that decision. had i had an opportunity or if i had an opportunity to do it all over again, i probably would have made a different decision. >> that's good news. that is good news, general. senator brown? >> thank you. i just have a couple of questions. in be fy-11, general, you're slated to get $16.2 billion. if approved, how will that money be tracked, and how will it be measured, and what expected return on the investment would you expect the taxpayer to get? >> senator, we would expect that the full measure of the $16.2 billion which is primarily designed for training and equipping of the afghan security forces, we expect that the full measure of the taxpayers' investment in terms of a return will be achieved. to that end, we have asked for

additional funding for sigar so that we can increase the numbers in our staff so that we can provide the coverage and oversight necessary to insure the american taxpayer that that money is completely used for the purposes for which made available. .. >> would be exclusively used for that purpose without waste, fraud, and abuse. that's what i'm referring to, senator. >> i see this 25 -- if i'm reading this correctly.

how many do you -- how how muche i going to spend in personnel compensation? do you have any idea? >> personnel compensation, not unlike the rest of the federal community, is high. our personal compensation is commemorate with my sigar counterpart, our staff who work in afghanistan by way of a compensation package approved by the congress, received 70% in addition to their regular pay for danger pay and location pay. we have to pay that, senator. sigar is an independent agency. i must pay as we go for everything that we receive, personnel and otherwise. the cost is very high. but we also a temporary organization, senator. so when we bring people aboard, they know that. we bring people aboard for 13

minutes. it's not like a statutory agency, and inspector generals thereof. we are also competing in a moral where 70 other inspectors in this cities are looking for investigators. we have to compete with their compensation, in order to bring aboard the level of talent that we need. i wish it were cheaper, senator, i certainly do. >> let me finish this with. then we're going to go to the next panel. you know where i'd like to you to focus, follow the money. find out where the money is going. and zero in on the taliban issue, why and how they are getting any of our money is number one. i want to know if there's any bribes, payoffs, and criminal activity where the money shouldn't be going. if there are people that are doing it, what we are going to do to stop it and plug that leak.

i understand. but not for you telling me, i would have overlooked the fact that you got appointed and there was a transitional period. so i get that. but now that you've done all of this women in elections and all of the policy stuff and you've focused there. i think the message for me and senator mccaskill and the folks that did your independent honor -- i commend you for reaching out and doing that. either was a cya, or you seriously wanted to get there and get some guidance. maybe it was new, maybe there wasn't any guidance. they have given you the guidance. i think we are giving you some guidance. please protect our money. find a way to bring that number up so that we can feel confident that the millions we are giving you, we are getting millions in return. at least make it a wash. that's my only message. i have nothing further, thank you. >> let me clean up a couple of things. i don't have a lot of questions.

in fact, louis freeh never was encouraged or inclined to participate in the contract; correct, general fields? >> that is correct. as far as i know. what assistant mr. louis freeh may have given mr. schmitz, i am not aware and able to comment on that, senator. >> i have not gone into any issues surrounding mr. schmitz and his previous tenure at the department of defense. were you aware at the time you hired him there was controversy concerning his previous tenure at the department of defense. >> i was unaware. >> you may have done a google search for his names that there were questions to ask. you would have had a chance to ask him before you hired him and be clear there weren't any problems associated with him. >> senator, our initial initiative really was to engage the louis freeh group of which

mr. schmitz to our understanding was a part. >> so you -- so now you've said that your -- the reason for hiring him was to get to louis freeh, to engage louis freeh. >> not necessarily, senator. the reason for hires any of the entity was to help bring the talent and expertise that we needed to address the issue in sigar. >> i said why didn't you research him. we were hiring him to get to louis freeh. >> no, senator, i did not say i was hiring anybody to get to louis freeh. >> why did you not vet mr. schmitz before you hired him? >> i had no cause. these matters were being highed by way of the contractor, and by way the cce. i did not have any reason to

doubt the integrity and so forth of mr. schmitz, as i understand it, the issues of which he may have been accused during his tenure as inspector general, this is information that i've found out subsequent to the senators having raised about my decision in hiring this particular contractor. as i understand it, the issues that were brought up concerning mr. schmitz were not corroborated in the following analysis. >> you understand the reason this even has come up in is preparation for this hearing, we did basic investigatory work that sigar should be doing. when we did basic investigatory work, we found that senator grassley had a lot of questions about mr. schmitz. i'm not saying whether senator grassley was right or wrong. i'm saying it was troubling that you would not be aware of those questions before paying someone the amount of $450,000 a year to

do work for the federal government, general fields. that's what i'm getting at. this audit agency is careful about what they hire and whether or not there's any appearance or problem. i'm not saying there is a problem. but i fact that you didn't even know there might be one is what i'm trying to bring to your attention. mr. mr. -- did mr. schmitz ever go to afghanistan? >> not under the contract involving sigar to my knowledge. >> so the pay for him, that you claim is market value, the $45,000 a month, did not involve any high risk on mr. schmitz's part, other than calling louis freeh's office? >> potentially, correct as far as i don't know, senator. >> all right. >> let me ask say, beg your senator's pardon, mr. schmitz is a registered government contractor as far as his registered to contract with the

government of united states as far as i understand. >> i understand, general, but i think the point i'm trying to make here is your job is to oversee contracting. your job is to set the gold standard on contracting. so you do a soul forth contract, no bid, you immediately hire someone, clearly there wasn't even a vet done that brought to your attention that there are questions you need to ask him about his previous service as an inspector general. that's the point i'm making, general fields. that's the point i'm making. as -- had you ever done or worked with an audit agency before you were given this game. had you done any audit work or been around any auditors before you were given this job? >> yes, senator, i had been. >> tell me what capacity, prior to taking this job. >> i worked with auditors in

conjunction with my support to the iraq management and reconstruction office or irml. it was indirect of work associated with reconstruction in support of iraq. >> what audit agencies did you work with? >> i did not specifically work with an audit agency per se. but as the chief of staff of irmo, my work covered multiple dimensions of reconstruction in iraq. >> if -- >> prior to that, senator, i served as the inspector general for united states central command. i did that work for two years. and that work involved some degree of oversight involving audit-type work, but not necessarily the professional auditors by which sigar is

characterized. >> right. this is something that the public is not aware of. there's a vast difference between inspector generals within the active military, and inspector generals within the federal government. correct, general fields? >> i would say yes. >> they report to the commander and there as the eyes and ears of the commander. they have no duty report to the public or congress or to performance an independent function in terms of monitoring taxpayer dollars; correct? >> those inspectors general are guided by the basic intent, no less, of the inspector general act of 1978 by which i and other senators are guided as well, senator. >> i understand, i was shocked when i went to iraq on my first contract oversight trip, and i'm sitting with inspects generals, i didn't realize we had two varieties that were different. i wish they weren't called the same thing. i wanted ore name the military inspector generals another

thing, the military informed me they had the name first. it got tricky. these are not the same funks. -- functions. they don't do the same thing. the reason that i ask, general, the first thing you do if you have an audit agency, figure out a risk, and do a tier analysis as to what tier is top tier of work and the highest risk, and you go down and do your audit plan determines how much resources you have and how to get to the most risk. >> yes, senator. >> at what point in time was risk assessment completed at sigar? >> i will go back, senator, to what i said earlier. we conducted a risk assessment which was published in our 2008 report to congress. that risk assessment was made up of several elements. it may not look like a risk assessment as the senator mightt

--. >> it's not a yellow book risk assessment, isn't it general fields? >> say it again? >> it's not a yellow book risk assessment, is it? >> it's not a yellow book per se. but it contains the assessment when it comes to oversight of money. >> did the auditors working for you at that time tell you that was sufficient in terms of yellow book assessment? >> i had no auditors. because we completed that assessment in conjunction with our october report to congress before i was privileged to hire my first auditor. >> so you are saying that you performed what you would consider a professional risk assessment of a major responsibility in terms of auditor function without any auditors? >> i performed that assessment, senator, intelligent folks. and i feel that this is not -- i don't feel that this is

necessarily rocket science, in order to determine what needs to be done, senator. >> you know, i got to tell you the truth. once again, i do not mean to be cruel. i do not mean to. this is not fun for me either. it's very uncomfortable to say that i don't think that you are the right person for this job, general fields. i don't think that's the right person for the job. [applause] >> no. that's very inappropriate. please leave the room. >> i'm leaving the room. >> please. please. >> thank you. >> please. [inaudible comment] >> the risk assessment -- the reason that you had the findings from peer review was because you felt -- fell short of the professional standards that are demanded in the world of

auditing. and i'm not saying the people that worked for you weren't intelligent. i'm not saying you are not intelligent. i'm not saying you are a hero, sir. i'm saying this is too important of a government function to not have the very highest level of experience, qualifications, and expertise leading this kind of audit agency. i have no other questions for you. we will keep this record open. if there's anything that i have said in in -- in this hearing that you think is unfair, if there's any information, we will keep the record open. i can say i will assure that you will look at all of it with the eye of an auditor. i want the record fair and balanced, and we'd be happy to include anything else that you'd like to include. i thank you very much for your service to america. >> madame chair, if i may. >> i'm sorry. >> no, thank you. i appreciate your service as

well and your forthright answers. >> thank you, senators. >> we will now take the third panel. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> former british prime minister tony blair has been called back

to testify again before the british inquiry commission looking at the iraq war. which is examining british involvement, and what led to the 2003 invasion. mr. blair who was prime minister from 1997 to 2007 testified for the first time about a year ago. live coverage here on c-span2 at 4:30 a.m. eastern. >> as the house debates repealing the new health care law, the national center for policy analysis is recommending nearly a dozen changes to the law. the center is hosting a briefing today that will include health policy analyst from the heritage foundation, the american enterprise institute, cato institute, and the american academic forum. here at c-span2 at 1 p.m. eastern, the house democratic steering and policy committee will look at the future of the health care law and gop efforts to repeal it.

members have invited patients to talk about how the law has affected them. >> the house takes up the repeal of the health care, watch the debate and final vote on wednesday, and go to c-span.org to read online, and continue on twitter and facebook pages. >> in a few moments, we're going to show you an hour of venezuelan president hugo chavez state of the nation address. first a background with a reporter that covers venezuelan issues. >> president hugo chavez gave his state of the nation address saturday, how long did he speak, what key points did he touch on? >> well, he spoke for more than seven hours. i suppose the most important thing in defense, at least what most of the commentators have been focusing on since is that he was remarkably con sin tri,

he usually in the his public addresses and addresses which are frequent, takes a much more belligerent line, and has done in previous addresses to the nation when we speaks to the nation. on this occasion, he was very saying, for example, that he and the opposition or the government and the opposition were not enemies. they were merely political adversaries, there should be dialogue. he also offered to cut back this rather notorious enabling law which the outgoing parliament handed to rule by degree degree- decree by as much as 18 months. on the whole, that's the main message. >> he's been in power since 1999, is he popular? could he win reelection? >> the next reelection is at the end of 2012. his current popularity rating is quite a bit below 50%.

it's significant as well when people are asked who should be president after 2012, about 2/3 of respondents say they would refer a change of president. while he has been extremely popular for most of the period, that does seem to be in decline. perhaps because we're in an economic crisis. >> the new national assembly was elected in december. what's the new makeup and balance of power there? >> well it's 165 seat assemble of which the government has 98 seats. the main opposition coalition has 65. and there's a party which was with chavez and has recently split with him, it's not formally a part of the opposition. 98 to 67 overall. which doesn't actually reflect the popular vote. the combined opposition got rather more than 50%, and the

government side rather less. so the parliament doesn't really reflect what's going on in the country. >> president achieve have -- chavez was granted power during the late lame-duck session. how did that come about? what it mentioned on saturday? >> it was mentioned. there's two versions, the government version it's necessary because of the flood disaster that hit venezuela in the last couple of months and which has left 30,000 people homeless. chavez says he needs special powers to deal with the aftermath. the powers go well beyond what could be necessary in an emergency. the opposition says that what's happening is because they have now returned in the floor to the national assembly, to the parliament, it's necessary for mr. chevy vermont, -- mr. chavez, he sees it necessary to

bypass them. >> what's the relationship between venezuela and the united states like? and then with other latin american leaders, who are the key allies of venezuela? >> well, to answer your second question first, i suppose the ally is fidel castro of cuba, or the castro brothers regime in cuba. the other countries which are very close to mr. chavez has been on all parts of his national alliance which is known as the alba, of primarily, plus smaller nations. as far as the united states, it's been an adversarial relationship more or less since mr. chavez came to power. that's not really changed, if anything, it got worse. at the moment we don't even have an u.s. ambassador here because mr. chavez decided to veto

washington's choice for u.s. ambassador. relations is rather low. and although they are not perhaps fierce in verbal publicly as when george w. bush was in power, there's not a lot of love lost between the u.s. government and venezuelan government. >> you mention rejection of the selection of our ambassador. why did that happen? >> well, the united states chose larry palmer to be ambassador to caracas, in his senate hearings and conversation hearings, in the course of those hearings, the senator asked a series of written questions which mr. palmer replied -- to which he replied in the frank terms that one would expect. this was then made public. the venezuelan government used that an as excuse that was intervention in venezuelan

affairs, and he wasn't fit. >> phil gunson is a freelance reporter based in caracas, we thank you for joining us. >> thank you very much. [applause] [applause] >> translator: first, in addition to the arms for personal use, that have been spread throughout. in addition to the values of associated with violence, these are the things that we need to disassociate ourselves with. we talked about drug trafficking, we talking about about alcoholism. it's not just a question of having alcohol, i also live that according to the poet. i lived through that phase.

but it's one thing to enjoy yourself, spend some leisure time with your family, and having a drink, and it's a different matter when you see total excesses, massive consumption of alcohol on the streets, and i must congratulate one of the mayors from the opposition matter in miranda who issued a decree banning the sale of alcoholic beverages after 8 p.m. i think it was awesome, i congratulate you. because that's where we need to focus on attention. the microtrafficking, drug trafficking, alcoholism, the soap operas glamorizing drug

traffickers, especially on television, projecting violence, violence against women, and i know that there was a horrible program, i don't have time to watch it, but somebody sent -- i received a video showing some people, some couples, what's it called? "12 hearts" was an obscene display, offensive to women, using women as objects. and the dress styles, -- and i'm not sure what time was that? in the afternoon. at the time children are watching television. we can't tolerate that. fortunately, i said to aailyah, before we enforce the law, let's call camero.

no, i i haven't been watching that. you are the owner of that outlet. he assumed that responsibility as the owner, because he's a serious-minded person. so we need to have people step up and say we're making a mistake, he gave ordered to remove that program. and if he hadn't done that, we would have had to enforce the law. we can't permit this. we cannot permit these things. and that's -- these are one the factors that has the most influence in this unbridled level of violence. i remember my son, and my boys, -- i wouldn't buy a rifle or musket, i'd rather buy them a book or a ball to play with. so sometimes people fall into that temptation. i remember the -- my son, the son of [inaudible]

they were all walking around with shotguns. and this is the result of that violence, that overall culture of violence. so i ask, i beg everyone, that we face this in a serious-minded way. we have begun, i think finally, we have begun to actually get to the pulse, the heart of the problem. because we know that there are police departments that have been infiltrated, and we have the mafia infiltrating some of the state security units, and, in fact, we had a whole wave of kidnappings and in other states. i said to the minister, look, we've got kidnappings and in a few weeks the governor. he said what happens is kidnappers that came from one area are now coming into this area, and conducting kidnappings

as well. so this is where we need to enforce the law severely, and we have to do away with impunity. impunity cannot only be applied to one sector. because those who defend impunity don't care that some murderer is lose on the streets, or thief is running around lose. impunity is a cancer. a true cancer. so we have launched a comprehensive project. and i ask that the national assembly please follow through on this in a serious-minded way to help us. i ask that the mayors, those who represent both the revolutionary, as well as the opposition, governors, members of congress, i have my whole life invested in these measures,

the bolivarian police, it's beyond this. it's a total initiative who are completely ignore. because those officials who don't want to see what's going on within the issues, the very serious problems that we're facing, nevertheless, this is a problem where we have been developing a project for several years, it's a comprehensive, preventive program. prevention with responsibility. that includes collective responsibility, resuscitating values, culture of peace, or nonviolence, it is a comprehensive program that includes cultural, education, social, economic, and very, very deeply rooted in cultural pillars. i remember the bratten. it was basically aimed at aiming

for the cooley. metropolitan police used it. just to give you an example. just as many police officers from the metropolitan police, the governor's police infiltrate ed by kidnappers, drug traffickers, we need to address this firmly at the institutional, moral level. we need to address this collectively. this new concept of public safety, i'm just going to read one page, reflecting that merger of two fields. security and development that needs to be translated into stability, peace, this new approach provides an opportunity for our fellow citizens to take hand in decision making at the local, regional, and provisional

level so that we can instill a culture of peace that is based on strengthening collective moral, political values, and reducing those areas that put human dignity at risk, and also to be able to prevent some of the major causes of crime, in other words, create the conditions conducive for achieving a true social inclusion that will assure the human and basic rights. it is the basic concepts, and i invite you all to study this. to become more and more actively involved in confronting this issue which is a problem that is severely effecting our society. in venezuela and beyond venezuela. so the bolivarian national police in 2009, it's already

commemorated it's first year. it's a model for police force, and we've already undertaken the selection protection, we already have the experimental security academy established. and this is not the project of a single political party. it's not the chavez project as some are saying that i'm throwing is in the chavez hordes. it's a serious, scientific, human process, and when we look at that, and hopefully we can replicate this, we're going to try to replicate it throughout the country. perhaps the governorships, the municipalities can begin to replicate that with the values, within that model. and in order to confront one the greatest scourges that we face. the bol vainian national police have been successful in reducing homicides. this is very closely, seriously calculated.

mathematically calculated, and i'm the first to say that we need to have that mathematical precision. we've had serious minded discussions with the -- for example, the president of the national bank and other officials. we're all looking at it in a mathematical way. how can we deal, and also with ethics. this has been put to the test mathematically. whenever we begin to use the bolivarian police, one of the most density populated municipalities. it's an area that is greatly affected by often kinds of crimes, like robbery and homicide. we launched the initiative in one of the most hard core areas, nucleares. we know those areas are the

highest crime rates are fairly close to one another. we have merida, lara, these are the regions with the highest crime rates historically speaking. that's not because the opposition is in government in merida, or predecessors who left that legacy. those who assert these things are lacking the code of ethics that politicians should have. we need to first study the issue, regardless. it's a problem that affects all of us, regardless of who's in office, either the president or governor obvious -- governor or minister. of it's a diabolical process that has gone beyond and spilled over. it's affecting each and every one of us. we need to recognize that. now the national police there in

that area was able to reduce crime, and it wasn't just the police, it was with the community at large. it received a 44% reduction in homicide hate -- homicide rate in just one year, the first year of it's existence. [applause] [applause] >> translator: and in those areas, i think, it needs -- this needs to hearten us, it needs to encourage us to continue to move forward with that model. we need to preserve it very carefully. we need to continue to perfect this initiative. nothing is perfect. but we need to find that. we need to go beyond the limits and make improvements. so we have focused our efforts also and some of you who have already asked about this. i know this was in a letter that you sent to me, i wasn't

surprised. i thought it was a good idea. because it's almost an intervention since you -- because as a state you have to assume greater responsibility. and i do assume that responsibility. and i've always -- i always assume it. i ask, however, for that shared responsibility. so one the questions that you asked, you asked why have i allowed, you said that i have allowed -- that 150,000 people be murdered. well, maybe that's not what you intended to write in your letter, but let's get to the substance of the problem, instead of the format. the issue is that the police that is involved in prevention and educational measures, this is a new concept facing a new

reality. 44% that reduction in that area, hopefully we can continue to expand on that. hopefully we can expand the law enforcement focus and improve the statistics. i have a lot of faith in that. and i ask for assistance, because it's to benefit all of us. take -- just imagine in sukra, which is the largest with the highest crime rate, the bolivarian police that began operating, we went into an area that has 12,711 inhabitants. 1,711 inhabitants. that's serious. these are the results of that

what went on in the 20th century in one small area in the country. that's where most of the population of venezuela is concentrated. but if you travel from victoria down maliki, it's a huge country. a huge expanse. almost completely uninhabited. that's the result of this imbalance in population growth. it's a symmetry. i have a great example of hope for the comprehensive development of the whole area known as the corridor of oil development. 55,000 square kilometers, and i'm sure you are familiar with the fact that we have under

taken intense investment and scientific studies, and we've been able to certify with what we did at the end of the year more than five billion barrels in november and december, and that has been recognized, officially, throughout the world and backed with scientific research. venezuela is the largest oil producer as far as oil reserves in the world. [applause] >> venezuela, we had given that up with some of the open policies of the path. i remember the military weren't even allowed in that area. i remember going north, we

weren't allowed to go in the areas. in other words, we had yieldedsoeverty in the largest oil reserves in the world. that's one the reasons that we maybe seen as a threat to the united states. we are building atom bombs. no. the issue is here we have the largest oil reserve in the world. from the time of gomez onward, when somebody tried to recover sovereignty venezuelan oil, that person could be eliminated. first castro was kicked out. then years went by. and of the 50/50, he was kicked out. then delgado chambone who was killed. the oil investigation, that was a call as was said, this was

nationalization. but yet many of the oil companies remained and continued to have ownership over the resources for years. that oil plan here and there. so look at the bolivarian police. these are important statistics in my opinion. we began with 950 police officers, men and women, and women who have contributed their wisdom, their strength of character, to lead. and i said when i leave after two or three terms of office, i hope i hand over the mantle of presidency to a woman. here in venezuela, that's what

i'm seeking. that's what i would like. please, i don't want to discounselor the men. because it's the venezuelan people who will decide that, who and when that will happen after i leave. of the 952 officials, we increased it to 4,000. from 952 officials we went up to 4,222 officials. and officers. the national police began with the first graduation class, 900. and we saw an increase of 444% in one year. that reflects the major investments, major efforts undertaken by our government. and i underscore the need to increase women and the role of women and receive that parity in

our institution. we have 718 women that have joined the ranks of the national police. i continue to call on more and more women to join, in addition to the men, the national bolivarian police force, an organization that is consistent with international standards creating police units based on these standards, 3.6 police officers for every 1,000 inhabitants. that's according to global standards. we used to be way below that. and we had a very poorly distributed police force. that's why we wanted to deploy them in the heart of some of these neighborhoods and urban centers. in 2010, we expanded those areas where there was a police

presence. we began with community policing, then we continued with vehicle patrols, and then finally the motorcycle and foot patrol. then anti-drug services also criminal investigation services. but i want to point out in particular, the community police that is based on the principals of integration and personal attention to the community. police serving as a force to articulate better livings standards. do you know who participated in saving the lives of many people? especially during -- in the tragedy that affected the main highway. it was the national police. they were able to evacuate families. they were able to take them back to the security academy for refuge. the police expanded it's radius

of action in specific areas, including security services and patrols in the metro. we were getting reports that the -- during the few months that the police were already present, they were able to dismantle several gangs that were operating and robbing people in the metro stations and creating a crimeless of lawlessness. second, a permanent security presence in the training. also in the metro system in santa, and diplomatic services, as well as anti-riot, as well as highway patrols in the major arteries, and highways. so the results are very encouraging. as i stated, we are following --

we're going down the right path. we've seen in notable reduction of all of the crime statistics in these areas, in particular, looking at crime in 2008 to 2009 in december 2009 and december 2010, we saw a major reduction of 57% of most violent crimes committed in the sucre district. that's a huge reduction for one year. 57% of all crimes committed. as i stated 44% reduction in the homicide rate. a drop throughout the entire perish of 26%, and then in the municipalities of [inaudible]

we saw a reduction on 62% robberies. and if we look at physical attacks, we saw a reduction of 62%, and in gender violence, we saw a reduction in 64%. so it has to do with cultural efforts. it has to do with preventive measures. it's not just a question of pass ing having reason si laws. they were aimed at sue pressing the poor and the people. in 2011, the initiative cannot be delayed. and i press that point. we cannot delay. we need to quite the contrary accelerate the process in 2010. in 2010 -- actually 2011, the

efforts will continue to multiply. there's another plan that has a greater territorial coverage that we launched in 2010. an action plan that is based on mapping. mapping of criminal focal points. prioritizing those states that according to criminal studies and statistics represent 78% of most of the prevalence of crimes, in particular homicides. this plan will be the bicentennial public security initiatives. i wanted to congratulate all of you involved in developing that, police, law enforcement, officials at the national, state, local level, the communities, the armed forces, this is an instrument that's based on scientific, specialized efforts. and in 2011, we will prioritize prevention over enforcement.

but, of course, we will also carry out those law enforcement measures against crime. similarly, in 2011, we envision because in 2005, 2010 we went up from 900 to 4,000 law enforcement officials. this year, and i see you are taking notes -- sir. in 2011, we envision an increase to 12,000 -- in fact, 12,000 new law enforcement officials that will be trained through the new law enforcement academy. with this, the number of officials will increase to a total of 6,7 -- 16,722 by december of 2011. at this point, the bolivarian police will expand at the national level and will be in

operation in those municipalities and areas with the greatest rates, highest rates of crime throughout the country. so in these municipalities, not in every municipalities, those municipalities that have the highest crime rate, lara, and miranda, in addition to the capital where we have will reinforce the deployment, and the government will this year in 2010, will have 1,643 million boulevards that will be invested by the government, and at the national academy for training new law enforcement officials, 360 million.

these will serve as a bridge with the public linking the government, the police, the people's police, the police focused on establishing justice. and at the same time, we will conduct disarming programs, we will try to reduce those values that are associated with violence, the sale of illegal arms. we hope to recover the concept that firearms should be basically in the hands of the state and those citizens that have achieved a permit, but the way in issues licenses, you have to be strict. the war on drugs, one of the other major advances that we

have received in the bolivarian revolution. we've had significant advances. in 2010, 63,820 kilos of different drugs have been seized. you know, we are constantly attacked, you know, especially at the international level. here we protect drug trafficking. well, this is the truth. in venezuela, 12,955 people were detained and 9,500 procedures and we have also extradited 17 kingpins of various international drug trafficking organizations. we just extradited someone else. they haven't been extradited yet. canadian, and we also extradited a columbian one last -- yesterday.

and he thanked me. and i said, no, you don't need to thank me. this was a kingpin that was sought after throughout the world. so 17 kingpins have been extradited. remember, mr. colone, the god father, al capone. when the da was here, nobody was captured. nobody could be c these are the facts. we have launched a national plan against microdrug trafficking. we have seized 12,182,550 doses. that means that thanks to the actions of law enforcement units, more than 12 million doses did not reach their final end users.

mainly the young people that have been severely affected by illegal drug trafficking. through the actions of police units, specialized forces, we have also successfully detained and we seize 7,700 tons of precursor drugs and other inputs that were being diverted for illegal drug manufacturing. in 2010, we dismantled 18 laboratories on the border with columbia. thanks to the presence of the national bolivarian government and armed force who's are patrolling on land, in the air, and in some cases at sea, for the 5th consecutive year we were able to declare an abscess of illegal drug cultivation in

venezuelan territory for the fifth consecutive year. [applause] >> translator: we have ensured and we have seized over 500 assets, including aircraft, yachts, large mansions, businesses, especially in the lowlands. and you see suddenly these investments appear out of nowhere like in barina. be careful. that's one the motus op ranidae. we have seized several branches that have been very profitable, dairy farms, cattle ranches, and 35 aircrafts have been seized by us.

i'm not going to press the point too much. i'll leave it you up -- leave it up to you. there's the area that i don't like. maybe we can begin a debate. in other countries, the operation to shoot down the suspected drug traffickers planes. the other day i spoke with f-16s pilots, and a former air force pilot i know they never beat in competition, the pilots would tell me that the suspects would make fun of the authorities because the authorities are trying to slow down, in fact, it's very difficult for an f-16 to slow down enough because of it's basic characteristics, it's hard to slow down.

so the suspects would laugh at them, even close the curtains, they were lower the curtains on their own aircraft, and continue moving forward. so that is why we're implementing this legislation. and i'm -- i'm asking that this be studied. because i know that these are human beings, and i don't really like the idea. but this already exists in other parts of the world, it's hard for me to propose that. but we need to conduct a full-fledged effort against drug trafficking, against crime in general. [applause] >> translator: we have continued to sign international agreements with various countries that has cooperated fully. the only country with whom we haven't had an understanding is with the united states. they had the dea here. do you know what the dea was doing here?

they would conduct undercover operations because the backs of our government and our institutions, strange operations, and i think, even involving drug trafficking. and they had a bunker here. and they were building -- they had communication systems in order to intercept us. how can the country accept that? i say that because we have been so frequently attacked because we put an end to the agreement with the dea. but we are working together with just about every country. this year we signed agreements with italy, the dominican republic, syria, gambia, we have 52 cooperation mechanisms in place against drugs. the struggle that we wage against corruption must continue. and that is something that i urge as chief of state, as head of state to the legislative

branch the judiciary, citizens, the prosecutors office. we need to continue to strengthen our efforts to try to do away with this scourge. and we need to continue the efforts with the appropriate instruments. i know we have incoming judges appointed by the assembly. and that's good in order to refresh to renew, to reenforce law enforcement issues as well as the correctional option, process. now we need to discuss economics as the coffee and sandwiches arrive. but i must continue forward because you have expect that of me. :

the percentage and how that has changed, you probably have some screens you can display this on. you have screen there? what we see here is the percentage or the ratio, perhaps it is not that.

i didn't have enough time to make modifications. since 1961, up to 2010, this is the ratio between the gdp and the total nation's foreign debt, both the external and domestic debt. that dark shaded area reflects the foreign or external debt. this area is dark red, reflects the domestic debt. that is the ratio percentagewise with the gdp. if you look at this peak right here, that reflected events in 1988. 1987/1988. this was right after the most successful renegotiation known to the world, one where the

government assumed private sector debt. you can see how it spiked. not because venezuela received any more revenue but because venezuela assumed foreign sector debt. private sector debt. at that point during that spike it was 80% the ratio between the debts and a country's gdp. here we have the pattern for 1998. that is where it was in 1998. what that was attributed to was the oil, financial, economic coup d'etat, will flow we face. you can see some than how we have seen a reduction in the

debt but the ratio today is 20.17% of gdp. which is that over $300 billion. when the revolution came into office it was about $100 billion. today, we have reached a ceiling of $300 billion. it is more -- we have seen an increase of growth of the country's gdp on the order of 300%. i also want to point out there are european countries whose debt has tripled these heavy its gdp. the u.s. with all its power is the most highly indebted nation on earth.

it is twice the value of its gdp. and i say this just to provide input for our discussion. we have today seen a focus on domestic debt. we do have resources. we have sufficient resources in order to maintain a specific development programs and we continue to resort to foreign debt when so required. we don't have the same dependency that we use to have 10 or 15 years ago on the imf or the world bay. this year, despite a drop in the country's gdp from 2009 into 2010, at the end of the year, i

think we achieved zero% -- zero percentage increase, we will work hard to ensure that this year we will register a positive economic growth rate. the cause of the financial crisis is not socialism. what about the growth rates in 2006/7/8/9 which were among the highest rates in latin america. in some cases it reached 18%. fifteen%, 10%. the main cause to the setback was the external financial crisis. we still rely a great deal on a our oil revenue. an overwhelming reality. we have challenges ahead of us

that the drop in oil prices, the reduction in oil production raised in accordance with the opec agreements, and now we have overcome that, we are moving upward. in addition to that financial crisis we saw drops in investment rates, we saw climate change, the energy crisis, electrical energy crisis as well as inflation and i have some data here. here we have the gdp statistics. these are exact data. i try to make sure they're fixed values. the gdp was $88,597,000,000 in 1998. in 2010 it was $257 billion.

this is a proximate -- statistic. here we have the chart that reflects the variants in gdp from 1970 up through 2010. here we see we were almost at 0% growth rate. then we saw an increase and then we had the crisis in 2003 with a major drop. then we had a spike. we reach that peak. we continued to have high growth levels and then we had a drop in 2009 to-3.3. in 2010, it was negative 1.9. but we are now moving up. in this first quarter we should

be back in positive growth level. this is very important and i ask that we undertake joint efforts between the public and private sectors. ready to establish those working group's as maria mentioned through those trade and labor working groups. we have a minister mendez, minister ro joe of agriculture, minister jordan who is chairman of the economic and financial development working group. minister gino con from the basic industry sector. inflation rates. i read and i hear that hugo chavez is to blame for inflation. that the revolution and the government and socialism is to

blame. this is the truth. the mathematical, empirical truth. if you look during the last three administrations, from 1989 to 1993 the average inflation rate was at 45.3%. let's not forget that. inflation had taken off. this was not known at the time of the previous presidents. we didn't have inflation after black friday. chaos and disaster. then we began to see these issues arise. there was a loss of control. 45% inflation rate. look at 59.6%.

in one month it was almost 100% in one year. achieve 100%. if you add to that, wage freezes. it is high, you can study this. you can refer to of the books -- i admired him a great deal and i always would read his criticism. every time i spoke with him i enjoyed those discussions because he had a good sense of humor. he didn't like to use the computer because he liked the sound of a typewriter. they actually added to the keys of his computer the sound of typewriter keys. i have his book on macro

economics. i enjoyed it. he is a major asset to venezuela. i always remember him and render tribute to him. this is the average. 21.7% inflation rate and continue to make effort. this is a high rate but we need to find measures. if you recall in the last two years we almost reached 10% inflation rates. here is the inflation rate during the last few years of the caldera administration it reached levels of 103% and then began to draw. the last year it was 29%. then 13 during the second year and then 12 and here we saw an increase of 31.2% and then it

went up to 31.9%. if you look at the average is much lower. we have to break through that cycle. we have to go through that threshold, below 20%. then we will bring it below 10%. that will be done in a few years working in a coordinated fashion by listening to one another. various sectors. but not demonizing one another because when you demonize someone you are not listening. you cannot listen. if you are the devil i won't pay attention to you. if everything is demonized, communism, fidel castro -- there is nothing to discuss. the same has to be said on our side. the private sector spokesperson, we need to make an effort to listen and understand and sit down and discuss things.

all of this has to be driven by national interest. we are not here to exterminate one another. we will live together throughout our lives and our children, beyond those new generations of young people. they will have to coexist. getting back to the inflation rate, the economic statistics, gdp. i am done with the economic aspects and i am going to move faster to discuss health and to benefit the national assembly at 4:30. let's take a look at the minister of science and technology background information and i will make copies of all this. mr. speaker. so that you all will have access

to this. this is being broadcast over the networks. there is a game going done. i know you have to keep -- you be the time keeper. let me know if the game is on. if there is a game we will finish so that we can have the networks broadcasting. sometimes i am playing and people say thanks to hugo chavez we couldn't watch the game and i didn't even know about it. what time is the game? 5:00. it is 4:30. when the game is about to begin, you have the green light to take us off the network or anything else going on. any major event worldwide or within the country.

sometimes i am blamed. that hugo chavez was on the network so that some news would not be reported. i don't want to cover anything. i want everything to be seen, what needs to be seen. there are a few important issues we need to discuss regarding science, technology and various intermediaries. industrial sectors. democratization to access telecommunications which is a sector that continues to grow. we talk about the economic sector, some may suffer another is not. even in the most pressing and challenging times we have not seen any setback for the telecommunications sector. increased 6% in 2010. it has a minor impact if you measure it with in the total

economic context but this is a major strategic filler for growth. service, telecommunication. to democratize these. if you look at -- that is an example of -- increases its efficiency providing better services than in the past so it is not true. everything that is nationalized will collapse or fail. we have nationalized businesses that already failed and we took it to rescue them. the odors -- on at least two occasions they were facing

problems regarding the price of steel, salaries, workers were asking for, they outsource a large part of services. we even before gave -- remember joe? the argentinian that came, the owners, we had to lower the price of electrical energy, power services because they had failed. socialism failed. the soviet union failed. we saw a major diversion and many other socialist countries. failures are not only associated with weather business is

socialist or capitalism look at capitalism, howard continues to fail. thousands of businesses in the united states, large corporations. how much of the government has to give to general motors and to ford and how many others the personal billions, $600 billion. they provided the bailout fund to bring back these major corporations, large corporations in europe. let's not continue with that -- bose comments. i applaud those successful businesses and as the constitution states they should continue with those purposes. and i applaud those businesses and criticized those that are

unsuccessful regardless of their model. the major revolutionary stated socialism cannot constantly be at odds with the efficiency. let's not try to demonize and confuse the issues. out of 3.5 million existing lines before the nationalization of that business, 3.5 million -- with 5.9 million lines in existence. this constitutes 65% growth during that period. in 2010 alone we had 635

telephone lines installed that have almost been shut down. that results in an increase of 20%, was achieved in 2009. what -- in this total we have 592,911 households, 1 and 20 municipalities and we saw the institution of 20,664 telecommunications lines, public telephone lines installed. that had almost ceased with the privatized initiative. >> the house takes up the repeal of the health care law. watch today's debate on c-span and go to c-span.org to continue the conversation on twitter and

facebook pages. >> a number of live events related to the health care repealed bill in the house. at noon the national center for policy analysis will release its recommendations to congress on ten proposed changes to the law and why it should be repealed. speakers include health-care analysts from heritage foundation, american enterprise institute, cato institute, all groups that support the ndp recommendation. that is live at noon eastern on c-span. here on c-span2 the house democratic steering and policy committee is holding a hearing on the health care repeal. patients who benefit from the health care law will talk about patient protections and what they will risk losing it is repealed. that is live at 1:00 eastern on c-span to. -- vagracy law. a panel of industry executives

in the -- gathered to talk about how innovation and technology impact the u.s. economy. at&t's ceo randall stevenson and federal communications commission chaired julia -- this was a series of discussions relating to various business sectors hosted by the brookings institution. it is about 1 hour and 20 minutes. >> it is my pleasure to welcome you here for the third forum. the third series we have been running about the topic of growth through innovation. the first two forum that we held were private but we felt that the group assembled here and has been the core of the effort has become sufficiently cohesive and enough scenes have begun to crystallize that it is time to

go public with this venture. first because we feel there are some ideas important to put it into public debate and we think it is timely to have the public forum at the time the new congress is coming in to office. what we call this is an all brookings priority. what i mean by that is it is intended to address the nation requiring focus and input from all of our institutions to say we are drawing on expertise across disciplinary lines. to put it in context the other three that we have our first, one on how to design and bring about an energy future for this future and the world. that makes economic and

environmental sense. we have right a priority on how to ensure that our economy, government policy, capable of providing maximum opportunity and well-being for our citizens and the third priority is managing global change. the premise of gt is inherent in what the initials stand for. to be sustainable growth and needs to be based on innovation. that means new ideas, new strategy, new technology and also new ways of investing while the same time restoring fiscal sanity to our nation and it means unleashing or reviving the american back for invention,

products, techniques and competitive strategies. in the previous forums, we brought together brookings experts, in the private sector and opinion leaders. we have a series of conversations a anchored by colleagues in the institution. on the issue of the information economy, darrell west is going to be the anchor. he is vice president and director of the government studies program and founding director of our new center on technology innovation. on the subject of clean green energy we will be hearing from bruce katz who will lead that discussion. he is the founding director of the research programs. and defense industries, we are relying for leadership on peter

singer, and michael hamlin who leads the 20 first century defense initiative. on innovating public institutions the nature -- the managing director of brookings and also senior fellow in our government studies program. on manufacturing we will be counting on martin bailey, head of the initiative on business and public policy. the event will conclude with a conversation between the chairman of the board, john floridian and valery jerrod from the white house. in just a moment i will turn this over to glenn hutchins, trustee at the notion and the national economic council in the 1990s, the founder of silver lake founders and an equity firm that specializes in technology,

instrumental in conceptualize in the series of forums and bringing them together and i want to thank him as well as his cochairs of this whole enterprise, and steve banning and fudge, clause kline felt and the chairman of the board, john thornton. over to you. >> good morning. our goal is to discuss how to think about a plan for national economic competitiveness. in particular we want to address weather in an era of intense political partisanship and a yawning divide between government and business, we can conceive of a non-partisan approaches.

both state and federal, liberal and conservative, working with industry to foster economic growth and job creation. if it is privileged to the future, a vital spurs through prosperity. we fear that the u.s. risked losing competitive advantage. we have assembled an extraordinary group, jack kennedy once said there hasn't been such a group since the white house--such a group assembled versus thomas jefferson dined alone. we have the similar experience today at brookings. an extraordinary group of leaders to explore these. information technology, communications, manufacturing resources. we also have with us public

policy leaders who have grappled with our most difficult public policy questions and looking at an and others have the stars to show for it. ... >> than we have today. it seems clear that this must be driven by innovation at all levels. by advances, for instance, in basic science, technology,

industries of the futures process efficiencies, revolutionary business models as well as and this is very important supporting innovations in capital formation, the delivery of public services and approaches to institutional governance. the dimensions along which we need to work are quite straightforward and we intend to ask each panel today how public policy solutions can be collected in their research. cutting edge advances are done every day. it goes on and on. it's meant to be intermable. education, research and development, immigration, fiscal balance, federal, state and municipal, health care cost control, tax reform, labor market initiatives, persistent poverty issues, metro area initiatives, governance reforms and most important of all fostering invasion.

i see some of my friends that are out there. that partisanship to these problems are not possible. we find that mindset unacceptable. in contrast, we believe that americans are prepared to meet these challenges and those assembled here today are more than ready to do their part. we're also often told industrial policy are picking winners is folly in a market economy. that misses the point. every high growth country in the world, many business people here like me spend a lot of time in those parts of the world is implementing a carefully conceived long-term plan to create the conditions for national economic competitiveness and the resulting prosperity. right? absolutely right. this does not at all mean

mckinsey has been nodding his head so i feel validated. it means creating a foundation upon which markets can function and businesses can thrive. as strobe mentioned in his opening this is a third meetings that the brookings has convened bringing together leaders from private and public sectors under the banner of growth in innovation. the first of these two sessions were smaller or brainstorming sections with business scholars, business people who explored a range of these issues. today you'll hear brookings scholars talking about some of the work these discussions have inspired as they moderate corporations of corporate leaders and corporate officials. in fact, i'm happy to announce today that two policy briefs that have been produced as part of this effort have been released today. one by darrell west. one by darrell west, one by martin daily. martin is here somewhere. both touch on topics central to restoring u.s. competitiveness and innovation skills transfer. darrell's paper recommends moving from a family's first to

a text skills first immigration visa policy, pardon me. martin's paper offers complementary recommendations for increasing in the u.s. these are important papers and i hope we'll hear about them today. in addition to the brookings scholars whom strobe just introduced, i'd like to thank the corporate leaders here who braved the weather to attend. it was a little bit of a paper tiger at least in washington. a number of people got out of their respective cities earlier to get here and we do appreciate the effort. people need to get here today. this combination of research, private dialog, and public discourse is what makes brookings very, very special. and what makes me very proud and pleased to be associated with it. but brookings is also uniquely capable of creating a forum like today where partisan -- but where partisan political differences and commercial self-interest can both be set aside in pursuit of the common good. i'm happy to assure that you

this work will continue to follow today's session. the growth innovation team will corporate today's cessna strategy paper for national competitives in ovation in the near future. in closing many have argued that our problems -- today's problems are the culmination of a generation of both the accumulation of debt broadly defined and the neglective -- the solution koos well require -- could well require reimmediate kwlags to many this challenge seems too daunt. why not as they say in this town just kick the can down the road. leaders, though, that means we must act with a sense of urgency and resolve so let's get started. [applause]

[inaudible conversations] >> okay, thank you, glenn. and before we start, i'd like to acknowledge glenn's leadership on the issue. it was actually his suggestion that brookings launch this forum on growth through innovation and he has helped to make it an amazing success. each conference that we have put on has gotten better and better. we appreciate all that he has done in emphasizing innovation and highlighting the challenges facing our country. and as a side benefit, we have also discovered that when we are

really nice to glenn, he's willing to show us his boston celtics championship ring. [laughter] >> and i'll tell you, it's a really nice ring. even my wife is impressed with that piece of jewelry. [laughter] >> for those of you who don't know me i'm darrell west vice president of government studies and director for technology innovation at brookings and i would like to welcome you on the economy. glenn has explained the rationale for the program today and the importance of innovation for long-term economic development. there's little doubt that innovation is the key to american prosperity. it's one of the reasons the united states thrived after world war ii and in following decades. with congress back in session now, all eyes are focused on how to improve the economy. now, that clearly is the central issue facing our country right now. we all need to figure out ways to remain competitive and facilitate future innovation. these are some of the reasons

why brookings last may launched our new center for technology invasion our mission is to drive the innovation and have media and public center understanding of technology invasion we have undertaken education technology and public sector innovation among other subjects. we work closely with the white house, members of congress and the private sector to determine what policies are needed and how to promote best practices in the public and private sectors. in our research we have found the technology innovation is crucial for economic development. this area is one of the few industries experiencing double-digit growth. so if we want to get back on track, we need to strengthen our information economy. that is the platform for future progress in areas such as education, health care, energy efficiency and mass entertainment. to help us understand the

information-based economy we're pleased to welcome three distinguished leaders to brookings. jeff bewkes is chairman and president and ceo of tom warner. mr. bewkes oversees time warner corporate, hbo, t-bs and warner brothers among other parts of the country. previously he served as chairman of the entertainment and networks group and chairman and ceo of hbo. you see him regularly in the industry on the industry and the future of television. last fall he wrote a widely quoted column for the "wall street journal" with the very provocative title of the coming golden age of television. everybody thinks it's the internet. he thinks television. >> uh-huh. [laughter] >> and i hate to be upstaged by my panel members so early in the event but he's exactly right. but he does have tremendous insights into how innovation

takes place. randall stevenson is chairman, president and ceo of at&t. and as all of you know, at&t is the world's largest telecommunications company. as chairman, he has strengthened at&t's position as a leader in mobile broadband and global i.p. data. at&t invests around $18 billion each year to upgrade broadband and bring wireless service to people around the country. >> it's closer to 19. >> closer to 19. excuse me. [laughter] >> a billion here, a billion there. [laughter] >> at&t is launching its new 4g lte, long-term evolution service and carrying apple's popular iphone. the at&t and other telecommunications companies have built made possible the new services that are coming online. so there obviously are lots of amazing innovations taking place in health care, education, energy, entertainment and communications and mr. stephenson is right on the

front lines leading to that innovation about i'm about introduce my last panelists i've done corrected on the last two panelists but i do this as great trepidation. julius genachowski who's on the fcc commission. prior to joining the fcc, mr. genachowski chaired candidate obama's technology media you and telecommunications policy working group. he has extensive experience in the private sector. he was chief of operations at the interactive corporation and cofounder of lock box digital in rock creek ventures. we're delighted to have him with us today as well. our format will be as follows. i'm going to start with a few questions for our panel. we'll have a little bit of a discussion among ourselves and then we will open the floor to any questions and comments that you have.

so we'll start with mr. bewkes. there's been a flowering of media and entertainment content providers. this has shaken up the industry and produced new players, vigorous competition and new business models. can you tell us what competition means in your industry and how it enables innovation? >> sure. i don't want to change the mood because it was a spurious and uplifting beginning. we're in a period of huge success in the media business. the easy way because media is pretty big is so look at television. we all know the television screen, the television business has been with us for a long time. you use that phrase it's either a renaissance or a second golden age. obviously, the first golden age was when it was invented and it had this transformative effect in life not just on the united states but all around the world. and i think if you think back, the advent of tv in the united states was really the most

vigorous and the one that served as a template for what then happened in the rest of the world. that's happening again. and has been underway for at least 20 years. and so if you think about -- we'll do objective measures first and then subjective ones and then you'll all be the judge. objective measures, the ratings the viewership, the earnings, the programming investment, the number of channels, the type of diversity or subjects that are on television every day, 24 hours a day, is more vital, healthy, every indicator including financial indicators. to this minute, every corridor without change. if you go away from objective measures in the tv industry to subjective measures and you ask yourself, what do you see in the quality of what's on? what do you see in the diversity of not only the subject matter but the type of programming, the

genres of programmings, the mix between mass audience appeal, efforts versus targeted appeals that may be of interest to you that we all know 20, 30 years ago you couldn't find that on tv. it didn't work that way. it was a mass low common denominator industry. not true today. and so if you move then from the range and precise quality and focus of all the different kinds of tv shows that are on the air and absolutely a measurable dramatic increase of the money being invested in this program, look at the talent, the directors, the writers, the actors that you used to associate with the big screen. they're working on television now. and they're doing work that you can't do on the big screen because of the commercial nature of the film business and i won't dwell on unless someone appearance question about it. >> you have this all going on the quality and health side.

if you look around the planet, basically this system of an explosion of channels and different types of programming is being duplicated and created. the american development is being quickly implemented all around the world. so you're looking for the first point at a very healthy industry that's very connected to the citizens' lives everywhere. that goes hand-in-hand when something, i think, randall is going to talk about -- you can't do any of this without a very healthy well-funded infrastructure that can bring you hundreds of channels. it can bring you high definition soon it will be 3d. increasingly it will be the delivery of all this kind of programming on every screen you have, which is why the internet and tv are the same thing. because there's no difference between your tv screen. it's got a glass front. you all know what it looks like. and a smaller one called your laptop and a smaller one still that's portable that's your hand-held device.

these are all the same thing. and so it's extremely important -- randall said $19 billion a year and that's just at&t. the amount of money put in, in the united states, in broadband, road construction, think of it like roads, or all over the planet in this infrastructure capability is very important. it's a huge source of innovation. and it, of course, has side effects in terms of education, low barriers to entry for people to come in over that system and create new programming forums. and that industry as it puts in the money to create that capability now you have hand-in-hand the media -- let's use the television channels industry and the infrastructure industry that brings you your video and your broadband all together bringing you the next thing, which is all the programming you want on demand. you pick it. get it when you want, future on any screen you want and don't pay anything extra for it.

that's a business model. there are other models where you pay extra show by show. where you pay for other subscription providers. but point of it is, and then i'll stop, there is a huge vitality in competition and innovation that's occurring now in the intersection of internet and television, which is basically accelerating. and i think to the point that glenn asked at the beginning is a brookings subject. what is the best way for public policy in the united states and around the world -- 'cause they look at what we do, to foster a good intersection or public square where this innovation can continue to take place because it's working very well as it is. >> okay, you mentioned infrastructure. that provides a nice transition to mr. stephenson. at&t is investing billions in

broadband and wireless infrastructure. what do you see as the biggest obstacles to continued innovation and job creation in your industry? >> obstacles. when i think of job creation that's been the topic over the last couple of years. and i think of public policymakers -- everybody said it ought to be about creating jobs. you listen to jeff talk. and it makes it even more apparent that jobs are kind of a byproduct. jobs are not the target themselves. jobs are a byproduct of investment. innovation is a product of investment. and, in fact, if you do your correlation coefficients, the highest correlation coefficient to jobs is capital investment. and so i step back and say, if you want to create an environment for innovation, environment healthy for jobs, you have to create an environment that's very attractive for investment. and so from a public policy standpoint, when i think about what does that environment look like, what are the triggers you can pull to drive investment thereby jobs and innovation, i

mean, it's -- you'd be disappointed if a businessman didn't stand up and say a tax policy is one of the greatest drivers of investment and regulation being another one. and tax policy is kind of front and center from my standpoint. if you want more of something, you know, what should be your tax policy? you tax it less. if you want less, you tax it more. we do that with tobacco and alcohol. you tax so you don't generate so much consumption and it was maddening, you know, to me coming up in the last part of the last year somebody who invests $19 billion a year as we were headed towards this cliff of driving up capital costs dramatically. dividend taxes, capital gains taxes, depreciation, you know, all these things going away. they ultimately got put in and i commend the administration. i commend senator mcconnell for getting this put this in place and it brought some stability. it kept capital costs down. it allowed to us continue investing at the same place we're investing but those are -- i can't tell you how critical they are from an infrastructure

provider to continue to drive investment and to drive job creation in all these media that jeff was talking about. the next and i would say just as important is regulation. and regulation affects capital costs in that it can create uncertainty. and so when i think of how our environment is regulated and you heard jeff talk about what's going on, we are as a company, at&t -- and i would even suggest is an industry. we are almost at full investment capacity. i don't know that we could put much more capital away than we're putting away at this time. in the industry. so investigation one of those things that sticks its head up and creates uncertainty and obviously uncertainty is one of the greatest drivers of capital costs as well. that's why we work very aggressively -- i take my hat off to julius and his team. we were able to come to a place on how wireless and the internet is regulated. look, it's a place where we know

what we have. it accomplishes two variables, you know, i always say regulation needs to be fair, it needs to be consistent. and the capital investments we make they are multibillion dollar bets we make every year. and they are multiyear investments. they're 10, 15-year horizon investments and so making these capital outlays when you don't know 5, 10 or 15 years how they're going to be regulated and deliver services. that's a big deal to us. but that wasn't going to happen. we landed in a place where we have line of sight. we can commit to these 10 or 15-year horizon investments and i'll finish by just saying proof points if you will is we have these tax policy changes put in place right before the holidays. we have these regulations and these rules that are better defined coming into the holidays. it is not a coincidence that we stepped up last week and said

we're pulling all of our 4g investment forward. we're accelerating all of that. to take advantage of these tax policy changes and again, we have some clarity, some line of sight in terms of how these investments will be regulated. so i think those are very critical and those are the two elements from an investment and infrastructure standpoint that i think are most important. >> okay. mr. genachowski, a year ago the fcc released a national broadband plan with an ambitious agenda for innovation, public safety and spectrum among other areas. what do you think are the most important public policies for encouraging innovation? >> well, let me start if i could by telling but what i saw last week at ces. so consumer electronics show is one of our big handle showcases for innovation, technology, investment. and i noticed two things this year that are worth pointing out. one, if someone went to ces, 20,

30 years ago almost all the devices would have been built on a platform of electricity. electricity was this incredible platform for innovation. it led to tv's and radios and ovens and one of the reasons we led the world in economic growth in the 20th century. well, today all of the incredibly cool gadgets, devices, and products that i saw at ces were connected in connection to our electricity, connected to the grid. wireless to wireless. if you shut down the connectivity you would have shut down ces. that's point number one. point number two is, i think that in the past -- almost all the products at ces would have been the consumer products that we buy around the holidays.

nothing wrong with that. >> it's a good thing. >> very good thing. and this is rough and we'll ask what the statistics are but i noticed two things this year. one, more and more products that go to business productivity in addition to home entertainment. and more and more products that are part of vertical economic categories that matter because of opportunities for economic growth and also because of the social benefits like health care, energy, education. and to me, the reason i start there is because it really illustrates what we have been trying to accomplish around broadband. everything we're doing is built on the premise that making sure we have a world class infrastructure in the united

states for wired and wireless broadband is what is essential to the kind of innovation that both of the companies that are up here working on, the many other companies that are working on it. and you do see a tremendous amount of innovation and a tremendous amount of really exciting things going on, attracting a lot of investment, opening up new markets. do you have a question of what the policies are that we're working on? there are some challenges to this great story that we're worried about. you know, one at ces was illustrated by what happened if you tried to get on wifi or even if you tried to, you know, make a mobile call around the convention center. and, you know, congestion was pretty high. spectrum was being very heavily used and a lot of people there had pretty frustrating experiences. the tell there is the products that these companies and others are generating that are causing

consumers to put so much more demand on our spectrum infrastructure. smart phones, tablets. it's all incredible. it's all great. it's dramatically outstripping the supply of spectrum that we see on the coming -- online at the fcc, no, i don't have a secret drawer with a lot of spectrum that i can just put it out. [laughter] >> and so we'll come back to it but i think that's a challenge that notwithstanding what i think right now is a leadership position when it comes to wireless and wireless innovation in the country, and also long-standing leadership around television-related innovation. it's something that could hold us back other countries aren't waiting around. another policy innovation and i can talk about -- we continue to have policies in the country that made sense in a communications era that was dominated by telephone sense that don't make sense that is broadband. one example is something called

the universal service fund. programs, spent several billion dollars a year. has done a terrific job connecting people around the country to telephone service. it still wakes up every day and supports connecting people in rural areas and others to telephone service. well, that doesn't make any sense. we have to transform it and modernize it to apply to broadband. we have to look seriously at a whole bunch of wasteful, not particularly smart policy pieces that have become part of the program over the years. it's going to be more expensive to support broadband in rural america. we have to do it not spending any more money than we are now which means we have to cut to be smarter about the program we have. it's tied up. there's a level of detail that will probably be not interesting to many of the people but it's tied up with another program called intercarrier comp. the point is, right now this whole system is creating the opposite incentives in many ways

of what we would want with a. in some cases it's discouraging companies from going from circuit-switch communication systems to all i.p., digital pack switch systems. we have to tackle that. third thing, we have to continue to look at barriers to investing in our communications infrastructure, wired and wireless so that -- while randall may be at the peak in terms of his investment capacity, not everyone is. and capitalizing that investment and having that investment go further. and so there are a whole bunch of areas, the kind of blood and guts of communications infrastructure, power sighting, pole attachments that are not particularly thrilling but together i think can make a difference in cattalizing more

investment and getting those investments to go further, that is for the same, you know, dollar, you get two towers up instead of one tower up. if we can reduce red tape, if we can reduce barriers and inefficiencies to cause that to happen, all of those things together will put us in a much stronger position, the rest of the world at a point in time where there's clearly global competition going on in these areas. >> jeff, in your various public statements you've talked extensively about a tv everywhere strategy regardless of platform, tv, the internet, tablets, mobile devices, what does this proliferation of platforms mean for future innovation and how should the government alter its regulatory approach in light of the emergence of new platforms? >> before we answer that, i just have to say this must be a good session because if we're talking about tower siting and pole attachments, i'm getting teary-eyed over here. >> on the ground.

[laughter] >> yes, it's the public policy these days, cell towers. so all of these -- we don't know much and i guess randall, you should talk about the spectrum issues and how you should interacting and help the policy in rural areas. we don't do that. all the content companies, and this is true whether it's television, magazines, whatever it is, we're basically putting out the content on the theory -- and this is now accepted by, i believe, every media company and every connection company, telephone, satellite, cable. if you have paid for a magazine, if you have paid for a television network, if you have any economic relationship with any of those pieces of content, and you used to get it either as a tv channel or a magazine, this concept is, you can for you have it for free, no extra payment on any device connected

electronically. and it basically works on demand so that if you want to watch whichever show isn't scheduled on but it was on last night and you can do that. anybody who has hbo today can do it now so you can see that future now. and it would be no charge across all devices, same thing with magazines. so if you were reading "time" magazine, you can do this on an ipad right now. if you have -- i'll use people as the biggest magazine in the world. and if you have a subscription to "people" magazine, and you have a tablet device, including an ipad, you're a subscriber and the thing is coming to your house, you turn on your -- light up your ipad, push the people icon, you'll be reading people for free with moving pictures and if you want to read deeper into a subject that was published in another issue, you can do that, too. so when you have a -- whether it's television, magazines, frankly any kind of content is a business model that simply uses

all of these advances without changing the wholesale or distribution structure, at least not initially that doesn't require consumers to make a payment or deal with another entity. and the aim is if you think about your relationship to any tv network or magazine -- something you know how to use, you want to go watch cnn or discovery channel, it should work the same on every screen, on every device. it should all be on demand. you shouldn't have to pay differently. you shouldn't have to do anything. and that's basically a massive innovation that takes this industry, which i started out by saying the ratings, the economics all at the top of wherever they've ever been. and it makes it more useable at no extra charge. so it's a good deal. now, there's certainly issues as we go along of well, how does the economic prospect of that go forward?

you have cable packages that you pay for. you may want to discriminate in terms of what you get, most people -- or a lot of people are paying more every morning for coffee than they're paying every day for all of this media choice. and the one thing i would say on behalf of the media business and the tech business is that there's an idea which i hope you take it as a joke. it's kind of an un-american idea. which is that, you know, the new -- let's use the new content in a way that's good enough. it's good enough to have an inadequate selection on your broadband screen, one that's less complete than the one on your television. it's good enough to have it with bad resolution, no high def and no 3d and not that much on demand and with latency. no, it isn't good enough. that is not how we get in any of these industries to the leading

position in the world. so let's think about what we always think about in this country, the highest quality, the biggest innovation, the widest availability, the most freedom of choice. >> jeff has mentioned the emergence of smart phones, tablets, high definition video and new wireless applications in a variety of different areas. what would you like to see in terms of spectrum policy, regulation, or other policies to further these new technologies? >> julius said it best. if you want this world, jeff just articulated it, to be a reality and a reality at a reasonable price points so the consumer can take advantage of all this, the one brick wall we're looking at is spectrum, the availability of spectrum. and to put this into perspective, you know, the world, jeff, is articulating, you know, i think it was maybe five years ago, we first started talking about a 3-screen strategy and people say, oh, that sounds really great and kind of nod and go on. that's a reality today. what jeff articulated, we offer

today. the product that we sell called u-verse, a tv service. i can get this service on my iphone. i have it on my ipad. that programming is available to me in all of those formats and all those medium. so it is there. what will keep us from proliferating this, you know, broadly the entire base is spectrum. the bandwidth in wireless is this airwave, these airwaves, this spectrum. over the last three years, if julius will approve this last transaction we did with qualcomm we have spent $11 billion just on spectrum. and we still see the end of the spectrum that we have in our portfolio now. and we maybe three or four years ago, our pattern was we would go through 10 meg jahertmegahertz,f this spectrum, and all this content that we're streaming to

all these devices, we'll burn through that in 10 months today. you can do the arithmetic and see how quickly this spectrum is being consumed and utilized. this is why julius and i -- he talks about about it all the time and i talk about it all time we have to free up more spectrum to get more spectrum in the hands of the operators and so forth. what does that process look like, darrell, julius and i would would have a difference of opinion here. you go figure, right? but, you know, i just -- i always believe the markets ought to work let the free markets work. and so i think auctions and so forth tend to be the most efficient way to ensure treasury gets the most value for the dollar out of these and then allocate the spectrum the other way. i understand there are other public policy issues. but to make this world that jeff is framing a reality, this is the one issue that will be the constraint as we move forward in the next five years. >> okay, julius, both jeff and randall have highlighted this spectrum issue. what are you doing about it? >> well, i actually think this

is an area coming back to where glenn started where it's the opportunity for a smart, nonpartisan market-based approach to deal with our country's spectrum needs. as i said before, we don't have a lot of spectrum sitting around. let me just give you some numbers to back up what randall was saying. the amount of spectrum that the fcc has kind of based on a status quo pipeline to put on the market for mobile broadband represents about a 3 fold increase over what's available now. which sounds pretty good until you see the numbers that, you know, randall knows better than i do. but over the next five years, the data demand on our spectrum coming from smart phones and tablets, you know, because all the content jeff is doing and others is likely to be more on the order -- of a magnitude of a 35x increase over what we have now. which i personally think is too

conservative because those studies were generally done before the ipad really took off. so that's a gap that we have to close if people's expectations to be able to get content and incredible data-rich services over their mobile devices is going to work. we have various parts of spectrum where most people would like at it and say you know what? that means underutilized. we're not really sure ithe market would put the spectrum t those uses, if there really was a free market and if there were parts of spectrum allocations that were protected from market discipline. certainly a lot of people point to over the air broadcast spectrum as being in that category. when i was a kid, i got 100% of my broadcast tv viewing over the air. today, most americans -- americans get the under 10% of

their broadcast television viewing. this isn't a point about tv and the success of tv. jeff is right. tv is going internet. what was the over the air broadcast tv business really should just become the tv business. so how do we get to an area where we can think creatively about the 300 megahertz, believe me it's a big number, of very high quality spectrum in every market but set aside for what was a very important technology in the 20th century? here's the idea that we put forward. i agree with randall that auctions have been the best method devised to allocate spectrum. what we proposed is running essentially a two-sided auction where the supply of spectrum in that auction would come from broadcasters and there are other bands that we could look at to, that we could create a supply of spectrum from this auction on a

voluntary basis incent vices by getting a shared portion of the auction proceeds. we basically let the market say, look, if you think you have a better idea for use of the spectrum than what the market is willing to offer you, that's fine. if not -- and the reason why some people ask why does government have to be in the middle of this? the reason is, the way that broadcasting was originally allocated, a checkerboard of 6 megahertz blocked noncontiguous so that we could have local broadcasting and not interfere from town to town or city to city. i think randall will agree that's not the way that companies like at&t and others want spectrum for mobile broadband. they want large contiguous blocks of license in blocks more than 6 megahertz. so what we need to is incentivize to give us back the

spectrum and reorganize the spectrum so that we can free up big contiguous blocks. i'm getting a little wonky and detailed than i should. >> it's okay at brookings, by the way. laws [laughter] >> but this is a -- it's a market-based idea that will help make sure that our invisible infrastructure, our spectrum infrastructure is what it needs to be in the next few years. we need the authority of congress to do this because oddly we have the authority to take back spectrum for someone. we have the authority to auction it off. we don't have the autrity t share proceeds to run a two-sided incentive based market-friendly auction. this is an example of one of the things i think we can do. there's other things on spectrum to reduce restrictions and other bands of spectrum to allow more mobile broadband use. there are things that at&t and other companies are doing on the ground to get more efficient use of spectrum that we're trying to encourage. but the big ticket thing is this

incentive auction idea which if we don't do it, i'm very worried that other countries in the world will end up with a more robust spectrum infrastructure than we will. and this huge advantage we have right now of the most incredible init -- innovation in this country could move to other countries. it sounds crazy but a few months ago people read the newspapers and saw a company called ply materials focused on the energy technology space decided to move its technology operations from silicon valley to beijing. you know, how many companies have to make that decision before we say, hey, there's crisis here. we've got to deal with it. >> let me ask one more question of our panel and i'll just sort out to all of and you we'll open the floor to questions and comments from all of you. it follows on the last point julius was making of the global situation in which the u.s.

finds itself. there is a report by the information technology and innovation foundation that claims that the united states is slipping behind other countries on innovation and competitiveness. it specifically names places such as singapore, taiwan, finland, south korea and china as nations that have gained at our expense. is the u.s. losing its technology edge? anyone? >> well, i'll give you a classic example. we last year put out a request proposal on our 4g network build and so who would be the technology suppliers, the key technology suppliers. i won't list the four company names but i will tell you not one of the four is headquartered in the united states of america. and i find that alarming. the united states is driving this mobile broadband revolution. i mean, we are -- we're the engine behind this. you look at what's transpiring here in the u.s. in terms of the content jeff keeps talking about. and the volumes and the spectrum requirements. there is not a country close to

the u.s. in terms of the level of volumes and the innovation that's going into mobile broadband here in the u.s. and the thought that from a manufacturing standpoint, not one of those companies is headquartered in the united states i find alarming. one has to ask himself, why is that? probably all of us in here would have different reasons for that. but i think that is a patent and blatant example where we tend to lose our edge from the innovation side. >> there's a study that looked at 40 industrial countries and ranked them on a small number of metrics relating to innovative capacity and competitiveness. >> yes. >> and on a snapshot basis it ranked the u.s. sixth out of 40. and these metrics go to broadband and some other metrics that would make sense, i think,

to everyone in this room. ranked the u.s. 6th out of 50 and that's an interesting err rorshack test. oh, that's good. the study looked at the 40 countries and those metrics including broadband metrics and rated each country on rate of change. all the countries were improving and so there's really rate of improvement. and on that basis it ranked the u.s. 40th out of 40. and i'm sure people can attack the study for this or that but that tells you something that really should worry us. and i also think it give us a little bit of a clue about, you know, why aren't we moving faster as a country. we are moving forward when it comes to broadband. but other countries are moving faster. and so we have the illusion of

forward progress and most americans don't really appreciate that other countries are very, very focused on this. i know when i visit with my counterparts in other countries, they're very, very focused on this. in australia recently an election turned literally one government was picked over another because of broadband policy. but i do -- you know, i do worry that if we don't take care of our broadband infrastructure over the coming years, than all the incredible innovation that we see, you know, companies up here or others, companies scattered all over the world, that we're not going to have the basic infrastructure on which those products and services can succeed. and we risk seeing that innovation shift to other parts of the world. and i do think that there are things that we can do to tackle it. >> jeff? >> i agree with all of those

things. and the media business content creation is not primarily thought of as a tack and if you ask that question of innovative technology. if you have a healthy infrastructure -- technology innovation is not the only kind of innovation. and i think glenn said it at the beginning. business model innovation, innovation in the things that given the rule of law and cultural history of the united states, think of basically free expression, content diversity, one of the great -- in fact, i don't want to overstate it. but the forums of popular entertainment, whether it's music, magazines, television that exist around the world, there were -- most of them pioneered in the united states because of the nature of our society. and so while i take nothing away. i agree with all the statements

on how to preserve a very innovative and capitally funded platform on tech infrastructure, let the american system work in terms of content creation. we're the best at it. we're the only country where all over the world where everybody wants our popular cultural exports. and they range from the somewhat tawdry as we all know. to the quite excellent in other ways. and so let's not forget that innovation is technical in guys in white coats. it includes business model freedom. it includes that intersection of popular culture and free markets. that is so admired around the world that it's instantly taken up and copied. i'm talking about forums of tv shows, forums of movie. copy in other countries, in other languages with other casts. but let's not count ourselves

out. we have huge areas of success. >> let's open the floor to questions and comments from you. there's a person with a microphone right there in the aisle. and if you could give us your name and organization and we would request that you ask a question as opposed to making a long speech because the only people allowed to make long boring speeches are the scholars, of course. [laughter] >> i have a question for chairman genachowski. there was an article in the "washington post" about your efforts to attach this universal service fund. and i found out that companies like at&t and verizon actually are blocking efforts to attach the program. thank you. >> well, first, when i first said universal service fund most people thought that's not what we're going to talk about.

it's not true actually. i think we've been working with a very broad set of companies and others in the ecosystem in the universal system and in your carrier comp to come up with a smart, efficient way to transform it, to modernize it from telephone service to broadband. and unless you're doing something i don't know about -- >> are you doing something i don't know about? i think we're in a position -- it's not easy because -- you know, in a lot of different areas, i would say in both the u.s. at her and the spectrum area we face innovator dilemma problems where precisely our successes in the 20th century that present challenges from both the business and a public policy perspective for the 21st century. and so, you know, telephone service -- i think the rollout

of the telephone service in the 20th century was a huge success. it helped fuel commerce, connect people, connect businesses, you know, i remember as a kid traveling to other parts of the world you couldn't go anywhere that had better phone service than the united states. it mattered. now, around that built up a whole series of policies that were optimized for telephone service and the market structure that existed at the time and they created all sorts of acronyms and words that nobody understood but the bottom line what made us successful in the 20th century is not what we need in the 21st century but the whole fact of reliances and dependencies grew up around these programs makes transition hard just as it does for a market-leading company that deals with a new disruptive technology and it knows what to do strategically but it can be hard to make the change and jeff is doing it at time warner. it's much harder at some times than having a white board and starting from scratch. and jeff alluded to this before,

what we did with spectrum in this country -- none of this is perfect but on a comparative basis we commercialized our spectrum here faster and better than any other country in the world. it led to a very vibrant, healthy broadcast television industry that together with our film industry created this content industry that is a major american business, a major exporter to the rest of the world. and, you know, has been an amazing contributor to our economy. my point is that some of what led to that success in the 20th century, you know, in particular the use of spectrum for broadcast television is holding us back from what we need to do in the 21st century. and what i'm looking to do and i think brookings is a great place to talk about this is to get people to say, you know what? yeah, that's kind of right. and let's tackle this innovator's dilemma and make the tough policy choices that we need to make so that whether

it's usf or whether it's spectrum, we're moving in the right direction for the 21st century so we can really unleash the kind of things that these companies and others are doing is very different because the global world that's very different. >> other question? right there. >> hello. brooks, politico pro. i listened to you guys talk about the market and having lived through a couple of huge market failures, i wonder where does the public interest come in this? should at&t be required to make my iphone work in manhattan? should time warner be required to, you know, in the broadcast world come up with the indecency, comply with indecency? where does that come from? where does the public interest in all of this about how great the market is? >> i think, everything we've been talking about today has

been about the public interest, you know, driving the american economy, driving innovation, driving job creation. so this has been a discussion about the public interest. on, you know -- to say something about iphones in new york, i will tell you a lot of the spectrum discussion has been about -- and i think randall can elaborate on that. on decencies, we've got litigation that's addressing that issue in court and we'll have to fight that litigation and see how it's resolved. >> i think the free markets have worked quite well when you think of wireless. an iphone comes out -- i mean, think about this. that came out three years ago. and in the course of that three years, two years ago there was no such thing as an apps store. literally it was launched two years ago. this thing is moving at a remarkable pace. as a result of that technological introduction, the cell phone, now you look at the opportunities, whether it's an

android based, a blackberry base, everybody has a touchscreen smart phone in the mobile broadband marketplace and i don't think you would see this kind of proliferation with technology. you're seeing the same thing happening with tablets. you have the state-of-the-art come out right off the bat, the ipad and there's tablets all over the place. i would suggest the markets are working very well. markets are pushing at&t at levels in the history of our country trying to stay ahead of this capacity and innovating new technology. you know, you listen to the discussion on broadband bills. it's kind of an interesting below the radar screen type phenomenon but one of the greatest broadband projects in the world right now is all the fiber being deployed to these cell sites all around the country. we're investing a lot of money, verizon, sprint, t-mobile on deploying fiber out to these cell sites so you're getting this massive introduction of technology as a result of these

technologies the free markets are working. it's driving this industry to invest at unbelievable levels. it's driving technology curves that i think are very, very impressive and it's driving prices down. i'm not sure what more you want out of the system. >> i think if you asked about compliance with indecency, that has a specific meaning. julius addressed it in terms of broadcast because it comes over the airwaves into your home. you don't choose it. when you look at the voluntary industry where you choose a channel, book or magazines you future in your home. what we label and identify exactly what's in there so you have the choice and can control it and there's plenty of things if you're particularly focused on a question of indecency, with regard to television that allows parents to try to deal with what their kids did. now, it gets -- i'm not sure if it's funny or sad but your kids

can beat you when you're trying to use those devices. it's a difficult problem. but just think about the thing -- if the question was asked in the reference to television, think about asking that question in terms of the internet. and what the content and lack of control there is. or people particularly young people to wander into really bad neighborhoods and everything that you have as an issue, if it's for suitable content for younger -- for kids. you have it in spades in the internet. >> you take that to your kids mobile device and it compounds. >> we have a question over there. >> thank you. byron from the kennedy. thank you. i wanted to ask a question about -- well, this is a huge industry and it has a huge impact in and of itself on investment and innovation. i wanted to ask a question about

its impact on other industries as an enabler. julius, you mentioned health care, education, energy, just to take those three examples. those are huge industries in themselves where consumer behavior and new business models can make a big difference in those industries. one of the most interesting examples are the opportunities you see for this industry enabling others like that to innovate? >> all of the above. i'll go first. you have a lot to say on this and you and i talk about this a lot, but health care is the most dynamic that i can think of. and you think of the health care ecosystem. if you really want to drive efficiency, you want to drive in ovation, you want to drive improved health, the telecom infrastructure will probably accomplish this, i think, as effectively as anything. health care in the home. you need significant bandwidth into the home to really begin to have monitoring capability,

diagnostic capability as well as access to doctors all over the world. if you have a really robust broadband infrastructure into the home, it changes a health care delivery model. these mobile devices that we're talking about and think about the spectrum, the ability to monitor diabetes patients, real time live with devices on the body, the ability to monitor heart patients. it goes on and on. it's a very exciting area but again, the more this proliferates, the more demand and the more stress it's going to put on julius' spectrum situation that he's talking about. but this will change how health care is delivered. and i won't go into it all but you can let your mind go what that means as it relates to education and then energy, you know, the smart home -- i'm not sure that the energy sector itself will lead the way in terms of the smart home and the energy management. i do think a robust broadband

infrastructure will accommodate people to begin to manage the home energy requirements and business energy requirements independently of the energy sector. but i may be proven wrong on that. >> i agree completely. health i.t., huge opportunities, you know, where moving to make medical records electronic. you all know about that. if we make medical records electronic and then we get to connect hospitals and clinics and family doctors, you know, as appropriate we won't succeed from the incredible cost benefits from electronic benefits and that new industry won't be as strong as it could have been if we get the communications infrastructure. energy, same thing. i agree with randall. integrating smart grid and our broadband infrastructure in a smart way that empowers both, you know, the supply side, the providers electricity and the demand side consumers.

huge opportunities. education, same kind of thing. distance learning is a wonderful thing. i've had a chance to see it up front as i have some of the health care examples. and let me just close on this point by talking about digital textbooks. .. sfwlaish >> that has all of their textbook information, and candy candy, this is easy, personalized learning so that

you can help teachers deal with the 20, 25, three kids in a class or at different levels in math or other things. we should be the first country in the world to move from paper textbooks to digital textbooks. and it's a wonderful national challenge. >> we are thinking maybe more doctor shows. [laughter] >> okay. we have -- will take to question over here. they will give our panel a chance to respond to each of them. >> this is for julius. just to be very pragmatic on this topic with this wall the randall talk about, spectrum, in your proposed solution, and all the good that could come out of that. just for chitosan to check, what are the chances congress will go along with your proposal? and if so, in what timeframe? >> you know -- >> holdover just a minute.

will take multiple question and give the panel chance to respond to each of you. >> jeff, you spoke with great enthusiasm about the ubiquitous platform where you could identify people on lots of different devices and deliver all the content they want. you also talked about the places america innovates, that include our values and our policy interest. randall, you talked about the need for the sustainability of policy and regulation, and health care, health i.t. embedded in all of that isn't unstated question, i hope it's not a downer at the end of the program. i hope you approach this with the same enthusiasm, what are your ideas on how to innovate on user control of information and on privacy protections so that we can have predictability and robust use of i.t. that you would like to see can't be sustained without user backlash?

>> so julius, congress, user control and privacy. >> i'm not oddsmaker and i defer to other people. i do think that the incentive option idea, you know, bringing market forces to underutilized is the kind of idea that should be nonpartisan where everyone who is interested in our spectrum future should be able to roll up their sleeves together and say let's make this work. so i'm hopeful. we've had good conversations with people on both sides of the aisle. we know our job at the fcc is to be resourced. we will be, we will be very active, you know, and i'm hopeful but not certain. there's been examples where smart, good ideas didn't go anywhere. as soon as possible. i think, you know, running this kind of process is not

instantaneous. it takes a few years from developing the idea to actually running the auction. i think given the trends around spectrum usage are not slowing down. jeff wants to get his programming on every platform everywhere county using creative business models, and that's great. so the gap is going to increase. we've got to tackle it as quickly as possible. so i think every month that goes by without tackling this is a month that hurts us from a global competitive spectrum. one word on that. other countries are looking at exactly this. not exactly the incentive option idea, whenever he got more and more blocks of spectrum for global broadband. many of our global competitors don't have the same challenge because they were not as successful in the 20th century and they didn't commercialize their spectrum. and so, they can have much easier conversations inside their country about what to do. we have to tackle harder

problems here, spectrum because of our success in the 20 century. that's fine. i just think we have to admit that and figure out what we're going to do about it, and not let older rely this independency slow us down. >> can i make a brief comment? i think he is right on. the sense of urgency i'm very pleased with what julius and his staff are on this. historically, from the time we begin one of these process until the time we put spectrum online, it has been about six years. six years is too late on this one. it's arithmetic. it squeezes out on price. it's rationing, right? so the urgency on this one is really important. >> on the question on privacy, i don't think it's down. i think it's a great question. it offers a lot of opportunity. there's no reason that getting all of us more choice over what we want to read, watch, whatever it is, when we want on whatever

device and not pay extra, that doesn't need to lead to anything of privacy. but if you talk to different age groups are different individuals, people just differently as to whether they want people to know what they are watching or reading, or whether they want to share that with someone else. young people tend to want to share it more. i think we all know in terms of popular, that one aspect, go to the movies with your friends, talk about what your friends. increasingly people do it at home or on screens and to communicate or get difference to watch it with them. the point i think it's an has to be a real choice, not this thing where whoever is greatness system grades and opt in or opt out in a way where you end up with your kids end up defaulted into lack of privacy that they did not want. you know it's a very complicated issue and there's a lot of people that want what they detract so they can be given

either proposals or advertising that fits whatever they are doing. i don't like it, but some people don't care. the point i think is we've got to really make it so it's in the control of the people, not the corporations as how it works. >> one thing to that very quickly, why it's an important topic, we have a broadband adoption challenge in the u.s., right? 65% of people have adopted broadband, it should be closer to 100%, 90%. we have an adoption problem when it comes to small businesses in the u.s. too few small businesses are taking advantage of the opportunities to expand their markets and lower the cost with broadband. there are many reasons for this. but one of the reasons is kind of a lack of trust and what happens with information when it goes online. and some of those concerns are legitimate. and so in addition to the really

powerful values reasons for getting privacy right, there's also an economic reason. if people are not confident that the internet is a safe place for their families, a safe place for their businesses, they're going to hold back and that undermined the kind of positive ecosystem and innovation that will really matter to our economy. >> i think we have time for one last question. >> this question is to the chairman of fcc. many years ago when i was in school in india we were learning about david and data management. we would talk about information technology, how to manage information technologtechnology because information about the next level of david, by the time i left school india was talking

about other things. is something like that, dear me. get information on top of that. on top of that becomes knowledge and build a system. i heard chinese are trying to create that society. so today in 2010 we are sitting here talking about the future of this country and you are talking about creating an information economy. so don't you think you are looking backwards instead of looking forward? some other countries are actually doing that for my own experience. the second question to -- >> i think that question would be sufficient with our time remaining. >> switch from an information economy to wisdom-based economy, i like that question. >> i'm not sure i completely understand it. i think -- >> that's what makes it such a great question. >> i'm glad you got it. >> it wouldn't be the first time.

so i'm going to apologize. made we can talk about it afterwards. >> i think the general point he is getting at is how -- are we as forward-looking as some of the countries? when you think about india, china, other countries in asia, i know when i travel there i am very impressed with the decisions they are making, their government structures in better designed than ours to make these types of changes. do we need to be more forward-looking? >> i think that's been the subject of the discussion, a real challenge that we face as a country. as i said before, when i travel with my counterparts around the world there's a tremendous focus on unleashing investment and innovation and opportunity around these devices. and we need at least equivalent focus here. so i think that's incredibly important, and as i mentioned before, moving forward slowly isn't good enough.

the point that other countries have national competitive and his policies, and we don't, we did produce our country's first national broadband plan in which a lot of the ideas that we are talking about today were developed i think doing more work together with the companies that are building our infrastructure, innovating, creating a content that is on the infrastructure that is very important. i'll mention one other thing. one other thing we did in the broadband plan that i look forward to dealing with others more broadly is some goalsetting for the country. and so, we set some goals in the broadband plan around fees, around adoption, around a vision for would want to be in 2015 and 2020, and more of that i greek -- i agree with would be helpful. >> so with that footnote on wisdom, we will conclude this

session. i want to thank jeff bewkes, george's county for sharing your thoughts. [applause] [inaudible conversations] [inaudible conversations] [inaudible conversations] >> a couple of live events today on c-span networks related to

that health care repeal bill in the house. >> more now from the brookings institution conference on governmental growth and innovation. up next a panel discusses the potential of green technology

for long-term national economic strategy. among the speakers is the ceo of general electric, jeff immelt. this is about an hour. >> we are going to start. i'm bruce katz. and director of the metropolitan policy center at brookings. and this panel is going to focus on the potential of the green economy to really transform the broader american economy at a time of intense global competition. and i think the order of the day, there is a method to the madness. it really make sense to follow the prior panel on information technology, because the shift to a low carbon economy is going to be a market transformation

really as profound as the information revolution. it is going to rely on technology. it's going to require smart public policy, really at all levels of government. and it occurs within a period of intense global competition. so our perspective, coming from the metro program looking from the ground up, is everything is about to change. and, frankly, everything is changing. the energy we use is migrating from an almost exclusive focus on carbon fuels to a more sustainable mix, wind and solar foreshore. but also nuclear. the infrastructure we build is moving from outmoded transportation and energy to systems that are smarter, more technologically enabled, more focus on market pricing. the products we buy are moving from high carbon gas guzzlers to obviously a basket of sustainable goods.

and the homes we live in and the buildings and retail facilities we frequent are becoming more sustainable design, more efficient in the use of water and energy. and, frankly, better arranged so we can walk less, spend more, have a higher quality of life. like the information revolution, this is a transformation that is ubiquitous. it affects everyone in every place, but it also concentrates in major cities and metro areas here in the u.s., europe, asia, latin america, because certain places are really going to leapfrog onto the front of the line on idea generation, on production and deployment, on financing. at the metro program we are trying to map that sectoral and differentiation within the united states compared to our competitors. this is a competition. and i think a lot of this conversation i think frankly is going to be how does the u.s.

play in this transition to low carbon when places like china and germany are ahead of us at embracing this as a market transformation. obvious either very positive environmental consequences of this transition but we see competitors abroad, particularly china, hell-bent on out investing is on renewables and other aspects of the green transition. and outcompeting us. i think what we are going to do in this panel is focus on three levels of conversations. where does the u.s. get in this transition to a global low carbon economy? what our strengths, assets, attributes? how do we strengthen them? what should we be doing from a public policy perspective to catalyze markets and investments. and then re- out policy, what can be done at a time of intense partisanship and polarization if

the fed can't quite act and send the right signals to the market, what can states do, what can city to come what can metropolitan areas do? that's the genius of our system. we have three great panelists to walk us through this. the first to my right is jeff immelt. is the ceo of ge. fourth on the fortune 500 list, 300,000 workers, many countries across the world. so can give us both a domestic perspective but also the global perspective. michael greenstone is a colleague at brookings. is the director of our hamilton project, served in the obama administration, but also has we'll deep expertise in environmental economics, the economics of climate change. and mac heller is the head of coda automotive, a small firm really at the cutting edge vanguard of electric vehicles

based in that production engine, santa monica, california. so that's going to be a special conversation with mac. but i'm going to start with jeff because there something that you wrote with john doerr back in 20 -- 2009 which sets up this panel. you said the u.s. has no long-term market signal to tell companies and consumers -- there's no policies to discuss -- discourage any hundreds of billions of dollars here overseas for energy. it does not offer adequate sustained or defunding to be a serious competitor in this huge business. so, like the informational revolution, the green revolution ready requires platform of policies, smart policies to capture innovation and investment. what's your assessment today, 18 months or so after you wrote

that with john? >> it sounds more like john than me. first i would talk about it in terms of clean and not green. so i broaden the definition and talk about energy productivity, energy security, pollution reduction in its broadest terms. it's a great business. it's not a good business. it's a great business. when you look at the consumptive for electricity around the world which we look at the adoption cycle is in india and china on automotive's, when you look at the amount of technology that is possible, when you look at the number of different divisions this will be a great industry for somebody over the next 10 or 20 years. so let's kind of start with that. at ge, we are long in the space. we're about $45 billion energy company, probably the biggest in the u.s., one of the biggest in the world. we are in many places where the only american company that competes in these spaces, a

business that is tripled over the last decade. so that's kind of, this will be a big business for somebody. so who wins? i would say that basically if everybody in this room is smart, if you basically do in your own mind kind of a little matrix. and on one side is market, how big is the market going to be over the next 10 years? because markets accumulate practitioners, and practitioners decided wins. so how big is the market, who owns the innovation, how much r&d is being spent, what are the patents, things like that? the third element is who's got low-cost supply chain. energy is a scale business. if you took one thin film technology to commercial development, one, you will spend more on r&d than google spent before it became a public company. so low-cost supply chain. and in the fourth element is public policy.

who has public policy. you have a small market but if you have aggressive public policy, you can be a winner. then you plug in on the other side china, the united states, germany, australia, canada, things like that. then you plug into the matrix solar energy, natural gas, coal gasification, every technology that is out there. that's the clean energy future it will be centered on technology. the u.s. doesn't went on many of them come if any of them. fundamentally china is kind of green all of them. and europe because it uses public policy is green on some. and the u.s. basically, you know, in other words, ge is going to invest on coal sequestration, but we are going to do in china because that's what a practitioners are. there's no real practitioners here. so from a ge standpoint we kind of bobbing we can decide what we want to go. were a global company and that, we can decide our own destiny. we don't really need -- you know come if we decide as a country

that we want to be a leader in the clean energy revolution we've got to fill in this grid for ourselves and we've got to decide, you know, certain areas like natural gas we can still be the winner. so that's kind of the state of play. big industry, our destiny right now is not really pleased us to where we can lead the best. now i no longer talk about what i'd like to see. i would rather talk about what we could see. i think, you know, i hate coming to any session and just whining about blah, blah, blah, blah, blah. because there's plenty of ways you can do that. i would take you what we could see. i will focus on efficiency, you know, you can use tax code to encourage efficiency. efficiency is a great thing. it helps consumers. it helps foreign industries. i think it would be really good. some kind of indication -- when i say clean energy, it didn't

take a technology or a fuel, but basically said look, let's get our carbon footprint to ask by certain date, maybe pick a utility industry, fuel agnostic, coal can get there if it did certain technologies. gas could get there. i think that might be possible. in many ways we have today is almost too many energy policies or in not at all, but something like that would be helpful. a way to nurture investment, kind of what rde has done. i believe it helps some of the small companies get launch. and then he could export policy. in other words, our mark is not going to be that big. ge might make 120 heavy-duty gas turbines in greenville, south carolina, every day. five go to the u.s., 115 go outside the united states. so could export policy. and the last thing i see, just words like green have killed

this movement. it's so precious. it's become like such an elitist, such an elitist indication that i think we have to talk about energy security, energy efficiency, job creation. this has to be reformulated and remarketed and repurposed, he does it's just become an elitist us versus them. that's never what this has always been about technology, job creation, productivity, american leadership and it all got lost and so i think that's were i would in. >> perfect beginning. you to get exactly what i wanted to go. to the practical when we get done. mac, we're going from the largest to the small. and you are at the cutting edge of a sector which i think actually has captured the american imagination, electric vehicles. a completely different vision for mobility in the country, but as we all know has profound

effects on place in the infrastructure necessary to support it. where do you see the future moving, and really given just great matrix where does policy fit in? >> thanks, bruce. let me zoom right down to ground level from the heights of policy. coda as many of you know is an electric car company and an electric battery storage company for vehicles and for grid storage. and so we are a technology company but we are also a consumer facing companies. and as we think about innovation and the united states and job creation, let me start with a couple of things that i think are working. first is privately funded r&d. u.s. investors have created u.s. numbers that are higher than the private investment numbers for other countries around the

world. and i'd like to go further and say that the u.s. r&d allocators have been shrewd stewards of capital, and returns or the discoveries per dollar, the patents per dollar have generally been superior. we discover in united states many, many commercialized will technologies. and so that brings me to the second thing that i think is what -- working well which is the discovery itself. when you go through our area, if you want to look at it high and battery system look at the mars rover, look at the b-1 bomber. everything as we look forward from smart grid technologies to vehicle to grid technologies what electric cars will be distributed storage for utility grid systems, and you may be selling power back into the grid as your car sits in the project night, very high proportion of

that discovery takes place in the united states. so two things working well private funding and discovery. where we fold-down, however, is the next two steps. and the first is creating can't just mention this, large and dependable home markets for these technologies. if you invent something here, you may well describe -- decide to marketed first in the e.u. or in asia. why would you do that. you would do that because governments in those places may well have created a sustained regulatory structures and a sustained price signals that are necessary for the successful and secure commercialization of new technologies. it would be a more secure market for your product summer else. this is a very big issue and when you combine it with those other nations, generally higher or better rate of change, public investment