on poor seniors, workers, gop is the problem. and another tweet here from lee. how can anyone have confidence in the economy when president obama spends money like a drunken sailor. and chris in bama tweets in, reason after republican brinkmanship during the debt ceiling debate, the economy grew by 2.5% last quarter. republicans sad. chesterfield, new hampshire. ron is a democrat. let me punch that button. there you go, ron. hi. >> caller: hey, how are you doing this morning? >> host: great. >> caller: good. i think the economy is starting to improve a little bit. we got into a big hole. the large companies really, and the banks really messed things up. if they repeal dodd-frank and kill all them regulations we're going to get right back into that cycle again. they are going to take advantage of things and, mess the economy right back up again. i think dodd-frank has lots of regulations and i think

that is what, between that and enforcement i think that is what, wall street needs, and, then, you know the republicans and congress have been doing absolutely nothing. except for trying to get obama out of there but obama, anything that comes from washington or the senate it's completely, it is just dead on arrival when it reaches congress, whether it is good for the economy, bad for the economy or indifferent it doesn't matter. all they can do is just say no. and at least obama is trying to do something. congress is doing nothing, sitting on their hands and just vetoing everything that comes across their desk. . .

>> this is live coverage on c-span2. it is just getting underway. >> hello, everyone. i'm so pleased to be here at the urban institute. and where i am privileged to be a board member to participate in a discussion about a subject that is near and dear to my heart. and a subject that i think is far too little attention in the national discourse. i think it gets too little attention in this city, and around the country. and whether it is because children don't vote and they don't have a voice in the halls of power, whatever the reason is, it is i think undeniable

that americans at the other end of the age spectrum have far more influence than do the youngest americans. i think this topic, the nation's priorities in children, how will they go together, could not be more timely. we have a fabulous panel here to discuss, experts from across the spectrum to talk about for the next hour and a half. i feel privileged to be part of this conversation. i just would say to kick it off, there's no better evidence about time it is in is in the last day or so that the administration has granted california a waiver for its medi-cal program, california medicaid, which is simply means it is going to be harder for millions of californians to count on that program. and many of those are children. to get the sort of help and

medical care that they need. we know that 74 million americans are under the age of 18. we know that children are poor and all other age groups. but again, in all the sound and fury of today's budget battles, the word children doesn't get mentioned as often as conversation about social security, medicare. the deadline window for congress as a super committee, less than a month away. we know the election, especially for white house, president, congress and governors, just a year away. and any new publication from the urban institute which i think everyone in the room should have a copy of accuracy, and those of you who are watching on television will be able to go online to get tickets on the urban institute website,

www.urban.org. the publication is titled today's children, tomorrow the america. experts face the facts. and in that document, experts from diverse disciplines tackle a simple hard to into question, how can solutions to our national and state budget crises hit the facts about children in the united states. and in their approaches to each one of these writers wrestles with reason and with approaching economic and demographic challenges in different ways, and brings very different experiences to bear. so we will be testing some of those observations during our conversation over the next hour and half, and we are so privileged as i mentioned to have such an extraordinary group of scholars with us today. to talk about this. i'm going to introduce them starting on your right, on my left is charles kolb, president

of the committee for economic development, served as deputy assistant to president george w. -- george h. w. bush for domestic policy. he has been assistant general counsel of the office of management and budget and he's been deputy undersecretary are planning, budget and evaluation at the department of education. sitting next to charles is olivia golden who is in institute fellow here at the urban institute. her research focus on human services programs, helping children and families. she has been director of state operations for new york state's governor. she's been director of district of columbia's child and family service agency, and she has been assistant secretary for children and families at the u.s. department of health and human services. seated next to olivia between olivia and me is robert reischauer, a familiar face i know today going.

he is president of the urban institute. he was director of the congressional budget office from 1989-1995. bob, of interest to all of us today, is one of two public trustees of the social security and medicare trust fund. so he brings that experience to bear in his observations. moving on to my right, is former congressman jim kolbe, a senior transatlantic fellow for the german marshall fund of the united states and a senior advisor to a strategic consulting firm. he did serve in u.s. house of representatives from 1985-2007, representing the tucson, arizona, area. he was on the appropriations committee for 20 years and shared two of its subcommittees. our next panelist is margaret simms. she isn't institute fellow here at the urban institute and the director of its low income

working families project. previews issues vice president for governance and economic analysis of joint center for political and economic studies. one more panelist was coming and i'll introduce him when he arrives. but let's get started because we want to get our conversation underway by hearing for a few minutes from three of our panelists to put their ideas out there and then we will discuss what they have said and hear from our other panelists afterwards. bob reischauer, i'm going to ask you to kick this off. >> thank you very much, judy. i think of some of you know i spent most of my career analyzing federal budget policy and entitlements like social security. so you might wonder what i'm doing sitting up here among child policy experts rather than sitting down where i should be, among you learning. well, the answer to that question is that about a month and half ago olivia came into my office and said that she thought

the institute should sponsor a focus on a question, you know, what's happening to children as a national priority as we grapple with current fiscal problems, both short run, economic weakness, and the long run, fiscal sustainability. i thought this was really a great opportunity, and i told her that when people asked me the question of what's the biggest challenge facing this nation, rather than saying something about taxes or budgets or health care, i always say really i think it's making sure the children of today will be the productive citizens and workers of tomorrow. so i jumped at the chance to participate in this. i have certain ability to propel

myself from the audience that i'm in right now. as all of you know, in recent years a whole lot of policy debate in this country has focused on how to get the economy going again, how to reduce unemployment and how to boost income over the long run. most of this debate has focused on what should we do about tax policy, which we do about government regulation, should we invest more in infrastructure, should we do innovative things to spur new technologies? my view is these are all important. we should all do them, but if we lack the skills in productive workforce tomorrow, none of these are going to make a lot of difference. and fundamental economic future really is the composition and

skill level of our future workforce. and on this floor i think there's a whole lot to be concerned about. today's children are going to be tomorrow's workers. any objective analysis of what our children face right now leads to the conclusion that without a really significant investment by the public sector, by families, by our society, tomorrow's workers are going to lacked the skill need to be successfully, an increasingly competitive global marketplace. and you could look at this by comparing, what's the situation facing kids now versus in the past. and you come to the conclusion that it doesn't look so hot. a larger portion of today's kids, are spending part of their formative years in disadvantaged

circumstances. medicaid pays for about somewhere over 40%, indicating lots of these kids are starting out at a disadvantage. one in five children last year were living before -- below the poverty line and that happened to be higher fraction of kids than all but two years of the last 36. so this is not an area where things are looking good, and we know now, which we did know 30, 40 years ago, that young people who grow up in some circumstances have much less chance of getting a job that a stable, that is adequate to support a family when they are adults. in addition, you look at the situation and fewer kids are growing up in circumstances

where they have two parents who can share the burdens of child-rearing, which are increasingly complex. in 1970, 85% of all kids were in a hostile situation where there were two parents. it's less than 70% today. and on top of that, because of changes in our values, much higher fraction of parents are in the workplace -- workforce, particularly when the midas demo time devoted to getting the kids to do their homework rather than watch television, or whatever. for this generation of children that is going up also the educational system really isn't quite what it used to be. migration patterns and differential birth rates across states means that larger fractions of kids now are

growing up in states that haven't place a very high priority on elementary and secondary education. they are the ones who have lower spending for kids. they are the ones whose test scores and achievement levels are not as good. and when you add to that sort of cyclical problem that is happening now, which is states and localities are under a lot of pressure from falling tax revenues and other burdens, and you see that how they are responding is cut back the length of school year, the length of the school day, the number of subjects taught, and things like that. you know, you despair when you realize what is happening in korea, taiwan, china, and the places that we're going to compete with.

about 46% of all kids now are an ethnic or racial minority. that's about double the fraction from the mid 1970s. therefore more of them will face discrimination. we also know dropout rates of some of these minorities are relatively high and will lead to less training. so you put all these things together and you say, well, what should we do? and the answer is simple. i think we have to put our shoulder to the wheel and get together with integrated investment strategy for children, one that will correct these towards nutritional assistance, augment early childhood education, more an emphasis on k-12 programs, and support for those kids are going

to go on to postsecondary education either in technical school or an academic setting. but there's big obstacles to this, and that is that historically we have placed the managerial programmatic and a lot of the fiscal responsibility for things that affect kids that the public sector does at the state and local levels. and if these governments have neither the will nor the wall at this point to engage in a massive kind of intervention, to the source that i think is needed. what that means i think is that the federal government is going to have to step in and take the lead. but we all know that the federal budget is also under extreme strain, and there's a whole lot of folks who want to scale back involvement of the federal government, especially in areas like this. i think that would be a huge

mistake, huge mistake because the consequences in this area don't end up ending at the state level. they end up at the national level. we as taxpayers, we as citizens bear this burden, if it comes to pass, poorly educated individual who can't get a job migrates to other states when they fall through the cracks and can't earn enough and it's federal programs that into picking up the support. and the nation as a whole suffers. so i think that has super committee, congress, leaders consider how we get on a fiscally sustainable path, at the same time they should spend as much time thinking about what does it take with respect to an investment strategy for children

to ensure that once we are all on the fiscally sustainable path we are not at such a low level standards of living are not what we have come to expect. >> bob, thank you very much. a lot to provoke our thinking this afternoon. margaret simms? >> well, thank you, judy. i would just like to build on some the things that bob said, particularly to children who are consistently poor. we get figures every year about the number of children in poverty that that only points to one place and time where children might be poor. but about 10% of children are persistently poor. that is, they spend at least one half of their years between zero and 18 living below the poverty line. that is true in terms of a study

from my colleague have looked at this issue and continuing to look at how it changes over time, but in their study they found that of the 10% of children who are persistently poor, about 40% of african-american children are persistently poor. and that means, as i mentioned, at least one half of their childhood in poverty. and for many, three quarters or more of their years in poverty. the consequences in early adulthood, and most likely if we could look at that, that group beyond early adulthood, are detrimental for the succeeding generation. they have lower educational attainment. they have lower employment in their late '20s and to their colleagues who are not consistently poor, and among young women they're more likely

to have had a teenage birth which means it's going to be harder for them to provide for their children. now, if we think about this hard and we want to say we want to do something positive for children, then we would ideally think of a dual generation strategy, that if we would want to make the parents more economically self-sufficient so that they could provide for their children and provide a better environment, but that doesn't always work out on their own, and it certainly would be a more expensive strategy if we're thinking about it in terms of public policy. so at a minimum we do need to help children so that we can make them economically self-sufficient as adults, and also try to ensure that there won't be a third and a fourth generation growing up in poverty, thereby extending the

detrimental impact in terms of economic productivity, as well as the well being of these children and their families. now, there's several strategies that we could talk about. i'm not sure olivia will talk about some of this in addition, and that is to look at some of the problems that young children face. one has to do with stability in terms of child care. we expect most parents now to go out and work. that's the current projection that not young, that mothers of young children will not stay at home. they will go out into the workforce and their children will go into childcare. but some work that we have done also under the low-income working families project is to look at childcare choices that are available to low-income families as they tried to combine work and taking care of their children's needs.

and these options that they face are pretty limited. off and they work in jobs that have erratic work hours, that means that the standard nine to five is that mrs. are available to them. if they have language issues they may be looking for childcare centers where the language that they seek in the home is available, even if you prefer that their children learn english. they would like to make sure that there's a way that they can communicate well. they may look for ones that are convenient for their places of employment or their home, and it may be difficult to find things that meet the needs that they have and still are convenient in terms of being able to get their children to daycare, to get to work. if they're able to find all of those things, are they affordable? most likely not, without some kind of subsidy.

so that's one area that we look at in terms of government support. also residential stability is very important. low-income families, families living in poverty frequently have forced moves. that is, that they may lose their lease, they may be evicted, and that means that when they move, often their children have to change school. these are not usually good circumstances for children in addition to the stability. they make legally wind up in schools that are not as good as the schools they were previously in. i was in a meeting earlier this week where somebody says they go from crappy schools to more crappy schools. so that is kind of a few of circumstances that in the absence of public policy will be

the life of young children born in poverty. so there's different ways of handling it, and some of these fall to the federal government, perhaps to do with residential stability issues, but, of course, state and local governments are important players in the education system. and we need to think about ways in which those school circumstances could be improved. my colleague talks about the importance of the federal incentives to ensure that states that may not have these things at the top of their priority could be incentivized to move them up through federal financial support as well as program or regulatory issues. >> margaret, thank you. olivia, you are our third kickoff speaker. >> thank you. good afternoon.

as bob said i am very excited that this paper and this panel are happening, because to me what we have tried to do with this distinguished panel of guests and moderator is to get three different groups that happen to be on same page if are going to solve this problem to share some information that right now nobody has. and that to me, people who are experts in children's policy, children's experts advocates, people in decision-making roles frequently know a lot about the needs and circumstances of children, but very little about the ins and outs of the federal budget, or least they feel they have no access to that. federal budget experts, legislative and executives, tend to know a great deal about the federal budget but the way children are funded in many federal programs and intergovernmental leak think it's really hard for them to have a picture of how the pieces fit together. and state leaders in the parts of my life that have been at the

state level sometimes though not always you have a good picture of children funding within the state, but, of course, you don't have a national picture and the complexity of the way federal money travels to the states can make it hard to make the decisions of their it. so my hope is we are getting those things together today. i want to make four points from a essay in the collection. ipo try to push us all little closer to solution built on some of the diagnosis from bob and for market. but the first point which bobby felt very full is that children's lives change in the last couple of decades in ways that were substantial number of children make it harder for them to succeed. that's the issues of poverty, low income, low wages, parental unemployment, and the fact that almost half of children are now minority, and groups that traditionally suffered an array of disadvantages. second point that i want to highlight is that the process of

figuring out what public investment we should make to help meet the needs of children is a lot harder than it needs to be, because some of the key information about how budgets and spending relate to children isn't widely known, the process isn't transparent. so to give you a few examples of things that i think are important to solving the problem, the largest single federal children's program is medicaid. although in the top 10 our stance, the new name for food stamps and other nutrition programs, several programs in the tax system, social security, and instead of the education brogue rams that we traditionally think about and some of the early childhood social services programs. a second or another example of a fact that is really important to solving the problem but isn't very familiar is that our public spending, when you take federal, state and local, in some ways

it's the reverse of what would make sense based on what we know from the research when you think about the ages of children. we spend far less on the youngest children, babies and toddlers, than we do when children get older even though a lot of what we know from the research is about crucial role of investments that start early and then continue. another fact which bob highlight is that about two-thirds of the spending on children, public spending on children, in state and local. and i'll be interested in raise take, but i was about the federal budget officials tend to think of the space asset unknown group, not as a crucial partner whose physical well being essential to being able to invest in china. those are kind of key budget facts that are really important to solving the problem. third point i want to make from the paper which can bob mentioned briefly, is that the problem of getting that

two-thirds to be spent successfully and effectively for children, it's hard right now because of the aggregate circumstances a state budget. kim's paper gives more detail, but over all they are not back where to where they were in 2008, but it's even harder because of, bob mentioned, the fact that some states are losing children, and those dates as an aggregate does an individual children are leaving but have fewer children than they used to, though states are most in the northeast and midwest. states that have larger increasing numbers of children are in the south and southwest, like texas, florida, georgia, north carolina, arizona, nevada. many of those dates have both lower per pupil spending and tax structures that make it hard for them to expand to meet the needs of their increases in the number of kids and shifts in the kinds of needs those children have,

for example, as english language learners. so that's a challenge to meeting our future needs. .. >> third, if there is reform or change to entitlement programs as part of overall budget strategies, it's important that we keep in mind the crucial contributions, particularly of medicaid, but also to a lesser degree of social security to

children, and that we think about how to not just protect, but potentially build on those contributions, and the other suggestion i have is a process suggestion, perhaps coming a little bit from my state experience, it's more common at the state level, but that the federal budget process should include a step each year that assesses spending on children could be more or less elaborate, just a children's budget or look at needs and effectiveness and that that would help us have a focused conversation, so i know that in the rest of the panel we're going to hear from very distinguished people representing all of the different experts that need -- that are part of the federal and state budget process, and i really look forward to that conversation. >> all right. thank you olivia. we heard a lot from the three experts, and i want to turn to you first, congressman jim

colby. you spent 20 #-some years in the congress, and appropriations committee for responsible budget and picking up on what olivia said, you know, we'd like to see the federal budget process address children. help us just understand how that process works, how well -- how does it work -- i don't mean to go through the whole thing, but give us a thumbnail of how decisions get made and whether you think that process is working and how hard would it be to tweak it to see that children were adequately attended to. >> well, i'm not here obviously as a children's expert. i'm certainly not here either as the budget expert. that guy is on the other side of you there and knows more about this than the rest of us combined here, so i really should be deferring to him, but i can talk about it a little bit from the standpoint of one who is elected. as i've listened to the discussion here today, it occurs

to me that there's really two things that work here. we're really talking about a budget issue, and them we're also talking about a priority. i don't think anybody in the room or anybody that would be listening to this disagrees with anything set up here about how important children are, and so the question is then why aren't children made the priority? that is the fundamental question. it comes back to the budget, and when you come to the budget, it's not just children that are not getting talked about up in congress. it's things like highways. it would be things like cancer research. it would be things like environmental protections. these are all things that are in the discretionary budget. people are now focused on -- not defense which is discretionary -- but it's entitlements, its residents and entitlements.

as olivia pointed out, entitlements do play a big role when it comes to children, but we can't really talk about what to do for children or how to make them a higher priority until we fix the entitlement program because entitlements are just squeezing out more and more of the discretionary spending. they are just left there to spend on whether your priority would be saving gnarl parks or -- national parks or somebody else's priority is cancer research or whether the priority is children, early children's care, those things are going to be squeezed out by entitlements if we don't fix them. we should be applauding the committee is focused on this problem at least. whether they accomplish anything or not remains to be seen, but they are at least focused on it. it isn't -- >> on reforming. >> on reforming this and actually making some changes, so that we can then, perhaps, be able to save the kind of

discretionary spending we need in order to make children a priority. that's the issue. until we are able to do -- to curb entitlement spending, and it's revenues and entitlement, and i recognize there needs to be tax reform so we can get a higher degree of revenues there, but ultimately, if you look at the long term picture, it is entitlements that squeeze everything out in the long haul. you simply cannot raise enough rev new to make anything work if you don't fix the entitlement program works. it's a matter of -- i think people -- i think congress senses priorities for children, but it's -- they have the minds focused on other issues right now, and one other thing i'd say is that one of the reasons it doesn't get the attention at the federal level 1 as already been

said here, it's largely states that had the responsibility for children whether it's education, foster care, early child care, a lot of it through federal program, but states have implemented those programs, and so it isn't as much on the mind of federal legislators as would be a defense program or as would be something dealing with epa and environmental protection. >> because it's been the state. >> because the states had the responsibility for it. >> well, that's a good segue to introduce our next panelist who i'm going to call on now, but as i do, i'm reminded we want to ask anyone watching either on television or the web cast to please send questions you have for the panel because you can get your questions in too. publicaffairs@urban.org. send your questions in, please. the next panelist i want to

introduce is raymonday, a professor of practice of public policy at the university of virginia, frank school of leadership and public policy. he's served for 28 years of the directer of the national governor's association working with over 300 governors, two of whom became president and others who became senators or cabinet secretary. you heard the tail end of this conversation, but speak to us about what is on the mind of governors, picking up on what jim kolbe and members of congress say that's what state and local governments are doing. what's the mind set of governors right now when it comes to children's welfare and children's issues? >> it's tough because it's sort of a continued deteriorating in the systems. i think, unfortunately, that's a long run problem now, and a lot of people say, you know, once we

come back to the 2008 revenue level, we're going to be okay. i'm more pessimistic because we have permanent tax systems meaning revenue growth will not be very good. we continue to have $3 trillion of unfunded liabilities in the pension area, and we have got sort of health reform in the huge increase in medicaid so i think there's a lot of interest particularly in the early childhood from a stand point, but over the last several years really, they've been looking at $150 billion on deficits that have to be filled in because most of them have balanced budget requirements, so i think it's a priority, but as you're aware like others said, little public money goes to them in the first five years, and to the extent there's any system out there for early childhood, it's

a fragmented system, and there's a lot of volunteers and smaller groups as opposed to states billing it, so i think governors are aware of it, but it's hard to find the money now to actually put it down where it needs to be. >> so money's tough at the federal level, and money's tough at the state and local level. i want to bring in charles cobb now, the committee of economic development, where you are, focused on the need to invest in children, and you saw the budget process in your experience from the white house to omd and the department of education. what do you have to add about the way the process works and how hard it is or isn't to get something done for children. >> first of all, judy, i think we can fix this problem right now if we wanted to. i understand that there are budget constraints, there are all sorts of issues that the conman mentioned, but let me state what i think a fundamental

problem is, and it's not the budget. it's not appropriations. it's cultural and it's political. the cultural issue is the fact that this country simply lacks a strategy for investing in human capital. we don't like at our young people from an investment perspective, and it's actually across the entire education con continuum, judy. for years, and the system wrote on this, we brought business leaders in to encourage greater public, private, state, and local investments in the years, and we under invest in the early years. the country we make fun of all the time, france, got it right. they are smaller in terms of their economy, but they have the system that really is a model for the rest of the world, and as a result, their human capital investments in young people mean their young people start school ready to learn, and incidentally

they have lower incidences of mortality and children obesity. they invest in the front end, and then they invest in the k-12 system. the education trusts late last year put out a report that said almost 25% of the high school graduates in this country who took the army entrance examine flunked it with questions like two plus x equals four, solve for x. there's a system that pushes people throw, gives them a certificate, and graduates can't do the third grade malt. look at post secretary education. world war ii ended, we had an investment strategy in the young men returning from europe called the gi bill. now we have a debt driven model where for the first time student loan debt is about to hit a trillion dollars exceeding

credit card debt. looking across the spectrum there's an appalling approach to human capital. how do we fix it? first of all, the country as a whole is fix sated on short termism. we can change this now. if we have the cultural will to do it. we have to get off this short term fixation and have a human capital strategy for the country. why is it a political problem? i think, judy, you eluded to it in your opening remarks. 3-year-olds don't vote or make pac contributions or make super pac contributions, so i think there's all sorts of reasons why the congress, can't get its priorities rights, and we need to look at the way money comes into our political system. it affects our ability to set priority, and i do think frankly that young people are shortchanged by this system. >> so how do -- you know, what are practical ways around that?

i mean, given the budget, i mean, we're all acutely aware of the budget situation at the federal, the federal and the state and local levels. how do you make human beings, young human beings more of a priority? >> well, the congress needs help in many ways, and what we tried to do the the committee for economic development at the state and national level is to get business engaged in this because business leaders do -- many of them do understand the concept of investments. the other thing that deis some years ago we went to gym heckman, a nobel right at the university of chicago in economics, and we asked him to drill down deeply and quantity my the returns of investing in young people. you get some of the highest returns on public investments when you invest in young children, and what we do as a country is we invest a lot of money in cleaning up the

problems that shouldn't occur in the first place. you look at where a lot of the education department's budget, which i used to oversee goes, perfectly good programs, title i, all of these programs, any business leader tells you if you have a problem, fix it up front. more business leaders need to get engaged in working with our elected and advocacy and policy representatives to make this is national priority. other countries do it. >> and some of that's already, you know, we see some of that happening. ray, i was reminded that you put a proposal forward having to do with early childhood. you want to talk about that? >> well, it's a fairly specific thing, and that's that currently states can't collect sales tax on goods sold over the internet, so they lose about $12 billion to $15 billion a year because there's bills pending up there that need to say all state

sellers have to collect the tax and remit itment one option is to tie it with actual children's trust funds in individual states, so the congress passes it, picks up that $12 billion-15 billion, and it's allocated backseat to each -- back to each state going into a trust fund, and i argue has to be spent on the education portion of it because i think that is where the real need is. it's not unlike states oftentimes do gaming; right? how do you get gaming passed? realm, you tie it to education. now it's a budget person's nightmare in terms of all of these side effects, but it may be a specific policy option that's doable. >> is something like that, bob,

practical and workable, and if it is, how long would it take to get something like that going? >> you didn't mention that ray also was a deputy director of the congressional budget office, so the budget office are very much against taxes, but in eight years, we'll forgive you. >> yeah, that's right. [laughter] >> no, i'm a pragmatist on this sort of thing, and i'm with ray on it. i think if there's an important national priority, you're sure it's going to be a priority for many years, it's a huge inefficiency in equity that's created by the fact that there's services brought through the internet by and large are not subject to sales taxes, solving that problem, dedicating the resources to something like

early childhood education where each state has the ability to define, you know, what it's doing with its trust fund i think is good policy, and i think it's, you know, it's something which two years from now if congress passes this, it's up and running. >> yeah, the software's up, and you'd collect it a month after they did it. >> it's there's the great difficulty of enforcement of that? >> not if the congress acts. the problem now is you have to have nexus. the supreme court said you can't do it, but the last time the court, i think in the early 1990s, the decision has to ask the congress to have the committee to fix it. >> somebody still has to collect the states. if i buy something over the internet, here in washington from a company in california -- >> right --

>> the tax goes to? >> well, wherever the good is used. >> wherever the good is used, so here. that means the company in california has to send the tax here and maine and all over. i'm told that that's a very difficult implementation problem, no? >> we already built the software. in other words, if you're a small internet seller now, you can log into software already available that does it for you. it's all there. >> okay. >> anybody know how much money we're talking about raised by a system like this? >> about $10 billion to $12 billion range. >> that's a dent. olivia? [laughter] >> yeah, the total in the children's budget papers you can find on the children institute website totals expenditures plus tax programs on kids is $140 billion. medicaid is $70 billion, so $20 billion is an important amount of money.

it's not spent on k-12 education in total, but it's an important amount. this is exceeding my expectations, the practical idea in the first few minutes. [laughter] i wanted to come back to two obstacles, one obvious call that congressman kolbe raised and the other that charles raised. the obstacle of fixing entitlement programs first, actually i had a slightly different reaction to that and wonder the thinking of those who are much more expert than i am was the sense that if bob's right, and, of course, i think he is, about the urgency, we can't necessarily wait to have the plan to get started on it, and perhaps part of the plan is to parallel, and what could you do at the same time? what can you do as part of entitlement reform given the importance of medicaid for children, the fact that health reform will also be important for them by adding their parents, as we focus on

prevention and early intervention and higher quality care of chronic illnesses to look for savings across the health care system, does that also sort of automatically add to what we're doing for children? people talked about incorporating ideas like paid leave and the instance of a child for social security, and although the states doing it now do it different ways, but i wonder if the panel has reflections on whether you can do some of those things at the same time? >> >> i think it's important to do them at the same time. there's a number of proposals about how to reform some of the entitlement systems, social security, and so on, and people have looked at it thoughtfully, have proposed wayings -- ways you could modify it, save money, and also target it more on the neediest groups, and in any of the entitlement programs you can do that by restructuring

the program itself as well as sort of putting a cap on some expenditure. you can do -- you can do well, and do good at the same time. >> just -- >> [inaudible] go ahead. >> just to clarify. perhaps i overstated my position. i'm not saying that you can't or shouldn't do things for children's program not at the same time that you're trying to fix the entitlement. what i was trying to say is if you don't fix the entitlement programs, anything else you do in the disdiscretionary budget is doomed to fail because unless you move children's programs into entitlement programs, those programs will consume everything in the budget between that and interest on the debt, there just won't be anything left. you got to fix the entitlement program. >> yeah, but i think that's a good point here and that's if you look at medicare or

aggregate u.s. spending on u.s. health care spending drip by medicare, we have an extremely poorly structured and wasteful system, and, again, i point to france. they spend slightly more than half of what we do on a per capita basis, and they get better results. they live longer. i know there's the smoking stuff and red wine -- [laughter] >> red wine. >> it's the red wine, but they live longer, and you can also look at some of the specifics around how they deliver health care, and we've got a very expensive inefficient fee-for-service system. it can be restructured, and i'm not tucking about just saving money for the sake of saving money, but we're wasting money, and we missed an opportunity to do the type of structural reform that would have, in fact, enabled us to redirect money in a more efficient way towards our

young people, but until we make the structural reforms in the entitlements, we're going to have difficulty as a country, but it's doable. other countries do it all the time. look at some of the other oecd models. we're no longer at the top, folks, but at the bottom. >> another thought is another challenge i hear when talking with children advocates or children policy officials in the states and federal government is people think children's programs are mostly discretionary, but, in fact, that is not true of the large dollar children's programs so that children's advocates and policymakers, administrators, special assistance in the state sometimes don't think about the extraordinary opportunities to meet children's early needs in medicaid or through the nutrition programs because somehow it's coming down in a separate chunk, and so i think

there's tweaks we can make that enhance those things, and that's important. >> that's the question i was going to ask because when you talk entitlements versus discretionary, medicaid is under entitlements, and children are recipients. >> i acknowledge that. olivia said that earlier, and i certainly agreed, but there's a lot of other program, and if we are talking about children's programs, i assume we're including education in that? >> absolutely. >> that's a huge -- >> that's huge, absolutely, i think so. >> in terms, going back to what is practical, what can be done in the short term or, and by that, i mean, the next few years to tackle urgent needs we're talking about with the children. i'm not saying that's what anyone is suggesting, but if we

say we have to get control of the budget and do this, then, you know, how do you work around that? >> well, i think one of the things that's important is to distinguish between cutting the budget now and getting on a right course for the budget. we have a long term problem that is the one that in some ways is most serious, that is how to deal with the trajectory of the budget over the next 20 years or so. that should be seen a little bit differently than the short term problem, which is partly the trajectory, and partly our economic situation, and so we shouldn't -- we shouldn't think that spending on children now is going to destroy our situation, and i know bob talks about it more in his essay looking at the fact that if we do look at

children's needs then, our long term trajectory is not going to look good because we won't be in the economic situation that we can afford the things that we would like to be able to afford, but we need to make tough choices, and thases congress needs to not only reach agreement on a long term trajectory, but look at how they make choices among the different programs that are on the table. the sad thing is that if the super committee and the congress can't come to an gree., they'll wind up going through an automatic cutting process. >> it might be worthwhile to look at some of the spending that we now undertake as a country that results from this failure to invest up front, and one example is prisons. we have, i think, the largest number of people in the world

incarcerated and the highest percentage of our population incarcerated. does anyone think that's not related to the failures at the front end, and that the possibility of investing more and better at the front end might free up resources at the national and the state level that frankly are a real waste to the country, to the states, and to the individual human beings that are subject to that system. >> there's no question that there's a symbol p what's gone wrong. >> that's fixable. it may take awhile, but it's fixable now. >> i want to read quickly just to indicate some -- this comes in from a viewer who is a minister just reminding us of talking about the underemphasis on children. many people in my community

misunderstand entitlement programs like social security and military retirement. he says they look at these like welfare programs. they are promises made by the government. i paid into it for more than 45 years, served in the military, risked my life for 20 # years, and the government must keep my promise to me. i was paid less than civilian jobs and had retirement at half salary and lifetime health care. that's owed to me. how dare the government treat it like they are giving me something. he talks about protecting social security. >> there's the love of the problem. >> this is a genuine view. >> no, of course, it really is. that's why it's so difficult for members of congress. >> it's why it's so difficult. olivia? >> linked to that question, i think, i mean, charles raised this set of questions about what sort of politically and culturally americans believe, and i guess i would say we haven't quite been explicit

about what are all the obstacles to addressing investments in children and we have to think about solutions. one thing is that many, many people, in fact, believe that these investments are above all the responsibility of parents, and that the failures we talk about are above all parent failures. it doesn't mean every parent thinks every child should go to private school. there's k-12 people understand there's a public role, and to some degree health insurance, which is why i think we've been more successful there, but i think there's deep distrust of the idea that even if there's a need that public investment means something, that it's not just a jargon word that you're doing more than throwing money at the problem, and the example you read understand more what might be a return as they get

older, and i think telling the story about the ways in which, you know, medicaid enables children to get checkups and get doctors and get to school and nutrition supports for families who are working, but can't make ends meet, puts food on the table, and what it means to have dollars for k-12 education, i just think that a part of the issue is that the public that is electing governors and members of congress has some understandable and long term skepticism about what we're saying even if they place a priority on children. ..

>> what can be done, and that's not just happening in californ california. >> if you just look at action states have done over the last two years in medicaid, they've cut back an optional benefits. dave dunmore on the drug side. they have decreased reimbursement -- i think there's only three states that have done that. so they are in this period. when you cut reimbursement rates they know you get double savings because you are cutting access. but, you know, throughout this

period they have tried to protect elementary and secondary education. they have cut everything else. and, of course, that includes higher education, tuition and so one. but, you know, the truth of the matter is medicaid is the pac-man a state government. there were many years with a change in medicaid is largely a change in state governments. and i think when i look back at revenue growth, it was quite robust around 1970-2008 very. that 30 year period we had revenue growth of 6.5% per year on average. only one year it went negative. now we are at a period of virtually no growth in revenues for five years. take us to for years to get back to the 2008 level. then we've got the expansion of

medicaid for 2014. we can debate who is paying what but the truth of the matter is it's going to be more costly for states. we don't know how much but it's going to be more costly. and i'm fearful, depending on where the supreme court decision goes, but the big way to save money going forward is to cut the reverse of that. the health care reform bill for primary care freezes it at 100% for two years, but as i remember it was only for two years. beyond that we will have the same problem. raise another issue, goes back to charlie's point a little bit, it's not just children but we've got to convince the public about public investment, rad, infrastructure and so one. we've got to start putting those

budgets have because we are now becoming a consumption economy. i really worry because -- >> what do you mean? >> getting people to focus more on public investment. when looking at research and development, looking at infrastructure and looking at capital, somehow pulling this together, start beating the drum, that the future standard of living will depend upon our investments here now. >> you want to comment, bob? >> at the risk of creating a little dissension here, both with transport and more importantly with lisa who wrote the very fine essay on medicaid and health, i would say that we're spending too much time talking about medicaid. with respect to this issue.

medicaid is a big sink financially for states, but at the same, by and large, elderly and disabled participants in medicaid, and that if we assume, big assumption, that the affordable care act is implemented and goes forward, and with respect, most children, most of the time we have health care pretty much taken care. in a horrendously inefficient way, and i would agree with charlie that, he and i could sit down and room and we could bring up a whole lot of resources more efficiently. but when i think the real challenge is, if i look out the next 10 years is really truthful -- teufel. one is the income distribution in america.

too many kids are growing up in families without the adequate resources to provide safe environment and productive environment, and that's a bit of a long transformation of our economy. to turn that around, you know, and if we do with respect to education training and everything like this, if you is what growing up more productive workers and fewer will be in prison and we will have, you know, different kind of income distribution. we can explicitly redistribute income by raising child benefits, social security or welfare payments, or tax credits and things like that. but politically that sort of proven to be a real struggle. the second place where focusing is on the institutions that we

have to train our children. charlie mentions the way the french did it down at the bottom, other countries how they pay preschool teachers more than secondary teachers but they realize this as investment that builds on itself and to what the best thing to happen early on. it's very hard to get back on the railroad track once you have gone off. there are ways we can both devote more resources and transformed institution that we have now with these responsibilities. we are doing it largely state and local responsibilities, and that creates a huge problem because every locality or every school board thinks it's the source of wisdom. if it believes, creationism, you know, equivalent to darwin's theories, you know, there's

nothing you can do at a higher level. >> the american way. >> we are in washington, so it's commonplace to spend a lot of time talking about programs at federal and state, and i don't want to create another cabinet department here but maybe we need a children's czar, something like that which could pull all this together. there are two parts that i don't think of, yet because they are not federal or state programs, and that's the private sector and philanthropy. i think of pnc bank, for example, whose ceo has renewed their commitment over 10 years to invest in young children. i think they're making a second, $250 million commitment over 10 years for a program that their employees helped to create called grow up great. so there is an example of one

major bank that is investing in young people in the communities where does business, and it should be an inspiration to others in the corporate sector. and then i would point -- >> how much money did you say? >> i believe it's $159 over 10 years. that's the second time. they have rehab for another 10 years. and james rohr gets it. he is a very serious and sincere about this, but the program, the idea to invest in young people and the committee came from employees at the bank. they were asked what would you like to see your bank do in the community? it didn't come top down, it came from bottom up. i think more involvement from the private sector, not to take the place of government but to kabul but it. then i would point to the philanthropic sector, i used to work at united way of america, and i believe it is still the case that the united way around the country have 350 success

programs, which have as a goal getting young people to school ready to learn, which means in addition to education, nutrition, immunization, et cetera. and as part of this combination between business and philanthropy i would make an appeal to those billionaires who have signed up to divest themselves and a lot of their fortune to play a role in making investments in used human capital a priority for the country. many of these people are doing wonderful things. bill and melinda gates, others, warren buffett. are also getting others to be a part of this. that's what i meant by having a children's czar in a sense, to really focus on all the strands that come together here on behalf of of our young people. >> how much will be picked up by the private and nonprofit sector? >> well, i don't know how to

answer that, judy, because i think part of the slack, the issue is the federal government already spent a lot of money in these areas. it doesn't always been very well, okay? so i don't know. i mean, well, for universal pre-k, some years ago we looked at it and i think we as debated the additional cost of 30-$50 billion per year. that's not a lot of money. we just been a trillion dollars on one of the wars, i forget which one. [laughter] but, you know, we can do this. it's not so much a question of private sector, you know, filling in for the government. it's looking of the resources, public, private, philanthropic, and really having a national strategy, like kennedy had when he made a commitment, you know, in 10 years. recently we made a lot of commitments under president h.

dubya bush and clinton. we're going to be first in the world in math and science by the year 2000. now we are, i don't know what we are, 37th. by the year 2000, one of those goals by the year 2000 all of our young people would arrive in school ready to learn. ray remembers that. we didn't make it. >> i want to get any comment on that. meanwhile, i want to open them up for questions, and have a couple more questions that are coming online. if you have a question raise your hand. but just before we do that, and any comments, reaction to what charles has? >> two quick thoughts. the first one is iq think that connecting a broader array of sectors is both really important but also a balancing act. i think you don't want to be confused about the fact that the scale of what is the is not going to be provided in dollars by the sectors. whether it's the scale of what's needed at the state level of taxes with half of the increasing children from

2000-2010 taking place in one state. that doesn't have an income tax and not as much investment spent and charles is nodding his head. >> right. so you have to keep the scale in mind but at the same time you want the engagement. the second quick comment i was going to make is that both charles its suggestion of a children's czar and ray the suggestion of a budget our process strapped that with the idea that would enable us to at least have this conversation. part of what i think is the challenge is that bob's way of noting here are the things that are most important and here's what not, you can't even get their endless you have some way of pulling together the conversation. >> just one comment on what charles said. the private sector can play a really important role in this. i'm involved in something, a program where we are trying to involve the private sector in foreign assistance for children and for others, and it's

remarkable the kind of programs that are available. the industries, businesses, corporations, once they get acted and involved they can do about. it's not a substitute for dollars renting out. we have to understand that. but where it can be really important is often the very leading edge, innovative creative kinds of things, and also it's the leadership of having those corporate executives and people all the way down involved in it. they become a spokesperson. they become the advocates and become the ones who are out there lobbying congress for it at the grassroots level. >> i saw a gentleman with a question. could you tell us your name and your organization? >> pete davis, economic consultant. i tutor twice a week for the last seven years for one of the schools here in d.c. i can assure you remedial education is a lot tougher than starting to read to a kid at one

or two. and the obesity problem is just off the charts. but the thing that really disturbs me the most, when i asked the young boys what they want to do, they all say i want to go to the nba or nfl. i try to explain the odds to them and the chances of getting hurt and maybe they out to have a plan b. they just sit there and credulous. then ask some of the young ladies, i had one last week on a fifth grader, sharpen math. i said you are smart enough to be a doctor. and she just looked at me like i was from the moon. and so how do we instill the aspirations to help these kids get along the? >> very important question. >> so they can all become hedge fund -- [laughter] margaret, do you have any thoughts about that question? >> i think it's important that we see how possible it is. and some of it is through rome

models and some of it is to understand the pathways that you have to follow in order to get there. we do these international comparisons. and one that i was working on a youth apprenticeship. base in germany looking at how they established a way in which people understand the path that you take. by eighth grade students and their parents know that if you want to be this, this is the path you have to taken these are the courses you need to take. we don't have any of that, even among middle-class students, does not always a clear picture of how you get from here to there. and we need to instill some of that in our system as well, but i think also we need to have people see the possibilities

from the neighborhoods in which they are, and that they can see the resources and that there are resources available to them that will help them along that path. >> i would also bring that question back to the covers a we just had about the role for other than governmental sectors, community, nonprofits. because the fact that you're having those conversations with those kids provides them with a really important connection to the broader world. and as the united states gets older, particularly as people who are white and have more resources are older, are more, live different places, look different, don't know as many people with young kids, that disconnection in itself plays out in the politics and plays out in children's lives. and so approaches to make those personal connections. so older people, people who don't live next to a school, you know, have that sense of connection. i think that's a really important role that is outside

of government but that contribute to the solution. >> yes, sir, in the back. is a microphone right there. >> thank you. my name is john wilson. i'm a consultant. i work with immunity based organizations that work with children who are living in poverty. and one of the greatest problems that we have around children are living in poverty is that the problem is not simply limited to issues of education, but it becomes an even broader issue because these children live in very isolated communities. so that the kinds of resources they need are not available to them, including issues of health care, issues of mental health. and as a consequence what we see is growing numbers of children

involved in the juvenile justice system. so the research has shown that the number one indicator of a dolt and incarceration is in incarceration as a juvenile. so we need to begin to start addressing those issues of how do we invest in children at a much earlier age, and also include the entire family, including the parents of these children. because often these issues are intergenerational. >> which broadens the challenge, because i think everybody here agrees, parents play a huge role but if the parents are not there to do the job that we traditionally think parents should do. anybody want to comment the? >> i think one of the other comments that was sort of

implicit in john's, is the whole question of safety of neighborhoods, and neighborhood influence. so we are really talking about how you make the community more seth ported environment for children. and so we go beyond it to the criminal justice system but in a positive way, not about incarcerating young people but about how we stood in the way from opportunities and how we have police, think more positively about kids who aren't really doing bad things. spent quickly interject or inject your an online question. this comes from a woman, she as between the federal government and america's children, or their parents, single parenthood absentee dads and education systems which allow social promotion all contribute substantially to poverty.

number one, she sang number one, promote marriage. kids need parents committed to each other, the very least for financial support. number two, educate youth about the impact of becoming a parent without a job. and number three, break a public housing so the poor families can be distributed throughout many types of neighborhoods. she puts those that this is what you think about the longer school year, six-day week school session? bob, that cost more money, doesn't? >> yeah, i'm all for. let's stop saturday mail delivery. [laughter] how about wednesday, to? no, i think those comments, both were very, very thoughtful. they deserve a seat of your more than i do. >> can i comment on that? the first question. i think part of the investment in people also entails

explaining to her young people that they also have to invest. in other words, the young people your tutoring, they look at the basketball players and celebrities and they think that's a quick way to success. most people in this country don't get there like that. most people who are successful get there because hard work, somewhat, serendipity, education. i remember a report some years ago said the typical fifth grader at home everyday spent something like three-five minutes a day reading and one in 30 minutes watching tv, this was before the internet. flip those numbers around and you'll get better performance. so young people also need to be mentored like you're doing, that they have to invest in the time. by the way, richard has written a book on post-secondary education called academically addressed point out the would you look at some of our colleges and universities, they are not much better in terms of time on task and our k-12 situation.

a lot of money being spent for five hours a week spent on studying. >> right here and then to other hand right near you. >> hello. i am gloria and i'm also a consultant. we seem to be the ones asking questions today. i have done much of me -- most of my work with hhs. one of the concert i have is none of these problems are really brand-new. a change to the decades of course. but in the '70s when, for example, moynihan had kind of children's czar role in the government, what are we going to do now that will be different from what we've done over the past 30 or 40 years? because this all sounds like the conversations were having in the '70s. and how are we going to make a change, and how is it going to be different this time?

>> has the conversation really not changed? do you agree with the? >> let me come than -- comment on this unless bob wants to. i think i've been successes as well as most any damaging direction and it's important to identify this excesses and learn from them. bob's comment that we may have helped taking care of, nobody could have said that. we made big increases in young children's health coverage. that's a huge success. from my perspective the fact that we're about to have their parents covered will be important for them as well. so if you think about how did that happen, yes, but it's not very big. is big compared to what's out there for young children. in terms of its reach among kids. well, i do think the quality is an important a compliment although there's more to go beyond that. that's also an important accomplishment since the '70s. but i think what's different, what makes the problem much more

urgent is the economic disparity and the enormous change in the u.s. population in terms of children are latino and african-american, about half now, and asian-american, that creates a set of different challenges. and some of the geography of where kids are, and the circumstances of the states financially. >> just a separate point that hasn't been talked about. we are in the spirit of austerity from all three levels of government, a fair amount of time. we have to acknowledge that we aren't going to generate more money for children is really to become a lot more efficient and delivery of all government services. somebody indicated prisons. i know at the state level, we went to that carried. guess what, prisons have become? [inaudible]

we probably do everything wrong in prisons. we probably need to increase at half the cost. i think really across the board we have preached for some time now states have had to redesign the delivery of older programs. because that's the only place you're going to generate savings is if you make the investments. and i think we've just got to understand that. >> we can start with education. we all know we spend more per capita on education than just about any country in the world. and yet the results are pretty abysmal. so we have an improved a lot. so it suggests that just doing the same thing over and over again and expecting a different result is foolish. the definition of madness, insanity. >> i just remind we have less than five minutes left our discussions i want to go and ask

each one of you for a comment to sort of pull together what you think is the most important thing or things that should be, can be done as we move ahead, given the budget constraint, given what we've talked about this afternoon to advance the cause of children. i mean, we've already all talk about the solutions, but tell us come i will start with you, margaret, what would you emphasize? >> i think if what i would want to emphasize is it would be one i think others have also talked about, and that is getting children off on the right start. we don't want to abandon the older children because there's still time to work with them, that if we wanted to think about the best way to get started, we want children not to be behind when they start school, we want children to be healthy and have a positive attitude when they come to school so that from there on their career is up.

>> charles, what about you? >> i would like to see a president of the united states who made investment in human capital his or her number one priority on the domestic side of the house. >> straightforward. jim kolbe. >> talking again here as a former member of congress and a budget person, i would like to see a somehow convince grandpa and grandma that they can't have all the things that are in the entitlement program, that they can't have the constant shift of our income to the elderly that we're going to have, that if we do that we are really sacrificing our future for our children and our grandchildren. i think you can appeal to people on that basis, and i think we'll have to do that if we will have resources available comment either in and other programs or discretionary level for our children. >> olivia? >> i am very struck by the

creativity of this conversation, which confirms to me the sense that bring together people have been think about children and people been think about the budget is useful, and so i would, perhaps i will highlight the process next up, whether it is invest in budget, contend this conversation, children's czar, that figuring out the next wave to keep this focus going which is very important. >> all right. >> i guess i would move on this concept of a government investment budget, probably try to get state and local and federal government to agree on definitions, and ask all three levels of government to publish it every year so that you've got transparency, and try to change the culture around investment versus consumption. my second point would be to get bob reischauer an op-ed to get

my internet past. [laughter] >> i'm going to come to him, but take 30 seconds before i do. i'm told you're working on an initiative developing the next generation of policy leaders. what do you say to the next generation about how they should be thinking? >> probably public sector is filled with the most fascinating career i think. what they can't understand is the challenges that occurred around the partisan nation under nature. it's much more difficult. and that they've got to rely on their analysis and stand up and push it, and don't be pushed away so much by the politics spent and is connected to what we're talking about here. bob reischauer can you get the final word spent mind is going to be all of the above until ray suggested i write an op-ed. [laughter]

i was involved with jim kolbe cutting back is congressional pensions we could solve that. no, i think, i think we're going to have to spend more money but we can't spend more money until we restructure the institution that creates new institutions to do this, and particularly i would focus on younger children. >> and as we look specifically to the super committee, what do we hope for coming out of there for children? >> that they don't do too much damage. spent on that uplifting no, please thank the panelists today, charles kolb, olivia golden, robert reischauer, jim kolbe, ray scheppach. thank you. [applause]

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>> the federal communications commission yesterday voted to require broadcasters to file online reports on their programming. reports include information on how much time tv and radio stations devote to news, public affairs, educational programs and independently produced programming. this is part of the sec meeting and is about half an hour. >> good morning, and welcome to the october 2011 meeting of the federal communications commission. madam secretary would you please introduce our agenda? >> thank you, mr. chairman the good morning to you and good morning commissions. today will include a few items for consideration and one presentation. first you'll hear an order on reconsideration of a 2000 thousands of enhanced disclosure

report, and order and further notice of proposed rulemaking proposing to be placed television broadcast stations public files with online public files to be hosted by the commission. second you will consider and report and order and further notice of proposed rulemaking to comprehensively reform and modernize the universal service and intercarrier compensation systems to ensure that all of americans have access to robust, affordable broadband and mobile services. last on your agenda you hear a presentation on the status of preparations for the nationwide test of the emergency alert system to be held on november 9, 2011, at 2 p.m. eastern standard time. this is your agenda for today. the first item will be presented by the media bureau. chief of the. will give the introduction. >> thank you. good morning, mr. chairman, and commissioners. today the media bureau presents an item that begins the process

of modernizing the way television broadcasters inform the public about how they are serving their communities. this proposal follows up on key recommendations in the information needs of communities report. one of a television broadcasters fundamental public interest obligations is to air programming responsive to the needs and interests of its community of license. broadcasters are afforded flexibility in how they meet that obligation, but they must maintain a public inspection file which gives the public access to information about the stations operations and enables members of the public to engage in active dialogue with broadcast licensees about broadcast service. today's item strives to make information about broadcast service more accessible to the public by taking advantage of current technology.

thereby facilitating interactions between broadcast stations and the communities they serve, while at the same time reducing compliance burdens on broadcasters. joining at the table this morning are robert radcliffe and sarah white so of the media bureau's front office. and mary beth murphy, john norton and holly of the bureau's policy division. holly will present the item. >> mr. chairman and commissioners, good morning. i am pleased to present this order on reconsideration and further notice of proposed rulemaking and the commission enhanced disclosure proceeding. in 2007 the commission adopted a an important order and is proceeding that required television broadcasters to make their public inspection files available on their websites, if they have one, and replace the issues programs list with a standardized form that required quarterly reporting of all programming in numerous programming categories.

the feedback we receive from broadcasters and public interest advocates as well as intermediate advances in technology have persuaded us to re-examine the balance that we struck in 2007 between public access to station information and the burdens that providing such access can impose upon broadcasters. as such, in this item we vacate the 2007 report and order, and dismissed the pending petitions for reconsideration of that order. we do remain committed to the principle of providing disclosure of broadcast station service to the communities of license as reflected in their public files. we believe in broadcasters disclosure obligations with the capabilities that 21st century technology provides do just that. therefore in today's further notice of proposed rulemaking, we seek comment on a new proposal. we now seek to replace the requirement of a public file at each television station with the requirement that stations submit

the relevant documents to the fcc for inclusion in an online public file to be hosted on the commission's website. by hosting the public file the commission will lessen burdens on broadcasters, in part because we be able to import documents that stations already file. without requiring further actions by licensees. these document will account for about a third of the items that are required to be placed in the public file. the further notice proposes a few modifications of existing public file requirements. for example, largely for privacy reasons the item proposes to exempt letters and e-mails from the public from the online posting requirements. these items would instead be capped at the station in a correspondence file. the further notice also proposes to require the online posting a sponsorship identification that are currently only disclose over the air as well as shared service agreements which

currently need not be disclosed. and the further notice discusses the commission's intent to make the online public file available in a standardized and database compatible format further improving the usefulness of this data. it tentatively concludes that while we develop that capability the stations should post documents and existing formats. we wish to provide the public with improved access to the public file as soon as possible while we continue to work towards developing a more sophisticated database. today's further notice is limited to online disclosure and applies only to the television service. in a separate proceeding we will revisit the standardized form that was originally adopted in 2007. the media bureau recommends the commission adopted this order on reconsideration and further notice of proposal making. thank you. >> i thank you very much. let's proceed to comments from the bench.

commissioner copps. >> thank you to much mr. chairman. one of the fcc recommendations emanating from the woman report on the information needs of communities is to quote emphasize online disclosure as a pillar of fcc media policy, and ago. so it is fitting that we have a disclosure item before us today. the history of this proceeding goes back many, many years. but i will refrain from visiting the full soccer this morning, riveting though it is, to make a long story very short. the fcc in 1981 and its requirement for both rochester to keep a program logged and to ascertain what with the program and issues interests of their communities of service. the decision was premised upon a straightforward if narrowminded cost-benefit analysis. those were some of -- at the commission. that's putting it mildly. rather in an effort to

deregulate at any cost those commissions made it more difficult for citizens to not only seek redress for station performance but even to unearth facts about what broadcasters were in fact doing. concerned citizens had to go to a lot more trouble just to see a stations filed and even when they got to it, they were closed off because someone of the public interest responsibly is of the stations have been eliminated why the fcc. i believe it is the responsibility of this commission to move forward on both these fronts. one, to provide more fold and more adequate disclosure, and two, to breathe life in many back into public interest responsibilities and guidelines. i have been pushing for action on both of these fronts since i arrived here 10 years ago, and purely as an aside, there's still plenty of oxygen in my lungs that it will dedicate to breathing life into these critical issues going forward.

many others have spoken up in favor of full disclosure and strengthen the commission oversight. these include the public interest community, president clinton and vice president gore's advisory committee and members of congress, concerned broadcasters, and millions of citizens across the land. we are not trying to bring back yesterday, but to forge reasonable 21st century expectations for 21st century broadcasting. as lyndon johnson put it more eloquently, yesterday is not ours to recover, but tomorrow is ours to win or lose. so i hope that we can start down the road now of winning that tomorrow, late in the day though it is. the further notice we are embarking upon almost promised a proposed a television broadcasters and their public files online to a site hosted by the fcc, which i hope will be searchable and aggregated, and, therefore, offer real opportunity for comparative analysis and white public

understanding. without that kind of searchability online disclosure would be small improvement over having to file kept in a broadcast station's basement. what we are moving online is in large measure the same information available in the current station files. we urgently need to consider expanding the range of required reporting. too often the files are spared to the point of uselessness. and, indeed, a notice of inquiry currently in circulation peace of such issues. i hope that we complete this proceeding expeditiously so we can move on to commonsense rules responded to the information needs of communities. there was some valid points made by broadcasters in regards to form 355 and i have often remarked since i'm making some alterations to the form, and then getting on with the job. i had hoped it would be a far less time-consuming process, and one was actually injured over the last few years. yes, i said years.

instead we are for the most part starting over. subsidy of action we take today is to vacate the previous report and order instead of looking for ways to revise our early work and expedite its completion. the report and order being vacated has been held in limbo and i do hope we will be better move on, given this is a problem of the hyatt highest public interest priority. we just do not have more years to consider this, and i believe other commission vehicles would have allowed us to travel a quicker route. disclosure is sunlight, and an important means to important means. and i repeat what i said at the time of the release of the wallman report, disclosure is a means to an end and not an end in itself. making information accessible to the public, the prerequisite that it is, serves the public interest only if there are consequences when the files disclose station shortfalls. so we have to ask ourselves what the public is able to do with the disclose information. bring a complaint?

based on what? have a hearing designated? have a more serious license renewal? it was interesting to me that any conversation that resulted from form 355, some broadcasters expressed their willingness to revive the information, but only if it would be anonymous, and with assurances that their licenses would not be affected. while many broadcasters work hard to serve the public, it would appear there are some who need to read the public interest bargain one more time. if disclosure brings to light behaviors that require redress, i am for having redress on the books. i happily acknowledge the additional requirement to include pay for play and shared services that the broadcasters need to put online. what i would be even more pleased if we made a decision that shared services are an interrupt around our rules, i do

believe this information will nevertheless be revealing. lastly, i know we propose moving the stations existing political files online. these two will be revealing. but not as revealing as it could be. i believe citizens are entitled to more information about the political ads that bombard them at election time, and nowadays it seems almost all the time. the supreme court articulated in its citizens united decision that transparency is a vital counterbalance to the perceived influence of corporations in the campaign process. opaque and misleading information is not what democracy thrives on. we are not well served for those who are attempting to manipulate our political dialogue in the coming election outcomes. can disguise themselves and hide kind misleading names. if a group calling itself citizens for purple mountain majesty's is in reality the mouthpiece of a special interest as refusing to clean up a toxic

dump or is born pollution into the great lakes, don't citizens have a right? yes, i said are right, to know that. open government can only exist where people and groups trying to determine elections stand up and tell us who they are. that's not happening enough. our democracy will continue to widen if -- i would hope the commission would find its way to use in the authority it has to require full sponsorship for the interest bankrolling so many of the ads we all watch all the time. when the roll is called i will vote to approve and move ahead with this item. hopeful that my colleagues will work with dispatch to advance wider disclosure proceedings in the months ahead. i think the bureau for bringing it up and i especially want to read this the hard work that a public interest committee did to emphasize both the importance and urgency of public disclosure on behalf of the public

interest. thank you, mr. chairman. >> thank you, commissioner copps. commission? >> thank you, mr. chairman. today i enthusiastically vote in support of vacating the 2007 order that requires television broadcasters to post their public inspection files on the internet and adopt the so-called enhanced disclosure form to replace the quarterly issues programs list. in 2007, i cast the sole dissent against the imposition of this form. at the time i caution that our action was treading towards reinstating and ascertainment regime discarded by the commission in the early 1980s. such action risk infringing upon the first amendment rights of broadcasters among other things. moreover, this one was burdensome, excessively regulatory, and to quote the fcc's information report, overly complex. it is not surprising that the form challenge before the commission, the course and even the office of management and

budget where the information collection was questioned under the paperwork reduction act. although our action today concludes this regulatory chapter, it appears to be only temporary as this contains a further notice of proposed rulemaking that could have additional burden. furthermore, recently placed on circulation at the commission is a notice of inquiry that initiates a separate proceeding to create a replacement standardized form and reporting requirements. more about that another day. in a further notice the commission as additional questions about placing the public file online it as is the case in 2007, i remain supportive of making the file more accessible and more useful that's improving communications between broadcasters and their local communities. hear the commission concludes that the public inspection file should be centrally located on the fcc website. hopefully this proposal would reduce costs and burdens on

broadcasters concerned that was voiced by many. by placing the onus of creating and hosting a website on the commission. i will be attended to a record that indicates otherwise. we also asked for comment about the proposal that the political file should be posted online and that the data should be made immediately after unusual circumstances. previously the commission decided to exempt political file from the online requirement including that quote the burden of placing the two on the internet outweighs the benefits, end quote. now, the commission asserts most political advertising transactions are electronic, so online availability may be less burdensome than previously thought. i look forward to hearing from stakeholders regarding the possible ramifications of an online political file. although the majority of the question and the further notice are meant to solicit comment on moving the public file online, either serve as a means to expand the requirement, made by

broadcasters. i have significant concerns about the substance of some of those questions, and my possible direction in which the commission could be headed. we propose that broadcasters upload a list of all on air sponsorship identification announcement and see comment regarding whether sharing agreements including those not currently required to be reported under our rules could be included in the online public file. such a sweeping requirements made overly burden the broadcast without sufficient corresponding benefits through the local citizens served by the station. further i wonder whether history is doomed to repeat itself. are we once again heading down the path towards newsy burdensome rules, regulatory overreach, and unconstitutional intrusions? stay tuned. despite the serious reservations i may have it is important to develop a full record and allow public comment prior to forming conclusions in implementing any

regulation. india think i would like to thank the chairman for seeking specific comment on the costs and benefits of the proposals contained in further notice. i hope that participants will provide us with information and data needed to balance the public interest and write access information for the cause and localities of such disclosure. as always i'll keep an open mind and look forward to learning more from all parties. for these reasons i support this order, and for the notice, but concur on the questions of expanding the scope of the materials required to be contained in the public inspection file. many thanks to those who worked on this item. thank you. >> thank you. commissioner clyburn. >> thank you. disclosure and transparency, words that inspired confidence, increase the public's trust, and convey their faith. we are seeing, hearing and focusing more and more each day on ways to enhance these efforts in both our public and private sector engagement so it greatly

pleases me today to join my colleagues in taking a meaningful step to this end when it comes to the media landscape. local television stations play a vital role in american lives. they provide us with daily updates on weather and traffic patterns, conduct in depth reports about area officials and businesses, and expose us to interviews and personalities in our neighborhoods when we are often too busy to notice. while i wasn't personally involved in local tv reporting, a small newspaper that i owned and operated offered unique insights and reporting that had value worthy of attention. undercurrent obligations that apply to commercial broadcast television stations, the program laws and files of any particular station can be accessed and inspected by the public. those files serve to assist not only need academics and scholars, who assess the trend and local reporting and

programming, but they also act as a verifiable means to hold stations accountable for the public interest obligations. if a broadcaster asserts that a certain show is educational and informational or informative, and relevant to the community, these files serve as a means for others to evaluate that contention. further, when a broadcast license comes up for renewal community residents can examine the public file to determine if objection should be raised based on what they may conclude are the lack of local reporting and community-based content. a community's desire to examine public files is only possible, however, if they have realistic meaningful access. i have personally seen such files. they recite deep within a broadcasters station, far from the recession area in a rather vintage filing cabinet with

letters marked only in small font. i make light of this to stress an important point. now is the time for us to move these public files out of those cabinets and onto the web. the public should have unfettered access to documents and records that affect them intimately, and i believe that local news does just that. today, 74% of americans turn to broadcast tv more frequently and any other source for news and information, while 78% of americans are online on a regular or semi regular basis. that statistical overlap is striking. physically going into a station and sifting through mounds and mounds of documents is time-consuming, travel intensive and difficult. creating a meaningful way for the public to view these files within online engagement is, to

quote a poplar commercial, priceless. despite these benefits, i am cognizant of the burdens that come with transitioning to a web-based filing system. to quote steve walton's report on the information needs of communities, a transition to a digital system needs to be handled carefully and in a manner sensitive to the capacities of different broadcasters. our item, therefore, ask probing and constructive questions in that regard and i look forward to input and suggestions as we move towards full implementation. in a separate but related proceeding, we will address the amount of programming content that should be contained in the online disclosure process. i certainly would like to see as much detail as possible. as i mentioned, i've seen the paper versions of these public files, and they leave much to be desired. while i am an advocate for streamlined process, submitting

a flimsy description for important story is neither okay nor should be permitted. the submission should have to meet a certain threshold, and i'm certain that broadcasters will be partners with me and my colleagues in that regard. .. >> the related item concerns future forms -- the future forms laid out in content, i'm confident that we will develop a mechanism for a robust and thorough process, and no matter

what shape or form this offering takes, it must be assessable to those with sight and hearing impairments. we have made significant progress under the communications and video accessibility agent, and this is another way where our agency can continue to lead by example. i wish to thank all of the hard working individuals behind this item, particularly ms holly over there, and i look forward to the next reiteration of this extremely important proceeding. >> thank you, commissioner clyburn. on my first day as chairman, i said the fcc should and would use technology to improve the overall operations of the fcc, running efficiently, and communicates effectively with all the american people and stake holders. moving from paper to digital and from offline to online is central to that commitment, and we've been doing that consistently. some examples -- we've revised

the rules for the timing of our tariffs electronically decreasing burdens on the carriers and the commission and now percent staff to notify parties electronically about filings instead of mailing copies, and we've expanded the use of electronic notifications of fees owed. we've harnessed modern technology to open the workshops and hearings and communications to people online on multiple, digital platforms. moving processes and information online is important for several reasons. it drives additional broadband use, develops app developers and consumers to use public data in innovative ways, and it drives processes and efficiencies that reduce costs for the private sector and for the government. look at the government. our government spends hundreds of millions of dollars each year on paper communications with citizens, with most of those

interactions with communities that are also low broadband adopters. by moving more services from paper to the internet in smart and creative ways, showing citizens the value of internal access, we can incentivize broad band adoption generating savings to reinvest in knocking down barriers to adoption. today, we're applying the common sense principles of moving information online to rules relating to television broadcasters. broadcasters have long be required to disclose information as part of their obligations, and this information is commonly known as the public inspection file, and right now, this information is disclosed in paper form in the public inspection file in a filing cabinet in the station's themselves. in today's broadband world, that doesn't make any sense. we propose to move the public file from paper to the internet

to host this information at the commission so there is efficient public access and reduced cost. all of these important steps in the commission's efforts to ensure effective public access to information. making this information easily accessible will let the public see the large number of broadcasters that are doing a strong job of meeting their public interest obligations, and also those that are not. this disclosure proposal that we act on today was a significant recommendation of the fcc report we issued recently on the needs of communities in the digital age. this proposal drawn support from leaders of broadcasting and public interest communities who are often at odds, but agree that there should be a streamlined and nonburdensome online mechanism for broadcasters to disclose key information about their service to their communities. i'm pleased we're able to take

action on this recommendation of the information needs of communities report, and we intend to act on another recommendation, the enhanced disclosure in the very near future. i look forward to hearing from all stake holders on prm, and additional ideas on how to continue to integrate digital technology into the way we work here at the fcc. i thank the media bureau, delay, all of you for your work on this item, and also the manager director's office for its work on this issue as well. with that, least proceed to a vote. all in favor say aye opposed, is a nay. the aye's have it, so ordered, and the request for editorial privileges is granted. >> also yesterday, the fcc voted unanimously to provide money to expand broadband interpret access to rural areas, and that money comets from the universal

service fund that subsidizes telephone access in rural areas. this part of the fcc meeting is about an hour and a half. >> no rest for the weary. [inaudible conversations] whenever you're ready, and thank you. >> good morning, mr. chairman and commissioners. today, the wire line competition and wireless telecommunication bureaus are very pleased to present fundamental reforms to the commission's universal service funds, usf, and the intercarrier compensation system or icc. when the plan was released, you issued a joint statement saying you would be comprehensively reformed to increase cannot and efficiency, encourage target investment and broadband infrastructure, and em size importance of these programs in the future.

today, we have an important order accomplishing exactly that. today's order recognizes that usf and icc complemented each other in supporting the valet of phone service in fiewrl america. the order holisticically reformed both programs to eliminate waste and inefficient, target support to where it's needed, and transition support from voice only networks to broadband networks capable of supporting voice as well as other applications. the order would establish a connect america fund or caf for supporting broadband communications in rural and high cost areas of the country. for the first time, this support is allocated curling -- according to a budget based on the existing level of high cost universal support. once transition is complete, up to $2 billion is available for areas served by rate of return carriers and up to $1.8 billion served by price caf areas.

$500 million is dedicated to ensuring ongoing support for broadband voice and coverage in areas the private sector is unlikely to reach including up to $100 million for pry ball areas and 100 million is dedicated to new remote areas fund as described in a further notice of proposed rule making. a reform of this mag magnitude can only be accomplished through collaboration and team work. we required to slides to acknowledge the drafters, financial analysts, economist, engineers, and others who contributed their expore tease this roughly 500-page item. many of these folks are seated behind me. randy clark, brant gillan, trent, kevin king, al lewis, jenni prime, mike ralph, and in addition to those joining me at the table today, rick caplin and

his chief, and division chief marty wiener, wire line pure and rebecca goodhart, usf and pricing division ammy bender, and markus mayor, and victoria goldberg. they will present the wireless portions of the caf respectfully while victoria presents the icc reforms. amy? >> today's order establishes rigorous public interest obligations for all the elements of the caf including broadband performance and build out requirements. we maintain a strong partnership with state commission to continues to play an important role through state carrier of last resort obligations and designating etc's meaning carriers eligible to receive support. past resip recipients are

required to submit reports to commissions to ensure effective oversight and accountability. in price cap territories, the caf provides support for broadband in two phases. in caf phase one, all existing price cap legacy high cost support will be frozen and over time subject to obligations to advance our broadband goals. an additional $300 million in caf funding will be made available to price cap carriers committing to expediently deploy broadband to a specified number to unserved locations in their service area. for phase two of the caf in price cap territories, there's an established frame work to provide support in the first instance based on a forward looking cost model and directs the wire line bureau to undertake a brick process to develop the specific model in each state and territory, incumbent price cap carriers

asked to undertake a state level commitment to serve the high cost locations in their service territories in that state with voice and broadband excluding areas where there is an unsub sigh diesed competitor and low cost locations that can be servedded without support. carriers accepting the state level commitment will be obligated to meet robust service requirements. in areas where the incumbent declines the state level commitment, a imetive bidding mechanism is used to distribute support. the further notice proposes a structure, an operational details for the competitive bidding mechanism in which any broadband provider that has been designated adds an etc may participate. for rate of return carriers, the order informs the rules to support continued broadband investment while increasing accountability and incentive use of public resources. the reform's recognizes the

unique nature of small rate of return carriers and allows them the predictability of remaining on the current system in the near term. the further notice seeks comment on establishing a long term. broadband focus the caf mechanism for rate of return carriers and adjusting the interstate rate of return from its current level of 11.25%. as a transition to the new support mechanisms for mobile broadband service, the order eliminates the identical support rule that determines the amount of support from mainly mobile competitive etc's today and phases down existing support over a five year period. magrie will provide more details on the item. >> the report in order before you explicitly recognizes the role and value of mobility as a universal service goal and implements measures to ensure universal availability of mobile, voice, and broadband where americans live, work, and

travel. for the first time, today's item provides dedicated funding for mobile voice and broad service through phase one and phase two of a newly created mobility fund. phase one provides $300 million in one time support, and an additional $50 million dedicated to tribal areas. to explain mobile, voice, and broadband in such places where service is lacking. phase two provides $500 million annually for ongoing support to extend and maintain these availabilities of mobile, voice, and broadband, including up to $100 million for tribal areas. phase one of the mobility funds provides one-time support to enable swift deployment of mobile, voice, and broadband services in areas unserved by current generation mobile networks or 3g. this support is rewarded by reverse auction.

the auction mac mizes coverage of the unserved road miles within the budget reflecting the value of mobile, voice, and broadband coverage. auction winners will be required to deploy 4g service within three years or 3g service within two years. to ensure important public interest objectives are met, mobility fund recipients are subject to a variety of obligations including voice and data roaming and location requirements. in addition, the order establishes a separate and complement ri one-time tribal fund in phase one to award $50 million in additional service funding for tribal lands include k alaska and hawaii homelands. the order provides several mechanisms to ensure mobility fund support addresses tribes' needs for service on their tribal lands. phase two of the mobility fund

will provide $500 million per year in ongoing support. as part of the budget, phase two of the mobility fund includes debt kateed support for tribal areas up to $1 00 million per year. the funds available in phase two sustain voice, mobile, and broadband service in places where service would be unavailable absent federal support. the further notice of proposed rule makes proposes a structure and operational detail for phase two of the mobility fund including a distribution methodology, eligible geographic areas and providers, and public interest obligations. finally, the order dedicates at least $100 million in annual support to provide voice and broadband to the fewer than 1% of americans living in remote areas where the cost of providing traditional trees terrestrial services is high.

we award the support as part of the dedicated remote area's fund. victoria goldberg will now discuss icc. victoria? >> itc is a regulated federal state system of payment between carriers for delivering phone calls. the system, created in the 1980s, reflicks geography based permanent charges and subsidies but are intentioned with and deterrence to deployment of mod networks. the system is eroding rapidly as demand for wire line service falls and consumers opt for other communication services including wireless, voice, texting, and e-mail. this order comprehensively reforms the i thrks c system to help bring substantial benefits to consumers including reduced rates for both telephone and broadband services. the reforms also improve the fairness and efficiency of subsidies flowing through rural areas and unleash innovation for

setting the stage of transforming the broadband networks of the future. the order first tackles regulatory arbitrage by adopting rules addressing access stimulation and traffic providing schemes that exploit loopholes in our rules that cost consumers millions of dollars annually. the order next tackles reform of the current system more generally and adopts a bill and keep method doling as the end state for all traffic. this new method provides a unified national frame work with states leveraging their localized expertise to help implement frame work and oversee the transition of interstate access rates from the status quo. this transition involves capping all interstate and most intrastates as the effective date of this order. establishing a transition path for the reduction of most terminates switch elements and some transport rate elements.

the order also adopts a transitional recovering mechanism to mitigate revenues reduced by these reforms by providing greater certainty and predictability going forward. productions are adopted to ensure any increases in residential or business rates are minimal and capped. where necessary, some carriers will also be eligible to receive caf support. subject to requirements to use the funds to advance our goals for universal service and broadband. the order addresses the treatment of voice traffic, traffic exchanged over pstm facilities that originates or terminated ip format is subject to transitional itc and makes clear that all carriers originating and terminating voip calls are on equal footing to obtain compensation for this traffic. certain aspects of crm compensation are addressed to

resolve ambiguity and address disputes. this orders the deployment and use of ip networks and accompanying further notice seeking comment on the policy frame work from ip and ip interconnection. the eared makes -- ed oater makes clear we expect all carriers to negotiate in gait in response to -- good faith in response to request for ip and ip interconnection for the exchange of voice traffic. the bureau's recommendation dupes of the item requests editorial privileges. thank you. >> well, thank you. i don't know where to begin to thank you, but first, let's hear commissioner cobbs, please. >> thank you, mr. chairman, thank you, all. a lot of folks bet we couldn't get here today. they said universal service was too complicated and too con slay lewded ever to permit reform. it was out of step with the times, and carrier comp was

broken beyond repair. yet, here we are this morning making telecommunications' history are comprehensive reform with universal service and intercarrier compensation. the first thing i want to do is congratrate chairman for the leadership he brought to bear in getting us to a place where no previous chairman has managed to go. today, thanks to his leadership, we built a frame work to support the 21st century infrastructure that our consumers, citizen, and country so needs. mighty praise is due to the chairman and those who take exception to parts we approve today will join me in thanking him for his commitment, courage, and his effort to make this happen. in the face of the complex systems we modernize today, it's too easy to forget the simple, timeless goal behind the policies. all of us benefit when we are

connected. the principle of universal service is the life blood of the communications act. a legislative mandate to bring affordable and comparable communication services to all americans no matter who nay are, where they live, or their particular circumstances of their individual lives. so does all together fitting moving away from support design primarily for voice to support for broadband and we bear witness to the accomplishments usf made over the years to connect america with plain old telephone service. the fund achieved truly laudable success. thanks to both high cost support and low income assistance, we have voice penetration rates in excess of 95%. no other infrastructure build out in history did so much to bind the nation together. additionally, it enabled millions of jobs and brought new opportunities to just about every aspect of our lives. some stark challenges remain, of course, particularly in native areas. the shocking statistic in indian

country is the telephone penetration rate that at last report hovers in the high 60 percentile. getting broadband to other areas is a challenge to implementing the reforms we launch today. bringing universal service into the 21st century is the only way to extend the full range of advanced communication services to places where those services will not otherwise go. the big news here, of course, is that universal service is finally going broadband. this is something i have advocated for a long, long time. it is something a decade or more overdue, and the step in the joint board of universal service strongly backs. these new technologies in technology services are essential to prosperity and well being of our country. they are the essential tools of this generation like the hole in the plow, the shovel and the saw were to our fore bearers.

whether we live in the city or hamlet, in o fake try or farm, are fluid or economically disadvantaged, fully able or living with a disability, every citizen has a need for and a right to advanced communication services, access denied is opportunity to not. denied to us as individuals and as a nation. america cannot afford access denied unless we want to consign ourselves and children to growing, not shrinking digital divides. we already skated around the wrong side of the global digital divides in many ways when we should have learned by now that the rest of the world is not going to wait for america to cap up. if we seize the power of this technology and build it out to every corner of the country and make it truly accessible to every american, there is no telling what we can accomplish. america would be back at the front of the pack.

the current system for all the good it's accomplished outlived it time. it strayed from what congress intended and consumers deserved. inefficiencies crept in, and as props arose, they were allowed to compound. at best, we settled for band aid that never stopped the em raj. sometimes we didn't try band-aids and we calls services things that they were not. engaging in linguistic strategies with a theory that the most intense biblical scholars of old for incapable of aching. we lost site of the original purpose of the telecommunications act in 1996 in general and the universal service fund in particular. whatever the causes, and we can debate them for hours, our current usf and intercarrier compensation regimes are broken.

rates encourage carriers to maintain yesterday's technology rather than reaping the benefits of today's ip based networks. the hidden manipulations of payments cost consumers billions of dollars each year. we reimburse some carriers for whatever so ever they invest when a lesser amount was needed. insome areas of the country, we subsidize four or more wireless carriers based on the cost of a wire line network. all of this is reflected in inflated monthly rates that consumers pay. the old saying is if it's not broke, don't fix it. this is broken. we have left with no real option short of the major fix, no tinkering around the edges is capable of putting these systems back on a solid footing. some will claim we attempt too much today, but we would not have to overhaul these programs if the commission had been attentive to its duty to address

these problems as they arose and worsened over the years. it's not that we didn't see the writing on the wall. many people did. years ago as one example i proposed putting universal funding services to work supports build out like other countries were doing. four years ago, four of my colleagues here were ready to vote to put usf on a new footing including a pilot program for a competitive auctions on intercarrier compensation, we were ready to vote at the same time for lower rates, and commissioner mcdowell remembers this well because we worked very closely on it. what we are doing today is repairing two broken systems and putting in place a credible and efficient frame work to benefit consumers, carriers, and the country. we are approving a frame work for allocating limited resources to mitigate serious communications short falls, a frame work to give all a clearer picture of how the systems work going forward, and will provide predictability for rate payers,

businesses, and policymakers. i would have preferred a higher budget for the fund. a budget that i believe consumers would accept because of its importance to putting this nation back to work and providing our kids with the tools they need for their futures. that being said, we sat down a good and welcome road here with steps that will make a huge difference, and that is why i'm able to approve the item, although, it's not the precise item i would have written. our focus is on support targeting the unserved areas that need it most. there's much to be said at this time because of the harsh budget realities the nation faces and because of the perceived need to limit universal service, but i hope and expect our actions today have spillover effects in underserved areas too because america will not be broadband sufficient until the underserved become fully served to. inner cities can be just as

handicap as more remote areas. here opportunity denied is opportunity denied. i base the support largely on the size of carriers and focuses on where broadband refuses to go meaning targeting money for areas where consumers would not otherwise have service, and i believe is the first time we can say that about the fund. acting on another long standing recommendation of the joint board where we are creating specific funding mechanism to support mobility. this is an historic accomplishment. there's areas, many areas where mobile broadband providers do well in delivering services and profiting handsomely and where support is not needed, but there's other areas strangers to coverage where the mark will not go. the mechanisms, reverse auctions is a new tool.

while we have considerable experience with spectrum options, this is a new species of auction, and we have to be careful in how we approach and evaluate it. i hope it lives up to the high expectations parties have for it and become a truly efficient way to expand our dollars to reach unserved areas. i expect to learn a lot from the first auction and apply lessons to the future. when we also say how much i appreciate the items prohibition on nationwide package bidding in the mobility fund. this is an important safeguard against gamsmanship and further consolidation in the industry and this goes down to the benefit of rural consumers and, indeed, all consumers. we're adopting another safeguard to encourage state in the transition not new regime for mobile support. the course has two option phases with the second dependent upon further decision making. understanding the need for

predictability, we'll halt legacy support if for some unan -- unanticipated reason, this does not take place as planned. i am pleased we were able to grow the mobility fund from the initial proposal. i would have supported and actively encouraged a larger number given the scope the challenges we face, but the increase is seen as an important down payment and further deployment. i appreciate the chairman's support for this, and particularly commend the leadership of my friend, commissioner clyburn. we launched a fund specifically to target support for mobile service in tribal areaings. it's a national disclosure grease in the low dujtses, and, again, getting this right is requiring more money than proposed in today's proceedings, but it hippings on more than money alone like taking prompt

action on other proceedings and other issues pending before us. in addition to all of this, there are a host of confidence building and cooperation building challenges confronting us. i do believe that the current commission it on the right path to rebuilding our consultive mechanisms with native nations. there's new disclosure looks, new inputs shared, and new commitments to look to the. we are moving towards the fuller appreciation of tribal sovereignty and give them the fuller and more active role they must have to ensure the best and most appropriate deployment and adoption strategies for their areas and their populations. i feel encouraged that we are at long last positions ours to make progress by working more closely and creatively together. the sad history here as we know is many promises made, many promises broken. we need to turn the page, and i think we are beginning to do. that now, i also applaud the

strong buildup bench marks that will be a condition of receiving molt fund dollars, and, indeed, support for many new programs with meaningful enforcement and call back consequences if you do not meet your obligations to consumers injecting much needed discipline into the system. it is another really important component of our actions today and strongly enforced one that will inspire much more competence in the new system than we ever had in the old. today is his historic because we take on the challenge of intercarrier compensation taking meaningful steps to transform what is badly, sadly broken. this item puts the brakes on the arbitrage and gamesmanship that plagued icc for years and diverted private capital away from real investment in real networks. by some estimates, access stimulation costs nearly half a billion a year, and phantom traffic affects nearly one fifth of the traffic on carriers

networks. today, no more. we adopted rules to address the schemes head on, and importantly, we tried to install a bill and keep methodology to rid the system of these perverse incentives entirely. my enthusiasm here is tempered by the fact that end user charges under the label of access recovery charges are allowed to increase, all be it incrementally for residential consumers. i wanted to prevent my increase. alternatively, we can allow individual carriers to dmon stlait the need for more revenues before invoking the or k. problems the most profitable companies should not charge, however, the commission does adopt some important measures to protect consumers, even as it allows additional charges, and in particular, consumers already paying local phone rates of $30 cannot be charged the arch. the use of this ceiling recognizes early adopter states already tackled these rate, and

their citizens may be footing a reasonable part of the bill. in the end, i'm grateful that at the very least additional charges to end users are not as great as they might have been. our spread over a longer period of time, and should be offeat sen matched by savings realized because of the programs we put in place. i am hopeful the commission does everything it can to assure savings are passed on to consumers. i continue to leapt the fact we don't have a more competitive telecommunications environment to ensure consumer friendly outcomes. while inside the beltway crowd and the armies of angry analysts and others will be parsing today's items with eyes focused exclusively on which company or industry is up or down as a result of what we do, who gains the most, who gains the least, and all of the other issues that will cause for us to be shopped down and vats of ink drained, i

hope we can keep the focus on consumer benefits whaf we are doing. iwould not, could not support what we do today unless the expected consumer benefits are real enough to justify the effort, and, yes, the risks, of so sweeping a 34r57b. much depends on our implementation and enforcement, and i'm sure on mid course corrections, but i believe there's real and tangible benefits in the items before us. more broadband for more people is at the top of the list. as an example, we anticipate significant now investment with over 7 million previously unserved consumers getting broadband within six years. that means more service, that means more jobs; it means more opportunities. building critical infrastructure, and broadband is the most critical challenge, has to be a partnership. the states are important and sesht partners -- essential partners in designing

new programs. i've a strong advocate for closer state, federal, partnerships since i came here more than ten years ago. i had the opportunity to serve on the joint boards with state colleagues, to be a part of the deliberations, to appreciate the tremendous expertise and dedication they bring to their regulatory responsibilities and to have learned so much from them. it is just simple good sense to maximize our working relationships with them. more even than my perm preference that's deeply held, this is the mandate of the law. section 254, the act is clear that the states have a critical role in the advancement of universal service. while i understand the need for predictability in an icc regime, i am pleased that my colleagues retained a key role for states including arbitrating interconnection agreements, monitoring intrastate access to bill and keeping, and implement

our universal service fund as well as in many cases their own state universal service funds. state regulators are closer to the needs of the consumers than federal regulator will can be, and they retain their role as the likely first venn few nor -- venue for consumer complaints. i encouraged all to think about how to implement the new systems. i hope that carriers would see the benefits of this federal, state cooperation too. it is unfortunate and highly counter productive 20 consumers when companies exercise their huge lobbying machines to encourage state log tores to cut public and state utility commissions out of oversight making everyone jobs, except the industry giants, more difficult, and it harms the nation. some of the calls in this item

are unnecessarily and unfortunately more than they need to be. we should be long passed declaring obligations are required under the act. we have the chance to do this, and declare that voip is a telecommunications service back in 2002 and 2005 and our failures to do so have had tangibly perverse consequences. avoiding action not only harms competition and delays the more first time build out of the information infrastructure, but ensures that america will continue to be down the global broadband rankings in the world where that just doesn't cut it for us. we need to lead the world. we need to lead the world, not so that we can pin a medal on our chest, but to regain our prosperity and competitiveness and our capacity to provide jobs and opportunity to every one of our citizens. broadband adoption is at great or greater a challenge than

deployment. we'll continue to push for doing more in adoption. we are limited here by the reality that today's emphasis 1 on reforming infrastructure, deployment to high cost areas. that said, i worked with my colleagues to include adoption in this proceeding. i'm pleased that carriers received funding can be expected to connect community anchor institutions that they pass. these entities often are the places where unconnected consumers get their first exposure to broadband and learn how to use it. i'm pleased that all universal service programs now include a real and enforceable requirement for foorkt. it's only logical and consistent for the mandate of section 254 that not funded by support should be required to offer service at affordable rates. that said, much of the important adoption items are still ahead of us. we have an imminent opportunity to update the lifeline and leng our programs, and i suspect we'll accomplish that before the

sunsets in the year 2011. there's much work to be done still. the success of today's frame work depends heavily on the commission getting related integral policy calls right. we have to revisit our long overdue special access proceedings, something critical to small businesses and anchor institutions. this is 5 situation with huge spillover effects on the excessive rates consumers are forced to pay. it's a problem to be resolved by report and order in the months ahead because it has simply waited years too long. similarly, we have to act on contributions methodology. the distribution of funds is only part of the broadband challenge of equal importance is the contribution of funds going into usf. i would prefer to see such an item in front of us today. there's inherent inequity of a system that deploys on assessments of intrastate.

once we ensure double, triple play services benefit from service bear their fair share, we will not be so subject to the unnecessary financial constraints that our current approach imposes. we also need spectrum management decisions that avoid putting similar peck trouble into too few hands. that drives the better mobility options. successful implementation of the steps we present today demand a degree of stake holder cooperation we have not seen this many, many years. consumers, states, businesses, the fcc, congress, and the administration each have a role to play, but as you heard me say before, stake holder partnering is how we built america's infrastructure over the past two and a quarter centuries from the early bridges and canals up to the super highways and rural electricity. now is the time to practice that american way one more time. i believe here the process has started off commendably.

everybody had the opportunity for input. when we approve the rprm in february, i'm remarked everybody gives up a little so the country gains a lot. that spirit of shared sacrifice made today's action spobl. the process has genuinely, if not perfectly worked. stake holders stepped up to the plate, they were creative and helpful, discussions held between likely and unlikely players too, and i applaud that process. i have no illusions about what perils awaits, but we'll be better off if our efforts going forward focus on working together to implement the new frame woshes and working constructively to make changes where they may be called for rather than spending precious time that the country doesn't have on litigation or legislative interests at the expense of the greater public good.

if the generally cooperative spirit of the last several months is our guide going forward, we can avoid those pitfalls. lots of people made heroic effects to get us today's historic achievement. i mentioned the remarkable leadership of the chairman. our internal team put together by the chairman worked mightily and expertly on a whole host of unbelievably complex issues. the dedicated experts of wire line, wireless bureau, rebecca, ruth, rick, jim, everybody on the two-page list -- [laughter] spent many, many hours answering our questions and discussing our requests and they were backed up by dozens more of our typically brilliant and dedicated fcc team. my commissioner colleagues spent weeks and moments immersed in the tall weeds taking hundreds of meets, talking with one another, and developing constructive proposals, and the

8th floor advisers including commissioner's staff, christine, and commissioner mcdowel's worked long days, nights, and weekends to make this happen. in my own office, margaret and mark stone provided not only great on sis, but creative suggestions to get us better outcomes, and i note all my staff felt the weight of this and all performed at the stardom level. it has been a highly professional effort by a world class agency of which i'm proud to be a member. thank you. >> thank you, commissioner copps. commissioner mcdowell? >> thank you, mr. chairman. the feat of modernizing the subsidy program to support next generation communications technologies while keeping a lid on spending is truly monumental. thus, our action today is a vital first step in reforming usf while ensuring that rural consumers benefit from needed

advanced services. as i said several times before, the communications needs of rural america is personal to me. my family has deep roots in rural america. my father spent part of his boyhood in the great depression in a ranch without electricity, running water, or phone service. with that background in mind, i'm exited to carrying out the intent of ensuring the most remote parts of the country are connected. the challenge of soling the seemingly intractable universal service of the puzzle, however, cast a long shadow over the fcc for more than a decade. in the nearly five flaf years hear here, i traveled across america to learn about the practicalities of the program and helped round table discussions with multiple stake holders in the least populated state, wyoming, as well as its neighbor, south dakota. i've tray traversed tribal land

and some the least population density areas like anesthesia, and some who pay rates above costs 20 subsidize rural consumers, and my colleagues concluded similar investigations as well. in trying to capture what the fcc's accomplishing today, i've turned to one of north america's best telecommunications policy minds. none other than the great one, wayne gretsky. he said, well, without us realizing it by implication he predicted what we'd do today when he said a good hockey player plays where the puck is and a good player plays where the puck is going to be. the fcc is repurposing the high cost program to support unserved consumer's use of communications technologies from where they are to where they're going to be in a technology and geographic call

sense. october 27th, 2011 is a date that marks a dramatic departure from nearly a century old policy of opaquely, opaquely sub subsidizing analog, circuit riched voice communications to using the efficiencies of market based incentives to support broadband connectivity in areas where economic realities have stalled market penetration. under both republican and democratic administrations, the high cost fund has become bloated and inefficient. today, the republican and three democrats are taking a giant leap together to fix that. i commend the chairman for his leadership and fortitude throughout this process. i also thank commissioners copps and clyburn for their thoughtfulness and their participation in the hearing. since i arrived in 2006, i called for the fcc to achieve five primary goals when focusing

on reform. the most important of which is to contain the growth of the fund. while our effort the today are not perfect, today, we are largely achieving this goal in the town otherwise known for its inability to control spending. while i'm on that subject, some suggested we scrap the usf program all together. others can have that debate. in the meantime, we're mindful congress created the program and its ultimate survival is a matter only for congress to determine. we are duty bound to operate within the statutory constructs handed to us. in the spirit of being fiscally responsible, however, we're mandating the high cost portion of the universal service fund live under a definitive budget for the first time in history. functionally, the budget serves as an annul cap through 2017. until then, the fund may not rise higher than $4.5 billion a year on average after true ups

without commission approval. after that time, it is my hope that competitive forces will flourish and the development of new technologies will create additional efficiencies throughout the system. if so, much of the vaccine consume will have been filled, and the need for future subsidies will have declined substantially and perhaps the day will come that congress determines subsidies are no longer needed. of course, there's nothing we can do to prevent future commissions to vote to comprehensively amounter what we have done -- alter to what we have done and spend money later. that's true as a matter of law whether we call can a definitive, budget, cap, or hat. if they want to undo what we did today, however, good luck with that. you're going to need it. if history's the guide, the commission can accomplish reform is nothing short of glacial. nonetheless, i hope future

commissions keep their caps on out of respect for fiscal responsibility and the consumers who pay for the subsidies. also, today, we're addressing the high cost portion of the distribution side of the universal service fund add commissioner copps pointed out, and not addressing the fund that districts $8 billion a year. usf is larger than the annual revenues of major league baseball. in separate proceedings, we'll reform the other usf spending programs. i cannot stress enough that all of the fiscal efficiencies that we'll realize in the wake of today's reform will be lost if similar discipline is not applied to all universal service programs as well. moreover, we're only addressing part of the distribution or spending side of the universal service program. in fact, despite all of the exhaustive efforts to get to this point, our work on

comprehensive universal service reform is not even half finished. equally important is the need to reform the contribution methodology or how we are going to pay for all of this. there's no secret that for years i've been pushing for contribution reform to be carried out at the same time as distribution reform. obviously, that is not happening today. therefore, we must act quickly. the contribution factor, a type of tax paid by consumers has risen each year for approximately 5.5% in 1998 to an estimated 15.3% in the fourth quarter of this year. this trend is simply unacceptable. we must abate this automatic tax increase without further delay. accordingly, i strongly urge that we work together to complete a proceeding to reform the contribution methodology in the first half of next year.

in the meantime, today, we are undertaking significant reforms. although time does not allow me to discuss each one, i want to mention a few of my favorites. first, it may surprise some observers the vigor and breath to which we give life to competitive bidding, a market based approach to distributing subsidies also known as reverse auctions. this is more than i could have hoped for in 2008 when a republican controlled fcc teetered on the cusp of comprehensionive reform before our efforts were scuttled, and i'm delighted we're here to actually get to this point. supporting these provisions was likely not easy for some of my colleagues, and i thank them for their spirit of compromise. secondly, we are eliminating the inefficient identical support role, the wasteful era of sub subsidizing multiple competitors in the same place has come to an end. third, we are finally giving

consumers the benefit of more transparency by phasing out hidden subsidies, all be it 15 years after congress told us to do so in 1996. better late than never i guess, huh? gocht and industry alike has to do their best to keep consumers properly educated on what they see ton their bills and what it all means. rates should decline for vast amounts of consumers or stay the same, so i look with skepticism on news stories that claim the fcc is raising rates. the simple truth is we are not. fourthly, we are creating a frugally minded, but reasonable waiver process for highly unlikely cases where carriers are definitively experiencing extreme hardship due to our reforms. did i say that narrowly enough? [laughter] were there enough adjectives in that?

fifth, i'll stop at five, no worries. [laughter] in further notice, we propose means testing to identify qualified recipients in remote areas and this could save money and maximize effectiveness of the firms. as a legal matter, some question whether the commission has the authority to use universal service funds to support broadband directly. as i said before, i believe the commission does have broad authority to repurpose support to advanced services as handed to us by the plain language of section 254. i have a much longer legal argument in my full written statement, but in the observance of times and small bladder, i will not go on further. [laughter] it's no surprise that i cannot support the view that section 706 supports broadband through universal service funds. as said before, section 70 # 6 is narrow in scope not providing general authority to do much of

anything. we respectfully agree to disagree on this analysis. finally, given the breath of today's actions, the effects will not be fully apparent in the near term. certainly, there's varied opinions regarding what we accomplished. that said, universal service reform is process. we will constantly monitor its implementations and quickly make adjustments if needed. in sum, i'd like to thank all the people who sacrificed countless family dinners, weekends, vacations, birthday and anniversary sell -- celebrations and such over the many months 20 make today possible. i was going to name names, but i realized that's an impossible task because i'll leave people out. i want to reflect for the record as the longest table we've had in front of us in the history of the fcc where often it's in the press action over there --

[laughter] you would have added more tables, but he would have been on the other side of the wall, i guess, controlling the cameras. i want to make special mention of not only everyone in front of us, but the legions who stand behind each one of you who have all shed your blood, sweat, toil, and tears to make this endeavor possible today. i think, perhaps, we should have held the meeting at fedex field, but perhaps it was raining today. i want to commend zach for his tireless efforts, patience, and leadership throughout this process. further j machine, i thank mr. copps's legal advisers and commissioner clyburn's as well. from my office, christine deserves special mention hiring her two years ago from the senate. i said your main mission is to fix universal service, and she accepted my offer anyway. [laughter] but she's completed half the mission today, and i thank her

for it. many, many thanks to each and every one of you and my colleagues, this is a historic day for the fcc. thank you, mr. chairman. >> thank you, commissioner mcdowell. >> we are taking a moment to step ever so close to fulfilling the goal congress set forth for universal service in the 1996 telecommunications act to ensure that all americans have access to affordable voice and advanced communication services. we would not be here, but for the incredibly hard work of the fcc staff, under the direction and leadership of chairman and his office as well as significant input from congress, our state partners, industry, and consumer representatives. i believe that we have drawn from many competing sources to form a balanced frame work to support significant broadband deployment as quickly as possible to those consumers that are currently unserved. the painful truth of the matter

is that there are 18 million americans who have not fully benefited from our current universal service policies and that is unacceptable. they remain the have-notes of the broadband world who i'm determined will benefit from the most, the most from what our action, this action, is today. as i have considered these reforms, it is the unserved consumers who are first and foremost in my mind. this plan provides speedy broadband deployment to many of those consumers and with an injection of capital in 2012 for both fixed and mobile technologies. in addition to these immediate needs, i carefully considered how much those consumers are being asked to shoulder when it comes to the cost of intercarrier compensation reform as well as the impact on those consumers who already have service. it also shouldn't surprise

anyone that it was similarly important to me that we give service providers and their investors time to adjust to our propose reforms because from day one, i made a firm commitment to know flash cuts. a reasonable transitional period will help ensure that providers can navigate e -- reforms successfully, but those who need time to adjust, there's a waiver process that's firm, predictable, yet fair. another benefit of this waiver process is that it provides this commission with a safety net so that we can adjust support as needed in order to avoid inadvertently harming the success we've already achieved through our legacy system. overall, i believe the chairman's proposal carefully balances these interests and will result in a meaningful difference for many americans, and i want to commend him and my

colleagues for the significant progress that is reflected in this order. accordingly, i offer my full support for the actions we take today . .. >> however, it is equally important that we have the flexibility to adjust as needed

within and between these high-cost programs. i want to thank my good friends and colleagues for working with me to assure that we have not unduly limited our ability to revisit our current estimate of the funding that is needed for the high-cost programs for the future. an underlying theme of today's reform is shared sacrifice for the common good. after all, we are talking about the people's money. we are accountable to them and i am confident the adjustments being made to the legacy and defending mechanisms being adopted for the new connect america fund are sensible. these reforms will put both the u.s. and icc regimes on a sounder footing so we may better accomplish our goal and congress' mandate to serve more americans with advanced communications network for matter where they live, work or travel in this great nation.

for a number of years the federal state joint board on universal service, and state and federal members, have called for this commission to provide for the direct funding of broadband. early on they recognize the importance of both broadband and mobility service. i am proud that this commission has heeded this call and this formally adopting the principle advanced by the joint board last year in its recommended decision the universal service support should be directed where possible to networks that provided the in services as well as voice services. moreover, upon the advice and good counsel of our state members and colleagues we are adopting a mobility fund for $300 million in capital to extend 3g and 4g networks to more americans in 2012. in addition we are adopting a mobility fund to ensure that consumers have access to mobile broadband services, providing

support to providers in hard to serve areas and eliminating our identical support will. we owe a great gratitude to our state members. they had been a significant resource for this commission in our reform process. we sat through numerous workshops and meetings together, hashing out ideas. they spend countless hours drafting a proposal for our consideration and they have been more than generous with your time and advice. i want to sincerely thank them for the good counsel in this proceeding and for their service to our nation. that fcc has heavily relied on suggestions and their plan. we are requiring u.s. recipients to meet milestones, the annual report on the buildout and service requirements, and to file those reports jointly at the fcc and the state utility commissions. we also are implementing a cap

on total support and other fiscally responsible measures to eliminate waste and efficiency. in addition, we are clarifying in our order that we expect all carriers to negotiate in good faith in response to requests for ip to ip interconnection for the exchange of voice traffic. not only do we hear from the states about how important it is to ensure that ip interconnection occurs, we also received significant comment from competitive of voice providers that the lack of the ip interconnection is impeding the development of ip networks, including voice services. as such, the order confirms that a duty to negotiate in good faith does not depend upon the network technology underlying the interconnection, i.t. or otherwise, and that we expect

good-faith negotiations to result in interconnection arrangements between ip networks for the purpose of exchanging voice traffic. another topic that i spent a great deal of time on with my commission colleagues was the intercarrier compensation version. today's decision set for the national approach for reform for both intrastate and interstate access rates. it's probably not surprising that i naturally gravitated to the proposal, and i notice proposed rulemaking, that would affect the stage reform their own intrastate access rates and left the intrastate reform to this commission. but after much discussion and consideration i will accept the chairman's proposal that a federal approach is the right outcome in this instance. a multistate process for reform would be long and arduous, costly and demanding on the

state with unpredictable and perhaps inconsistent results. in the meantime the pressure would continue to build for us to intervene and stabilize that icc regimes to provide the companies the predictability and certainty they need to continue to invest and innovate for the benefit of consumers. however, i think it's only appropriate that our actions today carefully preserve and recognize the reforms that some states already have undertaken. most importantly we have provided for replacement funding at interstate access rates declined as result of our reform which released the financial burden that would have been on states in their own attempt at reform. to that end, we also have carefully balance icc revenue replacement for providers with the important goal of not burdening consumers with significant increases in their bills or overburdening the u.s.

ask which is ultimately paid for by consumers. as indicated by our stats analysis, we believe that the overall benefits that will flow to consumers as result of this reform will far outweigh the minimal price increases they may experience on their phone bills due to icc reform. i also want to be clear that states will continue to have an important role with respect to the arbitration and interconnection agreement and the operation of usf. with respect to usf, states will continue to designate eligible telecommunications to carry or usf purposes and will continue to protect consumers through their carry of last resort obligations. as technology evolves, so, too, must the role of regulars. who are experiencing a significant technological evolution as networks are transitioning to internet

protocol and consumers are using multiple modes of communications, sometimes simultaneously. indeed, the underlying cause of reforms we implement today is due to the enormous technological shift that has occurred over the last 10 years. one constant that i've seen, however, is that consumers expect their state regulators to serve and protect them. moreover, those of us at the fcc need the states expertise and knowledge on the ground to properly execute and operate a new universal funding mechanism. for instance, we need the states assistance in identifying those areas that are currently underserved by broadband. we want to target our limited resources to those consumers who do not have any broadband provider offering them service. likewise, we will need the states help assessing that those providers who receive funding

need to their public interest obligations to build and serve. as such, i am confident that these reforms are an opportunity for us to continue working hand in hand with our state colleagues to assure that broadband is available throughout the country. and i look forward to our continued partnership with the states in this important endeavor. the communications marketplace has changed dramatically, and one significant reason is the explosion of mobile services in the u.s. more and more americans are relying upon the smartphone to access the internet. almost 30% have cut the cord when it comes to home service. i have worked closely with my colleagues to assure that we are providing significant support for mobile services, particularly in rural america. certainly rural consumers and those who travel in the urban areas expect that they'll have access to mobile services that are comparable to anywhere else in this nation.

we want and expect our devices to work where ever we are. as such, i believe that a budget which reflects the growing importance of mobility to americans is important, and that we should offer ongoing support for those areas that would not be served otherwise. i am grateful that the fund ongoing for mobility support the mobility fund has been increased 25% over what was originally proposed in a circulated draft, reflecting the fact that mobility for burrell served areas is a priority. i also want to thank the chairman for agreeing with me that while the identical support should be phased out, we need to ensure that mobility funds to is operating and funded before the phase down is completed for wireless needs exceed. the pause in phased out i proposed is now fully reflected so that while national wireless

carrier can have some confidence that they will not lose more than 40% of funding before they know what support they may qualify for in mobility fund ii. by deployment of networks that reach individual consumers has been paramount, the paramount purpose of the high-cost fund, it is also provided for service to community institutions including schools, libraries can health care facilities and public safety agencies. in order to ensure that these vital institutions can obtain the modern services that are essential for service to their communities we have provided them an opportunity to engage with usf efforts and the network planning stage. as such their communications needs are fully considered by the providers. similarly recipients with a detailed in the annual report to the fcc and the state commissions, those commuted anchor institutions that have received service as a result of the fund.

accordingly we will be able to account for all of the benefits that local communities receive as a result of usf support. although the reforms we adopt today are extremely important for ensuring that basic and advanced service, communication services are physically able to all americans, those services cannot be truly available if consumers cannot afford to purchase them out if the devices they need to access them are not available, or if they cannot obtain the skills they need to know how to use these services. i appreciate those who have called for us to address these consumer needs today it and i agree with you that we need to do more in this area. our broadband task force is working diligently to find solutions to these issues and i fully expect that we will soon be addressing the proposal in our lifeline proceeding to adopt

pilot projects for broadband adoptions to benefit low income americans who qualified for the lifeline program. i look forward to our continued work with our task force, including finishing the lifeline proceeding before the end of the year so that we can make more headway on the significant issues for low income consumers. to our bureaus and their staffs, i thank you for your tremendous and herculean efforts to at this proceeding. i know you have made many personal sacrifices to help us reach this moment, and i wish to commend you for the results. you conducted workshops, reviewed our record, listen to the numerous interested parties in this proceeding, at least all concerned, crafted the order and accompanied notice, and yes, put up with our office. but please know how much we appreciate all of you. i wish i could say right now that we are at the finish line,

but this indeed is a marathon. and for those of you who will compete in sunday's race, sadly, it will not be the end. you had been preparing for the smile so that we reach today. but we are at mile 20. just a little further to go. and i for one look forward to our continued engagement on the implementation of these reforms. i also want to join in congratulating the chairman and my fellow commissioners on today's vote. the task before us has not been an easy one, but it is certainly one for which i am proud that this commission has finally achieved. commissioner copps and commissioner mcdowell, i know you have both witnessed past attempts at usf and icc reform, and you must be deeply proud today. thank you for your diligence and hard work. and once again, mr. chairman, i want to thank, express my

gratitude for your leadership, engagement and willingness to listen and address my concerns. and for your honest attempts at reaching consensus. lastly i would like for you him to give me the privilege of acknowledging the hard work of mike wireline advisor, ng. your tireless commitment to our priorities and willingness to make incredible personal sacrifices serve me and our team will. you and lily throughout this process were able to capture and defend those principles principles that i hold dear in numerous meetings and exchanges. and i wish to sincerely thank you, commissioner copps, margaret mccarthy, sharon, victoria, rebecca, i should say all women, zach, even though we know who is working, right? and for all of these, those captured in those slides for

your commitment to reform and for your willingness to serve this nation so nobly. thank you so much, mr. chairman. this is an incredible day for all of us. >> thank you very much, commissioner clyburn. today is indeed a momentous step in our efforts to harness the benefits of broadband for every american. i am tremendously grateful to each of my colleagues on the commission for working hard, working together, to get this done. the work of the staff has been just incredible and i will have more to say about those and there are others to thank as well. but this is a once in a generation overhaul of universal service. keeping faith with our nation's long commitment to connecting all americans to communication services.

we are taking a system designed for the alexander graham bell era of rotary telephones, and modernizing it to the air of steve jobs an and in the futuree imagined. we are reaffirming for the digital age the fundamental american promise of opportunity for all. we are furthering our national goal of connecting the country to wired and wireless broadband, and we're helping put america on its proper 21st century footing, positioning us to leave the world in a fiercely competitive global digital economy. infrastructure has always been a key pillar of american economic success. connecting consumers and businesses facilitating commerce and unleashing innovation, broadband internet is the

indispensable infrastructure of our 21st century economy. recognizing this fact for years respected voices have called the universal broadband an essential ingredient for america's economic competitiveness and job creation in its 2007 report rising above the gathering storm, the national academy of sciences said that accelerating progress toward making broadband conductivity available and affordable for all is critical. and he urged governments to take a necessary step to meet that goal. in 2010 international broadband plan we correctly called extending wireless broadband to all the americans the great infrastructure challenge of the 21st century. and last year ibm ceo sam thomas donnell expressed the view we have heard from other ceos from governors, from mayors and consumers across the country, he implore policymakers to fix the

bridges but don't forget broadband. and he said that, a pervasive broadband infrastructure would be a powerful generator of new jobs and economic growth. today, building on years of hard work by the fcc and on capitol hill on on stakeholders, outside agency this commission is acting unanimously and on a bipartisan basis to meet this critical national challenge to bring the universal service fund and intercarrier compensation into the broadband age. our action will enable millions of americans to work, learn, and innovate online. it will open new vistas of digital opportunity and enhance public safety. it will create jobs in the near term and laid the foundation for interim job creation, economic growth in u.s. global competitiveness for years to come. today's reforms of the multibillion-dollar universal

service fund and intercarrier compensation will bring real benefits to consumers and communities in every part of the country. over the next year the connect america fund will bring broadband to more than 600,000 americans who wouldn't have it otherwise. in the five years after that, millions more rural families will be connected. and today's order puts us on the path to get broadband to every american by the end of the decade. to close the broadband deployment gap which now stands at close to 20 million americans. we are also extending the benefits of mobile broadband coverage to tens of thousands of unserved wrote miles, those areas where millions of americans work, live, and travel but that are areas of frustration and economic stagnation for so many people today. where mobile connections are needed but unavailable where

small businesses lose out on customers and productivity, where people in traffic accidents or other disasters can't reach 911. today we make mobility and independent universal service objective for the first time, providing dedicated support to the world's first ever mobility fund. and over the next three years provide almost a billion dollars a year in funding for universal mobility. mobile is one of the fastest-growing and most promising sectors of our economy and having the world's largest market for 3g in 4g subscribers will be a key competitive advantage in enabling us to lead the world in mobilization. new wired and wireless broadband would be a lifeline for rural communities currently being bypassed why the opportunities of the internet revolution. as a result of what we're doing today, young people who didn't

see a future in their small hometown will now be able to access a new world of opportunity. entrepreneurs and small towns will not need to move to the big city to live their dreams. instead, small business owner doing everything from selling beef to starting hunting lodges, like a resident i met in liberty nebraska wanted to do, they will be able to reach customers in the next town, the next city, the next day or country and boost their market, their efficiency, productivity. today's action will empower small businesses that otherwise couldn't exist in small town america and create new jobs in those committees. that includes farmers who need broadband to access commodity pricing, crop information, real-time weather reports, online auctioneer doing a process we've heard directly from farmers in rural america. today's action will help connect anchor institutions which can play a vital role in expanding basic digital literacy training,

so needed in a world where broadband skills are necessary both to dash that both define jobs and to land jobs. today's action is one of the biggest upgrade in rural america in decades. we estimate the order as a whole will unleash billions of dollars in private sector broadband infrastructure spending, in rural america over the next decade creating hundreds of thousands of jobs. and by empowering millions more americans to engage in e-commerce, as biosensors, the order will grow the size of our over all online marketplace. and provide a boost for main street businesses all over the country including urban areas. today's action will change the landscape for students who are now answered by broadband providing educational opportunity that would otherwise be denied. now would change the landscape for seniors and people with illnesses, providing remote diagnostics and treatment to people who would otherwise have

no access to would have to travel for hundreds of miles. it will enable parents and now answered areas to finally connect with their children in military service overseas for video chat or other modern communications that require broadband to each of these are examples of people we met in our proceedings over the last few months and talked about real needs that they have today. and by constraining the growth of the fun, today's reforms will also minimize programs placed on all, keeping hundreds of millions of dollars in consumer's pockets over the next several years. our overall of the intercarrier compensation systems gradually eliminate the millions of dollars in hidden subsidies currently paid by consumers across the country through their wireless and long distance phone calls. our staff estimates the consumer benefits of icc reform would be more than $2 billion annually. and consumers will get more value for their money and less

waste. in these material benefits flow to radically from the policy principles and structural reforms that we have embraced in this order. the reforms implement the idea that government programs should be modernized to focus on the strategic challenges of today and tomorrow, not yesterday. starting today usf will be transformed into the connect america fund, which will directly take on our country's 21st century infrastructure challenge by enabling the private sector to build robust, scalable, affordable broadband to homes, businesses and anchor institutions and answered communities. our reforms will also advance the deployment of modern internet protocol networks, and as a telephone network, transitions to an ip network, the order, the carries negotiate in good faith for ip to ip interconnection for voice traffic. today's order also recognizes as i mentioned the growing

importance of mobile broadband. for the first time, take significant concrete steps to meet that goal. also a first, today's order brings market-based competitive bidding into the universal service support. in a series of ways, including auctions, we have structure distribution of public funds to ensure real efficiency and accountability in both the connect america fund in the mobility fund. for the first time our order puts the fund on a firm budget for fiscal responsibility was a principal announced on day one and we have adhered to that in this order, protecting the interest of millions of consumers who contribute into the fund every month. we put in place a series of reforms to eliminate duplicative and other funding where it is not needed and can't be justified. we also have arbitrage schemes to take a finish of gaps,

closing loopholes. faced with many complex and nuanced policy questions, i believe that this commission, all of us together have reached the right solutions because we approach the issues the right way. we didn't rubberstamp or adopt wholesale proposals every stakeholder or group of stakeholders, but we welcome our proposal, all constructive engagement. instead, we made our decisions on what's right for the american people and our economy based on facts and data gathered in one of the most extensive record in fcc history, including hearings and workshops all across the country. more than 1700 comments totaling more than 26,000 pages, all of which were reviewed carefully by this incredible team. we have focus on putting consumers first, calibrate and policies we adopt to maximize consumer benefits. we have been careful to ensure that affected companies face predictable and measured

transition paths so that they can keep investing in their networks to better serve consumers and support our economy. and we have brought increased clarity the areas of uncertainty, created by tensions between new communication services, like voice over internet protocol, and our old rule. getting to this point wasn't easy. it required us all to make tough choices about what the connect america fund and consumers could not support. started at very high levels. some proposals would have required consumers to pay a greater share of the cost of reform, or would have increased the size of the budget. that would've put too much of a burden on consumers during these difficult economic times. some that we should reduce the size of the fund. but that would've left behind the millions of americans being

bypassed by broadband with no prospect of broadband connectivity denying opportunity and economic access to those communities. some would have had us operate as if we were riding on a blank slate. but, of course, we're not and that would have meant needless consumer disruption, delays in other indicated an undesirable consequences. getting to the point on it required some choices and it required the engagement of many stakeholders around the country of our partners in the federal government, the states, tribal committees, private sector, nonprofit community. i appreciate the broad level of constructive engagement. it made a difference in our results. that constructive engagement very much includes the many members of congress on both sides of the aisle who have worked for years to reform and improve universal service, and his ongoing and constructive input is reflected in our action today. there are too many to thank

individually in congress, but i'm grateful to all of the numbers of congress who provide input and guidance. the president has been a consistent leader on broadband and the opportunities of technology, and our actions today help meet national goals of universal access to wired and wireless broadband. i want to thank our state partners who pioneered many of the reforms we adopt today. moving forward i am pleased that the states will continue to play a vital role in assuring that consumers are well served by our universal service program, and in other ways. now, very importantly i am deeply grateful to my fellow commissioners who have worked tremendously hard to make today possible. measures cops and mcdowell have been fighting to fix these programs for years, and commissioner clyburn strong experience at the state level in south carolina has been

invaluable in our efforts from top to bottom. today's order reflects the seriousness of purpose and thoughtful input from each of my colleagues on the commission. it is a better order as a result, and on behalf of the american people i thank each of you. at a time when citizens want solutions not gridlock, i'm proud this commission is approving bipartisan reform of a broken system that will deliver massive benefits to the american people. now, of course, this would not have happened without the tremendous work of the expert staff of this agency. and without you we would not be a publishing today what's been elusive for many years, making reform a reality. our staff as all of my colleagues have acknowledged have not only worked hard, they performed brilliantly.

crunching numbers, mastering complex technologies, operating at a world-class policy level. today's order is a product of that tremendous effort. i'm not the first person today to say this, but your work makes us proud, the phils the vision of the expert of the fcc's an expert agencies serving our country. there are so many people to thank as you saw from that list to each of you sitting here, sharon, ruth, carol, carol and i, andrews, and jim and others here have a first conversation universal service reform 20 years ago? [laughter] rebecca cooper, jim, michael, so many others, steve rosenberg, so many others in our wireline. no, i wireless bureau, general office strategy, all over the commission. i want to acknowledge the work

of the team that worked on the national broadband plan, includes many of the people here. also people who were no longer with the commission for playing an important role in advancing the ball on these reforms in a significant way. the staff of each of the commissioners on the floor deserve a tremendous amount of credit for mastering these incredibly complex topics for ensuring a serious collaborative effort. i mentioned the fact that so many people from the eighth floor staff and the bureaus were here late last night, but that might lead people the impression that last night was the only night people were here late. the more important point is that i don't know anyone can remember the last night when you all were not here late working on this, and we appreciate that so much. and you have produced a result

that you'll be proud proud of for many, many years. i want to particularly salute and applaud that guy, in my office, the quarterback of this effort, zach. you've ran this process in a way that makes us all proud. and that i think we have all seen how indispensable you are, bring all those together simply would not have been possible without your work. and also all the work other people work with you in the chairman's office. and again on the eighth floor and the staff of the peers. your leadership, your persistence, you're savvy, your columnist and strength

undermined in the foxhole, we all honor that and appreciate that very much. now, the bad news is accurate our team and everyone else is that our work is not yet done. we have implementation work ahead and will continue to be intensive engagement with all stakeholders in response to the further notice will adopt today, and in the months to come we still of course is my colleagues have mentioned face tremendous challenge in increasing broadband adoption. and ongoing berrier to opportunity in both rural and urban america. by there's no silver bullet for broadband adoption, the lifeline portion of usf can be part of the solution to a significant investment in broadband adoption, pilot program to access the staff to gear up lifeline reform reform for action this year. those are not big smiles.

[laughter] but wait, there's more. there's work to do on the contribution side. that's another important usf topic the commission will address. i believe with a closing thought -- i will leave with a closing thought that in the 1930s and 1950s when president roosevelt and eisenhower directed federal funding to roads, tunnels, bridges, bridges and the national highway system, they were investing in the then current technologies to connect our people and our communities. the same was true, the same was true for telephone service. key 20th century universal service achievements. all of those investments have paid tremendous dividends for our economy and our country. today, broadband internet truly is the information superhighway.

they key connected infrastructure of the 21st century. is what will drive our competitiveness, our economy, and broad opportunity for decades to come. our action today is firmly rooted in sound principles that have served our country well in the past, and i'm confident it will help deliver a bright future for all americans. with that, let us proceed to a vote. all those in favor say i go. all those -- [inaudible] >> the ayes have it. so ordered. the request for editorial privileges is granted, and i am asked to make a followed remind which under the rules, and the sunshine very prohibition of the next contest warning in effect until the full text of our decision is released. madam secretary, please announce our next item. >> the federal communications

commission and the federal emergency management agency will test the new nationwide emergency alert system on december 27 at the others will go out on broadcast, tv and radio stations, cable tv systems and satellite radio. at yesterday's meeting the commission heard from its public safety chief. >> admiral barnett, do not take this personally. [laughter] and now that broadband is available to all that is simply going to watch this. online. but please, the floor is yours. >> good morning, mr. chairman, and commissioners. may i say briefly the emergency alert system have been around for many years and i'm pleased to be with my colleagues from the public safety and homeland security bureau to brief you on our preparations for the first ever nationwide test of the emergency alert system or the a s. scheduled for november 9, 2011 at 2 p.m. eastern standard

time. at that time the familiar eas tones will interrupt regular programming on every television and greater channel across the u.s. weather broadcast, cable or satellite followed by the announcement that against this is a test of the emergency alert system. this test will occur simultaneously across the united states and u.s. territories and will last approximately three minutes after which regular programming on all channels will resume. this test will involve only broadcast radio television, cable television, satellite radio and television and wireline video service providers. it will not involve landline or mobile telephone devices or other critical infrastructure such as power grids. the purpose of the test is to allow the fcc, federal emergency management agency and the community to assess how well the eas would perform its primary function, that of averting an entire public about a national emergency. given a national alert is an

issue that fcc rules require that all eas participants, and that is all the ones i mentioned plus video service providers, and most interrupt the program to provide the alert. all eas participant must take part in this nationwide test and must submit the result to the fcc within 45 days of the test which would be december 27 of this year. the test is diagnostic in nature to assess how will eas equipment and the approximate 30,000 ts participant facilities nationwide can receive and obligate a nationwide alert to than public an event of a national emergency. so on november 9 at 2 p.m. eastern team will initiate the code for national emergency. the eas code and alert will rebroadcast cascading broadcast stations and other eas participant until it is been distributed entire u.s. and u.s.

territories. there will be similarities with the periodic monthly eas tests. however, there will be some differences. such as the test occurring on all stations at the same time and lasting a little more than usual. in addition to to technical limitations associate with the test use of an actual live code for national emergencies which is necessary if we really want to test actual system, the visual message accompanying the test may not indicate in all cases the event is, in fact, a test. this is particularly true for consumers during the test over cable television. the fcc and team have taken a number of steps to address this limitation. first we have worked with participants to develop technical solutions to address the issue. at national association of broadcasters develop a slide that can be inserted onto the screen during the test will let viewers know that this is a test. we suggest to the national cable and telecommunications association in conjunction with the major networks that they air

it breathes message immediately before and after the test with open captioning explaining it is only a test. meaning major networks have already agreed to do so. the fcc along with dean and eas participants have engaged in extensive outreach to people with disabilities and organizations that represent people with disabilities as long as other consumer groups to ensure that they understand that the alert on november 9 is, in fact, a test. our pure and consumer and governmental affairs bureau has worked with various groups representing deaf and hard of working for the deaf and hard of hearing. last week, we briefed them about the test and i would like to acknowledge and thank the association for the deaf and hearing loss association and others for their advice and assistance on this. in addition to the deaf and hard of hearing community fcc has taken steps to reach out to other consumer and community groups to inform them about the test.

for months we have communicated with over 100 consumer and consumer community organizations including those representing the elderly and those who do not speak english as a primary language. we developed a consumer fact sheet and produced public service announcements for radio and television in both english and in spanish, with captioning included. i have written the governor of each state and with contact a state emergency managers. the public safety bureaus have engaged in multiple outreach efforts to direct 911 call centers, state, tribal and local government including webinars and briefings for government agencies. we provide information for newsletters and blogs for over 40 national organizations representing public safety and other officials. we prepared a step-by-step guide for eas participants regarding exactly what to do on the day of the test. in addition the office of legislative affairs reached out to members of congress about the test, and even earlier this week

i did an interview with tv guide about the story that would run next week. as you are talking about the test. the fcc just launched a database through which eas participants they submit their test results electronically. our pure has hosted meetings with organizations representing eas participants and has participate in numerous roundtables and webinars hosted by fema come in a become a national alliance of state broadcasting association, pbs and others to educate eas purchase that's about it has and will continue to be these efforts right up to and including the test. i would like to thank the consumer and governmental affairs bureau and especially joe and karen and greg, the bureau, international bureau, enforcement bureau as well as the office of general counsel, and management director of media relations of legislative affairs for all their assistance in preparing for the test. we look forward to getting the

results from november 9 in order to make our eas system better. >> thank you, admiral burnett. any comments? >> real quickly. thanks to the bureau and fema, your agency partners on the whole wealth of stakeholders. i don't think there's any substitute for a good test. i think this is shaping up to be a really good test. i which is particularly commend you on the breath and depth of outreach that you did. kind of bills a bit on this and i think it sets a good precedent for other activities of this commission. we look forward to a great test on november 9 and take the lessons learned to make a stronger and more robust the eas. >> thank you. 's. real quick. i understand a number of broadcasters and other interested parties have invited as to actually come physically to observe some of these, this test. so i would hope would be able to

do that as much as the budget allows us to actually have hands-on of on site observations because i think we can all learn a lot if we are there in person. thanks. >> admiral, i'm looking forward to the engagement. and i was flipping channels, i think i might've been watching public television, that's my story, and i saw this familiar face. so it's already started. seriously, i want to thank you for the time and energy. and also recognizing some of the limitations and working through them, especially with those sight impairments. again, looking forward to tuning in on november 9, and appreciate all of your support and updating us on the progress. >> thank you. it is an important test.

part of a larger series of efforts on our part here at the fcc, together with our partners at fema, elsewhere in the federal government, states, to make sure that our emergency communication systems meet the needs of the public, especially as communications change through our work on the national public safety network for mobile broadband, very important, the launch of plan later this year which will allow government officials and emergency to send alerts directly to mobile phones, new york city by the end of this year, april, for the rest of the country work on location accuracy for mobile 911, tremendous work on next generation 911. there's really a lot to do here, and we acknowledge and thank you and your team for working so hard on these issues. we are all very much engaged with you to the importance of this particular test is indeed important. it comes out of good work that

you and the bureau did. i'd like to thank and acknowledge all of the efforts by your part, fema, broadcasters and cable operators to provide awareness and outreach. i do want to thank the many cable networks that have agreed to run public service announcements before and after the nationwide eas test to clarify that it is only a test, because we understand that some areas of technology may not be there to assert that when the test is run. that alone is already a good outcome from the test that we have discovered that. i appreciate the cable industry working with all of us to address these issues for the future. so thank you, and we look forward to the learnings from this test. do any of my colleagues have any announcements today? >> i do. not to cast a cloud of gloom over the otherwise celebratory mood that pervades the room, i

must today announced that margaret mccarthy will be leaving my office soon to return to capitol hill where she will continue her exemplary public service career in the office of senator amy klobuchar. senator klobuchar's gain is my loss. and, indeed, the entire commissions. margaret has brought a wealth of skill and creativity and smarts, and total candor and good humor to everything she has done in my office. our work on the universal service and intercarrier compensation item that we put a few moments ago should go down in commission handles as a best practices manual for all incoming eighth floor advisors. she mastered come and i mean really mastered all of the issues and implications of unbelievably complex set of issues, developed expert in innovative ways to improve items, and spoke as i say with total and refreshing candor to all parties concerned. she represented our office exactly the way i wanted it to

be represented. i'd like to think that if i were staying on, market would, too. i hope she doesn't think i've abandoned her, but i know senator klobuchar and margaret's new capitol hill colleagues will take very care -- very good care of her. so my thanks to her for everything she has done. and just for being who she is, it's been a delight working with it. she remains a member of the extended copps family which is actually getting to be pretty good-sized. [laughter] and i look forward to her friendship and counsel in the months and years ahead, and everyone in my office, wishing margaret all good things as she continues developing what is obvious he going to be a stellar career in public service. >> thank you. >> i would like to joined in chorus in wishing margaret well. we actually thought she, the last few days we thought she was a member of our staff.

[laughter] say, i want to thank you or the intelligence and the exchange and the willingness to be partners in progress. we will miss you but we know that you will not be far. and that we will call on you probably more often that you want. but now it is all out of love. anyway, thank you so much. >> i was taking it all in. i'm sorry, marker, out of order. we will miss you tremendously. it has been a true pleasure to work with you. you fight for what you believe in and you compromise what you think you can customize on. and what we can agree, it's a pleasure regardless. you've been a tremendous asset to the commission. thank you very much. >> thank you. the feeling is unanimous. we are all going to miss you a lot. it is again for senator klobuchar.

you will always have a place back at the fcc, particularly if you keep a positive eye on our budget. [laughter] and we have the headcount available. so we are counting on you and we wish you well. with that, madam secretary, can you please announce the date of the next meeting? >> it will be wednesday november 30, 2011. >> thank you very much. we are adjourned. [inaudible conversations] [inaudible conversations]

>> after yesterday's meeting, julius genachowski took questions from reporters for about 15 minutes. >> i will call and people. that's the rule. we have new faces today. we will start on the left. >> ask him want to mention one thing which i meant to say during the bureau which is we planned on moving to decisions on those sometimes in the spring. high, chairman. paul. on issue of contributions, do you expect any slow down given the election year we are headed

into? >> i think you are asking when we're going to do contributions reform? we haven't announced the schedule yet. we recognize that's an important part of the puzzle, but as you can see we have had a team that has been working around the clock on this for quite some time. we haven't set a schedule or agenda for the timing. >> i'm with telecommunications report. there's been a lot of speculation, before you all major decision here that there was going to be some litigation based on this. in the last few days there's been a lot of pushback from -- specifically saying what they were hearing was going to be included was not giving them the kind of support they needed to transition, you know, with the changes being made.

and i wondered if that was something that, you know, that was weighed carefully by you all, maybe more than something else, and other aspects at the end. and if that's something you all are worried about going forward? >> i think all the treasures talked about today we had a series of tough choices in a complicated area to make today. our collective focus was on transforming this old program to broadband, making sure that it met its goal of getting broadband to underserved americans, and to do it anyway that recognized the legitimate needs of existing players. so you heard all the talk about the importance of transition path and not have any flash cuts. i think we're all confident that we have made the right set of choices in a series of difficult

questions, and that our goals will be achieved and the program rolls out. >> what is your response to complaints that the usf reforms could raise consumers local phone bills, things like access for recovery charges and such as fiber line charge is? >> well, i don't expect that overall consumer rates will go up as a result of this order as compared to not doing reform. so the reform, what we're doing today eliminates hidden subsidies that ends up on consumer phone bills. it constrains the growth of the fund, and that growth would have translated directly into increases on consumer phone bills. and, of course, over all reforms today will deliver massive benefits to consumers all over the country by hitting broadband

to millions of uncertain americans, boosting small businesses, particularly in rural america but all over the country. and all the other been is that we talked about today. we think it's not a close call. consumer benefits from the reform today, are massive, very significant. >> i noted in a summit that the remote areas do not include provision for wireless, and unlicensed wireless services. could you please address how the reform deals, would relate to lightsquared quick specifically would they be able to provide services of unlicensed wireless provider and with it and when would they be available for founding? >> well, on the unlicensed these, i'll have to get back to you because i'm just, i'm not certain how to answer the question about what the item does with respect to unlicensed so we will get back to you on that. i apologize.

>> they are not licensed yet for broadband mobile broadband, when would they be, when will the funds be available for than? >> i'm going to let the staff people go through this specific timing on the mobility fund. the key points on the mobility fund are that, for the first time, the commission our country is recognizing mobility as universal service goal. and is looking not, what does that mean? he means not looking just at conductivity in the home but recognizing that if, when you travel between home and work you lose mobile coverage, that's an issue. if you have an accident on the road and you don't have mobile coverage, that's an issue. if you're at the mine in west virginia that had a terrible tragedy last year, the mine was at a place where there was no mobile coverage. some ability for the first time

is the recognize. and as you heard, out of the savings of the program that we are generating, we will be creating a targeted mobility fund to meet these objectives. >> mr. chairman, i'm wondering if you could take us through your thoughts that lead you to increase the broadband speed standards before deploying your cost model? and as a second tier to the, what happens if the cosmos come back and you find out that it is too expensive? >> well, decisions are based on a lot of data, a lot of work that's been done inside and outside the commission. we did think in planning for universal service, not just for the next year, but the years beyond that, we needed to find a way to embrace robust and scalable broadband. and so the number that we put into our best judgment on what

our sensible target numbers to it. .. >> the first thing i want everybody to do is who worked on this is to take time off, but we continue to focus on, obviously, implementation work to do on this, broadband adoption, which we've been talking about, continues to be important. we'll continue to pursue job

creation initiatives every day. obviously, there's spectrum issues ahead of us. there's public safety issues ahead of us. we still have a lot of work to do. >> thank you. >> hi, kim hart with "politico". the lifeline mentioned by the commissioners as a an important next step. any idea when that's taken up? >> well, i mentioned today i asked the bureau to gear it up for action this calendar year. that's the goal. we have to work within the resources that we have, but as you've seen, we have not been waiting on that to tackle adoption. we've had announcements in the past few weeks of adoption that are very significant, that are moving the needle, and it's important to understand that lifeline will be part of the solution on broadband adoption.

it can't be the whole solution what we're looking at is investing in broadband pilot projects to develop ways to determine the most effective ways to close the gap on broadband adoption by using that program. >> hi, "the hill. " there was a lot of talk about anticipating on the future commission needs of the american consumers. given that, doesn't it make sense for wireless or mobile to constitute a larger proportion of the u.s. endeavor? >> well, i think what we've done today on mobile is very significant both in our country's history and compared to what other countries are doing in identifying the importance of molt as a yiewn -- mobility as a yiewn veer sailing service goal. the amount of funds into that are very significant, and we

think we are both -- we've both found a way to dramatically improve or bring us closer to our goals on universal mobility. we'll also -- moving forward on the goals of getting basic broadband connectivity wireless to wireless to people who are unserved in rural america. we took seriously the constraints that we imposed on ourselves of fiscal responsibility, and one can make an argument for putting more money into a lot of different programs, but we were committed to funding this transition to universal broadband, to the connect america fund, to the mobility fund out of the existing program and the current budget.

>> as this becomes the federal government's biggest broadband funded effort ever, how would you assess the success of other federal programs, and do you believe that this needs to be -- that this could be a multiagency effort to fund projects like this, or should it be in one place? >> well, 24 is the -- this is the -- for many, many years we've been committed as a country to universal access to essential services like electricity, like tornado watch service, and this fund has helped, as you heard some of the commissions say today, bring telephone service up to essential universal rates in the united states, and that's good, but, of course, the today and tomorrow's communication infrastructure isn't old analog circuit switch telephone

service, but modern broadband internet, so transforming this program to broadband makes complete sense. we are doing it in a way that learns lessons from the past because as we all agreed here, usf over time met its goals, but also developed its own reasons for reform, and in today's order, we have tackled each of the areas that have been identified as areas where reform is needed to ensure accountability and efficiency under the program. for example, for the first time, we're bringing competitive bidding into the program, eliminating the programs that have repeated support, and we tried to learn the lessons from the past making sure this program is accountable and efficient, and we put in place ongoing efforts to make sure that the program remains that way. >> i'm sorry, but the

multiagency, you think it should remain these broadband efforts should remain multiagency or at one place? >> we're focused on the funds we administer. >> amy shots with the "wall street journal," i just wanted to see if the fcc is on its timetable with at&t mobile. >> i won't comment on pending transactions. >> are they looking at it mu? >> i won't comment on specific pending transactions. >> asked, but not answer, and i'll pass. >> sorry. >> brooks with "politico". i don't want to violate the one question rule, but i have one question on two items. does that count? [laughter] the first question is on the broadcast item, when you say you're going to be ready by spring, does that include the program, the stuff that was in the nli?

>> our goal -- we set a goal of taking action on those items in the spring. >> okay. so that would -- just usually it's nli, mprm report, so it's nli and then report and order? >> let me, i think the commitment i've made is that we're take action on those items by the spring, and we'll have to work with our colleagues to determine that action. >> and could you sort of explain more -- >> i -- >> i appreciate that. can you explain your decision on viot because it seems like that is the way the broadband is going? >> yeah. part of what the order recognizes is that voit communications has to be part of the systems going forward. one of the things the order does today is provide clarity around the role that voip plays making it clear that as long as there

is intercarrier comp clearing up the confusion about whether voip calls should be compensated under that. i think one of the many benefits of the order we adopted today is that by clearing up this uncertainty, we've removed a disincentive on some companies to move towards voip and other digital ip network. >> thank you. >> all right, everyone, thanks very much.

>> host: this is our america by the number segment. today, we're going to be looking at agriculture. we are joined by sippet ya clark with the usda's national agriculture statistics service. she's the administrator, in fact, and bob young is the chief economist with the american farm bureau federation. dr. clark, first of all, what is

the national agricultural statistics service? >> guest: the national agriculture statistics service is one of 14 major federal statistical agency, and our job is to collect data that's timely, useful on agriculture, and we focus on this sector of the economy. we issue over 500 reports each year. they are issued all through the year. we have weekly, monthly, quarterly, annual, and we even have a census that's done every five years. >> host: what's the value in these reports? >> guest: the value of these reports is to a large number of stake holders, the commodity traders are very interested in our reports, farmers, ranchers, investors, agri-business, policymakers, a wide variety of users of the data. >> host: you have here from

your reports, the economic research service of the usda ranking of farm products by cash received in 2010, and this says that us farms brought in or sold $314 billion worth of product in 2010, cattle being the most valuable followed by corn, powell ri, eggs, ect., ect.. >> guest: yes, that is a very important statistic. i think one of the very interesting aspects is that agriculture is now at the forefront of a number of societal issues, and $315 billion may not seem like a money that's coming from the agriculture industry, but agriculture touches on so many societal issues. seeding the future, food security, climate change, conservation, water usage, food

and nutrition -- many different issues, but you'll notice that the commodities that are receiving the most cash receipts changed over time we've been collecting data, and now cattle is the largest, corn, soybeans, of course, and you'll notice that poultry has grown in the industry as have hogs and picks. >> host: bob young is chief economist with the american farm bureau. mr. young, too according to the u.s. department of commerce, agriculture brings in a surplus when it comes to trade. it is predicted there's $137 billion worth of agricultural exports this year with about $94 billion imports in ag for a surplus of about $42 billion. >> guest: grots' one of the few -- agriculture's one.

one of the tbu sectors of the economy maintaining that surplus year in and year out. we've had close years, but we've been in a surplus situation with respect to agriculture products almost forever. >> host: why is that? >> guest: wii a competitive country with the cost of production in terms of our transportation facilities, our ability to put product into the market quickly and first timely. we've got, again, adequate supplies to be able to have the products to ship. we've got, again, distribution systems that do respond very quickly when asked, and, you know, it's all of that coming together making us very competitive in global markets. >> host: how would you define the role of government in america's agricultural economy? >> guest: well, i think a couple of ways. one, it's important for us to recognize that we want farmers. you want ranchers to go out and take the risk every year of

putting that crop in the ground so that we have adequate food supplies. we are able to maintain this kind of a trade surplus situation, ect., and i view the role of government in agriculture as to provide that kind of downside safety net, to provide us with the risk protection that, again, that we want farmers to take the risk, and they are willing to take the risk, but it's the downside risk protection we want government to provide. >> host: when we hear the term "agricultural subsidies" what does that mean, and how much does the taxpayer pay in agricultural subsidies? >> guest: when we talk about the farm bill, for example, 245 the great, great bulk goes to nutrition programs, goes to snap, goes to school lunch, those kinds of programs, and not to necessarily to direct grot rail sub subsidies. in ten years we'll spend $65 billion or projected to spend about $65 in commodity program subsidies, and we'll also spend

about $80 billion or so on crop insurance, and, again, some of that downside risk protection that is a proper role for government to play, and then we'll also spend about $65 billion or so over the next ten years on conservation programs as well. >> host: this is the america by the numbers segment, today, we're looking at agriculture. 202-737-0002 in you're in the mountain and west time zones. cynthia clark, how many farms are there in the u.s.? >> guest: in 2010, there were 2.2 million farms in the u.s.. this number has been fairly constant for the last 20 years. you'll notice that the graph, it does show a slight in connection

with. this is mostly because -- from 1990 to 2010 -- 1990 and 2000, there was a change in definition that included horse farms and christmas tree farms that accounted for a slight increase, and the last census, 2010, the -- we have been able to increase the coverage of minority farms and small farms and disadvantaged farms, so probably the number has been pretty constant for the last 20 years. >> host: one of the startling figures here though is the drop from 1960 to 1970 in the number of farms, 3.9, almost 4 million farms to 2.8 million. where did all those folks go? do you keep track of that information as well? >> guest: there was an increase in farm productivity, part of the reason for the drop, and there's an increase of people leaving the farm m i

think bob can give you more information on what he sees as the reason for the decrease. >> host: was there policy decisions made or economic changes in the u.s.? >> guest: really just economic changes. you know, the relative of income, for example, in the farm households during that period of time versus what they got by moving into town was pretty substantially different, and that was one of the reasons, you know, just economic opportunities to move into town and get additional jobs, drove an awful lot of that. you also had early 80s, for example, we had some very severe problems with financial downturn, high interest rates, all 6 that good stuff driving folks off the farm as well. we have stabilized here in the last couple decades or so, and part of that is definitional change and also just the income situation on the farm is now much more come pabl to what we have in town. >> host: how do you define a

farm? >> guest: it's defined in the sense that it's any place that can produce $1,000 of sales in a year or could have produced $1,000 in sales, so that is the -- that includes someone who planted an orchard no who is not yet getting it, and if you notice the size of the farms showing in some point in the presentation, there's quite a large number of these very small farms. grs well, we have a coup -- couple charts to show before we go to the call, and we'll put the numbers on the screen in a second, and average value of agricultural products sold per farm, 134 u87. that's the average farm? >> guest: correct, farms producing 1,000 to much, much larger amounts of cash

received. >> host: and the number of farms, if you could, how many farms are what you consider large farms, and i think you define that 500,000 and over; correct? >> guest: 500,000, we have that on one of our graphs. >> host: yeah, but i have it on mine -- i lost it here. >> guest: well, about 5.2%. >> host: show that to the viewers here. you can look at it. so, according to this, 73% of american farms are 500,000 and over farms, is that correct? >> guest: 73% of the sales -- >> host: oh, okay. 500,000 or more, but only 5.3% of farms in america sell over 500,000 or more. the majority are the $10,000 and less farms; right? >> guest: that's less than 1% of the sale. >> host: less than 1%.

this could be somebody with a vegetable garden and sells on the roadside, is that considered a farm? >> guest: it could be even my son who has chickens, and his kids sells eggs from the kitchens. >> host: as long as they make $1,000, it can be considered a farm, and then 24% of u.s. farms are 10,000 to about 100,000, and then 100,000 to 500,000 is 10.9% of farms. bob young, speak to the fact that 5.3% of the farms produce 73% of the revenue. >> guest: i think one of the poupt things to recognize, too, as we look at the numbers is that these -- the great, great -- and we don't have those in the charts today, but the great, great majority, 93%, i forget the exact number of farming operations in the united states are family-run corporations, family run operations. they have a corporate structure

for tax purposes, but they are family run operations. they are not, you know, as folks like to say it or we hear on the street, they are not corporate farms. they are family operations. they are just what they are, family farms. >> host: again, we want to hear from the farm community. who is watching c-span? we're going to begin with michael, a farmer in ohio. hi, michael. michael, turn down the volume on the tv and make a comment or question. >> caller: how much food a wasted and how much money do you think is wasted in the united states as a whole? >> host: what do you mean by that question? >> caller: how much money that goes, through the food we throw away, the sanitation pick it up, people drive out to farm communities and smaller suburbs -- >> host: leaving it there.

any thought on that? >> guest: you know, i don't know that anybody really knows because that's going to vary quite a bit from household to household. i've heard estimates in the 10% range or so, but somebody's got a better number, i'd believe that than what i came up with. >> guest: that's something we don't measure. >> host: appleton, wisconsin, hi, mary, you're on. >> caller: hi, i was wondering about the republicans and their vendetta against illegal aliens, and if they really got their way, how much would our food cost? >> host: is than an issue the farm bureau looks at? >> guest: we have looked at undocumented worker issues, and we looked in the neighborhood of 700,000 hired workers in the united states and understand the guest worker visa program we have in the united states in the

neighborhood of about 30,000 to 50,000 or so. again, our membership and farmers around the country, you know, are trying very hard to make sure they have properly documented workers, but it is a challenge when we don't have a program out there that provides folks with that kind of an opportunity. we can say we want to hire domestics, and i talked with members who try hard, but you run into this problem of folks not wanting to do that work. it's not an issue of wage rates. we are paying noticeably better than wage than average workers to the tune of $14 an hour or so by the time you figure all costs into that equation. >> host: how much would food prices go up? i don't know necessarily food prices go up that much, but the challenge would be where food production happens would

probably shift. there's movement of the fruit and vegetable production, for example, to south of the border and outside the united states, and that's something that could come back and haunt us on the trade numbers, peter. >> host: another map of the u.s. put out by cynthia clark's organization, the usda national agricultural statistic service center, and the more green you see in this map, the more farmland, the dark green, 90% of these cons, 90% of the dark green counties are farmland, and as you decline in greenness, it's down to the light green of 30%. you can see here probably no surprise to a lot of people that the midwest and the great plains are a lot of farmland. next call from doyles' town,

pennsylvania. >> caller: my biggest concern is the ag reporting the small farmer is out of business. i believe that if your callers hear unfitterred news with g. edward griffin, these things come to light. especially, i have a question for you know pam on gmo foods that include cotton seed, soy, which is 90% of our soy is now genetically modified, and corn and why they are not labeled, why we are eating this, and it's making us sick. allergies have gone up 10,000% in the last ten years. >> host: a lot to work with. bob young from the american farm bureau on a couple of those issues. >> guest: first the issue of large farms taking over small farms. again, i think you can see that, again, the great, great bulk of operations we have in the united states today are those small

operations. they do tend to be frankly lifestyle choices and hobby operations to a large extent, and there's quite of change over the last 20 to 30 years, movement away from the middle, if you will, but there's an increase actually in the number of smaller operations, and a movement away from the middle if you will because folks faced economic decisions that you have to decide to get larger in order to be financially viable or decide to do something else, and that's been a long standing path or long standing trend in agriculture in the united states. on the gmo issue, you know, i think that there has been substantial improvements in our yield and our production practices, and in the quality of product and our environmental quality we're able to maintain because of gmos. one of the big advantages that we have with say gm corn, for

example, is the eighty to produce no tail corn or no tail soybeans, ect., so you effectively eliminate the need to till the soil and actually turn over the soil, and that substantially reduces soil erosion, and we've seen that on a national level, substantial reductions in the amount of soil that leaves the form and enters the streams and den down to the gulf as well. there's, again, some real environmental benefit. for example, another one would be bt cotton where you actually put the gene in the plant that kills the bugs that eats the plant, and corn boars where the worm gets into the plant, it's tough for you to be able to spray and control those worms when they are inside the plant. this provides you with the advantage of being able to very specificically target that worm, that bug, and have little environmental effects because

you've used that kind of a product, so there's real, real benefits, substantial benefits to society as a whole and the use of gm products. >> host: does your organization measure where products go? where our export food products go? >> guest: no, we do not measure the exports. the world agriculture outlook board does provide quite a bit of information on world -- for the supply and demand for the world on various commodities, so if you want to know about that, talk to them. >> host: but you measure the states with the largest agricultural product or by farm sales. what's the biggest farm state in america? >> guest: california is one of the largest. iowa comes up very close. >> host: texas is up there with cattle. >> guest: texas has cattle, and then there's other states in the midwest, nebraska, kansas,

missouri, and then even wisconsin with dairy is one of the top seats. >> host: north carolina comes in as well. >> guest: oh, yeah, north carolina has poultry, very big in poultry. >> host: farms in every state? >> guest: there are farms in every state. >> host: and what about florida when it comes to citrus? do you know the total, the aggregate number for florida farm sales offhand? >> guest: i don't happen to know that offhand, but citrus is very big primarily in florida with some citrus in california. >> host: how many of the 2.2 million farmers, bob young, in america are members of the american farm bureau? >> guest: the vast majority would be members of farm bureau. we have about 6.3 member families in our organization from all over the country from maine to hawaii to north dakota

to texas and every place in between, all 50 states as well as puerto rico have farm bureau chapters. >> host: ruth, jackson, mississippi, good morning to you. >> caller: good morning. >> host: go ahead. >> caller: i grew up in the here in mississippi when we had plenty of cotton and mainly cotton, soybeans, and a whole lot of farming was going on in mississippi, and i don't remember the year, but i remember when the economic system changed when nay started paying farmers to stop farming and import all the stuff from overseas and other areas, and when they stopped, people in the mississippi from farming, then a lot of the people in mississippi, they came dependent on food stamps and all this other stuff they put out there, and when they stop people from being able to sell their food products, they stop people from

thriving. >> host: bob young? >> guest: well, we did have a period of time say back in the 70s, early 80s where we were operating programs that did actually ask folks to take land out of production. we've certainly moved away from those now, and actually since about the mid-90s forward, the government doesn't have that authority anymore to actually ask folks to take land out of production. i would say that, you know, in terms of cotton production, for example, in mississippi, it has gone through quite a bit of change over the course of the last 10 to 15 years or so. united states is a major, major exporter of cotton in the world, and, in fact, we probably export upwards of, oh, say, 15 out of every 20 million bails of cotton that we produce gets exported. the ratio's probably about right. the numbers may be off, but that, you know, we just don't use that much cotton at home because we send it over seas for

milling product oversea, and then bring the textiles back. you know, i will say that, you know, as i say, we've moved away from set aside programs, land retirement programs other than a few government programs still operated. just very different situation today. >> host: cynthia clark, do you measure the value of farmland and per acre cost? >> guest: per acre cost? >> host: well, do you measure the value of farm? >> guest: yes, we do. >> host: where's the most valuable farmland in america? >> guest: probably california because you have so many specialty crops there, and those are the high valued crops. maybe i presume also the land in the midwest is very valuable too. maybe bob can give us -- >> host: before we go there, i want to go back to the chart from your organization, average value of agricultural products sold per farm.

1978, it was $47,000. 2007, $134,000. that's pretty nice rise. inflation adjusted? >> guest: those numbers are not inflation adjusted, and if you look at the inflation adjusted chart which i believe we also provided to you, it shows quite a different picture. >> host: you have that? okay, i'll show that to the viewers. we see this chart here where everything's going up, $47,000 to $134,000, and here's the inflation adjusted chart. that 47,000 we saw in 1978, in inflation in 2007 dollars, that's $150,000 worth of product. today, that's, again, $134,000. >> guest: those are numbers from the census, so those are 2007 numbers, so they might not have quite reflected the recent rise in the prices of corn which

could, in fact, affect those numbers, but it is -- it looks more like we're not making many increases in the amount of income that an average farm is receiving. >> host: bob young, what's it cost to run a farm on average? do you have that figure? >> guest: that would be data that economic research service actually reports, and not nas, but it's a different federal agency than cynthia's. >> guest: we happy collect that -- we help collect the data on the management survey, but on the economic research service does the analysis of the data. our primary responsibility is data collection. >> host: indiana, hi, patty, you're a farmer it says. >> caller: well, when i had my seven acres, i owned 27, but a few years ago, i had seven, and

when it was planted with corn -- soybeans and corn, i was making payment from the usda, and the person that planted it, of course, got a bigger payment, and i was surprised that i was considered a farm because only actually seven acres. i have more than that now, but i can't have it farmed because the equipment nowadays is way too big to get into the entrances to my fields. >> host: is the cost of operating a farm prohibitive to people who want to break into it? >> guest: it does take money. >> host: sophistication and -- >> guest: it takes money and smarts. you know, it is a business. it's a very technical business at this stage in the game, and, you know, you need to know what you're doing. you can't walk in and say i'm

going to stick a hole in the ground and throw a seed in it. >> host: somebody wanted to grow 100 acres of soybeans in indiana. what would you guess would be the capitalization costs of that? >> guest: well, you could get that custom hired, hire somebody to plant it and harvest it for you. you know, you can take care of the management and that kind of activity, but just to go out and just the cashed costs of putting that crop in the ground and taking it out of the ground runs in the neighborhood of $175 to $200 an acre. corn runs north of $450 to $500 an acres to put the crop in the ground. cotton is $600. it's not small. cotton picker spends half a million on a new cotton picker. this is a very capital intensive industry. as i say, it takes a lot of

business savvy to get into the business. it's not something you decide you're going to go out and seven acres and go off and do things. don't get me wrong, there are some activities. you can decide to grow fruit and vegetables, strawberries,s things you can do with a smaller plot of land, but even there you have to be very technically savvy and business savvy to make a go of it. >> host: anchorage, alaska, probably not home to a lot of farms, but andrew, you're on c-span. >> caller: thank you. i was wondering about the effects of the usda farming practices in, you know, the 40s, 50s, 60s, and if that had a major effect in the decrease and minority and small farms and the effect of migration of minority out of the south, the great

migration. did that contribute a lot to the decrease of small farms? thank you. >> host: andrew, thank you for calling in. >> guest: i'd say no. it's more of the general economic conditions going on in the 40s, 50s, 60s, 70s, ect. that, again, you had a substantial income disperty between what somebody was going to get on the farm versus what somebody was going to get in town, and that drove -- people had the ability to make choices and they made choices, and they decided to go into town and do work there as opposed to working on the farm. i, you know, i'd say there's farms 234 alaska. we've about 500 members in alaska. i 4r say it's one of the smaller states. >> host: cynthia clark, do you measure farm ownership? >> guest: on the census of agriculture, we find out who owns the land, and we have done a land ownership vur veigh, but that's --

survey, but that's been 15 years. >> host: do you measure minority owner farms as well? >> guest: we, it's the operator of the farm that we're interested in, not the owner. the owner of the land can be not really affiliated with the farm operation, so, yes, we have data on that. the -- what we have done recently is focus more on the e niewm ration of those smaller and disadvantaged and minority farms than what i pointed out to you in the number of farms for the last 20 years, probably we did a much better job in 2010 than we did in the past, and so thous farms have been around, but we probably didn't measure them well. >> host: the last call for this day comes from the farm capital of the u.s., las vegas, nevada, go ahead, tim.

>> caller: i'd like to know how much product goes in and out of the country and how much of it is actually genetically altered if it's left to grow naturally or not naturally. >> host: again, bob young, review the exports and bring up the organic farms, but here, again is the export that we shows earlier. predicted that $137 billion worth of exports will be sent out of the country from the u.s. farms with an import of about $94 billion, $4 # 2 billion surplus in farm imports and exports. >> guest: we ship out in terms of the products that we export, we export, you know, substantial amounts of soybeans, substantial amounts of cotton, a fair amount of corn, we're shipping out more and more meat. we're to the stage now where one

in oh, eight or nine or so of the hogs we raise in the united states leaves the united states, or the meat from that hog leaves the united states, and one in seven or so chick pes. the meat from the changen leaves the united states. >> host: do you measure whether or not they are organic or genetically modified products? >> guest: well, again, not in terms of the exports. there is, again, you just know based on production how much is, you know, gm versus regular. >> host: have you seen a growth in organic farms, and how do you define organic? >> guest: we use the usda definition of organic farms, and we did a survey of organic farming in 2008, and we measured about 14,000 certified or exempt organic farm, and this is a growing industry. we know that it will be increasing. right now we're doing a survey for the risk management agency

to look at prices of organic products. >> host: talking with cynthia clark and bob young. thank you so much for being here. >> guest: thank you.

>> i don't want every story to be 1800 words. >> last month, jill became the first woman to hold the post of executive editor at the new new

york new york and believes it's more irreplaceable than ever, but needs changes. >> there's a lack of discipline. sometimes a point is repeated too many times in a story or there are three quotes making the same point where one would do, and i just like to see a variety of story lines. >> she'll discuss her career, new book, and the future of the times sunday night on c-span's q q&a. >> press secretary jay carney said republicans are the main barrier in passing the white house jobs agent. in today's white house daily briefing, they said the bill takes away the economic burden from american taxpayers. this is 40 minutes. [inaudible conversations] >> good afternoon, ladies and

gentlemen. welcome to your daily briefing in the west wing of the white house, the people's house. good friday to you. before i take your questions, i just wanted to point to something ill you've seen already is that today the obama administration announced it is taking two important steps to help businesses create jobs and strengthen competitiveness in a global economy. throw two presidential memorandums issued today, the obama administration is taking steps to speed up the transfer of research rein development from the laboratory 209 marketplace and create business usa, a one-stop central online platform where small businesses and businesses of all sizes that want to begin or increase exporting can access information about available federal programs without having to waste time navigating the federal bureaucracy. this is part of a series of executive actions to put americans back to work and

strengthen the economy because we cannot wait for congressional republicans to act. with that, i'll take your questions. >> "on the domestic sides both democrats and republicans made it difficult for the president to be anything like a chief executive. what have democrats done to make that difficult? >> well, bill was speaking, i think, broadly about presidents and congress, but there's no question that some democrats have not agreed with every position the president's taken on every

getting things done that the american people want, and that's understood by the chief of staff the the president, the vice president and the obstacle to getting things done is congressional republicans. the kinds of things that we put guard to congress to get americans back to work and grow the economy, were designed specifically with the hope to draw bipartisan support because they have in the past. republicans made a decision, clearly, that we hope will be reversed at some point, that their primary objective was not to help the american people get back to work, to grow the american economy. their number one priority stated by senate minority leader, mitch mcconnell, was to make president obama a one-term president. that makes getting action out of

congress on the domestic side of the ledger quite difficult when you have a congress like we do controlled by the house, controlled by republicans in the house and where republicans have the capacity to block anything in the senate. >> and does the president agree with bill daly's description of the first three years of his administration as "ungodly and brutal"? >> being can be candid and clear in his language. there's no question when this president took office in january 2009, we were in an ungodly bad situation economically. we -- the economy was in free fall. we now know that in the 4th quarter of 2008, the quarter that ended three weeks before he became president, the economy shrank by 8.9%. the most significant contraction of the economy since the great depression. we lost because of this recession 8 million jobs, a

terrible, terrible job loss, so that was an ungodly situation, and we've been taking -- this president's been taking steps, making decisions, ever since he took office to try to dig us -- rather climb out of the hole dug by this recession, and the decisions were tough and unpopular at the time, but have proved to be the right decisions, so i think that's precisely what mr. daly was describing. >> and then on occupy wall street, has the president had a chance to see the footage or get briefed on the alleged police brutality in oakland, the injuries to an iraq war veteran and any reaction to that? >> he's aware on it, but i don't know if he's been briefed on it. he's aware of it from news reports, and as i said yesterday, it's very important that we remember that we have a long and noble tradition of free

expression, free speech, and protests, and demonstrations in this country. with regard to the situation in oakland, you know, this is 5 local law enforcement issue. i would note that the police are up vest gaiting that incident -- investigating that incident, so i don't have much more to say about that in particular. >> going back to the interview, mr. daly says the president is surprised it's above 40. what does he think is should be? >> precisely because of the circumstances that have this country's been in since he took office. the worst recession since the great depression. i mean, it's -- it bears repeating, none of us in this room, i think i can say fairly, have experienced an economy like this in our lifetimes, and that has been brutal and difficult for the american people, and he's president. he's chief executive, and he's

had to make a lot of difficult decisions to get the economy growing again, to stop the free fall, to put people back to work, and that's been a tough situation, so the american people are frustrated, no question about it. you see it. they are enormously for thed with the fact that the economy's note growing fast enough, the fact there's still a per sis tently high unemployment, and they are exceptionally frustrated by the unconsciousbly dysfunctionalty of congress that has prevented common sense solutions from passing the house, passing the senate, and being signed into law by the president. i think that frustration is born out in the polls. it's born out in polls that measure the president's job approval, and it's born out in polls that measure congressional job approval. the latest of which i think was

9% for congress, so that's what he's talking about. >> staying on that 9%, you mentioned that yesterday, other officials mentioned it quite a bit. y'all take that evidence that the president's tour, his push for the jobs act is working? >> no -- i think other measurements that demonstrate that the american people by substantial majority support the provisions within the american jobs act show that the message about the jobs act and why it is filled with things that the american people support and fill and grow the economy and create jobs have been getting out. in terms of in terms it's related the fact that congress and republicans in congress refused to in the house even take it up, and that in the senate, they voted in unison against it. i'm sure it contributes to their

record low approval ratings, but we look more towards the positive in this sense towards the fact that the american people support overwhelmingly both the provisions in the jobs act and the pay force, and that's what i was trying to make the point about yesterday. what's remarkable about the situation of the republican obstructionism in measures of creating jobs and growing the economy is they ri alone. even within their own party, republicans out in the country support building roads and bridges and schools. they support putting police officers and teachers back to work. they support tax cuts for everyone who receives a paycheck. they support tax incentives for businesses of all kind to hire veterans. they support a payroll tax cut for employers for small businesses to help them grow and expand and hire, and significantly because this is the problem according 209 --

according to the republicans, they support the pay for, by which the means the president and the democrats in congress say they should be paid for, which is asking millionaires and billionaires, the people who have done exceptionally well in this country for the last 0 # years, but even the last ten years while middle class americans have seen their incomes flat line, to pay a little bit more, to pay their fair share, so they are completely isolated from their own supporters, their own constituents, and we think that with the effort the president's making out in the country to put forward his proposals and demonstrate the common sense solutions he's offering, hopefully those constituents make it clear to their elect the representatives that they want action, a yes vote on the very things that put americans back to work and grow the economy. yes? >> me? >> yeah.

>> okay, in the op-ed in the "financial times" there needs to be a credible fire wall. i wondered if the $1 trillion euro package institutes that and whether the agreement just this week changes the sentiment going into the g20 or not? >> well, as i said yesterday, the -- we welcome the decisions that were made, and now we look forward to a full and rapid implementation of those decisions, so i mean, they were -- there were steps along this process that include implementation. the drks as you read in the president's op-ed in the financial times, he believes that all members of the g20 need to work together to dmon stlait the kind of unity that these countries and economies represent as we take on these serious global economic

challenges and europe is in foe qus because of the crisis they are in, and fortunately they are taking welcome and important steps towards resolving that conclusively, so i think that the posture that the president brings to the g20 is reflected in the op-ed that was published this morning. >> can i ask -- >> uh-huh -- >> speaker boehner said yesterday the work of the super committee has to be with savings from the entitlement programs. your position about the need for balance, but does it boil down to that in your view as well? >> no, it doesn't. you know the president's position. you know the american people's position, and simple fact of the matter is you can achieve significant lasting impactful deficit and debt reduction of the scale that the president put forward in his proposal, an additional $3 trillion in deficit and debt reduction without making scene yores --

seniors or vulnerable americans shoulder the burden. it's not fair to do that, and it's not supported by the american people. it's why the ryan budget has garnered little support from the american people because that's what it asks. it says let's not only protect the tax cuts that were put into place in the last decade that helped explode the deficit for the wealthiest americans, but let's give them more. let's give additional tax cuts to the wealthiest americans who, as we saw in the cbo, nonpartisan report this qeek, have seen their share of the national wealth explode compared to middle americans, seen their wealth explode over the last 30 years. that's not an approach the president believes is fair or balanced, so, no, he does not believe that -- and it's unacceptable to him that this -- that a solution can emerge here

that puts all the burden on seniors, puts all the burden on families with disabled children, puts all the burden on middle class and struggle americans. he does not. let's move it around. all the way in the back. yes? >> thanks, jay. the "washington post" reported that there's a base in ethiopia. do you have a comment on that? >> i think i do. i think i have something i can say about that report. ..