>> some of those issues are not issues that china wishes to speak about. the president brings up because they are important to our standing mt. world, and our relationship with the chinese, and i expect him to do so. this is again, we have a cooperative, but a competitive relationship with china. and as in many bilateral relationships, we have -- we see the benefits of that, and we understand the difficult challenges that lie ahead. you mentioned iran and north korea in a security basket. currency is an important -- i'd say, currency and trade in the economic basket, and very important issue and real issue of human rights. >> let me put it this way, would the president continue what he's been doing in all of previous meetings with hu, or will he ratchet up the pressure?

>> let me -- i think you'll have an opportunity, one to talk to the two leaders tomorrow, and i think the president will be firm in outlining the important beliefs of this administration and this country. >> president hu's -- the end of his term is on the horizon, and pair that with the fact that there are a lot of people reports out there that he simply doesn't have the power that previous leaders of china had, that it's a bit more disfuse, does that change how the united states deals with china and the president deals with the president? >> let me not speculate on that. i think that -- i think this is the eighth meeting between these two. we believe, again, this is an important venue and forum with which to raise some of the concerns that you talked about earlier, and i have not heard voiced concern that we're not meeting with the right person.

wendell. >> does the fact that the president, as last's year's noble peace prize winner, give him additional pause about hosting the man holding this year's peace prize winner in prison? >> i think it might if we haven't spoken out so forcefully about that. but it doesn't, because, again, his -- our response both on the day of the awarding and the day of the ceremony were to call directly for the chinese to release the award recipient so that they could rightfully claim that prize. and i have no doubt that will be called renewed again tomorrow. >> on a different matter, republicans have made clear that they want commitments to cut spending in addition -- in exchange for raising the debt ceiling; some are calling for not raising the debt ceiling at all. but is the president willing to

go there, basically, to make commitments to cut spending in addition -- in exchange for raising the debt ceiling? >> well, the president is happy to have a very serious conversation with all of those involved about the path to get us -- about the path that we must take to get us back to some semblance of fiscal responsibility. this, wendell, didn't start either this year or even two years ago. we didn't get in a situation -- we didn't get in this situation in the short term. we got into this situation over a series of many years. so i think you'll see serious proposals as you have in the past, where we froze non-security discretionary spending. you'll see serious proposals in the budget to do that. i also think we have to balance that against important investments that need to be made

and ensure that we don't see draconian cuts in things like -- particularly in innovation and education. >> and finally, a series of attacks on the state department commented on against christians in iraq, egypt, and nigeria recently. has the president been briefed on this? does he have -- is there a theory about what's behind it? >> look, i have not heard an overarching theory. again, i'd point you to what state has on a number of occasions responded to this. and obviously, this series of events that has happened, the president has -- is aware of -- and i know both at state and at nsc, they are closely monitoring that. chuck. >> why give the platform of a state dinner to the head of a country who's human rights

violation -- who's human rights record is one as a country we constantly criticize, we constantly -- and it's one thing to have a bilateral relationship, but sort of the -- was there any pause inside this white house about giving the state dinner platform? >> no, look i'll say this again, i think, and the president had occasion to meet with, late last week, again, those that express, as he does, reservations about their human rights record. again, i think the notion of not being -- look, i guess you could take a couple of different tacks. you could either not bring it up, or not put yourself in a forum that allows you to discuss them directly with those that are making those decisions. and the president believes that the latter having that ability to speak directly with them, is

important. >> the symbolism of the state dinners sort of gives -- why -- i guess how can you tell the folks that really are upset about china's human rights record that somehow giving them that symbolic state dinner almost gives them a little bit of is -- it's like, well, yes, we bring it up, we do this -- you could do that with the same type of meetings you've met with the chinese president without giving them any state dinner platform. >> the truth is, chuck, we have met with them on many occasions. we had a state dinner in china. it was brought up before that. we had bilateral meetings at economic summits like g8 or g20 where it's been brought up. i think the president's belief is it is important to speak out, as he's done, and it's important to bring this up directly with them. >> is he going to bring it up at the state dinner? i mean -- >> no, i think the president will bring it up inside the oval

office, and bring it up inside the cabinet room where the expanded biliteral will be. that is what he's done on every other occasion where he's met with president hu, premier wen, or others in the chinese government. >> and i want to follow up in chip's question. we've asked this question before. you have no problem answers it on pakistan. the whole who's in charge question, right? how would you describe sort of the powers when you are asked -- when you are given a briefing when you ask, when you get a briefing, how is the power structure of china described to you? could you share that? >> well, again, i would refer you to the answer that i gave chip. i think we're meeting with the right group of people. i think it's important to understand that you may have causes and concerns that take up with a broad array of people.

i think president hu clearly is -- we're meeting with the right person on that. >> finally, has the president spoken with senator conrad? did he find out -- did he get a heads up that senator conrad was going to announce that? >> we got an e-mail on it. i do not believe he's had an occasion to speech with senator conrad yet. i believe double check on that. >> going back to the regulatory initiative, the health care reform law, the wall street reform law, including the law to give regulatory power to the fda over tobacco, are all very recent. are they going to be part of the review on cost-benefit analysis and perhaps more importantly, are they going to be part of this new effort to try to see how small business can either exempted or given -- basically cut more slack for the new --

under this new regulatory regime? >> well, again, let me -- i think that the op-ed outlines areas that the president has directed agencies to look at either going backwards or going forward; either rules that are on the books or proposed rules. so, obviously, some of that -- jonathan, i think some of what hinges on your question is whether or not those rules are in existence, or if they are being promulgated, the cost-benefit analysis in a way that ensures that common sense rule that i outlined is important. i would point out that small businesses get, for those that will offer health insurance to their workers, a healthy tax cut. and i think that would certainly show up in any analysis that's done of anything going forward.

>> right. but i mean a lot of these rules, especially on the wall street bill, a lot of them are being promulgated and they really will be critical to how the legislation actually comes out. is the president asking the regulatory agency to rethink of the way they approach these issues? >> no, the president is demanding, not asking, demanding that as we set forth rules that implement legislation that we take into account, again, the common sense notion of balancing the safety and security and the health of the american people with whether or not that makes sense or drags on our economic growth. but, again, this -- that's -- that's what the president expected us to be doing. that's what the president expects as we move forward with

any rules -- do these make common sense. i will say that, jonathan, i think you can point to financial reform as the cure for a massive, massive regulatory failure. i have no doubt that the cost-benefit analysis of what we have gone through and continue to go through over the past two years is one that would find both health care reform and particularly financial reform on the positive side of that. mark. >> robert, is there a final agenda for tonight's dinner? >> i do not have one. i think again, you understand the topics. i think the president believes as he has done with other leaders throughout the world, that this provides a bit of an informal setting in which to have some of these discussions. the president will be joined by secretary of state clinton, and national security advisor donilon, and an array of

interpreters. and i think he believes this is an important venue in which to begin making some of the points that we expect to come out over the next couple of days. >> will we get a readout? >> i don't know we're planning a readout. i think we might have a photo that pops out on this. roger -- i'm sorry. >> and speaking directly to the chinese, is this the right raise to raise issues of concern, why does that policy not apply to cuba? >> i'm sorry. >> why does the issue of speaking directly to the government that we have concerns with not apply to cuba? >> i -- look, we -- i think the cuban government knows many of the steps that it needs to take to make progress over the course of many years that are important and that the american people demand. obviously, we have -- we want to

ensure an engagement with the cuban people. and that's why you saw the president has, over the course of a couple of different times in the administration, taken steps to ensure that engagement happens directly with the cuban people without propping up a government that continues, i think in the opinion of many, to fail in the cuban people. >> is that what friday's directives for about? >> uh-huh. roger. >> sticking with the china, there's a meeting with ceos tomorrow. can you talk a little bit about that? what's on the agenda? what are the goals? about how many ceos are going to be there? >> we'll get a list out later today or first thing tomorrow. obviously, as i mention, we have -- we enjoy economic benefits through the export of being on

track to the export of more than $100 billion of goods and services to china this year. obviously, it's -- it is as i said, an important economic relationship, and you will see those in business that have an important role to play that helps create jobs right here in america. and, you know, as we talk about trade and intellectual property rights, as we talk about currency, all of those are things that this administration, along with american business want to see progress on in china. and that's what will be discussed between ceos from both countries as well as the two presidents. >> is this sort after break-down -the-barriers meet something >> i think you'll see important commercial relationship that is our ceos have and want to expand in china

that the president believes is important to make a forceful case in front of both the ceos from china, as well as president hu. >> will any of that be open, or will there be a readout? >> there will be a pool spray before that and i think you'll hear from -- i know you'll hear from president obama before. in that pool stray, i don't have the schedule in front of me to indicate whether that's on the top or bottom of that meeting. >> just one other thing. robert, can you think of any particular regulations that the administration had in mind that agencies are being ordered to review that have hurt growth of the economy? >> well, again -- >> can you name an example or two? >> i think the president talked in there about regulations that lack common sense.

i think what he wants us to do, i'm not going to prejudge that review, i think it's important for that review to happen, that we go back and look at and make sure the tests that the president wants exercised on regulations going forward meets that test on those regulations that are already on the books. i think that -- again, that's not what the president is asking. it's what the president is demanding that agencies and departments. again, i'm not part of the review team, roger, i'm sure -- i have no doubt that that review will find regulations that lack and do not fulfill the tests that we've outlined. look, the onoutlined in the op-ed, you can put saccharin in your coffee, and the epa asks you to treat saccharin as the dangerous chemical. a regulation that the epa dropped last month. if you can put it in your coffee, you probably shouldn't

handle it as a dangerous chemical. regulations that anybody might find burdensome need a simple common sense test. >> on the saccharin example, group that is are skeptical of this executive order today say that the amount of money spent on disposing the hazardous waste saccharin was negligible. they say it's not burdensome, it's really is useful. >> the president is outlining executive order, not the end of series of agency and department reviews of all of those regulations. that's the important test here. i think what's important most of all is that, again, we meet a very important and common-sense test which balances the very important need for health, for safety, and for security of the american people. and we understand -- look, go

back 20, go back 30, go back to the 1960s, when rivers were on fire; when there were very few rules that didn't allow the emittance of the types of pollution that cause asthma or threaten the health of the american people. we don't want to go -- we're not going to go back to that. there's a reason why those are in place. but let's go review and ensure that as we're protecting the health, that we're not sacrificing unnecessarily economic growth. but at same time, let's not -- let's not forget the important reason why a number of those -- a number of regulations are likely in place. that's to protect the well-being of the american people. >> the public health and safety advocates say unless you are

giving more money to these agencies asking them to go back and review all of the regulations, it's taking resources away from the mine inspectors, oil rig inspectors, and the people who are keeping americans safe. >> i don't see why that would be threw. >> there's a limited pie. to do the thing with the amount of money that you had before asked to do before. >> that by definition would indicate a burdensome regulation. >> burdensome on the agencies that are doing the regulates. >> if significant portion of your money is go to modeling as to whether that was what you were doing 20 years, or 10, or five, or two years, or one years ago. i don't know if that was meant to illicit the response so see what everybody was saying. i don't see how they would normal lion logically meet the test of what the president is asking people to do.

>> is there a reception for the new members of congress on monday that the president will attend. can you talk about what the intention of that is? what you hope to achieve through that? >> look, obviously, there are a host of new members. and the president simple toy have an occasion to meet them, have them come here, come to the white house, i think all in an larger effort to hopefully understand not what divides us, but what brings us together. i think the president and the team here look forward to -- look forward to that reception into meeting new members and finding, again, ways in which we can work together to make progress for the american people. >> robert, back again on the state dinner. presidents have used state dinners in different ways and have had different approaches to them. president bush liked to reserve them for very close allies to celebrate strong ties. i wonder if you could talk about

president obama's approach to this particular state dinner and what his reasons are for wants to honor president hu with it? and also if you could address speaker boehner's decline of your invitation. >> well, on the latter one, i'd point you to -- i don't know what their response was in declining the invitation. we have invited, and this goes to previous state dinners, invited leaders from both parties. and we hope that because of their importance of their relationship, that they would attend. i don't know why he declined on this occasion. i would point you to that. let me check and see what the -- >> did you invite nancy pelosi? >> considers her stance on -- >> i don't have the list in

front of me on who's coming. on the first part, look, i think that -- this is the third state dinner. and i think that two of those three have in india and now in china has been in, as you heard tom talk about last week, the fastest-growing region of the world, and one that -- india enjoys a very personal relationship with the united states and has through the administrations of president clinton, president bush, and now president obama; all taking important steps in visiting that country. obviously, whether it is secretary of state's first trip to -- in her tenure to asia, our visits back and forth to china, to korea, to japan, indonesia, india, other countries in that

region, this is -- again, this is a dynamic region of the world, one that is growing faster than any other, and one that needs to have full engagement of the united states of america. that hasn't always been the case in this region of the world. and given its growth and its die anymore, that it's something that our country can't afford. we would -- you know, we have been able, again, in sanctions against north korea, or in sanctions against iran, place the toughest -- place the toughest sanctions on those two respective countries because of our ability to bring a diverse set of countries on the security council to an understanding of the importance of those sanctions. and we want to build on the

cooperative part of the relationship with china and deal with directly with some of those very difficult challenges. >> just two more fast follow-ups. >> sure. >> the last time president hu came here, his arrival ceremony was interpreted by falun gong protester. are there any precautions being taken -- >> well, look, i think that in that case obviously -- >> i had another question. but it's escaping me. >> obviously, i think -- if memory serves me, i think the largely because the newspaper representing them was at the arrival ceremony. obviously, we want to ensure that we have -- the arrival ceremony that's important, that it be respectful, but at the

same time, i think the president again will bring directly up with president hu in his many interactions his direct concerns on the issues of human rights. >> the other question was just was it incumbent to have a state dinner because chinese gave him a state dinner? >> no, i think this has more to do with what i outlined in the beginning, which is the importance place that asia and this region of the world represent in -- as growing of our important foreign policy. yes, sir. >> >> robert, last week the justice department filed a brief with the first circuit court of appeals defending the defense of marriage act against two lawsuits. president obama has called this law discriminate tour, and said it should be repealed. but that seems unlikely any time

soon now because given the current makeup of the congress. is there any consideration in the administration to dropping defense of doma in court and declaring the law constitutional? >> we can't declare the law unconstitutional. i wanted to make sure i understand that part of the question correctly. if you look at what was written, the president enumerates in there, or the administration enumerates in there our belief on this law as we balance the obligation that we have to represent the federal government. the president believes, as you said, that this is a law that should not exist, and should be repealed. but we, at the same time, have to represent the viewpoint of the defendant.

>> do you still see legislative repeal of doma happening during the course of the obama administration? >> well, i think, as the president said, that is -- look, given the current makeup of the congress, that is inordinately challenging. and i think he said in interviews. >> one last question. any regrets about not pushing for doma repeal more forcefully before democrats had control of both chambers of congress? >> look, i think we are enormously proud of and grateful for the progress that we have been able to make. "don't ask, don't tell" was an achievement of -- i think that we thought of as an achievement not just for this administration, but for all of those involved; a monumental achievement in bringing equality and justice back. so i don't think -- obviously, we didn't get everything that we wanted to get done, done.

we've proud of that we did get done. yes, ma'am. >> i have a question on the schedule for thursday, where president hu is going to meet with senate and house leaders. there are a couple of senators, including senator schumer and debbie wasserman schultz who are proposing that they pass the bill that is supposed to reprimand china for currency inflation. does the white house have a position on that? do you guys support that? is there any coordination between you and senate leaders as they go -- >> well, again, i would point you to those individuals for some discussion on their legislation. i think -- as it relates to currency, i think you've heard secretary geithner, and others outline that while they have taken some limited step, more has to be done.

and that's the message of the president will bring to his meetings. >> is the president supportive of the legislative effort by these senators who are members of the democratic leadership? >> again, i don't think the message of the president will bring his message to president hu is exactly what others have outlined. >> thank you, robert. two brief questions. jake's question of regarding former president duvalier return to haiti. you said that any former leader coming back should concentrate on human rights and rebuilding in haiti; credit? does that policy also apply to former haitian president jean bertrand aristide -- >> look, again, i think for a period of obviously some

uncertainty in haiti, current or former political actors, and their supporters should focused on what is best for them, but what is best for the people of haiti. and that goes for anybody, either as i said, in power or formerly in power. first and foremost, we should be thinking about about the peace. we should be thinking about the prosperity and we should be thinking about what's in the best interest of the people of haiti as they continue to deal with more than a year later, the impacts of devastating earthquake. :

>> sure. >> robert? >> agent thing one more time. >> i'm confused. do you support the government's decision to bring him to custody or not in that part i'm confused. i'm sorry, didn't mean to interrupt. >> we're obviously for someone to come into the country from haiti requires a passport from haiti, and i'm not getting into that or develops that happened while i'm standing up here. there's a broader answer to

whether it is anybody else. again, whether in power or out, coming into the country in a time of uncertainty, it is important that we focus on peace and focus on the people of haiti. >> does the american government stand behind the haitian government and conducting business -- [inaudible] >> i'm sure the haitian government has not asked us or -- we're not on a checklist on what they decide to do in terms of -- in terms of arresting people, and again, this happened while i was out here. i have not had a long discussion since i've been out here as you can understand with the national security counsel about developments while i'm out here so -- >> [inaudible] >> thank you robert. according to yesterday's poll, 53% of chinese think --

[inaudible] how do you think this visit will promote the relationship between u.s. and china? >> i think that some of that may be somewhat dependent on what i just discussed in terms of whether there's cooperation between these countries on different aspects of bilateral and bilateral relationship -- multilateral relationships. there are challenges and things that must be worked through. i know in order to make progress on certain issues you've seen the two countries work together despite again having differences on things like continued economic growth and human rights and i think that's -- i think that's where you see the two

presidents discuss tomorrow. >> will there be joint statements? >> just at the press conference. i know there will be coverage of the oval meeting. there will be the coverage of the ceo's, and coverage obviously on the arrival -- obviously there's some weather balancing concerns we're working through for tomorrow's state arrival, but obviously the press conference and the questions tomorrow. yes? >> following up on that in terms of a joint statement. shouldn't we expect some form of united states from the visit considering the chinese are getting the formality and state dinner and optics they desire. we were steered away from expecting that on friday, but -- [inaudible] >> that's what i would -- >> saying there's any prospect

of announcements of positive developments in any of those baskets and is one more likely than another? >> i think we're hoping for -- i think we are hoping for and i think the president will outline -- president obama will for president hu, the steps that we believe need to be taken. whether or not those happen on a deliverable schedule -- we have a relationship with countries that isn't simply marked by a visit and a series of deliverables. our relationship is one as you heard secretary geithner and national security advisor donald outline that are vast and that are broad and that require constant engagement with this

administration and will be focused in on. >> i have three quick questions. first, i know the president talks about baby formula regulations, but nothing on guns on there. does the president support that? >> i don't think that's addressed in rules and regulatory systems. as i said last week, i'm sure there will be in proposals made out of the events of last week, and we will certainly examine and look at what those proposals are, but i don't have anything additional on that. >> recently the president told jake that his personal view on same-sex marriage is evolving. i wanted to know if he reached any new personal opinion on that and if that's something to hear about in the state of the union? >> i'm not aware there's change in that coming in the state of the union at this point. i would say what he told jake is

very similar to what he told a group, i think, in october that asked a similar question. >> is it possible he might bring up -- [inaudible] in the state of the union? >> i have not finished going through the first draft, so i don't know the answer to that. >> one last question. what happened to the lip. did you take an elbow? >> no, apparently i have the skin of a 15-year-old today. [laughter] you asked, so why not. i think i'm like old yeller. >> how essential is the success of this vote to the part of the state of the union address dealing with international relations? >> well, again, this is an important relationship. we have important relationships all over the world, but

obviously this is one that comprises economic security, human rights, all of which are important to the american people and all which are important to this president, but -- look, these are the issues the president will bring up, and the progress the president continues to hope to see as we move forward. it is as i was telling sheryl, this is an important part of our noon engagement in the part of the world as you heard tom say on friday, and we look forward to the visit tomorrow. thanks, guys. [inaudible conversations] [inaudible conversations] >> now a discussion on chinese president's hu's visit to the

united states. he arrived today to visit with president obama, lawmakers, and businessmen. events tomorrow include a joint news conference with president obama and a formal state dinner at the white house. this discussion from the washington journal is about 35 minutes. >> host: here to talk about the chinese president's visit and a new series launched by the financial times, china shapes the world, looking at themes related to the visit. let's begin with what china will want from the united states. what will the chinese president say to president barak obama? >> guest: well, in some respect i think the chinese would like to, you know, call the sort of aggravation that's taken over u.s.-china ties recently. you know, china has benefited and still benefits greatly from a stable international environment. china depends on trade, creates millions of jobs in china, and

really the relationship has got all out of kilter in two years, and i think china wants to cool things down. there could be tactical reassurance on china's part. china obviously still wants a lot from america and wants the markets open and technology from the u.s.. we can see a deal, i think, this week involving ge to talk about later which is also very interesting. i'll put it like that, tactical reassurance of the u.s. to calm things down. >> host: and the u.s. says what? one caller said, i don't know if you heard, about u.s.-china relations. one said, i want to hear tough language from barak obama when it comes to our relations with china. >> guest: yeah, i can't speak for the administration, but there's tough language laced with reassuring language from the american side as well. when obama came to power two years ago, the u.s. was not on its knees, but almost there, and i don't think the obama

administration wanted to pick the fight with china because wherever we look, we need china. china is at the center of it, you name it. mr. obama took a very similar line to china, but it's not reciprocated by china. it's not quite its moment like two years ago, but, you know, something a little bit like it. china was, you know, in a very strong position, and they took advantage of that. >> host: how have things changed? >> guest: there's a backlash not just in the u.s. and china, but more importantly asia against china. you see many countries in ash hustling to get the u.s. involved back in the region in an active way in a way they would not have done 5-10 # years ago. an example is vietnam. they are trying to reforge close strategic ties with the u.s. because they are worried about china. same for singapore, end knee

sha, philippines, japan, and korea. they have been assertive. the u.s. can take that. the u.s. is a superpower, but countries in asia worry about that, and they want a hedge. >> host: we've heard discussion about chinese currency and it's undervalued up by some estimates by 40%. what's said about that issue? we see that congress, some senators, specifically senator schumer, are calling on china to let their currency float. how does that impact the president's visit to this country? >> guest: well, the currency is important, but in my view it's important and way exaggerated on capitol hill. it's become this lit litmus test of all that's good and bad in a relationship, and i think that's wrong. there's no doubt that china manipulates its currency and controls it and you can see that by how much money they buy that comes into the country every

month, but that is a sign of weakness as much as strength because china has a closed capital account. if they did float the currency, i don't think china could handle it, and you might see the currency plummet rather than appreciate in the short term. the currency is important. the u.s. keeps up pressure on that. there will be tough noises on that particularly because capitol hill wanted to hear it, but in the administration's view, and i agree here, it's not the number one issues. there's many others, technology, and competition issues that the u.s. needs to address rather than the currency. >> host: we'll talk about that as well. first, the chinese president had something to say about the u.s. currency culling with a product to the past of the "washington post". >> guest: yes, the global currency order of the product of the past. this is him having a shot at the

management u.s. dollars, printing money, which what china feels that washes back on the issues and stokes inflation. that's strew, but i think china is exaggerating to put u.s. on the defensive. the real problem is not u.s. money printing it, but chinese monetary policy flashed open wide to cope with the financial crisis. i think, you know, that's a stick that the chinese use to beat the u.s. up a little bit and they'll do that. >> host: in "usa today" this may help u.s. exports. >> guest: absolutely. it's one thing for the china to revalue its currency and make exports more expensive. if you have inflation, the goods are more expensive. it's like reevaluation in the back door. the official amount of the chie

-- china's currency on a nominal value puts you through inflation and then dowels that. >> host: the deal between ge and china. what's the details? >> guest: i have yet to see the complete details, but the core is ge transfers technology to china as part of a joint venture deal to build airplanes in china. now, this is a very, very sensitive thing to be announcing on a trip by the chinese president to the u.s. at a time when the focus in the u.s. is jobs in the u.s. and technology inside the u.s., not technology transfer which many foreign companies in china think have been bullied into by the chinese and complained to its face recently and chinese stood over them saying we'll give you access to the markets, you give

us the technologies. ge also there's e-mailed indiscreet comments recently, but many think they wonder whether china wants them to succeed in china or just wants their expertise, knowledge, management skills, and technology before, you know, shunting them in the side. ge is sticking its neck out, so it's interesting. >> host: phone calls on this. we'll talk more. washington, robin, democratic line, ohio, you're first. >> caller: i agree and i believe the united states has to take a much more proactive agenda such as offering tax breaks to anything that's made here in america, passing the things we are importing to try to make the playing field a little bit better. i feel once -- we used to be the country where you bought a car, it was a well-made car, and

we've gotten so far away from making anything in this country, and i think that's hurt us a great deal. we are shipping jobs overseas and being -- in america when you want to buy a pair of jeans made in america, it's more expensive to do that than to import it in with a cheaper price. that's got to stop. >> guest: i agree with some of that, but i don't think the u.s. has slowed down in manufacturing as many think. we are still a larger manufacturer than china. i'm not sure tax breaks are the answer. it may be in certain areas, but i'm not sure it's a good idea. i think there's a whole host of other things that, you know, basic stuff that is just as important in the u.s. to combat or compete with china. you know, that is -- it is fixing, the u.s. getting its

fiscal house in order, fiscal education, basic research, getting your own house in order and a lot of other stuff is fixed as a result. that's the first thing. the second thing is to use global trading rules which china signed up to to stop the subsidies that many people are complaining about that the chinese use to attract business to china. i have no doubt u.s. can compete with china, but people are going to have to work harder at it. >> host: what do you suspect will be the middle ground that both leaders talk about from what i'm reading in the papers that they both get to publicly announce that they've made some progress here and there for their own country? >> guest: in some ways, it's the atmospherics. these are the too big to fail relationships these days. it's probably a fifth to a third of global economic output.

the military strategic capability is the most dynamic economic area which is at stake. in our lifetimes, these kind of arguments will be going on and beyond. this is like a full-time management issue. you're not going to have a solution this week. you're not going to have a dramatic change. you're going to see both sides agree to work harder to get on and manage their differences because there will always be big differences and problems. >> host: arkansas, frank, independent line. you're next. >> caller: richard, we really appreciate c-span. give me a minute. i've been listening to c-span forever. i don't call often. there's a number of us here. i'm a 62-year-old white male here in arkansas. we are concerned about the invasion of the chinese people.

we try to put all the chinese in the same box. there's 50 different cultures of the chinese and different religions there out of the billion-plus people. are they giving us a great gift? i'm afraid that our politics, our prejudice, our fear, and our confusion is going to deprive us of this wonderful gift of real medicine. i've encouraged listeners to look at gojitrees.com and look at the wonderful gift of traditional chinese medicine that we have here. big farmers are the enemy of china. they want to shut this down in favor of their chemicals that are killing us. have a great day, and we wish you nothing but best wishes. >> host: frank, if you go to the state department website and look at the figures for china,

many of you mentioned the amount of people there. the population as of july 2010 is 1.3 billion, life expectancy in the country is about 74 years old, 72 for males, 76-78 for females. education years, about nine, literacy is 93%. labor force 2009 estimate, 812.7 million and agriculture makes up 39.5% of that. >> host: i agree. there's no need to demonize the chinese people. the great traditional culture as you say of medicine and the like, but, yeah, i mean, china's achievements are remarkable. 300 to 400 million people lifted out of poverty.

we should not question the communism party running a country of 1.3 billion people. that's a massive task. in many respects they have done very well. demonizing both sides is just a dead end i think. >> host: what is the state of president hu and stature? we saw when secretary gates went to china there was a test of military power and appeared that the president didn't know anything about it. >> guest: you know, i don't buy that. i know that in that meeting hu looked at the defense minister when hearing about the test and is that true? maybe he didn't know, but i don't buy it. you know, mr. hu's most important title is not president. you know, it's party secretary of the communist party putting him above the mim tear. the military is a powerful interest group, but i think the party is in control of the military.

the second point is that mr. hu himself compared to past leaders is a weak leader. pretty much first among equals of the like. he has no real personality or connection with the population. he's like a superbureaucrat as it were and that makes, you know, it hard to get clarity on decision making because you don't know who makes the decision. you might get mr. hu's agreement, but that doesn't flow like a rapid stream in the system. he has to persuade everybody. he's not a strong man leader and people shouldn't expect him to snap fingers and get things done. >> host: what do you think of him joining president obama at a joint news conference an wednesday. >> guest: he doesn't do that thing. it's got to be fascinating. i wonder if it will be scripted questions or something like that. he's not used to this at all.

generally his officials shield him from this actively, and we'll see how he goes on his feet. >> host: he is doing this because of prodding from the united states? >> guest: absolutely. it's a good idea to prod him to do this. one reason china is misunderstood if it is is because we have no sense of the leaders as people. we don't know who they are, have no sense of their personality. we don't know what drives them as individuals. we get this monolithic view as one talked about that we demonize them. that's much of their own making in that respects. i think he should do more of it. >> host: china shapes the world. that's the discussion. we kick off the series on china's growing global influence. looking inside the paper, china takes charge, america's banker and other stories to read about in the "financial times" this morning. i'm curious, the day you kick

this off, the front page story is china's lending hits new heights. it's funding surpasses the world's banks and your third headline is it's a stack sign of beijing's economic reach. why the front page of this story given everything that happened in the news? >> it's a remarkable figure. now, you think about it. the world bank is the world's development lender. it has been, you know, for how many years? decades. but, in fact, china lends more poor states, development states, than the world bank. that's when china still receives foreign aide and still claims to be a developing country itself, yet it is the largest giver of development aide at the same time, so that just shows you how active they have been in courting states that may feel exploited by the west. africa is a particular target of that.

china's diplomacy not just happening in washington but many other forms right throughout the world. >> what is china getting in return? >> guest: well, they might get so, you know, diplomatic allegiance, but most importantly it's about resources. you know, china's oil needs are growing exponentially. they can't rely on the global free market for oil supplies, they want direct access to it. the same goes for coal, iron other, copper, all the sorts of things china needs in great amounts, and they want direct access to that and use money to get that. >> host: richard mcgregor. bill, on the republican line, you're on the air. >> caller: hi. good morning. the united states, you know, alaska possesses 16 trillion tons of recoverable high quality coal which is enough for 300 years for the needs of the

united states. we sell an enormous amount of this coal to china at the time. if we slow things down, we can jack up the price of the could and slow down consumption. >> guest: that wouldn't work. china has tons of coal itself. it has other countries beeping over backwards to sell it to china. a coal boy boycott of china would fall flat on its face. sorry to tell you. >> host: democratic line, you're next. >> caller: let me thank you for the great work you do and allowing individuals like us to voice our opinion, but i noticed -- and i watch a lot of c-span, but i noticed a lot of callers call in and never heard

anyone mention anything what -- [inaudible] the other thought is that -- >> host: we didn't hear you. what's the first thought? >> caller: is there any country that is in the united states at all? second thought is do you think it's possible due to the way the exporting is set up that china some of the debt that united states is in debt to, china could be some of that would come from importing and exporting? >> host: richard? >> guest: well, some of the debt that the u.s. built up came from funding u.s. consumption which exports, paying for imports from china. that's the case. as far as where the u.s. is a creditor, i'm sure there are some countries, but i haven't got a list in front of me today. >> host: vermont, mike,

independent line. good morning. >> caller: hey, good morning. richard, i'd like to say the primary reason for china's need to grow and be powerful militarily is the former situation where england, japan, united states, and france vick mizeed china, exploited it. i believe the u.s. and china are natural allies in terms of both nations being born in revolution. i'd say china simply is reassembling a former empire and that chinese's money to obtain resources. the u.s., unfortunately has used our military, building up the military to foreign nations to exploit resources. the leadership in those countries traditionally has been

fascist, military dictatorships. south america's reacting to that and moving left. we have a problem in south america. we have also have a problem in sudan where as you know the largest pool of oil outside of saudi arabia has been discovered, and the chinese are in there. that is my next concern about war. >> host: right. richard? >> guest: well, it shows within china there's a deep sense of historical justice, victimization and it's nurtured a little too much by the leadership to keep it going and keep that in reserve as it were if they need to turn it on. you're also right that the u.s. and china were both forged in revolutions, but very, very different revolutions. the u.s. had a democratic revolution. china has a very traditionally

structured communism party still in charge. in fact, still the biggest gulf at the time between u.s. and china is related to the different political systems. there's some similarities, but i think the differences are much more important. >> watertown, pennsylvania, bill, republican line. good morning. >> caller: good morning, and thank you for washington journal. three cheers for you as well, greta. here's what i'm looking at. the chinese people, of course, like all people are good people. they are people. they work their jobs. we don't have any problem with the chinese people, but as this gentleman just indicated, the chinese are communists. they are large world power. what is the united states doing? the united states is importing a lot of plastic junk like, you know, vcrs, computers, this type of thing everybody has to have,

and we are exporting dollars in gold and coal and iron and natural resources, copper. the chinese are accumulating this. what else is the united states doing? the united states instead of recognizing the military power of china and trying to strategize as you said maybe a slip of the tongue, but combating china, not just competing, but combating in communist regime, instead of doing that, we're off fighting a group of tribes in afghanistan. >> host: right. richard? >> guest: interesting comment. first, of course, the u.s. is importing as you say, plastic, but americans are buying these goods. it's not just importing junk, but yeah, i mean, the military aspect is very interesting. china's mill taser might is grow -- military might is growing, and

as it does, it runs up against the u.s.. many people forget one of the fundamental reasons china is so successful in the last 30 years is because the region has been kept stable by the u.s. military which is in korea, japan. if you look at the asia-pacific, the chinese civil war is unresolved. tensions are real. the only reason north asia is booming is because the u.s. has kept the peace in this area. now, overtime, china will want to be the dominant country in that area, and i think you're going to see a lot of the u.s. and the chinese military, the most sensitive part of the relationship, running up against each other a lot in the coming years. >> host: here is aaron's piece. the u.s. is in decline and now is the time to seek more global

influence. a tweet says this: the chie needs strategy is to win the war and not the side battles. >> guest: that's an interesting piece by aaron. i saw that, i think, last night. i think there's some truth in that actually that the chinese, you know, as we discussed earlier, think that the u.s. is weak at the moment and want to take advantage of that. i think, though, that i get the sense in the u.s. these days that the country's stabilized a little bit compared to two years ago. the u.s. as we discussed earlier has really expertly marshalled allies with china. this is going to be a competition or combat if you like in different forms between the u.s. and china through the decades, and the u.s. has to get it right. if it doesn't want to be forced to give up power and influence in the asian pacific which is

the most important part of the world including the indian ocean. >> host: get it right, how so? >> guest: well, you have to nurture your allies. i think the u.s. has done very well at that. going back to the bush administration's deal with india. we'll come to see that in time as a quite historic moment. rewater the roots of the relationship in asia with countries like japan, australia, singapore and the like which i think u.s. is doing, but they won't be strong unless its domestic problems are fixed, and i think that's the biggest problem the u.s. faces. >> host: the issue over the chinese currency and whether or not that is a real issue between the united states and china. this is a piece park wu writes who is an assistant professor at harvard law school. he says the currency is not the issue as you said. according to research, many of

the america's top experts in china are for capital and goods. price is but one of several factors for the purchases. in addition, american companies in the industries are competing against european and japanese firms rather than chinese manufacturers and second, i did an animal sit at the top american exports of the 20 leading foreign markets and found little evidence it hurts other countries. >> we tend to focus on the u.s.-china trade deficit. if you look at asia as a whole, the u.s. deficit with asia as a whole has not changed in the last 10-20 years. it just shifted to china because the point of last assembly shifted to china. in that respect, i agree with the points being made there. where i don't agree though is it's just not about the

currency. you know, one of the biggest u.s. and important u.s. exports to china and also japan, an area where u.s. has the lead is in aerospace like boeing for example. they are doing deals to build in china because china basically is forcing them too or luring them in, so, you know, the u.s. wants to be very careful it doesn't help build up a rival industry in china for the most iconic leading industries. >> host: new jersey, bill, democrat, good morning. >> caller: good morning. one of the things i netsed with -- noticed with china is they do unfair trade policies. they did it here and have a monopoly. for example. i work for a juice processing plant. this i know. two years ago they started underselling apple juice on the world market. they have since put the american

apple juice industry about out of business. all the juice we get is now from china and every juice that you buy if you look at the ingredients, there's apple juice somewhere in there. it's small, but it's just an example of what they are doing. thank you very much. >> guest: that's very interesting i think. you make two points there which may be unrelated in the way that you think. first of all, it's true that china has fake ma notary public mys. that's -- monopolies which is an increasing target. second is exports in chinese juice is fascinating if it's true. that would basically be largely private chinese companies. you know, it's incredible if you think about it. china feeds 1.3 billion people, but they are still a large agriculture culture. we see that with garlic which doesn't sound like much, but the

south koreans have it as a staple food and chinese it took over that market. i don't know if it's true, but they power extends beyond plastic toys, but other directions. >> host: we saw stories about rising food prices. what's china's role in that? >> guest: not much. it's largely a food problem and i think the leadership is pretty freaked out about it actually and they are on the receiving end of that. >> host: will they ask the united states to do something about it? >> guest: no, i think what they'll ask the united states to do is what we talked about before. they think u.s. monetary policy is adding to global inflation pressures. i think it's not the main part, but that's what they want to talk about i think. >> host: connecticut, steven, independent line. good morning.

>> caller: good morning. we just saw a revolution in that knee sha and one of the kicking pints was inflation in food, and i read in your newspaper about housing bubble in beijing and real estate bubbles. could you explain more about how -- what's causing inflation? i see going off the rails on the crazy train, and i really enjoy classical chinese literature. i've had a love affair with china, maybe a love-hate relationship, but this inflation and i see it going not only in china, but it's causing problems in north africa. what is this? what's going on with that? >> guest: well, i don't know what i can provide the absolute crystal clear answer, but within china, there's two factors. it's chinese monetary easing.

they flooded the economy with cash after the financial crisis to make sure that the economy didn't fall off of cliff of the that's the first thing. you know, that's too much money chasing too few goods. the explanation for inflation. secondly, china had all sorts of problems with agriculture in the last year. crops have been picking up slightly, but shortage of staple crops. the crisis for the agriculture goods they import like soy beans is going up. it's a combination of factors. >> host: here's a story in the "wall street journal". doo you need a chinese bank account? there's five reasons why you might want to put your money in chinese currency. it's unlikely to go down, likely to go up, you won't miss out on interest elsewhere, it will diversify your portfolio, and

offer you and your family a ahead against the decline of the u.s. economy. >> guest: i'd like one. if you have residence in hong kong, you can, but i think he's wrong on one point. there are currencies these days to get a good interest rate, but otherwise, i think, in the medium term, the chinese currency is going up, so it would be nice to have 10% in that. >> host: until now there's few options to hold money in wuan, but the bank has three u.s. branches now. you have to fill out paperwork to open an account and provide two forms of id with a minimum deposit of $500. cottonwood, oidz, republican line, last call. >> caller: i just would like to ask about the practice that

china seems to have that every country america is winning peace in like in iraq, in afghanistan, they go in there and they buy up all the natural resources and lock them up for china's use, and i don't think we need to fear the chinese people at all. i'm sure they're wonderful people, but the chinese government which is very communistic and i think very, very ambitious to be the superpower of the world, i think they are very, very dangerous. teddy roosevelt said walk softly and carry a big stick. well, america doesn't have a big stick anymore to carry, and so we have to smile and cower while china is buying up resources all over the world and locking america in a very uncomfortable position, and i'm just concerned about our country, and i would say this, american people pray

and ask god for wiz democrat on how to deal with china because i do think we want to be friends, but be very, very cautious about their government. >> host: all right. richard? >> guest: well, i mean, i don't think the u.s. is cowering. there's no doubt as you say china is growing in influence and using that influence to get the resources they think they need, but i guess the u.s. for whatever reason the u.s. went into iraq and afghanistan, it wasn't to keep the chinese out. it was to open those countries to the world, the global business for whomever wanted to go in there, so i don't know whether there's much that can be done about that. >> host: all right, richard, with the financial times. look for the the series ob china. it kicks off today. thank you for being here. >> guest: thank you.

we'll have live coverage at 1:05 eastern time. live coverage starts with events from the white house. guest arrivals, president hu's arrival and dinner toasts. we'll finish that with a discussion on u.s. china relations at 8 p.m. eastern all here on c-span2.

>> next a panel of telecommunication executives on how innovation and technology is impacting the u.s. economy. you'll hear from the ceo's of time warner and at at&t. hosted by the brookings institution in washington, d.c., this is about an hour and 20 minutes. >> good morning. our goal today is to discuss how we should think about a plan for national economic

competitiveness. in particular, we want to address whether in an era of both intense political partisanship and a dawning divide between government and business, we can conceive of nonpartisan approaches. this is a word you hear a lot to our common problems. we hope political leaders both state and federal local, liberal and con receivertive, to -- conservative, to foster job creation. our key premise is that innovation is the vital spir to growth and prosperity, and we fear that the u.s. risks losing our comparative advantage as the center of global innovation. today we have an extraordinary group. there was jack kennedy said there's no such a group assembled there since thomas jefferson dined alone, and i think we have a similar kind of

experience here today at brookings. some extraordinary group of leaders from the private and public sectors to explore the questions from the most important industries, information technology, communications, media and entertainment, manufacturing, resources, defense, and green technologies and so on. we have with us public policy leaders grappling with the most difficult public policy questions, and looking at anne and others have the stars to show for it. the economic problems to discuss today are mane festing and urgent, and in fact economists warn us countries experience high unemployment and low growth for a decade or more. to avoid that fate, we have to work in earnest to construct ways to put millions and

millions of underemployed americans back to work. we have to devise solutions to innovate the output to its potential which some of our economic experts around here is more than $1 trillion than we have today. it needs to be driven by innovation at all levels by advancing in basic science, technology, industries of the future, process efficiencies, revolutionary business models, as well as, and this is important, supporting innovations in capitol formation, the delivery of public services, and approaches to institutional government. the dimensions along which to work are straightforward and ask each panel today how public policies can be implemented in their sectors. research is done every day here at brookings reflecting the u.s. competitiveness. the list goes on and on.

education, research and development, immigration, fiscal balance, federal state and municipal, health care cost control, entitlement reform, trade reform, tax reform, trade initiatives, consistent poverty issues, metropolicy, capitol investments, and most important of all, fostering innovation. we're advised by political operatives that partisanship and paralysis mean that thoughtful solutions are not possible. we find that mind set up acceptable. in contrast, we believe americans are prepared to meet the challenges, and those assembled here today are more than ready to do their part. we're also told that industrial policies are picking winners and is folly in the market economy. that misses the point.

every high growth country in the world and 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 conceive the economic competitiveness and lasting prosperity; right? absolutely right. this does not at all mean -- mckenzie is validating that. thank you. this does not mean tampering with the allocation of resources, but creating a market in which business can thrive. this is the third meeting brookings convened bringing under the banner growth through innovation. the first of these two sessions were smaller brainstorming sessions of scholars, and today you'll hear brookings scholars talk about scom of the work these discussions imspired. in fact, i'm happy to announce

today that two policy briefs produced are being released today. one by darrell west, one by martin daly. both touch on topics central to restoring u.s. competitiveness, technology, and skill transfer. it recommends from a family's first to a text skills first immigration visa policy and others increase manufacturing in the u.s. and there's a few people who know about that subject. these are important papers, and i hope we'll hear about them today. in addition to the brookings scholars just introduced, i'd like to thank the corporate leaders here who braved the weather and i know a number of you got out of your cities to get here today. we appreciate that effort. this combination of research,

private dialogue and public discourse is what makes brookings very, very special and me very proud and pleased to be associated with it. brookings is also uniquely fit to create a forum today where partisan political differences and commercial self-interests can both be set aside in pursuit of the common good. this work will continue following today's session and the growth innovation team uses today's discussions in a strategy paper for national competitiveness in the near future. we look forward to sharing that with you. in closing, today's problems are the culmination of a generation of both the accumulation of debt and then the any elect of basic environments. the sleeve the solutions could require decades of remediation.

for most people this challenge seems too daunting. to many this seems daunting. why not just kick the can down the road? to business leaders, though, that means we have to act with a sense of urgency and resolve so let's get started. [applause] >> okay. thank you, glenn, and before we

start, i want to acknowledge glenn's leadership on the issue. it was his suggestion that brookings launch this forum on growth through innovation and he helped to make it an amazing success. each conference gets better and better and we appreciate everything he's done in emphasizing innovation and highlighting the challenges facing our country, and as a side benefit, we discovered when we're nice to him, he shows us his championship ring. [laughter] i tell you, it is a really nice ring. even my wife is impressed with that piece of julie. [laughter] i'm directer of technology innovation at brookings and i welcome you to this session on the american economy. emphasized and explain the the rational for the program today and 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 why the united states throifed 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 any center for technology and innovation. our mission is to analyze the drivers of innovation and have policymaker understanding of technology innovation. we have undertaken research on digital media, health information, technology, education technology, and public sector innovation, among other subjects. we work 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 with the

technology innovation is crucial for economic development. this is one of the few industries experiencing double digit growth. if we want to get back on track, we have to strengthen the economy. that is the platform for progress on energy efficiency and mass entertainment. to help us understand the information base of economy, we are pleased to welcome three distinguished leaders to brookings. jeff bucus is president of times warner. he oversees times, hbo, tbs, and warner brothers among other parts of the company. he served as chairman of the entertainment and workman's group and chairman of hbo. you see him in the news ouring his views on the industry and future of television. he wrote a widely quoted column

for the "wall street journal" with the title of the coming golden age of television. everybody thinks it's the internet and he thinks television. i hate to be -- [laughter] he's exactly right. he does have tremendous insights on how innovation takes place. he is chairman and pes and as all of you know they are the largest company. he strengthened at and trk's position on global band and information technology data. they invest $18 billion each year to upgrade broadband and bring wireless service to people around the country. >> closer to 19. >> [laughter] >> excuse me. a billion here a billion there.

>> at&t is launching its now evolution service and also is a carrier for apple's popular iphone. the companies have built and made possible the new services coming online. there's lots of amazing innovations taking place in health care innovation, education, entertainment, and they are on the front lines leading. i've been corrected on the first two, so i do this with great trepidation. she is chairman of the frl communications position and is focused on job creation and economic development. prior to joining the fcc, he chaired candidate balm's technology policy working group and has experience in the private sector. he was chief of operations at

the interactive cooperation and founder of rock creek ventures. our format will be as follows. i want to start with a few questions for the panel and we'll have a discussion for ourselves and open the floor to any questions and comments you have. eel start with mr. baucus. this has shaken up the industry and produced new players, vigorous competition, and new business models. what does competition mean in your industry and how it enables innovation? >> sure. i don't want to change the mood because it was very serious and uplifting beginning, but we're in the middle of a period of huge discuss and innovation in the entertainment business. media is big. the best way is to look at

television. .. first and then subject of and you will be the judge. objective measures, the dealership, the programming investment, and number of channels, the type of diversity of subjects on television everyday 24 hours a day is more

viable, healthy, every indicator of including financial indicators. to this minute every quarter without a change. if you go away from objective measures in the tv industry to subjective measures and you would 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 program, the genre of programs, the mix between the mass audience appeal efforts versus the target appeals that may be of interest to you. we all know 20, 30 years ago you couldn't find that on tv. it didn't work that way. it was a low common denominator industry. not true today. and so if you move them from the range and precise quality and focus of the different tv shows on the air and absolutely measurable dramatic increase in

the money being invested in this program will get the talent, the directors, writers, the actors you used to associate with the big screen on television now and they are doing work you can't do on the big screen because of the commercial nature of the film business which i won't dwell on unless someone wants to ask a question about it. since you have all this going on 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 at the first point at a very healthy industry that's very connected to the citizens lodge everywhere. that goes hand-in-hand with a something landaluze going to talk about which is you can't do any of this without a very healthy and well funded infrastructure that can bring

you hundreds of channels. it can bring you high-definition. soon it will be 3g. increasingly will be the delivery of all of this kind of programming on every screen which is why the internet and tv are the same thing because there is no difference between your tv screen. it's got a glass front, you know what it looks like, and a laptop and small one still put this portable your hand-held device, these are all the same things. and so it's extremely important. 19 billion a year and that is just at&t. the amount of money put out in the united states and broadband construction or all of for the planet in this infrastructure capability is very important, it's a huge source of innovation and has side effects in terms of education, low barriers to entry for people to come over that system and create new programming forms, and that

industry as it puts in the money to create that capability now you have hand-in-hand the media that's use the television channels industry, and the infrastructure industry that brings you your video and broadband altogether bringing you the next thing which is all the programming want on demand, you pick, get it when you want, put it on any screen you want and don't pay anything extra for. that's a business model. there are other models where you pay extra show by show and other subscription providers, but the point of it is coming and then i will stop, there is a huge vitality in competition and innovation that is occurring now in the intersection of internet and television, which is basically accelerating, and i think to the point gwen asked at the beginning it is a subject

what is the best way for public policy in the united states and around the world as they look at what we do to foster a good intersection of a public square where this innovation can continue to take place because it's working very well as it is. islamic you mentioned and for stricter, that is a nice transition to mr. stevenson. at&t is investing billions in broadband and wireless infrastructure. what you see is the biggest obstacles to continue innovation and job creation in your industry? >> obstacles. when i think job creation that has been the topic of the last couple of years, and think of public policy makers. everyone said it ought to be about creating jobs, and i -- you listen to jeff talk and it makes it even more apparent that jobs are a kind of by-product. jobs are not the target themselves, jobs are a byproduct of innovation is a product of

investment. and in fact if you view your coalition the coefficient of jobs is capital investment. and so i stepped back and say if you want to create an environment for innovation that's 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 is the environment look like, what are the triggers that you can pull to drive investment thereby jobs and innovation, i mean, you would be disappointed if a businessman didn't stand up here and see tax policy is one of the greatest writers of investment and regulation being another one. and tax policies kind of front and center from my standpoint. if you want more of something, you know, what should your tax policy? you tax it less. if you want less we tax it more so you don't generate as much consumption and it was maddening to the coming of the last part somebody that invest 19 billion

a year as we were headed toward the cliff of driving up capital costs dramatically dividend texas, gains taxes, accelerated depreciation and all these things going awaiting ultimately got put in and i commend the administration and come and senator mcconnell for getting this put in place, and it brought some stability. capital costs down, allow us to continue at the same pace we are investing. but i can't tell you how critical those are common infrastructure provider to continue to drift investments and to drive job creation in all of these medium that jeff was talking about. the next coming and i would say just as important as regulation, and regulation affects capital costs in that it can create uncertainty. so when i and our environment is regulated and you heard jeff talk about what's going on, we are as company at&t, and i would even suggest as an industry we are almost at full investment capacity. i don't know that we could put much more capital way than we are putting away at this time.

regulation is one of those things that seeks its head to create uncertainty and the trade on capital cost as well. it's why we work aggressively i take my hat off to julius and his team the we were able to come to a place on how wireless and the internet is regulated that i would be lying if i suggest we pleased with it but it's a place where we know what we have to be it accomplishes attack it trough to variables. regulation is there and needs to be consistent. they are multibillion-dollar banks that we make every year and they are multi your investments, ten, 15 your investments and making capital outlays when you don't know five, or 15 years how you're going to be regulated and you can deliver services. that's a big deal to us. so working towards the end where we didn't get everything we would have liked to have, i would like no regulation to be candid but that wasn't going to

happen obviously. so we landed a place we know what we have, we can commit to these ten, 15 year her eyes and investments and i will finish by just to say proof we have these tax policy changes put in place right before the holidays. we have these regulations and rules better defined coming into the holidays. it's not a coincidence we stepped up last weekend so we are pulling all of our investments forward. we have these tax policy changes and again we have some clarity, some line of sight how the investments will be regulated so those are critical and will be the two elements from an investment infrastructure standpoint - or most important. >> okay, a year of the fcc released a national broadband plan with an ambitious agenda for innovation. education, health care, energy, public safety and spectrum among other areas. what she thinks the most important public policy for

encouraging innovation? >> well, let me start if i could buy telling you about what i saw last week at nces. the consumer electronic show is one of our big annual showcases for innovation technology investment coming and i know there's two things this year but are worth pointing out. one, if someone went to ces 20, 30 years ago, it also was a showcase for innovation and investment. but also the devices would have been built on a platform of electricity. electricity was this platform for innovation that led to a tv and radio of fans and one of the reasons we led economic growth in the 20th century. today all with the incredibly cool gadgets, decisis, products that i saw at ces more connected

to our information creek, connected to the internet wire to wire list. if you shut down the connectivity you would have shut down ces. that's point number one. point number two is a thing in the past typical for all of the products ces would have been the consumer products we buy a run of the holidays, nothing wrong with that. >> it's a good thing. >> very good thing. but -- and this is rauf the folks at ces with the statistics are there are 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 a vertical economic categories that matter because of opportunities for economic

growth and also because 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 are doing is built on the premise that making sure we have a world-class infrastructure in the united states for one year and wireless broadband is what is essential to the kind of innovation both of the companies that are not here are working on, the many other companies working on committees 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. your question about what policies are that we are working on, there are some challenges to this great story that we are worried about. one ces was illustrated by what happened if you tried to get on

wi-fi or tried to make a mobile caller on the convention center and congestion was pretty high. spectrum was being heavily used and a lot of people have pretty frustrating experiences and the told there is that the products these companies and others are generating that are causing consumers to put so much more demand on the spectrum infrastructure. smart phones, tablets, it's just incredible, it's over eight bits, dramatically outstripping the supply of the spectrum that we see coming on-line. no i don't have a secret drawer to put it out and so we will come back to it, but that is a challenge that not withstanding what i think right now is a leadership position when it comes to one year less innovation in the country and also longstanding leadership

around television related novation is something that can hold us back to the other countries aren't waiting around. in a major policy area we're working on and i can come back and talk about any of these, we continue to have policies in the country that made sense in a communication the was dominated by telephone service that don't need as much sense in the year that brought in. one example is something called the universal service fund, programs spent several billions of dollars a year that have 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 and modernize it to broadband. we have to look seriously at a whole bunch of wasteful and inefficient not particularly smart policy pieces that have

become a part of the program over the years. it's going to be more expensive to support a broadband in rural america. we have to but not spending more money than we are now which means we have to be smarter about the program that we have to read it's tied up as a level of detail the will probably be not interesting to many people but it's tied up with another program called inter carrier. the point is right now this whole system is creating the opposite incentive in many ways of what we would want. in some cases it's discouraging companies from going from circuit switched communications systems to all i.t. digital packet systems. we have to tackle that third thing. we have to continue to look at barriers to investing in our communications infrastructure wire and wireless so that while it may be at the peak of the investment capacity, not

everyone is, a big part of the rich of this catalyzing more and more private investment and then having that investment go further. and so there are a whole bunch of serious, the kind of blood and guts of the communications infrastructure tower citing attachments that are not particularly thrilling. but together i think it can make a difference in catalyzing more investments and in getting those investment dollars to go further than this for the same dollar to get $2 to the towers instead of one. if we can reduce the red tape and reduce the inefficiencies to cause that to happen all of those together will put us in a much stronger position for the rest of the world at a point in time there is clearly global competition going on in these areas. >> jeff, in your very his public statements you talked extensively about atv everywhere strategy regardless of platform, the capitol, mobile devices,

what is the spot for me for future innovation and how should the government alters 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 are talking about tom worse citing -- [laughter] i'm getting terry is on the ground. -- getting curious on the ground. we don't know and i guess you should talk about the spectrum of issues and how you can interact and helped particularly in the rural lawyer yes. we don't do that. all the content companies, and this is to whether it is television, magazines, whatever it is. we are basically putting out the content on the furies, and this is now accepted by every media company and every connection company, telephone, satellite,

cable. if you have paid for a magazine, if you have bid for a television network, if you have in the economic relationship with any of those pieces of content and used to get it as a tv channel or scheduled tv channel as a magazine, this concept is you can now have for free no extra payment on any device connected electronically, and it basically works on demand so that if you want to watch whatever show scheduled tonight but it was on last night you can view that. any of you that have hbo today can do it now so you can see that future now. and would be no charge across all devices. same thing with magazines. if you are reading "time" magazine you can do this on an ipad right now. i will use quote code people" as the biggest magazine and if you have a subscription to "people"

magazine and a and ipad you are a subscriber, it's coming to your house. you turn on your ipad, push the "people" icon and you will be reading it 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 what you have for their it is television, magazines, frankly any kind of content is a business model that simply uses all of these advances without changing the wholesale distribution structure, at least not initially, and it doesn't require consumers to make a payment or deal with another entity. and the game as if you think about your relationship to any tv network or magazine, something you know how to use, you want to watch cnn or discovery channel it should work the same on every stream on every device commission ought on demand. you shouldn't have to pay differently, you shouldn't have

to do anything. and that is basically what a massive innovation that takes this industry which i start out by saying the economics all at the top of whether they've ever been, and it makes it more usable at no extra charge. so it's a good deal. there are certainly issues as we go along how does the economic prospect of that go forward? you have cable packages then you pay for you may want to discriminate more in terms of when you get. most people -- well, a lot of people, are paying more every morning for cost than they are paying every day for all of this media choice. the one thing i would say on behalf of the media business and the technical businesses that there is an idea, which i hope you take it as a joke, it is kind of an american idea, which is that, you know, the new use

the new content in a way that is good enough, it's good enough to have an inadequate selection on your broadband screen. one is less complete than the one on your television. it's good enough to have it with that resolution. no hi def or three eda and not that much on demand and with a wait-and-see. no it isn't good enough. that is not how we got any of these industries to the leading position in the world. so let's think about what we always think about in this country to get the highest quality, the biggest innovation, the widest of a the devotee, the most freedom of choice. islamic jeff mengin the emergence of smart phones, high-definition video and wireless applications in 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 to be a

reality in a reasonable price of the consumers can take advantage of all this, though one brickle we are looking at is spectrum, availability of spectrum, and to put this into perspective, you know, the world is articulating, and i think i was maybe five years ago we first started talking about a free screen strategy and they kind of nada and go on. that is a reality today. what jeff articulate we offered the product called u-verse, a tv service. i have it on my iphone and it's on the ipad and all of those formats and medium so it's there. what will keep us from proliferating this broadly the entire consumer base is spectrum. all of this bandwidth and wireless is this spectrum over the last three years if julius will prove the last transaction

we did we will 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 go through 10 megahertz a block of the spectrum every four or five years. today, thanks to the iphone, the ipad, the content that we are streaming to all these devices, we are going to do that in about ten months today. so you can do the arithmetic and see how quickly the spectrum is being consumed in utilized. this is why julius and i come he talks of the time and i talk about all the time that we have got to do something to free up more spectrum, get more spectrum into the hands of operators and so forth. what is the process look like? julius and i would probably have difference of opinion here, go figure, right? but i just always believed the market ought to work with the free markets work and so i think

options and so forth tend to be the most efficient way to ensure that the treasury gets the most value for the dollar out of these and allocate spectrum that 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 constrained as we move forward the next five years. >> okay, both jeff and randolph descramble highlighted the spectrum. were you doing? >> this is an area coming back where guinn started with the opportunity for a smart non-partisan market-based approach to deal with the country spectrum needs and as before we don't have a lot of spectrum sitting around in fact let me give you some numbers to back up what randall was saying. the amount of spectrum that the sec has kind of based on the status quo pipeline to put on the market for the mobile broadband represents about a threefold increase over what is

available now which sounds pretty good until you see the numbers that randall knows better than i do. over the next five years the date of the demand on the spectrum coming from smart phones and tablets because of the content that jeff is giving and others is likely to be more on the order of the magnitude of the 35 x increase over what we have now which i personally think is too conservative because those studies were generally done before the ipad took off. so that is a gap we have to close if people's expectations are going to be able to get content and a credible data-rich surface their mobile devices going to be able to work. we have various parts of spectrum where most people would look at it and say you know what, that seems underutilized.

we aren't really sure if the market would approve the spectrum to the use that there was a free market and if there were parts of the spectrum allocations that were protected from the market discipline. certainly a lot of people point to the over the air broadcast spectrum as that category. when i was a kid i got 100% of my broadcast tv viewing of the air. today most americans get under 10% of their broadcast television viewing. this isn't the point about tv and unity. jeff is right, tv is going internet, what was the over the air broadcast tv business should 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 that set aside for what was a very important technology. here's the idea that we have put

forward. i agree with randall that the options have been the best method devised to allocate spectrum. what we've proposed is running essentially a two sided option where the supply of the spectrum in that auction would come from broadcasters and the other bands we can look into who would create a supply of spectrum for this option on a voluntary basis incentivized by getting some portion of the share of the proceeds. we basically let the market say if you think you have a better idea for the use of the spectrum than with the market is willing to offer that's fine. if not, and the reason why some people ask why does the government have to be in the middle of this? the reason is the way broadcasting was originally allocated, a checkerboard of 6 megahertz blocks non-continuous so that we can

have a local broadcasting and not interference from town or town or city to city i'd think that randall would agree that's not the way that the companies like at&t and others want spectrum for mobile broadband. they want large continuous blocks in more than 6 megahertz. so what we need to do is incentivize underutilized license holders to get us back the spectrum and than reorganize the spectrum so that we can free up the contiguous blocks. in getting a little but wonky year in the details than i should. but this is a market-based idea that will help make sure that hour and visible infrastructure, spectrum infrastructure is what it needs to be in the next few years. we need the authority of congress to do this because we have the authority to take back spectrum of his feet, and auction off but don't have to share to run the two cited

market friendly option. so this is in a sample of one of the things i think we can do. there's other things we are doing on the spectrum to reduce restrictions and other bands of spectrum to allow more mobile world and use. there are things that at&t and other companies are doing on the ground to get more efficient use of spectrum that we are trying to encourage. but the big ticket is this incentive option idea, which is more robust spectrum infrastructure then we will come and the future advantage we have right now with the most incredible innovation occurring in this country could move to other countries. it sounds crazy, but a few months ago people woke up and saw the company called a plight material, very important technology company based in silicon valley on the energies

based decided to move its ctl and technology operations from silicon valley to beijing. how many companies have to make the decision before we say there's a crisis here. we've got to deal with it. >> let me ask one more question of the panel and then we can open up the floor to questions and comments and actually follows on the last point julius was making about the global situation in which the u.s. finds itself. there was a report by the information technology foundation that claims the united states is slipping behind other countries on innovation and competitiveness. specifically names places such as singapore, taiwan, south korea and china as the nations that have gained at our expense. is the u.s. losing its technology edge cracks anyone? >> to give you a classic it simple, last year we put out a request proposal on the network build so it would be the

technology suppliers, a key technology suppliers typically want in the company names but i will tell you not one of them is headquartered in the united states of america. i find it alarming the united states is driving the solution. i mean, we are the engine behind this. you look at what is transpiring here in the u.s. in terms of the content jeff keeps talking about and the volumes and spectrum requirements. there is not a country close to the u.s. in terms of level of the volumes and innovation going into mobile broadband care 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 it alarming. one has to ask himself why is that? copley all of us here would have different reasons for that, but i think it is a patent and a blatant example of where we would seem to be losing perhaps our technology advantage from the manufacturing site and innovation side to this and ii just have one thing and i don't

know if it the same study but the 40 industrial countries rank them on a small number of metrics relating to an innovative capacity and competitiveness and on a snapshot basis it ran to the u.s. six out of 40. that means the metrics go to broadband and some other metrics that would make sense i think everyone in the room, six out of 40 which is interesting when you tell that to people because some people say i was sixth? that isn't what i thought. and of course it's crazy. the idea that we could be sixth. but any way that isn't the scariest about the study. the study then looked at the 40 countries and those metrics including broadband metrics and read to each country on a rate of change. all the countries were improving and so there is a rate of improvement. and on that basis, it ranked the

u.s. 40 if out of 40 and i assure people can attach the study for this or that the that tells me something that really should worry us and i think it is a little bit of a clue why aren't we moving faster as a country to deal with some of this? i think it's because it is something as we are moving toward a broadband but others are moving faster and we have the illusion of progress and most americans don't really appreciate most countries are very, very focused on this. when i visit with my counterparts in other countries, they are very focused on this. in australia recently and he election turned one government was picked over another because broadband policy, but i do --, i do worry that if we don't take care of our broad and infrastructure over the coming years that the incredible innovation we see of companies

appear, companies all over the world we are not going to have the basic infrastructure on which on which the products can succeed and we risk the innovation shift to other parts of the world and there are things we can do to tackle the triet. >> i agree that the media business content is not primarily thought of as a -- you asked the question and the dream of technology, are we innovative technology. if we have a healthy infrastructure. the technology innovation is not the only kind of innovation and business model innovation, innovation that given the rule of law and cultural history of the united states to give basically free expression,

contant diversity. one of the great -- i don't want to overstate, but the forms of popular entertainment, whether it's a sick, movies, television, magazines, the existence of the world, most of them were 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 capital funded platform on tough infrastructure let the american system work in terms of content creation. we are the best, we are the only country where all over the world everybody wants our popular cultural influence, and they range from the somewhat paltry as we all know to be quite excellent others in other ways. let's not forget innovation goes

beyond technical guys in white coats. it includes business model freedom and the intersection of popular culture and free markets that is so admired around the world that is instantly taken up and copied. i am talking about forms of tv shows, copy other countries and other languages with other tasks but let's not count ourselves out. we have huge areas of success. let's open the floor to questions and comments from you with the microphone right there on the aisle and if you could give us your name and organization we would request that you ask a question as opposed to making a long speech because the only people allowed to make long speeches at brookings are the scholars of course. [laughter] >> [inaudible] i have a question just speak to

universal service fund and i found out that companies like at&t and verizon on the efforts to the program [inaudible] >> the universal service fund those people but that's not what we are going to talk about today. so it's not true actually. i feel we've been working with very broad set of companies and others in the ecosystem arnove universal service fund and the carrier to come up with a smart efficient way to transform it to modernize from telephone service to broadband. and so unless you're doing something i don't know about. >> are you doing something idled more about? [laughter] i think we are in a position it's not easy because, you know,

in a lot of different erica's i would say in the usf area we state that is a country the innovator among the problems we're sort of precisely are success in the 20th century that present challenges from both the business and public policy perspective from 21st century. as a telephone service i think there to be cut the telephone service in the 20th century is a huge success, it helped fuel commerce, connect people, connect businesses. a kid traveling to other parts of the world you couldn't go anywhere that had better phone service than the united states that mattered. now around that, built up a series of policy ceres optimized for telephone service and the market structure that existed at that time and they treat all sorts of mechanisms no one understands that the bottom line is what made successful when the 20th century is not what we need in the 21st century but the fact

is a series of alliances and dependencies grew up around these programs makes the transition hard just as it does for a market leading company the deals that they knew disruptive technology and may know exactly what needs to be strategically but it can be hard to make the change in the jeff is doing it at time warner. it's much harder sometimes than having a life word -- white ford and starting from scratch. spectrum is the same way. in the 21st century, and jeff delude to this before, what we did with spectrum, none of this is perfect on the comparative basis, we commercialize our spectrum here faster and better than any other country in the world. it led to a very vibrant health the broadcast television industry that to get there with our film industry created this content industry that is a major american business, major exporter to the rest of the world and it's been an amazing contributor to our economy. my point is that some of what

led to that success in the 20th century with 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 am looking to do and i think brookings is a great place to talk about this is to get people to say yet that is kind of right and let's tackle the innovator dilemma and make the tough policy choices we need to make so that whether it is the usf or spectrum we are moving the right direction for the 21st century so we can unleash the kind of things these companies and others are doing in the world that is very different because the global environment is very different. >> other questions? royte there. >> brooks political. i listen to talk about the market and having lived through a couple of huge market failures. i wonder where does the public interest coming to this?

should at&t be required to make my iphone work in manhattan and should time warner be required to as a broadcast world come up with the indecency, comply with indecency? where does that come from? where is the public interest about how great the market is? >> [inaudible] >> i think everything we've been talking about today is about the public interest. driving the american economy and innovation, driving job creation so this has been a discussion about public interest. randall had something say about iphone in new york, and i will tell you that a lot of the spectrum discussion has been about that and i think randall can he elaborate on that, there's not much to say we've got litigation that is addressing that issue in the courts and we have to fight that litigation. >> i think the free-market have

worked quite well when you think of wireless and iphone comes out. i mean, think of this cannot be years ago and in the course of that three years, two years ago there was no such thing as the store, is launched two years ago. this thing is moving at a remarkable pace. as a result of that technological introduction, the iphone, now you look at the opportunity whether it is an troy, blackberry base, windows base, everybody has a touch screen smart phone mobile broadband type of device in the marketplace and absent that i don't think you'd see this proliferation of technology. you see the same thing happen with tablets today. you have the kind of state of the art crowd of that. ipad and now there are trouble it's all over the place, so i would suggest the markets are working very well. the market for driving at&t to invest the levels unprecedented in the history to stay ahead of this capacity and innovating the new technology. you know, it's -- you listen to

the discussion on broadband bills. it's kind of interesting below the radar screen phenomenon of the greatest broadband products in the world right now is the fiber deployed to the sites all over the country. we are investing a lot of money. verizon, sprint, t-mobile on deploying fiber to these sites so you are getting this massive introduction of technology as a result of the technology the free markets are working, it's driving this industry to invest it unbelievable levels. it's driving technology curve is that i think are very impressive and it's driving prices down. i am not sure what more you want in the system. >> i think if you ask about compliance with indecency meaning julius at hurston broadcast because it comes over the airwaves into your home. if you look at the voluntary industry, the one where you have a channel or magazine or book to put in your home, the industry

does and we certainly do is we illegal and identify what's in there so you have the choice and you can control it and there is plenty of things if you're particularly focused on the question of indecency it allows parents to try to deal with what their kids to. now i'm not sure if it's funny or sad that your kids can beat you when you are trying to use this device. it's a difficult problem. so just think about if the question was asked in the reference to television think about asking that question in terms of the internet and what content and lack of control there is for people come particularly young people to wander into really bad neighborhoods. everything you have as an issue if the issue is suitable content

for younger for kids. you have it in spades in the internet. >> you take it to your kids mobile device and compounds, right? a question over there. >> i wanted to ask a question about this is a huge industry and has a huge impact in and of itself on innovation. i want to ask a question about its impact on other industries as an enabler. you mentioned health care and education energy just to take those examples those are huge industries in themselves where consumer behavior and new business models to make a big difference in those industries. what are the most interesting examples or opportunities you see for this industry enabling others like that to innovate? >> all of the above. i will gophers, and you have a lot to say on this and you and i

talked about this a lot, but health care is the most dynamic i can think of and you think of the healthcare ecosystem. if you want to drive efficiency and innovation, you are driving the telecom infrastructure will probably accomplish this. i think as effectively as anything. health care in the home. you need significant band with to 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 in the whole it changes in health care delivery model. these mobile devices we are talking about and think about this spectrum the ability to monitor the real time lives with the devices on the body, devotee 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 stress julius ' situation

he's talking about. but this will change how health care is delivered and then i won't go into it all but you can let your mind go with that means and relates to education. and then energy. the smart home, i'm not sure that the energy sector itself will lead the way in terms of a smart, and 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 and the huge opportunities, you know, were moving to make medical records electronic. you'll know about that. if we need medical records electronic and then we forget to connect hospitals and clinics and family doctors and patients

as appropriate we will succeed on the incredible cost saving benefits from the electronic medical records and that new industry won't be as strong as it could have been if we get the communications infrastructure right. energy, the same thing. i agree with randall, integrating smart greed and broadband infrastructure in a smart way that in powers both the supply side of the electricity and consumers, huge opportunities. education the same kind of thing. it is a wonderful thing. i've had the chance to see it up front as the health care if samples and let me close on this point by talking about digital textbooks. you know, it's such a wonderful vision. i had a 19-year-old who during high school most of the elementary school to read this big backpacked, 50 pounds back-and-forth every day. he was lucky he went to a good school. the textbook seemed generally

have to date. most are carrying around backpacks of groups not to date. this whole thing is crazy. there is no reason especially at the price of tablets coming down that every student in the country shouldn't have some kind of digital learning device that have all of their textbook information and can be this is easy for innovators around the country, personalized learning so that you can actually help teachers deal with 20, 25, 30 kids in the class to learn at different levels that 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 just thinking making a speech to [laughter] >> john thornton and then give the chance to respond.

>> to be very pragmatic on this topic with the wall randall talked about of the spectrum in your proposed solution and all of the good that that could come out of that. what are the chances that congress will go along with your proposal and if so, what time frame? >> we will to multiple questions and it could then give the chance to respond. >> you spoke with great enthusiasm about the ubiquitous quote for where you could identify people on lots of different devices and dillinger the content they want. you also talked about the place is america innovates that include the values and policies. randall, you talked about the need for the sustainability of policy and regulation and health care, health i.t. embedded in

that. i hope you will approach this with the same enthusiasm. what are your ideas for how to innovate user control of information and on privacy protections so that we can have predicted devotee and a robust use of i.t. that he would like to be could be sustained without user . >> so your plan in congress and in user control and privacy. >> well, i do think that the incentive option idea bringing to market forces to the underutilized bands of spectrum is exactly the kind of idea that should be non-partisan where everyone who's interested in the 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 ogle. our job at the fcc is to be a

resource. we will be very reactive, and i'm hopeful but not certain. there have been examples where smart, good ideas didn't go anywhere. it's i think running this kind of process isn't instantaneous. it takes a few years from developing the idea to really run the auction. i eink given the trend a route spectrum use are not slowing down. jeff wants to get his programming on every platform everywhere using creating business models and that's great. so the gap is going to increase. we've got to tackle with as quickly as possible. so i think every month that goes by tackling hurts us from global competitiveness perspective.

other countries are looking at exactly this. not accept the incentive option idea but cleaning up more blocks of spectrum for mobile broadband. many of our global competitors don't have the same challenge because they've learned to be 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 even have to tackle our problems here, spectrum usf because of our success in the 20th century to the that's fine. we have to admit that and figured out what we are going to do about eight and a lot older alliances and dependencies slow us down. >> can i make a brief comment? i think he is right on the sense of urgency i'm terry pleased with where julius and his staff are historical from the time that we began one of the process east to the time we put spectrum online it has been about six years. six years to lead on this one

and you know it's arithmetic. you run out of spectrum where does it squeeze out? it's rationing. so, the urgency on this one is really important. >> on the question on privacy it is a great question that actually offers a lot of opportunity. there is no reason it did in all of us more choice over what we want to read, watch, what ever come and get it what we want on the device and not pay extra that doesn't need to lead to any the ammunition of privacy but if you talk to different age groups or different individuals, people choose 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. people tend to want to share it more. i think we all know in terms of popular media that one aspect of to go to the movies with your friends, talk about it with your friends come increasingly people do it at home or on the screens and they communicate or get their friends to watch with

them. the point i think is a test to be a real choice not this thing where whoever is creating the system creates an opt in or opt out in a way that you end up or your kids end up defaulted into the lack of privacy that they didn't want and it is a very complicated issue. there is a lot of people, i am not one of them that what they do so they can be given either content proposals for advertising that fits what ever they are doing. i don't like it, but some people don't care. the point is i think we have 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 just very quickly why it's such an important topic. we have a broadband adoption challenge in the u.s.. 65% of people have adopted broadband it should be closer to 100%, 90% in singapore. we have the adoption problem and

it comes to small businesses in the u.s.. few small businesses are taking advantage of the opportunities to expand the 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 in what happens with information when it goes on line, and some of those concerns are legitimate. so in addition to the powerful value reasons for getting privacy right there's also an economic reason. if people aren't confident that the internet is a safe place for their families, a safe place for their businesses, they are going to hold back, and that undermines the kind of positive ecosystem of innovation that would matter to our economy. >> i think we have time for one last question.

>> this question is for the chairman of the fcc. many years ago about a decade ago there was a secondary school in india. we were warned about data management triet you were talking about in information technology because information of the next [inaudible] india was talking about the knowledge based economy so it is a pyramid, you have information on top of that and knowledge. the chinese government is actively trying to create that society, so in 2010 we are actually sitting here talking about the future of this country and talking about creating the information economy. the only thing looking backwards instead of looking for work because some other countries are doing that from my own experience.

the second question -- >> that question will be sufficient in the time remaining. the switch from an information economy to a wisdom economy, i like that question. >> i'm not sure i completely understand. i think -- >> that is what makes it such a great question. [laughter] it wouldn't be the first time. i'm going to apologize. maybe we can talk about it afterwards. >> i think the general point he's getting at is how -- are we as forward-looking as some other countries? when you think that india, china, other countries in asia, i know when i travel injury impressed with just the decisions they are making, the government structures seem better designed than ours to make these types of changes. do we need to be more forward-looking? >> that has been the subject of the discussion. there is a real challenge we

face in the country. as i said before, when i travel to meet with my counterparts around the world, there is 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 is incredibly important and as i mentioned before, and you know, moving forward slowly isn't good enough gwen mentioned at the beginning of the point the other countries have national competitiveness policies and we don't. we did produce the country's first national broadband plan in which a lot of the ideas we are talking about today were developed i think doing more work together with the country's building our infrastructure, and of leading greeting the content that on the infrastructure is very important. i will mention one other thing we did in the broadband plan that i look forward to doing with others more broadly is some

goal setting so we set some goals in the broadband plan around speeds and adoption, around a vision for where we want to be as a country in 2015 and 2020, and more of that i agree would be helpful. >> with that note on wisdom we will conclude this session. i want to thank jeff, randall and julius genachowski. [applause] >> any time you know that you're welcome. [inaudible conversations] ..

>> next, we take you to harrisburg, pennsylvania for the inauguration of tom corbett as governor. corbett at the outgoing attorney general succeeds governor ed rendell were served eight years in the top boxes. this coverage is practiced by commonwealth media services and is about 30 minutes. ♪ >> thank you, father and thank you color cards. ladies and gentlemen, what you please raise to join first attendant read priest of the eighth infantry division of the pennsylvania army national guard

as he leads us in the pledge of allegiance. first attendant priest is a recipient of the bronze star medal for valor come up for risking his life for saving it fellow soldier under fire in iraq. please remain standing afterwards for the performance of the national anthem by heather hartley of lancaster. >> i pledge allegiance to the flag of the united states of america. and to the republic for which it stands, one nation under god, indivisible with liberty and justice for all. ♪ oh say can you see by the dawn's early light. ♪

what so proudly we hail at the twilight's last gleaming who's broad stripes and broad stars through the perilous fight for the ramparts we watch were so galantly streaming and the rockets red glare the bomb's bursting in air gave proof to the night that our flag was still there.

oh say does that star spangled banner yet wave o'er the land of the free and the home of the brave. [applause] ♪ >> you may be seated.

thank you i'm a first lieutenant priest and ms. harley. ladies and gentlemen, please welcome the wildcat regiment band of indiana county for a special performance of amazing grace. ♪ ♪ ♪ ♪

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♪ [applause] >> ladies and gentlemen, to administrator the oath of office, chief justice of the supreme court of the commonwealth of pennsylvania, the honorable ronald castille. he will use the bible for commonwealth founder, william pen. >> tom corbett, please raise your right hand temperatures by 10 on the bible and repeat after

me. i tom corbett. >> by tom corbett. >> do solemnly swear. but i will support, obey and defend. >> support, obey and defend the constitution of the united states of america. >> the constitution of the commonwealth of pennsylvania. >> the constitution of the commonwealth of pennsylvania. >> and i will discharge the duties of my office. >> and i will discharge the duties of my office. >> as governor pennsylvania. >> with fidelity. >> with fidelity. >> congratulations, governor corbett. >> thank you. [applause] ♪ ♪

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>> ladies and gentlemen, it is my honor and my pleasure to introduce the 46th governor of the commonwealth of pennsylvania, tom corbett. [cheers and applause] >> thank you. thank you all, brave and hearty souls, for being out here today. was there ever a doubt that we would be outside here today? thank you for coming out. chief justice, castille, governor rendell, judge rendell, members of the judiciary leaders and members of the general assembly, honorary general

wagner, general court, acting attorney general bill o'bryan and members of congress. and our governors thornburg, mrs. thornburg, gunner range and governor rendell, governor schweiker and ms. rendell. my fellow pennsylvanians, today we celebrate a very long, proud sustaining tradition of democracy. over 300 years ago, a free society to prove here in penn's woods. the leaders of those times were uneasy with the government more prone to political favor into fairness of the people. they were deeply troubled. they were troubled by government exploitation and access them through the course of human events, envisioned the potential for a new government, a new ideal, based in unalienable rights and power derived from

the consent of the people. that debate conducted by our forefathers, beginning with william penn and carried to the 13 colonies was not without amid the rancor or sacrifice. but those noble leaders stood true to the belief to stability. stability stands at the core of true and peaceful government. as of this new chapter in pennsylvania's history, let us also step forward firmly, firmly dedicated to civil discourse. let us not confuse acrimony with passion or partisanship with principal. rather, let us take this opportunity to begin a new kind of debate, one that honors our share in history and unite the

same citizens in common purpose. in doing so, it greatly that we will unleash a new common prosperity to benefit all pennsylvanians. [applause] i would like to take this moment to recognize pennsylvania's new first lady, my wife, sue. [cheers and applause] she is my partner, to many, many years. she is my everything. her love of culture has always inspired me and i know that she will be an inspiration for all pennsylvanians in the course to come. it is spinning but i assume the office of governor, pledging my oath on william penn's bible.

as governor, i will eat each day, grounded in the truth of panthers liberties unmindful of the role we have in democracy's endurance. i will honor your trust by standing firm in my guiding principle to do the right things for the right reason, even in the most challenging at times. and i will dedicate each and every day, over the next four years, to fiscal discipline and a responsible, limited government. [applause] the chill that we feel today is that soli january's wind. we gathered during uncertain times and no one has been left untouched. pennsylvania is known for hard workers, but today they must search too hard for work.

small businesses can't higher. large employers can't invest. the government has spent beyond his means and individual corrupt acts have eroded an essential element of leadership, the public's trust. as we turn this new page in history, lieutenant governor, jim cawley and i are geek to chart a new course for pennsylvania. together, we are dedicated to leadership that is responsible to fiscal realties, leadership takes on financial burdens rather than pass in the sprint onto the next generation, and leadership that can see beyond today's turbulent finitude trust tranquility. for some, the impasse between political considerations and economic realities is too difficult. for some, the deadlock between the current size of government

and the size of our government should be is too daunting. i disagree. i have had the extreme privilege to see and experience all that is special about pennsylvania. our land is rich in resources. our industry is rooted in innovation and our people -- our people are extraordinary in their diversity and determination. as they worked to make a living and raise their families, our people are exceptional in their dignity. our commonwealth has been built by exceptional people, with exceptional ideas. william penn ventured into uncharted land to fulfill his dream of the great holy experiment. ben franklin struggled to define a young country's foundation. in countless men and women, honoring soldiers growth just

behind, and demonstrated exceptional courage as citizen soldiers protecting those freedoms. today, pennsylvania's tradition after her and courage carries on in the single mother who works an extra job so that she can send her children to a better school. and the researchers who have taken a nugget of an idea and turned it into the bible nanotechnology. and in a third-generation farmer who is as committed to the environmental integrity of this land as he is to keeping the family farm. our people, our fellow pennsylvanians, make this an exceptional state. so today, i call upon everyone, everyone in state government to summon up all of the will and the talent within you to advance the promise of our commonwealth

and to perform exceptionally for all pennsylvanians. this will require -- [applause] this will require creativity and encourage. to be short over there is creativity, courage, we will navigate the pending storms. it will take that courage. it will take courage to pursue government and legislative reform. as individuals, there are moments that require quiet contemplation, and implement step home within ourselves, to care yes to her ultimate destination. today is our moment. today is our moment to assess their state government and choose a course that would renew the founding principles of democracy is coming in.

in that reflection, i believe the only conclusion is the one the people expressed last november. we must act. we must act to renew the people's trust in government. we must restore transparency, accountability and fiscal discipline. we will move forward. we will move forward with government and legislative reform. because without it, there is no good government. [applause] we need good government. the people now demand it [applause] we need good government. the people now demand it and they deserve it. [applause] we will lead the way to a government that understands that just as families have found a way to live within their means, they too must budget in a way that is responsible and honest. a government that has the

courage to find fiscal strength in restraint. a government that shows compassion for those most in need and recognizes that citizens great investment, the government that must yield them a hopeful realistic return. to those who create jobs and to those who create our future workers, you create a government that will not ask more of its citizens until it asks more of it sells. i will not shrink from such a challenge. [applause] nor will i ignore the opportunities to set pennsylvania on its new course, a new course for financial security leads us to prosperity and greatness. you will never hear me say, impossible. to say it, or worse, to believe it, would accomplish nothing. i see the possible.

i see the possible and a sea of promising future for pennsylvania. i see a promising future that brings new life into existing companies such as agriculture and manufacturing. i see a future that embraces innovation and emerging frontiers of energy, life sciences and biotechnology. i see a feature that sets free the kind of creativity and competition that will make pennsylvania the envy of our nation. i believe in pennsylvania and i believe in pennsylvanians. and in those believes is a certainty that the best way to embrace innovation, the best way to make us competitive is to make us competitive in our nation. today our students compete, not only with those from the other 49 states, but with students

from around the world. our education system must contend with other nations. and so we must embrace innovation, competition and choice in our education system. [applause] all of this will take time. the challenges we face were not created overnight, nor will they be solved in a 24 hour news cycle or an arbitrarily conceived deadline. it is more important to me to lead with decisive action that is accurate and precise. this is a generational moment. our children's grandchildren deserve our focus attention on doing only what is right to bring about this generational change. i am confident. i'm confident because because that's the work is steady commonwealth with patience and

perseverance, our courage will be no less than the pennsylvanians have already dunn in summoning up their own best from within. there is no more noble example of pennsylvania's inner strength and the generations of courage that are generated just across the way and soldiers growth. last week i walked among the trees behind you, walked among the plaque phenomena to many men and women who have time to play protected or freeze them. they were ordinary people serving the next ordinary times. they demonstrated their commitment during the harsh winter at valley forge, their courage in the bloody field at gettysburg and their valor under beachheads of normandy. their heroism and korea,

vietnam, and iraq come with us today. and today, i ask that we honor all those who continue to hang tough in afghanistan. please join me in honoring our soldiers. [applause] wars do not make people great, but sometimes they bring out the greatness and people. such was the wisdom of the beloved pennsylvania patriot, major richard "dick" winters. his recent passing as it was not only for pennsylvania, before entire nation. major winters rallied behind enemy lines in france was immortalized by the band of brothers, but i believe what makes us look to him as the leader and is a true hero was

his courage, his honest humility and his private determination and the war respect he showed them fostered among his men. over the capitol today, we fly a flag given to major winters by fellow soldiers and honor the legacy he leaves and a reminder to all of us. let us honor major winters and all those who have served by calling upon the best within ourselves. let us dare to do great things by daring to do what is right day by day and let our legacy -- let our legacy reflects all that is exceptional about pennsylvania. in doing so, we will find the true commonwealth that allows this generation and future generations to dream with credible hope. joining me with as protective guidance, we will lead with

clear minds, full heart and eyes set towards new generations of pennsylvania's true and sustain greatness. may god bless you. may god bless our commonwealth and may god bless the united states of america. thank you. [applause] ♪ ♪ ♪ ♪