there are opportunities to try to find greater whirls for non nation state participants. there are other forms of membership in the i.t.u. that are non-voting that permits a good deal of participation. it is a legitimate objective to find better ways to make the i.t.u.s work. and improve the un organizations more available and more accessible and participatory in terms of the non nation states may be involved. ..

california mr. bill for five. gentleman, just general question, i'm not sure everybody else already asked it but, you know, as we say, everybody has been said, not everybody said it. what can con do to help with the negotiations with other countries to ensure a strong position that the internet remain free and open without the harmful international regulation stifling. what can we do in congress to help with the effort? what must we do? >> i think the resolution that was adopted or prom gaited in the last day or two is one very

important possibility. and it's one that where the more adherence it has here the better. it the clearer it becomes that the united states is completely unfied on this particular set of issues. secondly, i think the hearing itself is something that is very valuable. because it provides very plain demonstration that we in the united states are unfied across our political lines, and that, i think is an important message for the world. i can assure you the world pace close attention to what we do in the areas. we will hope to have an opportunity toward the end of this month to introduce the new head of delegation to members and staff who are interested in speaking with him. we will at that time, i think, be able to also provide sort of the sense of some what away think are the deeds that we have in terms of going forward, prepare are if the conference

and participating in the conference. >> i would have to agree with everything the ambassador said. i think we need to -- congress would help by helping the clarify the position. not even the smallest change should be allowed. following up on the wicc and having another checkup hearing at the first of the year because there will be many more similar circumstances coming forward in the years to come. >> you know, i personally a lot of time in latin america working on certain problems they have down there. one of the great opportunities we see, not just in latin america, but around the third word countries is being able to use the internet to help bridge the gap in the rural area can't go to secondary school get the education. a lot of things we take for granted, third world people don't have access to. and it's absolutely essential that the internet is available and the broad band is available

to bridge that education gap in third world countries. the question is, some of these countries are looking at the international telecommunication union is part of the solution on that. how should we respond to their legitimate concerns and how do we coordinate them to make sure that it moves forward? it probably will do more to help third world countries, long-term economic and social progress and a lot of other stuff that we've spent trillions of dollars on. the. >> the i.t.u. has a development sector. we participate in it extensively. it is valuable in collecting and dem semisenating capacity building in terms that have nature. it also has regional connect and particular region in the connect americas region conference will occur in panama in the middle of july, it is one that the u.s. will certainly participate in. it is again, designed to try to

address the kinds of issues that you've described. so it is a very valuable instrument in terms of accumulating and disseminating important information about the kinds of social issues that you've just addressed. >> i think the best hope, actually, is the growth of wireless. wireless internet has been explosive. the growth there has been tremendous. and that is primarily because government stayed out of the way as in this country as well. so, i think, we need to let the market work and encourage other countries to try to get out of the way as much as possible because the moble internet is the future for improving the human condition overall. >> i think as were as they can learn from maybe our approach at distance learning, mr. chairman, maybe we ought to be looking at the great successes

that look developed in places like panama and latin america where the private sector is billing actually the infrastructure in a telecommunication way that actually surpasses even activity of countries like cost costa rica that had hard lying technology for so long and the great opportunities it provides for the educational people in third world country. i yield back, mr. chairman. i appreciate that. >> chairman yields back the time. we recognize the chairman from new hampshire. >> thank you, mr. chairman. and again, a lot of the issues and questions i have have been addressed by other members of the committee, and i would say this has been helpful and informative both, ambassador, revere, and commissioner mcdowell have like end how the process work and what the consequences are should there be an implementation of at least a partial up to-down regulatory

structure for international internet, if you will. your comments, commissioner mcdowell about the engineering, an the economic uncertainty, and i guess, sort of dark and dismal sector for economic freedom over the internet is veried a adapt and hopefully many other nationses with especially third world nations understand the consequences of the given the fact of the structure of the deliberative body is relatively democratic and these little third world nations have quite a bit a of power. commissioner mcdowell. you have published article in the "wall street journal" which has helped farmers find buyers of crops. i can give you many -- by using the internet. and i'm wondering if you can speak a little bit how the

multistakeholder model helps small businesses and how the international regulations, if they went effect would hinder them. >> as many people have said already, it allows innovation without permission. so when you combine the liberty that comes with mobility. when you combine the invention of mobility for marty cooper with the invention of pact switching and the power of the internet you fundamentally change the human condition more so than any other invention that i can think of since fire. i'm trying not hob hyper pollic. you are not contacting a place or a thing. you're able to commune wait -- commune kuwait the individual. you do have farmers who can find buyers for the clops. without having to take on the

risks of travel together village, the market where they can lose their crops or be stolen or the buyer might not show up. so they can take care of that transaction. worried parents can find medicine for the sick children. they can locate portable water which is a huge global concern right now. through the power of the mobile internet. >> both of you, is the multistakeholder design governance model, if you will, really unique in that it prevents government entities and nongovernmental entities for that matter from controlling the design of the networking, and there by, the content that rides over it. do you agree with that or do you have any comment or elaboration on that? >> well, i think generally we think that this is in fact been enormously instrument tal in creteing the internet that we have at that today.

and we are anxious that the free flow of information. the freedom of expression remains as a center piece in terms of one of the many capabilities in the internet. and the multistakeholder model tends to help protect that. because it does bring all voices to the table. it is a kind of ethic in which no one set of voices is especially privilege and we think that probably does help in terms of this which you might think of a broader political social cultural aspects of the intirnt. >> thank you. >> just to conclude, on a personal note, commissioner mcdowell. my father had the honor of serving this in body when i was about the age of your son who is sitting behind you. and i remember well going to a science called the space committee. he was a member. it was the greatest committee you could be on. it was in the middle of the space race. being so excited.

here i was in the great place. they went through the hearing and i didn't understands a single word. what was said but when i got out, i told my friends i knew all kinds of things about where we were going in space. griffin, i expect you to brief your dad on the hearing. make sure he's set straight. knows where he's heading. >> thank you, mr. chairman. i'm going to recognize the woman from the virgin islands. >> thank you. i ask anonymous consent on behalf of ranking member to insert the new york times editorial into the record. >> without objection. they recognize gentleman from ohio, for five minutes. >> thank you, mr. chairman. and mr. ambassador and mr. commission. thank you for your testimony today. it is very enlight ening. and how everyone not only in the body across the nation truly believe that we want to make

sure that we keep our internet free and away from more a regulation than it's the best to have been developed the way it has from the ground up. from private industry and without government regulation. if i could, mr. commissioners, i'd like to ask a couple of questions briefly. i think i'd like to go back to the whole question as to i know there have been a lot of question as to businesses and business regulation what could happen out there. but the chairman has conducted hearings on security that have been insightful. in your testimony, on page three you're talking about the russian red ration asking for jury dibs over ip addresses. there's a phone number short ams or the chinese would like to see the creation internet users are registered using their ip addresses. i guess, you know, you end up a lot of to toll began began

regimes the ability to identify political distance. but has -- how would you look as those two areas that might give their countries or other countries some kind of an advantage on, you know, attacking the united states or gaining more intelligential property that's being stolen over the net today? because again, the more this out there the companies have to submit themselves to other countries, you know, it's hard enough right now to protect what question have. if you can answer that, i'd appreciate it. >> i think the general theme with that and also looking at history and other analogies would be a scenario where they might want to the rest of the world to live under a set of rules they then break. in other words, they would break the rules and everyone else would abide by them. that would be to their advantage.

>> mr. ambassador. follow up on that? >> well, the general issue, i think the that you race -- raised about the question of intelligential property that is very serious one. it's one that we at the state department work at very hard. it's one that the administration works at very hard through the office of victoria in the white house. these are issues that obviously are complex in terms of figuring out appropriate enforcement and so forth. there's certainly no debate about the importance of intelligencial property protection in the broader con text of the internet. it is something that is very important. >> thank you. and mr. commissioner, on -- you brought up in the testimony about that some foreign governmental officials have intimated the international

universal service fund. where by state-owned telecom companies would have an international mandate a to charge per basis so they can build on broad brand. with so many companies here in the united states having hundreds of millions of dollars to do that, would that then put u.s. companies at the disadvantage especially since you're looking at the companies in this country having to finance that? >> well, i understand you have to look which web destinations attract the most traffic it might be youtube or itunes or netflix. especially the video applications use a lot of bandwidth. and the point here is that there might be international sanction. or international mandate for some sort of regulatory regime to impose these charges. and that is a concern. if companies want to enter into contracts and competitive

market, i'm for that. but we don't need an international regulatory body distorting the marketplace to anyone to a disadvantage. >> thank you very much, mr. chairman. i yield back my time. >> we recognize the gentleman from illinois, mr.. who i think is the last one to ask questions at the panel and. >> thank you mr. chairman. i apologize for obviously keeping us longer. it's important. it's a very important subject. it's important if you've been involved as i've been fortunate to be involved with democracy and freedom movement. the eastern european countries. i pulled up with great technology the cyber attack on the e stone ya in 2007. just returned from the nato parliament tear meetings in estonia over the break watched the crackdown on in bella reduce. and and commission mcdowell,

you're highlighting the prime minister of russia's exact quote international control of the internet through the i.t.u. should give everyone cause for concern. those of us who follow the movements, are rightly concerned about as was stated and maybe a question or answer opening statement, the movement to do this is for regimes to stability and regime preservation. i mean, it's clear. look at the actors. russia, china, iran, i imagine north korea, it would probably be on there if they had any concern of anybody having concerns other than the handful they allow for downloading movies. i'm not going to go there.

briefly talk about will they be using it first, ambassador, and commissioner mcdowell, the whole siesher security debate and they're using it as an excuse to get further control and of that, we should be concerned with especially from state actors who have used technology to cyber attack other countries. they would be the last defenders of the system. ambassador, you want to comment on that? >> well, in the specific context of wicc there have been contributions and there ought to be some sort of a cybersecurity regulation. the discussions have tended to be at the very high level, for example. something like all countries should be responsible for protecting their networkings. things of that nature. the united states generally opposes any sit effort -- significant effort to bring

cybersecurity into the i.t.u. or similar bodies or as you know, enormously significant issues surrounding cybersecurity. there is a great deal of engagement that we in the united states have with other countries about how to improve the cybersecurity environment. but we don't think that apart from potentially a very high level kind of statement about the desirability about cybersecurity that it has any place at all in term of the itr. >> my concern overall that such international mandates could be used as attar sword and shield by aregimes tate. keep in mind that cyber security is discussed in many diplomatic foray not wicc or i.t.u. but other places as well. a general matter we should be concerned that before entering any kind of enteral agreements on this, we put at the disadvantage.

>> i don't know if congresswoman mentioned this. we were talking before. i had to leave the room. the but the process would be consensus agreement would then have to go back to the national governments for a treaty ratification. as we see in other treaties like kyoto, not to pick on it. some countries picked it up. some countries like the united states never voted on it. i think that's the issue of balkanization that you're referring to. but would not countries that kept -- wouldn't that disfranchise those countries that think they're trying to use it for the own -- fir their own regime stability and regime preservation. but it would really hurt them in the global economy and developmental process. wouldn't you? they're cutting despite the face. if they do this.

ambassador, would you agree with that? >>. >> yes, i would agree. >> thank you mr. chairman, i yield back my time. thank you we appreciate your questions and appreciate the answers and the testimony from our two very distinguished panel lists. you've been most helpful in us understanding better what we face as the country and the challenge that's ahead for both of us you and our delegation going to dubai. thank you. we appreciate it. and we'll call up the next panel of witnesses. only the second panel david a. gross and information policy u.s. department of state. on behalf of the world conference and international telecommunication ad hoc working group. mrs. sally shipman wentworth, she's the senior manager public policy for internet society, and mr. vitamin ton serf chief evangelist for google.

we admire that title and your work, mr. serf that powered us to have internet property call and addresses that you helped create. we love that the internet evangelist. again, we thank our prior panel and their testimony. we will start right in with ambassador gross. will be the lead off witness on the second panel. again, pull the mikes close. make sure the lights are light and you should be good to go. we look forward to your comments. >> thank you, mr. chairman. ranking member, it's a great privilege and honor to be back here with you all again. i appreciate it very much. i probably should start with an apologize to the audience. i did not bring lunch with us. i'll try to be brief. i want to underscore couple of points that were mae by the questions and answer presented by the first panel. first of all, i think it's important for the american people to know that i think the

preparations for the upcoming wicc conference are an excellent hands. i think we see the demonstrated by the statements and actions by ambassador revere, who you saw this morning. by assistant secretary larry strike land. by the white house, incoming danny who played an important role. and was announced by earlier today by ambassador revere, the incoming head of delegation terri kramer. ly confess. i've known him for many years. we worked together at air touch. we've been good friends for many years. and i could not be more pleased and confident of the successful outcome because of who i'm sure will be is excellent leadership. i would say his leadership is particularly important and i helpful in addressing some of the questions that were raised to the first panel about the ability to create, inform successful coalitions to be able to identify the issues, he has

great experience not only from the telephone industry but having worked and been active internationally. he knows what it takes to bring people together and be able to bring the consensus that will be important. i also want to recognize, of course, as you all have already done this morning. the great work that has been doing by the fcc commissioner robert. mcdowell. he has been tireless and passionate and focused on the issue that has greatly served all of us. i personally and professionally are pleased by his leadership today. having had the great hon now of working on the issues for many years, at the u.s. state department and elsewhere, i think there are a few core principles to make it particularly important. one, that was stressed earlier today about the importance of bipartisanship. and i would like to commend both sides of the aisle in this committee particularly in the members for the great work that you've done with regard to the new resolution 127, i think

that's really extraordinary. why the honor of coleading the u.s. delegation to the world summit to the information society, the u.n. state summit. a similar joint resolution was enacted i found than to useful and important for us as we went forward because the world recognizes the importance the congress plays on the issues. and it is important signal. the bipartisanship is a particularly important signal there. these are issues for which we are all together. i would say that i have the great honor of chairing an ad hoc committee that has been put together to address the wicckishes and the like. i think there is much to be learned from the diverse membership of that group. that group often takes different views on domestic issues. that's to be expected. but they come together and are

unified as the person people i believe are unified on the issue of that brings us together about the internet importance of the internet, and the role of intergovernmental organization and with regard to others going forward. it there are two things that i think are particularly important to focus on about wicc. the important to remember it's not another conference. there is a treaty writing conference. the output of this will be not just language that is used but in fact international law. therefore, it's a very, very important the details be dealt with very carefully. it's also very important because it's effects not only the american people but people globally. and the u.s. looked to by the people around the world for the leadership and i am confident that leadership will be maintained. it is the great changes that happen in the world that great growth in the internet that has been benefiting the people in the going world and elsewhere

most dramatically. that is first and foremost we always need to keep in mind. it's also important to recognize many of the comments this morning this is not about the i.t.u. as the constitution. the i.t.u. is an important institution not united states. the secretary general has been very important in the leader and very helpful to the united states and otherwise. having said that, this is about other members states as it outlined by a number of the answers earlier today. and those are the issues in the coalitions we need to build, the issues we need to address, and the facts we need to gather. and with that, i believe my time is about to expire. and i adopt want to -- i don't want to they are it any further. thank you very much. >> grows, thank you for the leadership on the issue and the testimony today and the encouragement on the bipartisanship resolution. which we hope to be able to move rapidly to the house floor. mr. serf, we're delighted and honored to have you here today, sir.

we look forward to the testimony and the insights on the matter. >> thank you very much chairman walled. i sthee ranking member had to depart. i certainly appreciate her participation today and members of the subcommittee, it's an hob honor to address you. my name is convinced serf. i serve as google. as one of the fathers of the internet and the computer scientist i care deeply about the future of the internet. i'm here today because the open internet has never been at higher risk than it is now. a new international inteatle brewing a battle that will determine the future of the internet. of all of us from capitol hill to corporate headquarters to internet cafes cafes in far off villages don't pay attention to what is going on, users worldwide will be at risk of losing the open and free internet that has been brought so much to so many and can bring

so much more. if we follow one path, the path of inclusion, openness, and common sense, i'm convinced that the internet as a future will be powerful and even more powerful economic engine and communications tool than it is today. the other path is a road of top town control dictated by governments. this would be a very different system. the system that promotes exclusion, hidden deals potential for inself-incriminate surveillance and tight centralized management. any one of which would significantly hinder innovate and growth. at the cross roads standard the international telecommunication union and agency of the united nations that came into being to regulate international testify graph services just four years after the pony express closed the doors. this agency plans to meet in six months to consider proposed changes to the international

agreements governorring telecommunications. until this year, the i.t.u., which through the u.n. includes 193 member countries, each with only a single vote. has focused the attention on telecommunications networkings and policies such as setting internal standards for telephone systems coordinating the allocation of radio frequency and encouraging the development of tell telecommunications in developing nations. on the whole, this to taws quo has been benign and helpful to the spread of the internet. but the organization recently passed a resolution in guadalajara calling to, quote, increase the role of the i.t.u. in internet governance, end quote. this should cause silt concern. in addition, some powerful member states see an opportunity to assert control over the internet, through a meeting in dubai this coming december. several proposals from member

states of the i.t.u. would threaten free compression on the when. other ul -- call for unprecedented mandates that would international internet fees. the international attack on the open internet has many fronts. take for example, the change high cooperation organization which counts, china, russia among the members. this organization submitted to proposal to the u.n. general assembly last accept for a so-called internal code of contact conduct for information security. the organization stated goal was to establish government lead international norms and rules standardize the behavior of countries concerning information and cyberspace. should one or more of these poems pass the the implications are disaster use. first, new international control

over the internet could trigger a race to the bottom where serious limits on the flee flow of information could become the norm rather than the exception. already more than twenty countries have substantial or per saysiveon line filtering according to the open-net initiative. the decentralized -- rise would be flipped on a head. the new structure would have the unintended consequence of shocking innovation and hurting american business abroad. as you can see, the decisions made this december in the i.t.u. could potentially put regulatory handcuffs on the net with a remote u.n. agency holding the keys. and because the i.t.u. answers only to the member states rather than citizens, civil society, academia, there's a great eed to insert transparency and detective into the process. what can you do? i encourage this committee to take action now.

by urging the u.s. government in partnership with like-minded countries and the citizens to engage in the process and present the current bottom plurristic system of internet governance and to insist that the debate of the i.t.u. and all other international foray be open to all stakeholders. it is critically important for do you engage and help ensure that the world understands that the economic, social, and technical advances driven by the internet are endangered by the efforts. thank you for the opportunity to testify on this very serious matter. i look forward to answering your questions. >> mr. ser of, we appreciate your leadership and comments. we'll go to sally shipman wentworth. public policy internet society. we look to your testimony. >> thank you, mr. chairman. my name is sally wentworth. i'm senior manage frmt the internet society. a nonprofit organization decaded toker inning the open

development evolution, and use of the internet for the benefit of all people throughout the world. on behalf of the internet society and more than 5,000 members worldwide many of whom who are joining new the audience and watching the web cast around the world. i would like to thank chairman walledden, ranking member eshoo and the members of the subcommittee to testify on the important issue. the internet society was founded in 1992, by many of the same pioneers who built the internet one who is sitting next to me. since that time, the organization has served as a global resource for technically vetted, aid logically unbiased information about the internet. as an educate fir technical list and policy makers world wide and as an organizers and driver initiative around world. the internet society serve as the organizational home for the internet engineering task force. who's mission it is to make the internet work better. we produce high quality relevant

technical documents that influence the way people design, use, and manage the internet. these technical documents include the standards guide liens and best practices that created and continue to shape the internet today. the international telecommunication union upcoming world conference on international telecommunication has rightfully drawn heightened attention from the global community. some i.t. member states -- that could have far reaching implications for the internet. while the internet society has no voting role in the it process, we do participate as what is called a sector member. in that capacity, with have raced significant concerns that rather than enhancing global interomit rehabilitate the outcome could undermine the security, stability and innovate i have security of networkings world. the internet society understands why some of the member states are focus on the intesht and the

infrastructure. the internet has fundamentally changed the nature of communications floablly and many nations view those changes as falling of the the under utu. -- sphrem the very real economic pressures that developing nations face. as a seek update the national policy frameworks to allow them to engage fully in the global was in economy. we're not convinced that the international treaty making process represents the most effective means to manage the cross border intesht communication or achieve creator connect evident worldwide. we are concerned that some of the december meeting are not consistent with the priewch and successful multistakeholder model. we're concerned that the process itself would limit the meaning nongovernment fall could create negative outcome. the internet model is characterized by several essential properties that make it what it is today.

a global networking that is constantly evolving. that provided enormous benefits that inabilities extraordinary -- on a tradition of open standards. community collaboration and bottom consensus. as the internet has flourished internet policy development as a global regional evolve to work with the internet to assure the ongoing development. this process has provided the capacity to cope with the necessary and fast-paced technology local call evolution that chacialt rised the internet to at a time date. in to the approach. some wicc legacy telecommunication regulations to internet traffic and manner that could lead to a more federal government fragmented for all. for example, proposal related to traffic routeing with numbering and peering would have significantly impacts on the future growth of the internet. but what we find strong cause for concern about the agenda of

the wicc meeting there is no reason why it cent produce worthwhile policy developments that advance the mission of the it and the ongoing expansion of global communications without imposing dangerous and unnecessary burdens on the internet. many it member states including the u.s. have shown they understand the value of the internet and the unique multistakeholder model. those delegates are in a critical position to respect the internet the global contributions while continuing to support the procompetitive policies that have been successful since the itr was negotiated in 1988. working with allies from around the globe, the united states government has an opportunity to chart a productive course forward and ensure that the value of the multistakeholder model and the light touch approach are highlighted. the internet society stands ready to play part in the process and assist the

subcommittee in any way it can. thank you for the opportunity. >> thank you for your testimony. we'll go into questions now. and i want to go straight to you, you mentioned in your testimony there are other parts of the united nations that have activities concerning the internet governance. if it's not the only place what other things that are going on that we should be aware of. >> thank you for the question. i think it's important that we put the wicc in context. the wicc is an extremely important even in 2012. it is a treaty making conference. the discussion of internet governance will not stop there. there are ongoing discussions within the united nations frame work in the commission for science and technology for development within the international tetle imriewnon and the u.n. generally assembly that seek to take on the issues of internet governance with a great deal of spessivity. all of these discussions are things that we at the internet society are following carefully

and we think that multistakeholder engagement and discussion of the issues over the next several years is going to be extremely important. >> mr. serf, you seem to be weighing in with a nodding head. >> i'm in agreement with her. first of all, the i.t.u. is not only the element in the united nations that is of interested in internet matters. the point about the committee on science and technology is one example. there's a long list of players who see the internet as a very fundamental part of the environment now and they would like very much to have some influence over it. i worry about even such activities as the internet governance form which out of the world summit on the society. the reason it has been successful, at least until now started as a multistakeholder activity.

as responsibility for the subject matter, under discussion, in the itf shifted from one body to another. the question about who controls the agenda now beings the -- becomes the big issue. the process of involvement in the united nations has one unfortunate property that it political sizes everything. all the consideration that are made whether in the i.t.u. orb are elsewhere are taken and colored by national interest. as long standing participate in the intesht architecture board and the task force where we check our guns at door and we have technical discussions about how tboas improve the operation of the internet to color that with other national disputes which are nonrelevant to the technology is very dangerous press dent. that's one of the reasons i worry so much about the i.t.u. intervention in the space. >> there are some press reports

out of the of the hearing that tend to say that the comments mean there isn't a grave threat to the internet and the serious threats on the table. would you character rise would you great with that or do you feel it is very serious matter? >> i am still very nervous, mr. chairman about the process. ly make one observation that it is not just a matter of voting question and the one nation, one vote, this substance of the changes or editions to the treaty or critical here we have somewhat more leverage, i think, those are not necessarily just a matter of voting. i think ambassador amplify on this. the negotiations for the actual language probably gives more leverage to us than the actual voting process does. but i have to say, mr. chairman, there is a notion in what's called chaos theory called the butterfly effect. the butterfly waives the wings in indonesia, and we have a ?awm

where -- tsunami where else. i worry small changes can be used and interpreted in ways that can be to the utility of the internet. >> what strategies did you employ when you had the honor and opportunity to fend off internal regulation that the u.s. government should follow now? thank you. if i may before addressing that. i want to ebbing owe what he just say. one of the keys here as we think about this, this is not about a discussion at wicc about broad policies. that happens at conference on a regular basis. it's something that the chamber can particularly appreciate. the negotiations over our treaty text language, language is important. language has impact. and what will be a real test for our negotiators and for all of

us is to be careful as to the language so the language doesn't come forward and mean something today and mean something very different in the way, for example commissioner mcdowelled talked about it morphs into something difficult and dangerous. it's no issue of ishes tu. it's issue for member states to negotiate and be very cognizant about. with regard to strategies. ic the strategies have been already some of the them have adopted by the current group. that is it's very important to be clear. one of the problems and opportunities you always have in international negotiations is to find fussy language. one of the keys here, because of the important of the issue and because of the implications of the issue for the over 2 billion users of the internet worldwide is to be clear what it is the u.s. is interest in willing to us and to negotiate which there are many things. those areas which are redlines.

things for we will not agree. it's not question of finding precise language, it is yes, it is no. it is very, very binary in that ens. i think that will be very clear. and the building of the coalition discuss in the first panel is obvious and important and i'm confident we'll be able to do that. >> i appreciate your answer. all the panel list will go to the gentleman for massachusetts. >> thank you, mr. chairman very much. what countries are you concern about? terms 77 their agenda. >> as we heard earlier the most visible are russia and china who have their names on a number of proposals. ores have come forward, brazil and india surprised me with the interest in intervening and obtaining further control. the others are the ones that you would normally expect. we hear from syria, we hear from other oppressive regimes even

those in saudi arabia, for example. those who are threatened by openness and freedom of expression are the ones in most interested in gaining control through the means. there are other mought elevations, however, that also drive the process. the developing world has historically generated stable revenue from telecommunication services as i'm sure you are well aware. the internet has become the alternative to much of what had been the telecommunication environment and i see them looking for ways adapting the earlier telecommunications settle arrangement, interconnectment arranges and the like as a way of recovering revenue they county have. >> just give us, ambassador, grows mentioned this. give us one redline subject we should never entertain. >> i think two things in

particular. i would never want to see any of the i.t.u. standards being mandatory. they should stay in voluntary form. i think we should be run away from any kind of settle arrangements or enforced interconnection rules that would interfere with the open and very private sector aspect of internet and connectivity. today it's a voluntary system. it grows buy logically and it has benefited from that. >> is there a able guy here to the satellite system that allowed governments to just extract wind fall profits in countries around the world that ran totally contrary to what should be the policy and that every citizens has real access to a phone networking? >> this is an economic question of ab engineer. i have the feeling you might deserve the answer you get. to be honest, i think that we

see a great desire to take advantage of internet in ways that damage the freedom and openness and the permission of innovation which is a lotted to grow. to allow any rules that sequester the innovation and inhibit others with damage the future of the internet. when you see new applications coming along, they come from virtually anywhere in the world. they don't all come from the united states. and it's important that we preserve that capability. >> thank you. >> no, but i appreciate kind of the global nature that you bring to it. the butterfly effect in indonesia here. creating a ?awfm tsunami here in the other place. we say it's the cow that burns down the city. that would be too american. you want to give the global view where innovation can occur. where a disaster can imnate from in terms of the impact it has upon the global internet system. that's who you are.

that's what the panel is really all about. ambassador gross, do you have a redline? do you agree with mr. serf or do you have another? >> i always agree with him. i think actually there are a number of red lines. >> give me one and we have to go to. >> i think that the number one red line is that there should be no top down control of the internet directly or indirect will everly associated with any international governmental institution including the i.t.u. >> okay. mrs. wentworth, do you have? >> we would certainly agree with the comments of mr. serf with respect to making voluntary standards mandatory. that would have considerable bank account on the -- we are also very focus on the definitions in the treaty as we know definitions will give you the scope. a number of the proposals to change the definitions would in fact clearly implait the

internet. >> mrs., give us your thirty seconds. what do you want it the committee to remember as we go forward over the next six months and years in terms what we should be app hencive about? >> you started. the hearing is a wonderful beginning that proposed legislation speaking to this problem and -- buy partisan. it's rarely used. i know, why it's hard. in a bipartisanship way it makes the roy'sing your concerns to the executive branching also extremely important. and making this viz able around the world is also very important. so i think you've started that process. and i'm deeply grateful for it. >> thank you. >> my time expired. i apologize. >> i'd like to recognize myself for five minutes. this is really -- i enjoy this this discussion. because it's when free nations

give up their decision-making process to a world organization that is not totally defined to be free. then there's credible -- there should be credible concerns i think we're raising those today. and based upon -- i have to pull it up. it went to sleep. the, you know. we debate the issue about the u.n. we get asked by constituents all the time about the role of the u.n. should we be involved in the urch should we fund the 1991 i've -- u.n. i've tried to keep a balance view where i vice president voted -- haven't voted to leave the u.n. i have i've been skeptical about the role it plays. it's keep current funding. get reforms. here's some of the things that the u.n. has done. cuba was vice president of the

united nations human rights counsel china, russia, serve on the counsel. north korea and cuba serve as head of the conference on disarmament. he was just named a u.n. leader for tourism by the world trade organization. iran sits on the u.n. commission on the status of women and formally chaired the joint board of the u.n. development program and the u.n. population fund. saudi arabia is a member of the executive board of the u.n. women. and so that's -- i'm not making this up. you can't. but, i mean, that is a concern. and there's also been some international debate and discourse about having a world organization based upon shared values. democracy, freedom, rule of law things that would make the process a little bit easier than trying to goarnt with to tal area regimes who will not have

-- the best interest of free discourse and exchange views and ideas and values. so i appreciate you coming. i appreciate raising this concern and making sure that we're all in. and prepared to keep this great architecture. i took a picture of you all and i tweeted, like a lot of people, kind of did the headline of the hearing. and i said, if it's not broken, don't fix it. the system has worked. obviously, there's some tinkering that some of you guy that must be done. or is there not? is it -- should we not touch it? or if there are tinkering to be done, what should be done? >> thank you very much.

the answer is, there are always opportunities to improve anything. except for my wife, who is sitting behind me, of course. but instead, i think the key here is who does the tinkering and what the mechanism is. i think the genius of the internet has been the decentralized nature but the multistakeholder process for the decisions. bring the best and the brightest from whoever they are and mo nairt what their positions are to be having a say in a voluntary bottom'sup approach. that approach is the key. i think the rub here, as you've heard this morning earlier this afternoon has been concern about a top-down governmental set of ways of dealing what are undoubtly real issues for real people around the world whether it's security, fraud, it's a variety things. we know this there a many issues that need to be addressed. who does the addresses what the

mechanisms turned out to be. the. >> what let me ask all three. i want to get a different question. any tinkering no matter how well intentioned could it be flexible enough to keep the process moving forward or will it tinkering itself really mess up the stakeholder involvement in a system we have today? >> so i think several on vases might be relevant here. the first one is that we can't run away from the united nations because it's too important a body to ignore. so we have to participate in the process. but we have another opportunity which i think we should emphasize. that is to encourage more involvement, more international involvement among the various nations states in the multistakeholder processes that are open and available to them that includes the internet golf nans forum, and all the

multistakeholder processes. i think if we make those increasingly attractive and effective, this could be a counter balance and alternative to the focus of the tension which is leading in the direction of the u.n.-based activity. it reinforce what we discovered over the last fifteen years. which is a multistakeholder processes actually work. they do bring many different points of view to the table and they result in better policy. >> thank you. and i preervet it. i don't have time to ask myself a question. i apologize. thank you for your testimony. i'd like to recognize the ranking member mr. waxman. >> thank you. mr. serf, earlier today ambassador revere stated that the u.s. advocating for the wicc con conference report to be made public. what other specific measures can be taken to shine more light into the i.t.u. processes?

>> well, the obvious possibility would be to open the process up to other stakeholders which is not a typical conclusion one reaches in the international agreements. it strikes me, again, reflecting back on the secures with multistakeholder processes that transparent say and openness produces better results. whether anyone in the current governmental world could be persuade of that, i don't know. i'm a great advocate of trying to include society in a technical world to the private sec nor matters that will have a very direct intaibt on them. once with again, publication of proposals and involvement of the other stored -- have the seen the impact on the internet to highlight to the i.t.u. participate ease consequence of the regulation of the interpret

and the world's economy. but what would be the role for the private sector in this process? how would they participate? >> so the private sector, actually, operates most of the internet. i don't know what the numbers are it probably exceeds 90% inspect no matter what we do or anyone says. it's the privateer sector that operates the entity and the actions in the sense determine what kind of interpret we all have. so my belief is that we have an opportunity here to empower the private sector to engage in policy making, which does not have an avenue to do today. at least not very effectively. you hear the i.t.u. say you can be a sector member. i think, ms. wentworth might agree with me, having paid your dues you don't get to participate or even have current administration about what's under debate. once again, i think openness is

going to be our friend here. but we have toed a -- advocate strongly and mildly for you. >> do you have additional comments or suggestions to increase the transparency the i.t.u. process? >> well, the intesht society has certainly been an advocate of opening this process for the wicc. discussion that are happening within the united nations more broadly. we think that the discussion can only benefit for more transparency. we come from the technical community and we look at some of the proposals and think there's a lot that could be said about the technical implications of what's being proposed. how do networkings actually work?

, and we want to encourage that of others, and also at the core, the prop here is that the iq is, by definition, an intergovernmental organization. their only government has votings. ultimately, part of the question is this issue is not a big issue when you deal with certain sets of issue, but when you deal with internet issues, for example, that at their core are about over 2 billion people interacting with the

information, those are the ones that call for the question, not only of transparency, but also whether or not the lines are about what the iq should be focusing on and when it should not be focusing on. i think that's where a lot of the issues can get resolved. >> thank you very much. i yield back my time. >> the gentleman yields back his time. >> thank you, mr. chairman, and thank you for your testimony and your for answers. in the testimony, it was stated, and all of you seem concern about the content to impose on international data traffic, particular concerns to the united states. we talked a lot about the monetary and stricting of content. could you talk, share with us,

your coalition's views on the proposal regarding imposing the economic cost on international data traffic? >> sure. i think it'll come as no surprise to anyone those are critically important issues. there's a number of different pieces of that. it's not just about the fact that it may change from a system in which there is voluntary market-driven decisions, contractual decisions for proposals to have top-down regulatory regime akin to the old settlements and accounting rate systems of the old telephone system. that's certainly a substantial concern and should be a substantial concern to everyone, but also, it extends to the issue of economic regulation and control about the issue of innovation generally throughout the internet ecosystem. the innovation was talked about

with new changes and technologies and applications coming from anywhere and anyone and the ability for us of us to benefit from that, and ultimately, all of that often boils down to one of the great core issues for all of us, which is the seamless flow of information. the ability of information, commercial, political, economic, social, to be able to flow seam leslie across the networks in ways that benefit the global community. >> thank you. >> wondering if i can amplify on this just a little bit? >> sure. >> there's a trade barrier, and i'm sure you're familiar with that. what i'm concerned about is the insidious effect of putting in rules that amplify former practices, projecting those into the internet, destroys or has the potential to destroy, this sort of permission with

innovation, but it also has the possibility of destroying potential markets. this is not just an american issue. we care about it bought at google, we're a global operation and want to reach everybody with the products and services, but the inverse is true. everyone in the world should be able to reach anyone else in the world with a new product and service. countries that choose to go away from that kind of openness are actually harming themselves and their own opportunities to exploit the internet for improved gdp growth, and i worry greatly about that. >> thank you. well, just to continue with this, many countries struggle with the problem of bringing broadband access to their citizens and international telecommunications union and the problems we talked earlier. how do we respond to the legitimate concerns, what can the u.s. government do and private parties do? >> it's a wonderful question.

thank you so much for asking it. first of all, the itu, through the development organization, has actually contributed to the growth of the net. i'm a member of the broadband commission that seeks to find ways to expand access to the internet all around the world, and in that sense, i tip the hat to itud for that work. at google, we found many opportunities in the private sector to help expand access around the world. we take our equipment that we don't need anymore, and donate it to organizations like the national network startup research center at the university of oregon, and they repurpose the equipment, deliver to people, especially in the southern hemisphere, and then they train them and get books and documentation from tim o'riley's publications and they set them up to build pieces of the interpret that get connected into the global system. there's endless opportunities here for the private sector to

engage. anything that you and the committee can do to help make that easier to do would be most helpful. legislation that makes it easier for us to repurpose equipment and do training overseas would be very, very helpful. just to advocate for that would be a good thing. >> thank you. i'm out of time. >> gentle lady's time expired. we want to thank you for appearing, and i'd end by saying totalitarian regimes may not care if they have systems that work, and so as you have totalitarian regimes involved in international negotiations, they may want a system that doesn't work across international lines and stuff, and it's a cautionary note on my part. also, i need to say that the record will be open for 10 days. you may get additional questions submitted to you by members of the committee. if you could reply to those if they come, we'd appreciate that. again, we appreciate your time

being here, and this hearing is now adjourned. [inaudible conversations] >> we'll show you the latest questions at 6:40 when he talks about steps the federal reserve has taken and the impact of new

regulation. at 8 eastern, we're featuring booktv's programs normally seen on the weekends here on c-span2. bill bradley shares thoughts on cynicism. >> last night in wisconsin, scott walker and milwaukee democratic mayor faced off in the final debate for the state's june 5th election. governor walker was the target of recall efforts just over a year ago when he signed a bill into law effectively ending collective bargaining rights for workers. scott walker defeated in 2010 to win the governor's seat. watch the debate tonight at 8 eastern on c-span.

>> we spoke for a half hour on john larson from connecticut about the economy, federal budget, and pending deadline for raising the debt ceiling. >> host: john larson, democratic connecticut, and the democratic caucus chairman, right in the middle of the democratic caucus policy and strategy and a member of the ways and means committee, tax writing committee in congress. thank you for being here. >> guest: great to be here. >> host: we have headlines this morning. >> guest: sure. >> host: this is the stocks, and "usa today," dow plunges in may. also they report labor market is below us. data suggests tepid out look.

the "wall street journal," the new fear gauge, treasury yield, investors embrace other havens to preserve their cash. doesn't sound very good in the economy. >> guest: it's not the use you want to wake up to, and yet, clearly, you would hope that congress would take action on it, that the president had a plan before, and the representatives having the plan taken up again at the state of the union back in january. the president asked to bring the plan forward. he's begin a checklist to congress starting with infrastructure and a congress that can't get its act together with the transportation bill which typically, susan, as you know, has been bipartisanly passed for years, but nothing was being done. summer is well into it, you know, with memorial day,

usually, vote june 20th, and memorial day kicks off the summer year, and these transportation jobs still are not out there, and it's not surprising on one hand, and it's most unfortunate that the public is frustrated about the lack of initiatives here in congress when we have so many millions of americans out of work and seeking it. >> host: i was going to show you european headlines because the state of euro decided over, and the tension in greece, and its economic situation, and amid uncertainty in europeans hedges their bets, do something now, save the euro as the continent's common currency. what are the lessons to learn? >> guest: i think the big lesson here is for government to respond, and rather than, again, if we're going to go through this playing chicken, you know, with the falling off of an

economic cliff over the debt ceiling, then i think that that's bad for the country. i think part of the headlines that you're referring is wall street's reaction to what the speaker said earlier that we're going to have another debt ceiling which, of course, is a phony argument to begin with and brought the nation nearly to the precipice of default back in the summer, and we all saw what happened to the markets then. this is not coming from us. this is going from bloombergs and the "wall street journal," and in is flat out bad policy, but the country expects us to be pulling together, focused on putting the nation back to work irrespective if you like president obama and his policies, but like the american people enough to care about them, put them back to work, and let them find the dignity from sitting across the table from

their spouse and knowing they have a job and can provide for them, and that's what's thoroughly frustrating for us, especially when we know we have the capability, and if we could act and move together as a congress, then i think the rest of the world would have an opportunity to take a look at where they should park the money for investment, and where the united states began would assume its leadership role creating global stability and also economic opportunity and more jobs here in this country. >> host: you say the lesson from europe is for governments to act, but there's a debate between germany and england pushing for austerity measures, cutting the debt, countries like france arguing for infrastructure. that mirrors the debt in this country. what is your philosophy about federal debt and how to approach it right now? >> guest: here's my philosophy. it's not different than roosevelt, and i think just a flat out common sense approach

that americans have. creation equals deficit reduction. more than a third of the deficit can be reduced with unemployment below 6%. how do you get there? by investing in the american people. of course we want private sector jobs to be created, which, under the obama administration, have been created more so than even during the bush administration where it begun the great loss of jobs both in the manufacturing sector and other jobs in general. here is a time when we need your country to stand behind its people, not by terms of sending out unemployment checks, but in terms of putting them back to work. very good tried principles that make an awful lot of sense, and in doing so, we help deal with the deficit and get after some of our larger problems as we work our way through the recession. instead, to your point, we end

up with a case great less filling argument in congress, and people say, well, gees, i understand the need for us to be tightening our belts, but, my god, we have to go back to work as well. why is it we can't rebuild our roads, bridges, sewage systems, and get broadband into the schools and put the trade industry back to work? why can't we be innovative and make investments? further, engage the private sector in this. john kerry has a bill that says let's have an infrastructure bank getting private capital and private equity augments what the government puts in as well and taking a look at the jobs in big time investments that we need to make, and we are not beyond a nation that still couldn't evolve itself into what the great highway systems did. this is what we've done in the past. we're america for god's sake. we can do this, and up stead, you know, we find ourselves in

these small petty games arguing back and forth over issues that really don't translate to much to somebody who's out of work. >> host: let's take the calls and talk about the tax debate over the extension of the so-called bush tax cuts. hearing first from carl a republican in west virginia. good morning, carl, you're on for congressman larson. >> caller: yes, sir. what i'd like to say is that, you know, we have half the country draw a check from the government, and the other half works to pay for these people's livelihood. how long can we survive at that rate, and we're coming to the point where there's no incentive for people to get out and get a job because they know the government will be there for them. you know, i worked until i was 72 years old, worked a job, and i look around me now, and i see

my neighbors in their 40s and 50s applying for disability, social security, and you know they are not disabled, and a good lawyer, and, bi in, go, they get a check from the government each month and they are out here working on their house, doing farming work. you know, for the cross roads in this country, are we going to be the socialist country or a capitalist country? >> host: thank you, carl. >> guest: thank you, carl, for that question, and i do think that people desperately want to find work. they want to get back and be involved, you know, just having a daughter who's graduated college as well as the number of people i meet back in my home state who are asking for work and looking for work. some of the work you want from the private sector, but some of the work in between and i would

agree with you rather than having people always be in a position to get an unemployment check to get by, it's a necessity for them and our economy to put them back to work. why not have programs that rebuild our infrastructure that we invest in roads. we all need roads, bridges, suer systems, schools, broadband, ect., just the conservation projects. this is american work forever. it has the private sector involved, and everything looking how we save the enormous amount of heat that exits from the buildings. get involved in boom pickings idea for natural gas. these thing, unfortunately, have been held up one way or the other from passage in the house of representatives or in the 60 vote cloture vote. it's unfortunate. the public wants to see an end

to it. we're coming down to a point, and, susan, i hope we talk about this too where the end game is really not the november election, but really what is on congress' plate because everything has been kicked down the road because of the inability to make tough decisions, put the country back to work and address the issues now. we're going to have the sunsetting of the bush tax cuts, the continuing resolution, the debt ceiling, what was commonly called the doc fix as well out and the tax extenders, little movements taking place in the united states congress. this infearuates people. we're hardly a socialist country, and i think it's important to have a safety net for people, especially social security and medicare and health care that doesn't leave people bankrupt in and out of their

homes. >> host: is the public welfare, members of the decisions called taxageddon and the press, and others will not be facing voters again? >> guest: i think it should give everybody pause about a process that's gone on for two years that you hope something might be accomplished between november and january as you point out in the lame duck. however, there's also a hope that all the virtue and all the hard work and effort that can come from a nation pulling together and recognizing that there is a balance here, and that there's nothing negative about saying we have compromised. we've come to a decision that's in the best interest of the american people. the devil is always in the details, susan, but i believe that there is an opportunity for that to come together. would it be congress was doing

its job, it would be happening now. unfortunately, in the midst of a politically charged campaign for where both sides are vying for power from pennsylvania avenue to both chambers of congress, the very -- unfortunately, today, what we see is this locking of all of the goals of the president of the united states, and so therefore a stale mate in congress. >> host: north carolina, felix, democrat there, good morning, sir. >> caller: good morning, congressman, c-span, and america, how are you on this beautiful morning? >> guest: great, thank you for your service. >> caller: you don't have to do that. we do it because we want to and not for the praise. i'm a vietnam vet, i'm not used to it. do you have a pen handy?

write down "wall street journal, january 2009, bush on jobs worst track on record. that's written by sediq reddy who idolizes presidents from truman to bush 41, lists the jobs, the creation, payroll extensions, and things like that. the question is which political parties, economical philosophy is most productive based on job creation, percentage of the payroll expansion, and to be honest with you, it's democrats. democrats created over 20 million more jobs than republicans, that averages out to over a million per year, and that averages out to 8.8% more per year so if y'all could incorporate that into your, you know, political program here and your campaign, perhaps america could get educated, and one last thing, if you would. i'm 100% physically disabled.

that gentleman from west virginia, he has his right for his opinion, but appearing from his statement there, he doesn't know any hidden dates or know what assisted devices they have, two relevant factors the law has in order to cover that. one last thing, thank god for america, and y'all keep up the good work. >> guest: wow. i'd like to take him on the road with me. just did a terrific job. thank you for pointing that out, and especially as it relates to the economy. unfortunately, for the current president, he's run into an obstacle in washington, d.c. in terms of getting anything he wants to pass or accomplish, and yet, there still persists and why he's giving congress a checklist to do including stop sending the jobs overseas, provide tax incentives for them

to come home, helping them with mortgages who are under water, who have been able to make payments to have an opportunity of fair chance with the opportunity to stay in their home and continue to make payments, putting the country back to work, including employees veterans first, and i think, of course, we could begin with the house of representatives bringing up the president's jobs bill introduced last september, all of these, i think, would go a long way in helping the country out, and, again, i believe that's what the nation needs for us to pull together, and i think we can all rally around the idea of a job. >> host: john as a viewer in north carolina hads a different view, and asks if printing money creates jobs and wealth? why are there any poor countries? >> guest: well, obviously, printing money doesn't create jobs and wealth. it's american ingenuity,

american innovation. it's hard work and labor that produces wealth, and we certainly are not arguing differently. we just think you have to make investments, and in order to create wealth, investments have to be made, and whether they are made from the private sector or whether they are government investments -- government investments in their people, this their education system, in their infrastructure, the roads and bridges along which are commerce from the private sector flow, and also in health care and disease and in science and innovation. these are the areas that we'd like to augment and help relying on the private sector and innovation and especially small businesses we know where the small ladders of opportunity for most americans that exist and where most job creation takes place. those americans all need an infrastructure starting

basically with an education that is sound and fundamental and gives them the tools, the creativity, and fosters the kind of growth that we know will lead to jobs. we want people to be wildly successful. we know that we live in an entrepreneurial time where the focus has got to be on innovating in a global economy, and that people are going to take risks. with risk comes great reward. there's also a chance that people in that same kind of system might take excessive risk, and people who work hard, but play by the rules can get hurt. that's why we developed a safety net. that's why we have social security. that's why we have medicare. that's why we have the affordable health care act, even though it's under itself. >> host: taxes, there has been a stalemate over the extension of a bush era tax roll backs, and this week, leader pelosi made a proposal to raise the threshold from the current $250,000 to $1 million, saying

it's a path to getting something done. speaker boehner reacted to the proposal. let's listen. >> i believe that raising taxes at this point in our recovery is a big mistake. even under ms. pelosi's argument, a half of those who would get the higher tax are small business people that are subject or other types of taxable entities. at a time we are trying to help small businesses create jobs, this proposal would kill jobs. >> host: do you support leader pelosi's threshold change? >> guest: i certainly do. i think leader pelosi is making a very valid point here, and when you con contrast it with what speaker boehner says, it's okay, i guess, to put pell grants for students, but no sacrifice has to be made from the wealthiest among us.

the men and women who wear the uniform of the country and fighting our wars overseas, we have not prevailed upon the american people to make any sacrifice other than those who have imposed on them by a different economy. the question becomes here i think is one of shared sacrifice and everybody stepping up to the place. ms. pelosi said minimally take a look at this time when people have done extraordinarily well that maybe they can do more for the country. it's probably a good segue for me to talk about an idea that, and the president mentioned this in his speech, the state of the union, when he talked about -- and the men and women who serve our military, and indeed, they have been the people we've called on to sacrifice, and they do so. it's an all volunteer military,

as you know, but it was not always that way in the country, and certainly we've never been in point in our history where both the wars were unpaid for, that we accumulated this national debt, and that we've seen stress and not prevail upon american citizens. we think we have a bit of a bipartisan wave to get people involved. i was going through my mother's letters that she and my father exchanged during the second world war. i notice this stamp here, i don't know if we can get that -- >> host: put it on the camera here, can i do that? >> guest: yes, please. it's a 3 # cent stamp that says "win the war," and back then with collecting rags and paper and glass and buying war bonds, you could buy the victory stamp, and the stamps, i noticed, often times there's more than one 3 cent stamp on there. she said well we did what we could. it was extra.

it was not the postage itself, but the extra money that went to help, in this case, in the war effort. i also noticed they had a first day issue that was on there, and if you look at the art work on this done by the postal office, i'm going to show them as part of, perhaps, one of the wap projects of this time, but an elegant drawing of a v draped in two american flags with holely at the -- holly on the bottom of it and a v for veterans, so i thought let's come up with a concept where every american can participate, why not a 21 cent nonpostal stamp, very muching? that can provide like we provided citizens the opportunity during the second world war, an opportunity contribute. 21 cents, 7 cents to va, 7 cents

to rural postal offices, and 27 cents to retire the national debt. small amount of money, but not much different in retrospect than collecting newspapers, glass, and whatever and also going through a cause in which we can try to appeal to the better angels of the country and certainly to a congress that should be focusing on what we should do to come together. i realize this is not any kind of panacea, but i do think it's a step that allows people to say, yeah, i want to do my part, no matter who you are anywhere. i can envision a volunteer group going to schools and schools writing to veterans and other people serving a dual purpose of perhaps bringing back curse -- cursive writing and be involved

as well. >> host: complicated by the fact that fewer people write letters? >> guest: it is, but it's not a bad discipline or thing to bring back, and certainly people still around all the holidays do send an awful lot of letters. there's nothing -- i'm sure people send e-mails as well, but there's still something about a card, there's something about the letter, something more personable about your handwriting. >> host: the stamp idea goes forward, they would buy regular posage and add these with no post al value? >> guest: exactly. it's a supplement. >> host: let's get to calls. dean, independent, south dakota, you're on with john larson. are you there? >> caller: hello, i'm here. >> host: you're on, sir, go ahead. >> caller: well, thank you. i'm registered republican, but i'm pretty much an independent

because i'm disgusted with both parties. now, this gentleman talks about a bipartisanship, and they should have done away with two parties years ago. seems like life has the different parties to blame the other one. always blaming the other one. it's the other one, but as far as jobs, i think they shouldn't get away with income tax 50 years ago. i said so years ago, it prices out of the market. do away with the income tax, and came up with spending programs that put us in debt, and live within our means, doesn't need to go to all these boards. i'm a world war ii veteran. i spent -- i was in the navy, and i spent two years in the pacific theater, but with all do respect, i'm a credit. i see it going wrong, and the economy we've got, and i said

when obama became president or before he was president, i said this economy is a situation that's worse than anybody seems to think. it was not just obama or bush. >> host: okay. stopping you there, sir. >> guest: we are pressing that, deen. the economy was a lot worse than people thought or imagined, and clearly, that's been problematic in terms of working ourselves through the worst recession since the great depression. most americans, certainly not yourself serving in world war ii, and perhaps have been alive during the great depression, you remember that. that was the worst, but in terms of its impact on people, for many people including myself in my lifetime, this is the worst economy that we've seen, and yet there is a path forward here.

there is a path by both, you know, revitalizing our private sector and great engines of growth, and also by helping them by investing in the american people and helping the american people by putting them back to work. you'll recall very vividly during that second world war when you were in the south pacific what people did, and we had things like the cvc and wpa so that people actually were out there doing work, earning a wage, helping rebuild the country. we also took on big projects, and whether it was immediately after the second world war in both the truman and eisenhower administrations when we rebuilt our entire infrastructure system and our transportation system for the country, we have to continue to kind of make these investments, and frankly, what we found being bogged down in two wars unpaid for and accumulating greater debt, other

nations, most notably our competitors, india and china, invest in their country, their infrastructure, their education, their health care system so we've got some work to do, and we have to catch up, but it's within our grasp. we're the greatest country on the face of the earth, and i always remain optimistic even though going back to george washington people had concerns about political parties, and more often than not, they have become overtly partisan around the fringes, and in the exasperating way to get something done down there. it's a false equivalent that we've been working very hard on the democratic side to put forward a jobs agenda that deals with the national deaf silt, that will put -- deficit, that will put our people back to work, invest in our people, help people

struggling inside their homes, provide education for students for them to become part of the economy, become the next innovator and small businessman, let government provide seeds and sprouts and be able to assist and help and let the great ingenuity and innovation of the american people take over. >> host: how would you respond to tom who on twitter writes to you build all the roads you want until you cut overzealous regulations. all governments can't build jobs. >> guest: we have to address the roads and infrastructure, but have to address regulation as well. it's a balance, susan. when people say "regulation," do they think there should be regulation on wall street, with respect to the fda? should we not take a look at what comes in from overseas and china? there can be and certainly, of

all people, i think i certainly had all levels of government that i've been in, whether it's local, state, or federal, do experience overbureaucracy or over regulation. you should attempt to streamline those to reinvent to make government more or as efficient as you possibly can, but to throw the baby out with the bath water not to have any kind of regulation leads you back to the era of jim fisk and the guilded age which many argue we've experienced during 2008, and would suggest that we need regulation like dodd-frank was able to achieve, although not fully implemented. >> host: bringing you back full circling to the debt limit.

do you think there's a debate even though the debt limit is reached six months or so from now? >> guest: it's a specious debate, kicked down the can, brought up for messages purposes, and i think, frankly, susan, when you say "debt ceiling" or "debt," we're not involved in getting the profiles of people done, but profiles in messaging, and if the public equates that with the debt ceiling as you can see how that can easily happen, they go, yeah, why aren't they doing something about the debt when in truth it's whether or not the united states defaults on its full faith and credit which happened 17 times under ronald reagan where we dealt with the debt ceiling, eight times under george herbert walker bush, seven times under bill clinton, and six times under george herbert walker bush.

it's a good idea for the government to be looking at what it with do to trim its debt. the best way to do it is to roll up the sleeves, put the nation back to work, focus on the economy by putting the nation back to work through jobs, and that an argument will lead us to the cliff again sends all kinds of bad signals across the glop in terms of whether america will default on its responsibility as opposeed to sending the message that we're the soundest place in the world, the economic leader in the world is demonstrated by our capability to stay together, and if we do so, the rest of the world in this insecure time is parking its moan and investments here -- its money and investments here to lead to job. >> host: the report will be out in ten minutes from now, and we'll show you as soon as it's

off the wire. thank you to john larson, house of representatives, for being here this morning to take your calls. >> guest: thank you, susan.

>> federal reserve chair taught a series of questions in george washington university school of business. up next, last of the four lectures talking about the steps take -7b by the federal reserve since the 2008 financial collapse, and the impact of the

dodd-frank financial regulation law. earlier in his professional career, chairman bernanke held classes at the graduate school of business at princeton university. 24 is about an hour and 15 minutes. >> i believe we are ready to get started, everyone. the sad thing, of course, about today is that this is the last one, and i know that everybody whose been here for the last two weeks has really enjoyed this very much and has had a terrific learning experience academically, intellectually, and just the experience of being in the midst of the event as well as being in the class. we are looking forward today to the final concluding record of the financial crisis and ben bern nan key. plach? mr. chairman? [applause] >> well, hello again. so today in the final of our

four lectures, as the professor said, we want to talk about the aftermath of the crisis. now, just to recap briefly, we talked last time about the most intense phase of the crisis, 2008 and early 2009, financial panic as both the united states and other industrial countries threatened the stability of the entire global financial system. federal reserve working, and federal reserve working, and i'll describe with others, served in its lender of last resort role, provided short term liquidity to help stabilize key institutions and markets. i think one of the points that we can now draw having looked at the history rather than being an ad hoc and unprecedented set of actions that the feds' response was very much in keeping with

the historic role of central banks which is to provide classes or facilities in order to calm the panic, and what was different about this crisis was the institutional structure was different. it was not banks and depositors, but it was broker dealers and repossession markets, money market funds and commercial payers, but the basic idea of providing short term liquidity in order to stem the panic was very much what the envision was writing the peach in 1873. i've been focusing very much on the feds' actions. that's been the topic of the course, of course, but the fed, obviously, didn't work alone. we worked in close coordination with both other u.s. authorities and foreign authorities. for example, the treasury was actually engaged after the congress approved the so-called t.a.r.p. legislation, the

treasury was in charge of making sure that banks had sufficient capital and the u.s. government took an ownership position in many banks that was essentially temporary, and most of those have now been reversed. the fdic, the federal deposit insurer's corporation played an important limit. the $250,000 deposit limits were raised essentially to infinity for a transactions accounts, and the fdic provided guarantees to banks who wanted to issue up to three years of debt in the marketplace for fee, the fdic guaranteed those issueances to get funding. this was a collaborative effort between the fed and other agencies. we worked with foreign agencies. i mentioned last time the currency swaps, still in

existence, by which feds gave dollars to central banks in exchange for their currencies, and the foreign central banks took the dollar, and on their own responsibility and own risk amaze dollar loans -- made dollar loans to financial institutions that required dollar funding. we also, of course, continued to be in close touch with finance ministers and regulators around the world as we tried to coordinate to deal with the crisis. now, we have the most intense phases of fire had not been enough, but there's been the strengthening of the banking system, and, for example, in a quite successful action, one that i think was very constructive, the feds working

with the other banking industries led stress tests of the 19 largest u.s. banks in the spring of 2009 so this was not far after the most intense phase of the crisis, and so what we did in an unprecedented way to disclose to the markets what the financial positions were of the major banks and those stress tests that confirmed that our banks could survive even a return to worse economic and financial conditions, created a great deal of confidence in investors and allowed banks to go out and raise private capital, a great deal of private capital, and in many cases to replace the government capital they received during the crisis. the process of stress testing has continued just a couple weeks ago. the fed led another round of stress tests, a very demanding set of stress tests. our banks did quite well, raising capital since 2009. they're, in many ways, stronger

position before the crisis in terms of capital. there's steps taken it try to get the banks back into full lending mode. it's still a process in progress, but restoring the integrity and the effectiveness of the financial system is obviously part of getting us back to a more normal economic situation. now, just to tell you a few words about the lender last resort programs, as i've already argued at some length, the programs appeared to be effective with runs on financial institutions and restored market functioning. the programs instituted primarily in the fall of 2008 were mostly phased out by march 2010, and they were phased out rail in two different ways. first, some of the programs just came to an end, but more often

what happened was thatted fed would, in making loans, liquidity provisions who financial institutions, the fed would charge an interest rate that was lower than the crisis rate, the panic rate, but higher than normal interest rates, and so as the financial system calmed down and rates came down more to normal levels, it was no longer economically attractive or financially attractive for the institutions to keep borrowing from the fed, and they wound down naturally. we didn't have to just shut them down, but they basically disappeared on their own. the financial risks that the federal reserve took in these lender last resort programs were quite minimal. as i described, the lending was mostly short term. it was backed by collateral in most cases. in december of 2010, we reported to congress all the details

involved with 21,000 loans that the fed made during the crisis, and of the 21,000 loans, zero defaulted. every single one was paid back. even though the objective of the program was stabilizing the system, it was not profit making. the taxpayers came out ahead in those loans. that was lender last resort activity. that was the tool, the fire hose that put out the fire of the financial crisis, but, of course, as i described last time, the -- even though the crisis was contained, the impact on the u.s. and global economies was severe, and new actions were needed to help the economy recover. remembering that the two basic tools of central banks are lender of last resort policy and monetary policy, we now turn to the second tool, monetary policy, which was the primary tool used to try to bring the

economy back after the trauma of the financial crisis. now, you're all familiar with conventional monetary policies. conventional monetary policies involves management of the short term overnight intros rate called the federal funds rate by raising and lowering the short term interest rate for the sake to influence broader range of interest rates that in turn affects consumer spending, purchases of homes, capital investment by firms and the like, and that provides demand for the output of the economy, and it helps to stimulate the return to growth. just a few words on the institutional aspects. the monetary policy is conducted by a committee, called the federal to market committee,

fomc as its called, meets in washington eight times a year, and during the crisis, it sometimes also head video conferences, and we have a meeting at the fomc, there's 19 people sitting around the table. there's seven governors, seven members of the board of governors appointed by the president and confirmed by the senate, and there's 12 presidents of the 12 reserve banks, each of whom has been appointed by the board, the board of directors of each of the reserve banks and then confirmed by the board of governors in washington. there's 19 people around the table. we all participate in the monetary policy discussion. when it comes time to vote, the system's a little bit more complicated. in any given meeting there's actually only 12 people who are able to vote. the voters at any given meeting of the seven members of the board of governors, currently five, we have two empty seats

and hope to get those filled soon, but the seven members of the board of governors have a permanent vote in every meeting. the president of the new york federal reserve bank also has a permanent vote that goes back, of course, to the beginning of the system and the fact that new york remains the financial capitol of the united states. of the other 11 reserves, there's a rotation system, and each year, 4 of the 11 other bank reserve presidents vote, and after the end of each year, they move to another set. geep, a toe -- again, a total of 12 votes on any given decision on monetary policy, but the entire group participates in the discussions. now, here's the federal funds rate. again, the short term interest rate, that is the normal tool the fed uses for monetary policy. you can see that at the end of chairman greenspan's term and beginning of my term in 2006, we

were in the process of raising the federal funds rate and in a sense normalize monetary policy after having easier policy earlier in the decade in order to help the economy recover from the 2001 recession, but in 2007 as the problems began to appear, particularly in the subprime mortgage market, the fed began to cut interest rates. you can see the right side of the picture as interest rates were sharply reduced, and by december of 2008, the federal funds rate was reduced to a range of between 0-25 basis points. 25 basis point means one-fourth of 1%. essentially, by december 2008, federal funds rate was reduced basically to zero. can't be cut anymore obviously. so given that as of december

2008 conventional monetary policy was exhausted, couldn't cut rates any further, and yet the economy clearly needed additional support into 2009, the economy was still contracting at a rapid rate. we needed to do something else to support recovery, and so we turned to a less conventional monetary policy, and the main tool we've used is what we call within the balance of the feds, large scale asset purchases or lsaps, or quantitative easing or qe, but in any case, i bow to the common usage, and the large scale asset purchase, which i'll explain in more detail, were an alternative way of using monetary policy, again, to provide support to the economy.

how does this work? well, to influence longer term rates, the fed began to take, undertake large scale purchases of treasury and gse mortgage related securities. let's be here here. the securities that the fed has been purchasing are government guaranteed securities, either treasury securities, the government to the united states, or the fannie and freddie called or guaranteed by the u.s. government after fannie and freddie were taken into conservativeship. there's been two major rounds of large scale asset purchases. one announced in march 2009, often known as qe1, and another announced in november 2010 known as qe2. there's been additional variations since then including a program to lengthen the maturity of our existing assets, but these were the two biggest programs in terms of the size,

the impact on the balance sheet, and taken together, these actions boosted the feds' balance sheet by more than $2 trillion. here's the picture of the asset side of the feds' balance sheet to help see the effects of the large scale asset purchases. the green, at the bottom, is the traditional securityings holdings so to be absolutely clear, even under all the most normal circumstances, the fed almost always owns a substantial amount 6 -- of u.s. treasuries, owning 800 million plus before the crisis began, so in that respect it's not like we started buying them from scatch. we always had a significant amount of the securities. the green shows the baseline where we started from. now what else appeared on the balance sheet on the asset side during this period?

the dark blue represents assets required or loans made during the crisis period, in late 2008, loans outstanding to financial institutions and to some of the other programs rose very sharply, and you can also see that as time passed and certainly by early 2010, those initiatives to address financial strain have been greatly reduced. if you look at the far right, by the way, you see a little bump there, right recently, that's swaps. we re-instituted an extended the swap agreements with european central banks and other major central banks, and there's been some usage of that in attempt to reduce strains in europe, and that shows up as a little bump there far right of the picture. now, geep, we ow--