have enabled it to come back. by contrast new york did become debt. and it came back not because of some government program but because of private entrepreneurship because of people coming up with new ideas creating change. >> you can watch this and other programs online at booktv.org. you've been watching booktv, 48 hours about programming beginning saturday going at eight eastern through monday morning at eight eastern. nonfiction books all weekend every weekend right here on c-span2. ..

>> this week on "the communicators," our guest is intel corporation vice president peter cleveland who talks about the obama administration's efforts to improve american innovation by assisting the u.s. technology community. >> host: well, we're pleased to welcome to "the communicators" peter cleveland, vice president of the intel corporation, and he's also in charge of their global public policy group. mr. cleveland, if you could, start by giving us a snapshot of what the intel corporation is, what it makes, where it's located, etc. >> guest: intel corporation was founded about 40 years ago in silicon valley, and we are primarily a microprocessor company, but we're getting involved in all sorts of products, software solutions,

hardware solutions. we produce the chips inside of netbooks, servers, desktops, but our chips also run medical devices, they also run gps systems in cars. you see them all over the world, and we are a great american manufacturing success story. we have been profitable for decades and employ 43, 44,000 americans in our domestic manufacturing base. so we helped found silicon valley, and we're going strong there today. >> host: so you still manufacture heavily in the united states. >> guest: absolutely. in california, in oregon, in arizona, in new mexico we employ 43, 44,000hi-tech, high-wage workers. they're the heart and be soul of intel, and as we expand our manufacturing facilities, we count on them to build our next silicon process technology, our new architecture.

as we go forward, it's our american working manufacturing base is key for us. >> host: also joining us is gautham nagesh from "the hill" newspaper, he's a technology reporter there. ma has been talking about his innovation -- president obama has been talking about his innovation agenda, and he's been referencing this in several speeches. here he is from last month at penn state. >> and anywhere you go in the country, you will find inventers and businesses that created products that are now sent all around the world. but innovation has also flourished because we as a nation have invested in the success of these individual entrepreneurs, these inventers, these scientists. in this country from the moment you have a new idea, you can explore it in the world's best labs and universities, you can develop it with a research grant, you can protect it with a

patent, you can market it with a loan to start a new business. you have got a chain that takes a great idea all the way through, and that's something that we as a nation have always invested in. it's how we as a people have advanced ideas from the earliest stages of research to the point where you can hand it off and let the private sector run with the ball. it's how investments in basic research led to things like the computer chip and gps and millions of good jobs. so in america innovation isn't just how we change our lives, it's how we make a living. and to support american innovation what my administration is trying to do is not just hand out money. >> host: peter cleveland, is it important for the government to get involved in technology innovation? >> guest: absolutely. president obama gets it. those remarks right there

explain how investing in innovation and job competitiveness is crucial, and there's a partnership that goes on between the private sector and the government whether it's patent reform or immigration reform or the r&d tax credit. the president has set sail on the right course. he's not perfect. there are areas that we work with him. but the private sector and the government coming together to push innovation makes all the sense in the world. >> host: well, in your kind of hometown newspaper, the "san jose mercury news", william shuguard had an op-ed, a professor at the university of mississippi, he's also associated with the independent constitute in oakland. and he wrote: while public investments in technological innovation sound like a good idea, the danger is that the funds will be directed toward politically popular projects rather than those with the highest economic value.

>> guest: that's one point of view. at intel we would disagree with that. the national science foundation, the national institute of standards, the office of science, the department of energy, they do crucial work. they produce the seed corn for great companies like intel. so we collaborate with them, and when president obama raises spending levels for these types of agencies and departments 7 and 8% consistently since he came into office, that's a real plus for silicon valley and tech companies like intel. >> host: gautham nagesh. >> host: speaking of research and development funding, we've seen a very political discussion over increasing the amount of r&d funding available from the federal government. how do you view the president's fiscal 2012 budget request and the way it handles that money? >> >> guest: the president has made

a series of good decisions to invest in nano electronics research, to extend the r&d tax credit permanently, but this is a hard slog. tax reform is an area, for example, where we are going to have to work with the administration on statutory rates, on the territorial tax system, on effective marginal rates. nothing is ever easy. he has the right ideas, the right principles to push science, to push engineering. however, we'll have to work in the context of a republican-held house, a democratically-held senate and a democrat in the white house to reach good compromises that encourages open platforms, open systems and open standards so that companies like dell or microsoft or intel or apple, the heart and soul of american technology k flourish going forward. >> host: can i step back and ask

you, we've really seen science itself become politically charged in the last few years. how does intel review these discussions regarding the importance of basic scientific research and funding and its importance as a company that's sort of at the new york stock ng jobs. >> guest: we have to do better. we sponsored something called the new york science talent search. we just brought in 40 of the brightest kids in the nation who present projects on a vast array of topics, and we we awarded $100,000 to a new winner. the k-12 education system is crumbling, and states and the federal government have to adjust curriculum, have to infuse technology into the class room so that students learn faster and more efficiently, but particularly in these hard areas. the dropout rates are unacceptable, and i'm probably being charitable when i say the system is crumbling in these

areas. we really have to invest in education, particularly stem education, science, technology, engineering and math. >> host: so are you talking about more teachers? is this more money for universities to do research? what, specifically, are you advocating? >> guest: a better cooperative environment between the federal government and researchers at universities so there's less litigation that follows on in terms of disputes about who's inventing what, higher standards for teachers, bringing technology into the classroom so that there's an immediacy to the learning and curriculum that's going on at the k-12 level. we're losing kids in the eighth, ninth and tenth grades, and other nations are surging ahead. and so we have to, we have to do better in this area. >> host: peter cleveland, your boss, the president of intel, said last year that american tech was on the decline and one of the reasons was because of our education system. lee now serving on the president's job requests council. is it -- president's jobs

council. has he seen improvements? has he seen a difference? >> guest: paul has 38 years of experience. he knows how to run a company effectively, and i think the president reached out to him to seek his counsel about steps that we can take to improve the work force. what can we do in the immigration area, what can we do to reduce patent litigation so that the patent and trademark office works more effectively. building jobs is not easy. it's a brick and mortar process. you have to invest in your people, in education, you have to take regulatory and statutory steps in government so that the private sector can expand its head count. and so paul is a good candidate to talk to the president often, and the president came and visited our campus recently in oregon, and we were thrilled to host him there. do you see a difference between this administration and the bush administration in its approach to tech?

>> guest: i think there are some subtle differences. the president, the current president, i think, believes in heavily investing in science, and you've seen that with his series of budgets. when i talked about these various departments and agencies, we continue to talk to him about tax reform. president george bush had some good ideas in the area of tax policy that would generate momentum in the private sector. and so when we talk about statutory rates or talk about a territorial tax system which intel advocates for, i give george bush high marks. and in many other respects president barack obama has done a fine job as well. >> host: well, one of the areas, and i want to investigate some of those areas you just mentioned, but one of the ongoing concerns for tech companies has been the h-1b visa issue. why is that still an issue? >> guest: i think the politics

of immigration are white hot. and so reasonable legislators on both sides of the aisle, republicans and democrats, recognize that lifting the cap on these specialized visas makes sense so that facebook and other sell con valley companies -- silicon valley companies can recruit the finest minds. we've hit the cap already this year -- >> host: for 2011. >> guest: for 2011. there'll be a new series of admissions for internationals starting in april, but we're stuck once again because the cap number is too low. so comprehensive immigration reform fails due to politics, but then there's specific subjects like h-1b visas, employment-based green cards that there's a consensus around, but due to the large e debate -- larger debate, we can't get forward momentum. >> host: so you do not see legislative action coming in this year? >> guest: i will be honest and

direct. we'll try to take some regulatory steps that encourage the white house to, perhaps, adjust per-country limits of admissions at the state department. but comprehensive immigration reform will be very difficult given the balance in congress. that doesn't mean the issue shouldn't be talked about. there are a whole series of issues that matter, and we'll come testify and explain how we use these people to generate jobs, to generate new patents, to expand our domestic manufacturing. immigration reform is crucial going forward. >> host: gautham nagesh. >> host: speaking specifically of the h-1b visa program, obviously, there are companies concerned there aren't enough visas out there. >> guest: right. >> host: i've also seen reports of mostly, most of the visas are going to staffing firms, or a disproportionate number of the visas are routed through technical companies here in the u.s. do you have any views as to how the program should be administer

administer -- administrated? >> guest: i think you've raised a valid point about who gets the h-1b visas, the 65,000 allotted annually. we compete vigorously for those slots. there are international staffing firms that have a different function and a different business model, and we operate differently than those firms. so administer straitive changes would be appropriate as congress considers this. >> host: also you mentioned president obama's visit to your facility in oregon, and they took that opportunity to announce that you guys will be building a new, i believe, $5 billion facility in arizona. can you talk about that plant, and also, was there any thought to building that facility outside of the u.s.? because you've discussed some of the tax issues and that sort of thing. >> guest: we'll be investing $5 billion in a new manufacturing facility in arizona, 542.

it signals our commitment to our workers. the education that they have, the system of government in this country that is very friendly towards how we operate, these are not easy decisions for us because we can build a factory overseas much more cheaply. it would cost us a billion less. but we're dedicated to our own country. we believe in our workers. we work very closely with public officials, both state, local and federal, and we'll continue investing in this country. the decisions, the investment decisions get tougher for companies like intel. you don't have to sub is itize us like you do gm or aig. we're very profitable, we're very successful. but it does make sense for the government to go the extra mile on all these areas so that we can continue to build out domestically versus going overseas. >> host: peter cleveland, let's talk about tax rates. one of the issues is the foreign tax rate versus the american tax rate. what would intel like to have

done with the tax system? >> guest: we'd like statutory rates to come down so that we can compete more effectively. oecd countries, many, many foreign nations have a much lower statutory tax rate. they have a much lower effective, marginal rate of taxation as well. we recognize there will be a trade-off. if you reduce those rates, then tax loopholes or expendtures as they're called, some will have to be closed. and that may, may not benefit us. but overall we want to compete against semiconductor companies in korea and elsewhere. we beat the competition right now. we're first class, we're number one, but tax rates are crucial. so as president obama and speaker boehner talk about a series of issues in the next year, year and a half, they ought to try to find some common ground such that comprehensive tax reform might be able to

occur after the next presidential election. >> host: is it true that the u.s. is the only company that taxes foreign earnings if you bring it back into the borders? >> guest: that is true. and it is a deterrent for fantastic companies like cisco or intel to bring their money back for r&d purposes or for hiring purposes. our money is stuck due to the punitive high tax rate. and so something has to give here. there needs to be a consensus, a negotiation, a compromise. and president obama gets it. he though knows the -- he knows the arguments, and politics intrudes sometimes when you have tax debates. and so we're, we're in a wait-and-see mode, but we're hopeful. >> host: gautham nagesh. >> host: thank you. switching, again, to patent reform. we recently saw the senate pass senator leahy's bill with a fairly strong bipartisan ratio. can you tell us the way it

alters the filing system? >> guest: senator leahy has done terrific work on patent reform for many years on all sort of provisions in that legislation; damages on venue, on the legal standard of review for how a judgment occurs, on first to file, on the patent and trademark office's ability to set its own fees and then not have the money it collects diverted to other parts of government. senator leahy deserves a medal. the senate has acted 95-5, and that's a good consensus. that's positive when you have republicans and democrats joining together. our ceo was in town last week to take the next step, to speak to the chairman of the house judiciary committee privately, lamar smith, who's a republican. who also has worked on this issue for years. you had leahy, a democrat, on the house side you've got lamar

knit, a republican -- lamar smith, a republican, who wants to move forward. this could get enacted into law, and intel's right in the middle. we're very hopeful. >> host: is there anything you'd like to see in the house version of the bill that's not in the senate version of the bill? >> guest: we would like to see a process at pto called interparties review which is fair and appropriate administratively so that there's not litigation. there's a way to judge how patents are issued and the elements of those patents and do it on a less costly basis. we spend $125 million on patent litigation often times down in texas, and we fight, and we fight hard because we have plaintiffs who sue us, these nonpracticing entities, and we believe in the products and our patents. we have 46,000 patents in our portfolio, so this is a drag on our ability to innovation. --

innovate. it is frivolous litigation, and we're not the only ones that suffer from this. microsoft and other tech company bees suffer like we do. >> host: well, when you go and do research on lawsuits against intel and on your own web site, in fact, antitrust is always the issue including an ftc issue with intel and antitrust. new york has issued and europe has issues with antitrust. would you like to explain that? >> guest: fundamentally, big is not bad. we have been extremely successful. european companies, chinese companies, american companies, they love our microprocessors. and so we have a sizable market a share. we have worked with the ftc and with commercial litigants and continue to work with the european commission to resolve the differences. we don't engage in anticompetitive behavior. your business practices are sound, but we recognize that the public authorities have the right to raise these types of questions, and we are as

responsive as we can be. at the end of the day, we produce a fantastic product. we're ahead of the competition in terms of the size of our microprocessors, in terms of the architecture. and that's why car companies or computer makers and many, many others buy intel chips. there's nothing we can do about it, but we will continue to work on a cooperative basis with authorities around the world on this issue. >> host: what's it like to work with europe and their governing bodies? >> guest: we try to become, we've tried to become a trusted adviser to the european commission on all sorts of issues, on environmental and energy issues, privacy and data security issues. we've worked very closely with them on antitrust questions. we have 85, 86,000 employees around the world who are trying to do the right thing, and they have incredible backgrounds, and we have a lot to offer. so if we can provide that information and knowledge and an

si to the leadership -- analysis to the leadership in europe, that's the goal. i'm flying to europe this afternoon and will be there this week to take just these kind of steps. >> host: this is c-span's "communicators" program. our guest is peter cleveland, vice president of global public policy for intel corporation. gautham nagesh, report from "the hill" is with us as well. >> host: sticking with antitrust, we saw intel settle in august an antitrust complaint, no admissions of wrongdoing, but we did see come concerns from the -- some concerns from the government regarding anticompetitive behavior. do you expect competition -- the government to be scrutinizing recent transactions? >> guest: we've worked closely with authorities on the mcafee transaction and the infin ontransaction, and we've made some slight adjustments. the security software area, a

$7.7 billion deal was approved, and security is becoming more and more crucial to consumers. so we'll take steps to integrate mcafee successfully into our business. the bottom line is broadband is educate loading. -- exploding. we are trying to diversify our business away from just microprocessors into new areas, into software and into operating systems, and it's challenging because there are other competitors in that space. but we recognize that open standards and markets and free trade agreements are positive in terms of expanding our business prospects. >> host: has the government's broadband plan enacted last year been beneficial, number one, in be your view, to the country and to intel? >> guest: absolutely. the president talked about a sputnik moment for this country in his state of the union address in late january, and he set a goal for expanding broadband to 98% of the country. he's got the right ideas here.

the problem is that spectrummal hoe case -- allocation right now needs to be rearranged on a voluntary basis. we need to make sure that mobile providers have sufficient spectrum so that people that are on the go and on the move can rely on data and e-mail communications. and right now that's just not the case. so we need to expand spectrum allocation to mobile wireless providers. it'd be a law that we'd be required to do that. the president is supportive. there are democrats and republicans that are supportive. it's going to take some legwork to complete that process. >> host: can intel be more efficient in the way they design their microprocessors to increase spectrum usage? is. >> guest: we are trying to get smaller and smaller as convergence occurs. we're coming from above, we've done very well with desktops and laptops, and we're getting into

smaller communications devices. and that's called convergence as others come up with their microprocessors and other types of communications chips. so we have to lower our power management and produce different types of chips which will be difficult, but we're making steady progress in that area. >> host: switching once again to the r&d tax credits, we've spoken before about the importance of making that credit permanent to the technology industry -- >> guest: absolutely. >> host: -- to less b uncertainty. we've seen, now, a house bipartisan push, again, to make the credit permanent. how optimistic are you that this is going to be successful, and can you explain why it's important for intel for this to be a permanent program rather than being renewed every year. >> guest: 18,000 companies benefit from the tax credit, and we're probably one of the largest beneficiaries because we invest so much in research, $7.3 billion a year. so congressman bilbray on the house side has introduced a good

bill. a starting step to talk with democrats about making the r&d tax credit permanent, simplifying it and raising the amount of the credit. we've dropped on the r&d tax credit from first place 20 yearr ago to about 24th place in terms of the value of the credit. the government needs to do better. it's reenacted every other year or so, it stalls, it's hard to know when it will be enacted again. and so legislators on both sides of the aisle and the president recognize the value of the credit. l we just need to -- we just need to improve the process for considering it. >> host: well, peter cleveland, make the argument then on the other side against the r&d, making it permanent. we've been doing this show for several years, and we have our morning show, "the washington journal" as well, i have never met one legislator who's against making the r&d credit permanent. what's the argument? >> guest: if you extend it on a

yearly basis only, then legislators can act in their oversight capacity to determine how effective companies are using it. we use it to great effect, and we've developed technologies like silicon foe tonics so that data travels on light beams versus electrons on copper wires. so legislators have a very important or role in the public policy process for assessing how corporate tax provisions work. and so if you make it permanent, it would be hard to make it unpermanent. so i worked on capitol hill for 18 years. i understand why they don't make it permanent, but that won't deter us from continuing to advocate for that. >> host: and peter corps zinn was chief -- peter cleveland was chief of staff to senatort( feinsteinçó in his career. >> guest: we know him very well, he has some interesting ideas for come comprehensive tax refo.

we talk to him often, and we'll continue to do so. he's, he's a first-rate legislator. >> host: again, switching topics, we've recently heard that commerce secretary gary locke is going to be heading to china to serve as the u.s. ambassador. he's served as the administration's front man in terms of speaking to the technology industry and hearing their concerns. can you talk about what you would like to see or what intel would like to see from the next commerce secretary and what their priorities should be? >> guest: president obama has talked about doubling exports over a four or five-year window. the commerce department needs to drive hard on that goal. gary locke was terrific. he was a nuts and bolts governor. he understood how to push exports, and he's going to be a terrific envoy to china given his background and chinese-american descent. the commerce department really needs to, through its messaging and through it activities and through its personnel spread

across the country, integrate well with businesses to push exports to the four corners of the globe. there are all sorts of barriers, nontariff barriers, regulatory barriers, taxes, difficulties we face, and the commerce department should be our ally in breaking down those barriers. >> host: go ahead. >> host: sorry. we've seen a lot of names floated, ron kirk, even former google ceo eric schmidt, the fcc chairman,çóñvó julius genachowso you have any thoughts on whether someone from the private sector is better? >> guest: the better choice would be someone from the private sector. i think the white house gets this. perhaps a ceo that has run a multi-national company that knows the in thes and outs of how tough it is to generate revenue, to make a profit, to make personnel decisions. that would be a positive choice, a