>> blair levin, former fcc chief of staff, former broadband plan executive director, now at the aspen institute. mr. levin, thank you for coming back to "the communicators." >> guest: thank you very much. >> host: also joining us is eliza krigman of politico, a reporter there. it's been about a year since the

national broadband plan which you spearheaded was introduce today the country. give us your assessment of the past year and its progress. >> guest: well, first, i think you have to understand what the plan really was, and what the plan was was an agenda-setting and target-clarifying device. that is to say, it was supposed to say here's the things we need to do over the next few years, and also here are targets that we either need to shoot for or shoot at. that is to say here's some really concrete proposals to move us toward action. and i think in that way it's been a very successful year. every debate that's going on with the exception of debates about mergers are really debates that are very, about how do we accomplish the goals of the broadband plan. and i think that in terms of agenda setting, it did prove to be a very unifying and consensus kind of document that everyone kind of, the stakeholders generally agreed the kinds of thing, spectrum reform, rights of way reform were very

important things to be done. in terms of the targets that we set, you know, we're moving toward some of them. some of them we're coming up with better ideas, that's perfectly fine. so i think it's been a pretty good year. i would say that this is not like a blueprint where every element has to be exactly right or there's structural instability. it's more in the nature of a book to a movie. and it's a different kind of source material x. there and the as many ways to make a movie out of the book the christmas carol which, by the way, is 41 because that's how many movies have been made out of it. two steps forward, one step back. there's some things i think are great. others i go, really? but that's the way you expect it to be. >> host: where would you like to see the policy different? >> guest: well, there are certain important issues where i

think we've gone off track on the debate. for example, the spectrum issue which i think is extremely important for the country over the next 5-10 years and certainly over the next 20 years. i think the important issue we need to reso is how do we -- resolve is how do we constantly reallocate spectrum to serve what the public needs. we've had a lot of different spectrum debates such as issues like the d block for public safety, about repacking spectrum and things like that. but at the core we need a plan so that as markets change and technologies change we reallocate spectrum in a way that serbs the public -- serves the public interest. and i think we've gotten off track in that debate. and, indeed, what's interesting is that in some ways there's an argument being made that we don't ever need to reallocate spectrum. the most important thing we all do every day is figure out how to reallocate what our scarce

resource is, whether it be time or in the case of this show, how do you allocate who's going to be the guest on the show, those kinds of things. when i was on wall street, the most important thing was to figure out how to reallocate capital. the most important asset that the government controls over the next ten years will be spectrum. and we need a method to reallocate it, and the debate is getting lost. >> host: okay. one aspect is the proposed incentive auction. do you support those? >> guest: right. absolutely. basically, there are only four ways to do reallocation. the first way is to assume we got it perfect in the first and, therefore, never need to change it. in any business, in any life this would be considered insane. in washington it's actually a very respectable argument where people say, hey, you allocated it this way in the 1950s, you have to stick with it. i disagree with that. a second way is let the market determine it entirely, have no restrictions at all.

that's actually not a bad argument, but it's interesting, there was a letter from 112 economists who pointed out the many problems with that. you have to coordinate, there's international harmization, there's equipment around monoization, there's -- harmonization. there needs to be a rational market for spectrum, and the government has to be that market maker. it's a debatable point, but i think that's the better point. the third way is the status quo which is you wait for a crisis, and then the government by administrative fiat simply takes it away from whoever has it to begin with. i'm, you know, i'm okay with that except that that's crisis response. it's ineffective and, basically, leads to years and years of litigation. incentive auctions would provide a method that's market-based. that's what i'm for. >> host: so in a sense, in your view, are the broadcasters sitting on underutilized capital? is. >> guest: well, i think some are

and some aren't. what's interesting about the debate is that the broadcasters continue to say things that assume that all broadcasters are the same, that if we allocate spectrum to any broadcaster, we need to allocate it the same way to all broadcasters. we have 25 broadcasters in new york, we have 32 in los angeles. that was done at a time before there was cable, before there was internet. do we really need that many? now, i'm, i think the right answer is to let the market determine that. and what incentive auctions are about is letting, when the market changes and changes the value of spectrum to go up but the value of broadcasting to go down, for some, for the 25th broadcaster in new york it may be it's more valuable to sell the spectrum, and we need to have a rational mechanism for doing that. but it's curious, the broadcasters seem top of the view that any change in the system is have been very, very problematic, and i disgreet.

>> host: you say we've gotten off track, is that because of actions that have or haven't been taken? >> guest: i think there are a lot of different reasons why. for example, the debate over the reallocation method was pair with the the debate over public safety. i understand why people did that, and that was a rational decision, i just think it's unfortunate because i think it's very important that we establish the right reallocation meth. i think the broadcasters have been very successful in taking people's eye off the ball which is, again, what's the method that you want for rehallal -- reallocation. and, by the way, i'd be happy to sit here with gordon smith and here his answer to the question, how should the country reallocate spectrum over a 10, 20-year period? he's never answered that question, and i think the country deserves an answer from the broadcasters. >> host: let me ask a follow up. the administration and congress

would like to use the money from the incentive auctions to not only build the interoperable public safety network, but also help reduce the deficit. is there enough money for both, and how should this be parsed out? >> guest: well, look, congress is spending the money the way they want to spend the money. i don't have expertise, nor if i did would they listen to me anyway. but the more important point is i was involve inside the first auctions. i have followed every auction as an analyst. you can make estimates about auctions, but they're very tricky. and there's so many different variables that will effect the auction, what the markets are at a particular point. if you had had a spectrum auction as we did in 2007, if you'd had it a year later after the financial crisis which has nothing to do with telecom, you'd have a very different forum so -- a very different result. the projections, obviously, are a very important tool, but the

fundamental point is not about using spectrum to raise money. it is about using spectrum to create competitive, innovative, dynamic markets that drive economic growth and productivity. >> host: so enough money for both or not? [laughter] >> guest: well, the truth is i don't know. i really don't know. you have to make an estimate. and it would be great if there was, but again, i hope the decision makers focus not so much on the -- i mean, the money will drive the process to some extent, but the fundamental thing, again, let's make sure we have spectrum policy that drives competitive, innovative, dynamic markets. >> host: mr. levin, do you agree with julius genachowski that there is a looming spectrum crisis, especially when it comes to the new tablets and smartphones, etc. >> guest: absolutely. and it's funny, we did our estimates prior to the ipad coming out, and if you look at the numbers on the ipad, you know, we were way too conservative. there's no doubt that there's a looming spectrum crisis. the only question is, is it

something that's going to hurt us in two years, three years, five years, seven years? whatever number it is, we're going to need a method to reallocate spectrum. and i think it's very important that we put this front and center on the nation's agenda today because if they were to pass incentive authority tomorrow, it would still be a number of years before that spectrum could be reallocated. this is a long-term process, so you have to start now. and if you think the spectrum crisis is going to hit, even if you think it's going to hit in phi years -- five years, you've got to start today. just some commentators have said, well, the federal government essentially gave the broadband back to the broadcasters back in the '50s and '60s, so why should we have to buy it from them? >> guest: do you mean why can't we take it back? [laughter] i would say one could foresee a situation in which the economic consequences to our country could be so damaging -- not

tomorrow, but long term -- that the government would actually be forced into a position where that would be an alternative. you know, if we don't have the same spectrum kind of allocated that other countries do, we are essentially -- it would be the equivalent to having a highway system with a lot of potholes and a lot of tolls. and so it's, i think the process of simply taking it back is a, is not the most effective way to do it. but if we don't get incentive auctions, you know, that's the only other alternative, i think. >> host: this is c-span's "communicators" program. our guest this week, blair levin, former chief of staff at the fcc and former fcc broadband plan executive director. he's now with the aspen institute. joining us as well is eliza krigman of politico. >> host: thank you so much. let's talk about another component of the broadband plan, universal service fund reform,

transferring that from one that supports traditional telephone lines to broadband. commissioners have set an aggressive deadline of putting on order by the end of the summer. is that possible, and how do you see this process coming along? >> guest: it's possible, i don't think it's likely, but i think they should be forgiven if they miss their deadlines by a month or two. that's not that important. what's important is we move in the right direction and we move with some speed. here's what's happening, is that the industry is currently negotiating among themselves and hoping to give the commission kind of a consensus document. i think that there's, you know, it's roughly 50/50 whether they'll succeed with that, but i think that there are a lot of things to be optimistic about, and there are some that cause me some concern. the things i think we can be optimistic is there's consensus about the fact that we need to move to broadband, that the old paradigm doesn't work, that we

need to reform universal service and intercarrier comp which is a very arcane system by which phone companies pay each other. but i do think we've lost sight of the fact that we really need to do this as part of a public strategy. these are, essentially, we are -- as we do with other things -- cause a lot of people to pay so that other people can have service, and when we do that, there's got to be a public purpose to it, not just a private purpose. we should not be doing it simply to prop up certain phone companies, rather, because we all gain because of it. and i think some of the proposals i've heard and seen are really much manufacture about propping up -- much more about propping up private companies who, frankly, we've been paying to act in non-economic ways, and that's very disturbing. >> host: the commission hasn't teed up the contribution side of this equation yet. is that important to be done at the same time as the other pieces? you know, why or why not?

>> guest: yeah. so there's really two sides, right? one is how to you raise -- how do you raise money for the fund, and the second is how do you distribute money for the fund? we set out a ten-year plan to reform the system in three stage, and we said the first thing to do is deal with the distribution and to deal with the contribution, which is how do you actually raise the funds in the second phase. the reason i think that it's important to do it that way is, first of all, there are tremendous gains to the country to be made by rationalizing the distribution. a lot of money that simply is not going to an efficient public purpose anymore. we need to change that right away and, in fact, some changes have already been done which i think is good. if you try to do both simultaneously, i think you get gridlock and nothing happens. i think, you know, there's time to do the change in the contribution, but first let's make sure that the money we're spending we're spending toward that public purpose. >> host: on to a current events topic. commissioner baker surprised many by deciding to leave her post at the agency and take a

lobbying gig at comcast. did you see this coming? did it surprise you? >> guest: it did surprise me. >> host: do you think there's anything ethically incorrect about it? >> guest: well, look, anytime you know a person, you tend to view it through the eyes of knowing the person. commissioner baker was a wonderful commissioner. i worked with her a lot on the plan. she was really good on spectrum issues, very, very smart, knew the landscape extremely well, made an enormous contribution. i'm very, very grateful to that, and i think she's made a contribution in other ways, often very quietly. i am quite certain that she did not break any law. i'm quite certain that this offer came to her after the merger was already approved. but e completely understand -- but i completely understand why the public feels the way they apparently do about it. look, there's a very simple answer to this that she shouldn't be held accountable for, but i hope we learn a lesson here and that's simply

this; knowing a senate-confirmed person at that agency should interview for any private sector job while they're there. it's one thing if president says i want to move you from the commission to something el, or or -- else, or if a nonprofit comes along. but if you go there and the senate confirms you to be a decision maker, be a decision maker. and when you want to leave, leave. take some time off, enjoy the family and then look for a job. nobody leaves for a private sector job while the sitting commissioner -- we just, it would be better off. >> host: so you agree with free press then which sent a letter to the agency today asking the remaining four commissioners to publicly pledge they wouldn't consider taking a job at at&t or t-mobile while they're reviewing the merger? >> guest: well, i'd have to see the letter. i'd say i agree with the sentiment -- i'd go part --

farther and say they shouldn't interview that has anything to do with a regulated entity while they're serving at the commission. my only concern ant the letter is i don't know that you want a lifelong ban for working for those entities or something like that. but in some ways i would go further than they would. >> host: blair levin, just to follow up on eliza's question, what about the at&t/t-mobile merger, should it go through? [laughter] >> guest: you know, a lot of people have asked me that, and i have remained very quiet on that. i should explain why. first of all, mergers are very fact-specific. i learned this both at the fcc and also even when i was practicing law. and unless you're willing to dive into the details which require far more, you know, a lot more reading than i'm willing to do about the merger, i really don't think that somebody like me should opine on it. sprint just filed a 377-page document, i will confess i

haven't gotten all the way through it yet. also because of my role with the broadband plan, i'm hesitant to say something which could be interpreted in various ways relating to the plan or relating to the her merger that i didn't intend because it's just not what i'm working on these days. i will say analytically, it's been interesting to me the extent which at&t has premised some of the merger on the broadband plan which i find interesting. i do think it remits that -- represents that people recognize the goals of the plan were good goals. but i would also say at the end of the day, they're making an argument to the fcc, but the merger -- i think your viewers understand this -- the question of whether or not that merger goes through will be fundamentally decided at the department of justice, and they're going to look less at those issues, about, you know, what's the impact on universal service and buildout, and more on competition, and that's the way it should be. the doj has competent people.

they'll figure it out. >> host: on its face, just looking at it on its face, does it strike you as okay for competition? >> guest: you're asking me the same question -- >> host: in this a different way, you're right. >> guest: i'm going to avoid it again. if i studied it, i might have an answer. i have a lot of respect for antitrust economists and lawyers. they're kind of like the neurosurgeons of that part of the practice and smart and know a lot of stuff that i don't, so i'm just going to decline to answer. >> host: eliza. >> host: let's approach this from another angle. [laughter] i know you're excited about this question. at&t is touting this deal as good for the public because they're saying wireless conductivity to 97% of the public. can you speak to the fcc's track record for enforcing conditions? >> guest: you know, a great question. there are certain things -- i haven't studied that as an academic, and it is an

interesting question. when i look back at my own time at the fcc, i would absolutely say this, that we had certain merger conditions and stuff. the best stuff we did had to do with market structure and had to do with competition. that what we did -- we made a series of decisions in '93 -- actually '94-'95 time frame that reed hundt made a speech about. there were five decisions critical about wireless. a few of them were great, a few of them we would look at them and say maybe they were great, maybe not so much, but fundamentally laid the foundation for a very competitive, dynamic, innovative wireless market that we've really enjoyed the fruits of in this country. and i think that, you know, making sure that there is a competitive market is far more important than whatever conditions you could put on that you then have to enforce. now, at&t would make the argument there is sufficient competition, so i'm not opining

on that question. i'm just saying that if you are depending on enforcement actions, it's a much tougher road. i do think, and i think it was very interesting that verizon picked up on this, that one of the concerns kwr0ud have about -- you'd have about a merger is does that inevitably lead to the need for more regulation? i think that's one of the questions that the department of justice will grapple with. but when reed and i got to the fcc my first time, we had, essentially, a regulated duopoly. and it really wasn't working for the country. and a lot of things went into changing that, but it worked much better when we actually had a deregulated, competitive market, and i hope we keep that. >> host: if you won't give us an answer, maybe you'll tell us if you would like to be the next commissioner at the fcc. >> guest: the next commissioner? >> host: yes. >> guest: i'm working on some stuff now that i think actually would be more money than being the next commissioner. i think commissioner's baker's

leave -- commissioner baker's leaving does a funny thing to what happens to her seat, what happens to the copps seat. there's some great people that could go there, and i prefer to work on the stuff i'm working on at aspen. that's more important for me now. >> host: you thought the additional broadband plan was successful in some areas, not so in some areas. overall, was it -- >> guest: well, first of all, i think the implementation -- two steps forward, one step back. and there's a variety of different factors. look, the best single line in the plan was this plan is in beta and always will be, and i deeply believe that. we moved a lot very quickly. and i think that it was certainly in the sense of a new agenda for spectrum reform very, very good. for universal reform, i think we've moved the ball forward dramatically. there's also a number of other things i think people haven't

noticed in education, for example. we were aligned, and we were not unique in this, but we were very much aligned with what the department of education is doing. if you look at their technology plan, it's similar to ours. if you look at the new consumer finance agency, they are taking a number of lessons that we talked about in the civic engagement section about how an agency can interact with the public. i think there are some other things, you know, something that got not that much attention but i think is actually quite profound, there's a proposal we had called the unified community anchor proposal which is how do you get next generation high-speed networks into every community? not every home, but every community through anchor institutions. that's something i don't think has gotten a lot of publicity but is moving along very, very well. i think it was visionary enough, but i react a little negatively to the desire to be visionary because there are a lot of people who want us to be visionary without any

relationship to mathematics, by which i mean money, or to effectiveness. so people said you should be more visionary, we should do what korea does and have a gigabit in every home. that's not that smart a policy, and certainly -- i mean, it may be smart for korea which has a different market structure and a different population density, but for the united states it would be incredibly costly, and i'm not sure much gained. so, you know, i think it was a pragmatic document, a thoughtful document, i think it sets out an agenda. i'll let history decide whether it was visionary enough. >> host: you just said it's always going to be in beta, that's important to remember. >> guest: right. and by the way, you know, i gave a speech on the one-year anniversary about what i thought was my personal biggest mistake. i think what we did on the adoption side was thoughtful and very good in a lot of ways. but as i studied it over the, over the year that i was at aspen, i began to realize that wasn't visionary enough. and we needed really a new,

fresh approach, and i laid it out in a speech. >> host: back in beta, always in pay that, we've talk -- beta, we've talked about some technologies and be policies that were set years ago. >> guest: right. >> host: you were chief of staff at the fcc during the 1996 telecom act. how do you rewrite that? [laughter] >> guest: you know it's. >> host: bring it up to 2011, 2012. >> guest: remember, the '96 act, i think the first draft of that was 1973, okay? so you don't want to freeze things by depending on a change in the law. if we could all get in a room and rewrite the law in two weeks, hey, you know, i'd love to do it. i'd love to sit there. but that's not the way law making works. i think we as a country, there's a lot of discreet things we need to do to move forward. there are many interesting things about the '96 act.

i actually think in some ways the an untold success story. i know this would be a controversial notion. but one reason why we actually, you know, mckenzie just came out with a study about the internet and it effect on economic development, and it would surprise people how well the united states does there. but there are some fundamental reasons. one of them is research institutions, that we just have human capital that knows how the to use this stuff which leads us being the leaders in applications which is important. the '96 act, actually, led to a lot of build-up of infrastructure which turns out to be important too. but the fundamental mission of the '96 act was to allow long distance into local and local into long distance, and i think we all would look back in history and say, turns out that wasn't the biggest issue from a historical perspective. its roots lay, you know, many years earlier in the breakup of at&t. and, again, it's why we need to be humble about grand designs

and great visions. i think we can see a need for spectrum reallocation. i think we can see easily we need to transform education dramatically. i mean, the ipad and the tablets create incredible opportunities to improve the way kids learn, and you're actually seeing this in some schools, and hopefully, we'll see it nationally. incredible opportunities to change health care, public safety and job training. we need to focus on those things. >> host: eliza krigman. >> host: let's talk about another law where some people would like to see a rewrite, carriage renegotiation. they keep saying broadcasters have an unfair advantage. what's your take? >> guest: it's always interesting on these things. you know, my take is that this is a fundamentally an economic battle between two industries over how you divide an economic pie. my guess is that the most critical thing is not what is

being debated. and here's what i mean by that. right now the debate is what is the nature of the law. in a very important piece that the firm stanford bernstein just put out on the impact of policy on the telecommunications sector, it's pointing out that because of what's going on in our greater economy, we're reaching a point where a huge portion of the population is not going to be able to afford, um, the kind of things that we think of as being almost essential. and this, if i was in the industry, this would be my biggest concern. the problem with the way retrans has gone is it has constantly raised the rates for multichannel video. and, you know, the cable guys blame the broadcasters and vice versa. i'm not opining on either one, i'm just saying the entry price is going to be out of reach for

most americans, so there will have to be a change. i have a feeling that change is going to be driven by economics, not by change in law. it's either going to be driven by the economics of everyone finally realizing you can't start at $100 a month or whatever the starting point is. and that number's probably a little high, but whatever the number is, it's still too high for tens of millions of americans. or it could be changed by things like netflix, over the top video. that's where i think that debate is going to go. >> host: we have time for one more question. >> host: do you see following up to that over the top video as a complement or a substitute to traditional cable? >> guest: right now it's clearly a complement, there's no question about it. the question is, what happens in the longer run? when i got to the fcc, wireless was a complement, it was not a substitute. now it's a substitute product. there's a lot of different things. i think that'll fundamentally be driven by economic decisions. i think by the producers, that is to say the content creators,