a compelling case to make, and we want to see it happen. they deserve to be listened to, and they deserve spectrum. we all want them to be able to communicate and have basic emergency need. the second is the licensed spectrum where it's bid on, everyone gets money. but there's a third called unlicensed spectrum, and a lot of innovation occurs there. we first pushed for that years ago, and it started out with

garage door openers, but now i there's all sorts of technologies. unlicensed means no one pays for it, and you have to abide by certain rules like not interfering with others. it allows great and tremendous innovations that i can't even think of, and there's a lot of opportunity there. all spectrum is essentially the same except it has different characteristics, but in terms of how you allocate that beachfront property, there should be some for each of those three groups. >> host: but specifically, does cea have a position on what should occur with the d block? >> guest: no. >> host: okay. as far as spectrum, something else that the fcc has done is white spaces. and a lot of your members have pushed for that to be opened up which it's going to be for unlicensed devices, so that is some of the innovation i assume you're talking about for broadband -- >> guest: oh, definitely. the fcc's almost done, and that was a tricky thing for the fcc to do, to deal with the spaces between the television signals and so-called white spaces. and deal with some of the people

that are already using that in one fashion or another, you know, the wireless microphone people versus others. but definitely microsoft, spell and others are just waiting for that final decision, and we expect the fcc to do that shortly. >> host: i-shapiro, back to the consumer -- gary shapiro, back to the consumer electronics show and policymakers. coming out of this show, coming out of all this technology, again, what would you like policymakers to know about your industry and how would you like them to react here in washington? >> guest: well, i think policymakers understand as they go out to the ces, and this is democrats and republicans, that basically innovation is pulling the u.s. economy along, and there's a phenomenal matter of innovation out there. it's tough to walk that show floor and not be optimistic about our future as a country, a society and an industry. and you recognize that government isn't the one that necessarily creates the jobs, but government has to make sure entrepreneurs can start because we run that show for the