>> we have a number of provisions in title six of the act, what is lease access or obligations. obligations that date back well before when the internet was just a science project. so we have a chance i think should congress be the want to address that directly or through ensuring that the tools that are available through the forbearance process to clarify we really shouldn't pick and choose between services when we are talking about regulations. >> that's a great point, and as you know, here's another example of a tool i guess into how sometimes without perhaps the type of presumptions i'm talking about things go the other way. in section 629, the navigation

device, authority provision giving the fcc authority to regulate navigation devices. now has a proceeding in which it is proposing to do that. again even as you described a competitive environment in video. there's a sunset act provision right in that statute, fairly unique among, you don't find in many other places in the key mutations act or in other statutes. that was put there as a tool, i believe there's been no sunset of the commission's authority although arguably there's competitive developments to mitigate the need for the commission to be designing navigation devices. but maybe the point that i'd like to lead, that's another example where you have to accompany those tools. perhaps just a type of evidentiary presumption. it can be rebuttable, and you can show that you don't have the sufficient competition or the public interest is not served,

but that essentially when things are close that she is one way. steve. >> i just want to get back to the idea about the sunshine law for a second. i think that's in the 96 act. >> that's the 76 act. >> just to be clear about it, it's not only applicable to the fcc, that's a governmentwide requirement. >> i would just say, i think that it's something that the fcc needs to look at, and i think it goes to the fact of the kind of commissioner uac nominated to those positions. -- you would see nominated to those positions. if you would meet with her fellow commissioners, even commissioners that were appointed under republican or democrat presidency. and i just think that if it

doesn't work then they don't have to meet. if it does work they have the opportunity to meet. i think commissioner copps idea of having, if it's a bipartisan group that is meeting, i think that's a good thing. but i think at the end of the day what i think it would do is you would find commissioners that were more than in tune with policy that the sec's has responsibility for, as opposed to politics. and i think at the end of the day because i know working in the wireless communications aspect, it really is not a partisan issue. we don't talk about partisan ideas. this is about moving businesses forward, competing. so we can talk to democrats about that. we talked republicans, we don't care.

we want good policy. i think makes it available, they'll have to meet but making it available maybe would reshape the type of candidates that would be looked at for fcc commissioners. >> that's an excellent point. >> can i cut in for one second. on this point of bipartisanship, i think it is important for the audience to know that well over 90% of the orders would adopt in the commission are adopted unanimously. i think that's what the great things about the telecom space is that most of what we do is something that you can build consensus around. now, of course, you are hot button issues were that's not true, on whether just very strong disagreements between industry segments, things like that. but i do think we talk about this collaboration within the commission, that it is important to know that more than 90% of what we do specs as we talk

about the spirit of the collaboration following steve's remarks as well as train force, commissioner copps wrote, he issued a statement about three weeks ago perhaps, there's ability to introduce angel, i think it was an issue and others to change the sunshine act provision along the lines that steve mentioned your genetic bipartisan group, and commissioner copps right out of the gate issued a statement praising that. and then i the next day wrote a little piece praising commissioner copps, and the fact he jumped on this issue. to be honest with you i don't have a chance to praise commissioner copps that much. we don't agree 100% of the time, or considerably less, but anyway, commissioner copps called me later that they as he does on the rare occasions when i praise him, no, he called the

lives that day and said the sunshine act thing in his youth is important and we've got to try to figure out a way to get it done. and i assured him i wanted to do that as well. okay, now, let's turn to the audience for questions or suggestions for reform. who wants to go first? there must be -- don't be shy. actually there are a number of people in the audience who have been doing communications law and policy for quite a while. i've got a couple more. i'm going to ask another question in a minute if someone doesn't have any. does anyone have a question or suggestion? okay, then if not we'll wrap it up in a couple of minutes, but another topic that seems to be high on a lot of people's list

in terms of actions for reform in is in the merger review process, and this is one as ed said i know people at different about it. my own view is that it's an area ripe for reform. and if for no other reason that i think is quite a bit of duplication. another two different standards and the justice department operates under -- but nevertheless, there is a lot of duplication of effort and as a windows in today's environment, were ever in a government that that might be eliminated is something worth looking at. i would think. and i think there are a lot of people that believe that the process that leads to the, quote, so-called voluntary concessions, that usually are

put forward very late in the day after what can be a year-long process, that coming so late when the parties are anxious to get their merger through, there's something a bit unseemly about that. but the commission operating under this broad public interest mandate, which means whenever three commissioners say that it means, that it essentially, there's no condition that one could imagine that might not meet the public interest test of three commissioners perhaps. so i want to ask the panelists because there seems to be a growing momentum for reform in the area, baker gave up what i thought was great, thoughtful speech in which she outlines some particular reforms about the shot clock. anyone want to tackle merger reform and either support it or oppose it? walter?

>> i strongly support it. i mean, i think that, if you look at historically, the communications model was based on the transportation model historically, the department transportation, head coach are stationed with the justice department over airline merger. not anymore. it's just justice department. and probably only our industry and the railroad industry or communications industry and railroad industry are probably the only two industries that are left with the inquiry isn't, you know, competitive arm. the inquiry is something else. you know, or we find no competitive harm, but is it a in the public interest? and so then that, people begin to ask the question, is that consistent with communications policy. what communications policy? what's in that policy? we don't really know what these

things are going to do. so i really believe that with regard to merger reform, i think mayor ted baker's remarks were very good. i think that the inquiry shall be no. i think it should relate directly to competitive harm's. i think it should on related competitive harms. i felt i don't think that there should be duplicative merger reviews. and i think that this is an area where i would hope that the fcc would exercise restraint but i also think it's important for congress to clarify the roles of the agencies. and that this is simply an area where we don't need to have central state planning or industrial policy, agencies called upon frankly to engage in central state planning or industrial policy in the context of merger reviews. >> at the end, michael. >> as the representative of a public interest organization i think i will defend the public

interest standard a little bit. i think the public interest standard is different and a board for lisa to reason. one is that many of these mergers involve a unique public resources, and that's spectra. so there is a unique role beyond is this competitive or not what the fcc. and another thing is that many of these mergers involve crucial avenues for speech. and speech has a special place in our society and is worth taking a moment to do a special review of some sort of merger that will significant impact how freely speech can flow. but that being said, the current merger process is not free of flaws or problems. one of the problems is the reliance on, the voluntary agreements, they hang a number of conditions for the condition of the merger. at some point there needs to be a recognition that some mergers

cannot be solved with conditions. there are no number of conditions that can make a merger in the public interest. it will get to the point where we pages and pages of conditions, especially those conditions by and large expire after a couple of years, it may be time to look at the underlying merger and say this merger is not in the public interest. and as a corollary to that, sometimes merger conditions are used to impose policy that is not specific to the merging entity. and i think that many people in this room will agree, that really distorts the regulatory market. if the market is really important enough that we think that it is important and it should be used in the merger and we kind of hope that it will influence the other actors in that field, that's a time where

we say no, this is not a merger condition. this is important enough that it will be an industrywide practice but if it isn't that important, do it that way. if it's not that important and it's just the merger is an excuse to try it out, there may be a merger condition isn't the right place or something like that. >> i agree with that last point wholeheartedly. ed, did you want to say something? >> well, i'm a little reluctant all because we have a very large merger in front of us. so anything i said will be viewed in that lance. i will say this, it is important to conduct -- with a statutory -- of the arguments made for and against whether that's the right statutory mandate to review whether transactions serve the public interest. our job at the pump is to carry out that mandate and it's important for us to do it in a thorough, fair, and open with. that's what we are committed to.

we stand by our record in the terms of the transactions had been conducted so far under this chairman, and that's how we're going to act going forward. >> that's good. what i would say, review the mergers under the public interest standard and so what i would say is that's capacious enough standard and in determined enough that this, there's room for self-restraint by the agency, maybe a lot more self-restraint in the agency's use in the past. without saying more about any particular merger. do you have a question? [inaudible] i think you refer to statutory, i think it would adhere to your statutory mandate. [inaudible] i'm wondering what the facts and

data drove the fcc to determine if they have any, authority to vote, and what dictated determination that any authority, if we should be doing this. because the market dictates it's necessary or the date determines that we should be doing something like this. >> time would not allow a full answer to the question, but i would refer you to our website where you will find the open internet order which contains page after page after page of data and analysis to support what we are basically status quo rules of the road that amounted to only one page of rules and that would basically agree to be reasonable by a wide swath of the industry as well as the tech and other folks. and on data roaming, again i would say when you think about

that is for our antibusiness, if you look at the record, you will find basically everyone but the two largest incumbents asked as to do the data roaming rules. so i would just welcome attention to the orders themselves because they contain those justifications. [inaudible] >> so, there's dozens of pages of law in the open end of that order explaining exactly where the legal authority comes from. that will be decided in court, whether we are right or wrong. title iii applied to the authority. we are challenged on a authority almost every time we issue an order, and the agency wins the vast majority of the time. >> we're only going to do one more question because the panel has been indulgent, if there is the question.

okay, if not, i just want to say when we have put together this program, my hope was that we would start or take the extent it's been started that we would carry on and provoke further discussion on regulatory reform and institutional reform at the fcc and get out some ideas. and so, without hope, now that we're concluding, i can say that my hope was fulfilled even beyond my expectations. i think this was terrific. i want to again thank c-span for being here and the c-span audience for joining us. i hope you here will join me in thanking our panelists here today. [applause] [inaudible conversations] [inaudible conversations]

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>> the heads of the two federal agencies who are writing the rules to regulate the u.s. derivatives market testified before the senate banking committee. derivatives are financial instruments whose price is right from the valley of an underlying asset. fcc chairman mary schapiro and gary gensler chairman of the commodities futures trading commission discuss proposed rules on derivatives that their agencies were authorized to implement under last year's financial regulatory law known as dodd-frank. hearing was chaired by south dakota democratic senator tim johnson.

>> i'd like to call this hearing to order. due to the length of this afternoon's hearing, we will limit opening statements today to myself and ranking member shelby, and we ask the other members of the committee to please submit their opening statements for the record. today, we will review the implementation of the new regulatory framework for the otc derivatives market required by the dodd-frank act. this is our committee's first oversight hearing on this issue since the passage of dodd-frank. while i know there are many other issues that senators may like to raise with her regulators before us today, we should focus our questions on the subject of this evening. the dodd-frank act brings transparency and accountability to our derivatives market and

addresses problems that are greatly exacerbated the 2089 and two crisis commend all of the regulars here today and their staffs for their extraordinary work and long hours they have dedicated to the important reforms. creating a new framework to regulate the vast 600 euros and dollars swaps market in this age of instantaneous global capital movement is a competent task that demands close cooperation with international. we must create new rules of the road to ensure that our financial markets remained in the of the world. our regulators should follow congressional intent to craft rules that are based on relevant data that reflect the unique

structure of the swaps market, while uploading rulemaking for political expediency. and ask chairman gensler and chairman schapiro and all our regulators to work carefully to do what is necessary to get this right. this effort will require strong coordination both within and among regulators to review the full set of final rules and a holistic way before the are finalized. the regulators must also integrate any for public input into this review. i urge our regulators to work together to craft a streamlined set of workable rules that protect the ability to hedge risks in a cost-effective manner and minimize unintended consequences that could send market jobs overseas.

with that, i turn to senator shelby. >> thank you, mr. chairman. today the committee will examine the implementation of the dodd-frank act's new derivatives regulatory schemes. there's particular need for oversight in this area because dodd-frank has needlessly i believe briefed widespread uncertainty about the regulation of derivatives and threatens to impose huge costs on main street businesses as well as on our overall economy. the irony is that the proponents of dodd-frank told us that the new law would bring certainty to the market and stimulate economic growth. instead, dodd-frank has set in motion a massive regulatory rulemaking process that is on an unrealistic timetable. predictably, the result has been regulatory confusion and market uncertainty. regulators are hastily proposing

rules to meet the extra me short deadlines without fully considering the of the economic impact or how they interact with rules proposed by other regulars. meanwhile, market participants are screaming to understand how the numerous and complicated rules will impact their businesses. in fact, they have filed thousands of comments on the proposed rules. the comments reveal the gravity of their concerns as well as their confusion about how the rule would work in practice. this process is a direct result of the poorly conceived a regulatory structure created by the dodd-frank legislation. although numerous studies have recommended consolidating our financial regulators, dodd-frank actually dispersed authority for derivatives regulation. unfortunately, the danger of having multiple regulars involved in a process involved

is a process marked by confusion. for example, although regulators have proposed numerous new rules for derivatives, the cdc and the fcc have still not proposed rules that clarify the definition of a swap. this omission alone has had serious ramifications for our markets and implementation process. after all, if regulators do not know what the definition of a swap is, how can they finalize their own rules governing swap dealers or major swap participant. since it is unclear exactly who is covered by these rules. and if market participants do not know if they will be classified as a swap dealers or a major swap participant, how can they be expected to know when to submit comments? this is just one example of how dodd-frank has created a confused derivatives rule making

process that is not preceding in a logical order in create significant uncertainty in our markets. the regulatory -- regulatory process is further hampered by the fact that dodd-frank, that the dodd-frank act was so poorly drafted. here's just one example. simple example that illustrates my point. one of the first of dodd-frank rules promulgated by the cftc was an interim final rule for quote, reporting the reenactment swap transactions. stated purpose of the rule is to reconcile two conflicted dodd-frank provisions, section 723, and 729. the cftc rule proposal specifically states, and i'll quote, the inconsistencies between these two reporting provisions must be reconciled in order to eliminate uncertainty with respect to the actual reporting requirements for the reenactment swaps.

in other words, our regulators and forced to undertake additional rulemaking in an effort to correct the inconsistencies and errors in the dodd-frank act. although i'm not sure how rules can alter statutory requirements, it's clear that dodd-frank has fundamental flaws and should be revisited. today, i look forward to hearing of the regulators plan to improve this broken regulatory process, particularly how they will consider and incorporate comments from the public. make no mistake, the unprecedented scale and scope of agency rulemaking mandated by the dodd-frank derivatives title make it impossible for regulars to engage in deliberative and rational rulemaking and still meet the unrealistic deadlines imposed by the act. i'm also concerned that the regulators are not fully considered the cost and benefits of the rules and the effect that these rules could have on our markets and job creation in the

country. as the american economy continues to struggle, this may be the most important facet of the current regulatory process. i think it must not be overlooked. thank you, mr. chairman. >> i'd like to welcome and introduce the witnesses on our first panel. the honorable mary schapiro is chairman of the u.s. securities and exchange commission. previously, she was ceo. she also served as commissioner of the sec from 1988-1994. and chairman of the commodity futures trading commission from 1994-1996. our honorable gary gensler is chairman of the committee futures trading commission. mr. gensler previously served in the treasury departm