in that respect that perhaps the senator from new york could check her blood pressure little bit and we could move on down the road.

senator john mccain has proposed a bill that would require cable companies companies to provide oligarch plans to let subscribers pick which channels they pay for. they testified at a senate hearing about the bill. this is an hour and 45 minutes. >> we will call the hearing to order and i want to say good morning and thank everyone for being here this morning. we have two panels today. i want to thank all of our panelists for being here. this morning this communication subcommittees hearing is going to be on the state video. again i want to thank everyone for their participation in their input today. this is the second in a series

of hearings on the state of communications in the united states and it is my hope that subcommittee members and the public have a better understanding of the current policy issues that people in the communications sector face. today we are focused on issues of importance to consumers on video services. as we all know the video industry has changed dramatically in the last decade particularly in light of two things, internet video and wireless video. it increased the adoption of broadband watch video programming bringing both opportunities and challenges to consumers and companies in the video marketplace. while video continues to put pressure on the use and availability of spectrum. our witnesses today will tell us how consumers are navigating and take advantage of this ever-changing environment. we will alsor panelists

about their concerns and views on a number of policy issues including some that have been in place since the cable act was enacted over 20 years ago and others longer than that. many of these issues were discussed last summer before a full committee hearing and i think it's helpful that with their new and returning members we hear witnesses of views on this matter. most importantly we want to hear about our current policies in a dynamic market affecting the consumer. is the consumer receiving the services, channels and shows that he or she wants and are these products affordable? before we go to our panel discussions, i would like to ask senator wicker to say a few words. >> thank you very much chairman pryor and thank you for holding this hearing on the state of the video. this is our second in the state of hearings. this is a good time to examine the truly vibrant growing and

multifacemultiface ted video marketplace. today's video marketplace is radically different from the one that existed two decades ago when the only options for consumers were over-the-air broadcasting and cable television. the advent of the world wide web has given consumers a seemingly endless toasts of avenues to receive video content. there are cable and satellite services. there are verizon fios and universe services as well as so-called over-the-top options such as netflix, youtube, itunes and hulu which grow in popularity each day. the unregulated video media marketplace has truly thrived. as a member of the subcommittee i'm here to learn how policymakers can ensure that the video delivery ecosystem continues on this path of exponential growth offering policies that encourage innovation rather than hindering

it. to focus not only on the current marketplace the more importantly on the future of video. we need to identify not only where the market has done but where it is going. i would like to thank our witnesses for testifying today. the industry and consumer representatives are able to bring diversity experience and expertise on the current state of video and i look forward to hearing from and i'm particularly interested in hearing their perspectives on the state of video in rural america. out of 22 members on this communications subcommittee at least 17 represents what would be considered the rural states. so few points on the unique challenge of these areas would be appreciated. i would also like to recognize each of the three industries representative today in rural areas particularly in my home state of mississippi.

first broadcasting from forecasting storm coverage and issuing tornado and hurricane alerts to helping first responders. broadcasters have been a valuable resource to mississipians during times of natural disasters and one example occurred in february when tornadoes devastated businesses and in march the major hailstorm caused major damage. enacted in mississippi. in each case local radio and television's nations where the lifeline when cable and cell towers are gone and i would like to publicly thank them for their service to my constituents. actually i misspoke mr. chairman. it was not just peddle mississippi. it was a vast portions of hattiesburg, hattiesburg as well as lamar county mississippi with a devastating tornado. as with arkansas and west virginia, mississippi has a number of rural remote areas that make it difficult to reach

the traditional infrastructure. satellite providers such as dish and directv have stepped up to write access to competitive quality video and broadband resources. the satellite industry serves approximately 450,000 households and businesses in my state. many of its dish's are commonly visible at football tailgate parties during the autumn in mississippi. finally cable has demonstrated a strong commitment to broadband adoption investing $200 billion in 1996 to build a broadband across the country. cable has created partnerships with the federal government and the private sector to increase broadband delivery to low-income households that need it most. this includes a company called comcast which started with one small cable system in tupelo mississippi in 1963.

they wandered off to pennsylvania and celebrating their 50th anniversary this year. we want you back in tupelo. again thank you mr. chairman for hosting this timely hearing. i think the attendance where have testifies to the importance of and i look forward to hearing from oliver witnesses and having a healthy debate on the video marketplace issues. finally i would like to welcome my friend, colleague and a former chairman of this committee the warm and cuddly senior senator from arizona john mccain who is here to give a statement on legislation he recently introduced regarding the pay-tv market so welcome back senator mccain and thank you mr. chairman. >> thank you. afore we hear from industry panel we would like to stand a very special welcome to senator mccain and former chairman of the full commerce committee and long-standing member of this committee and we are happy to

hear your thoughts on the current state of video marketplace. senator mccain. >> thank you very much chairman pryor and ranking member flicker. i thank you for your warm words of welcome and it's great to be back on the committee that i enjoyed as much or more than any that i was ever privileged to be part of with a myriad of credible and fascinating issues and part of an ever-changing world that we live in. as you know, i introduced television consumer freedom act and the bill would give consumers the option to purchase and i emphasize option, to purchase television channels on it per channel basis which is also known as à la carte rather than programming currently offered by satellite and cable companies. basically i support à la carte and i believe most americans do

for the basic reasons that consumers shouldn't have to pay for television channels they don't watch and have no interest in watching. if the legislation that television consumer freedom act statute and regulations such incentiveincentive s to encourage the retail and wholesale distribution of television channels on an à la carte basis. proponents will say that government should stay out of television industry but obviously that overlooks the government 66 thing prices throughout the market in the form of legal benefits like compulsory copyright license and syndicated exclusivity and nonproduction nonduplication of which is rife with government involvement. it's time to restore the proper operation of the maintenance plan of the market by empowering american consumers. it's hard to garner the support of consumers union and free press. they recognize that an à la

carte channel option is the right thing to do an popular with consumers in large part because as we all know a dramatically rising cable prices which have dramatically exceeded the cost of living. according to the most recent fcc pricing survey, since 1995, the average monthly cable bill for expanded basic service, that's the most popular tier, has gone up from about $25 a month to $54 a month today. that's a 6.1% annual increase of more than 100% total price hike over the past 16 years. consider the following story offered by a cable executive on à la cart. he says quote my next-door neighbor is 74 and a widow and she said to me why do i have to get all the sports programming? she has no idea that in the course of the year just for espn

and espn2 she is sending a check to disney for about $70 even though she does not watch it. she would be apoplectic if she knew. articulate today's challenging economy $70 is a lot of money for a lot of americans. i'm a spor fat and i loved espn. i stay many nights watching games back in arizona with the horrible prayer time ch never, and i would never go without espn. the fact is the majority of tv consumers have no interest in sports programming that shouldn't be forced to purchase it. many of these americans are beginning to realize that included in their cable bill is a charge of $10 a month just to carry sports programming like espn which cost nearly $5 a month. far more expensive than any other cable and even less popular channels like regional

sports networks which can be almost as expensive. also we addressed individual channels tied together by television programmer that sold you a pay-tv company and packages. once again the consumers actually want -- the answer is obviously no. according to nielsen statistics, 1995 the average cable household with sol 41 channels and tuned into 11. in 2008, the last year that the statistics were compiled the average cable household was sold 130 channels that tuned in to only 18. these excess channels are of basic driving up cable bills. companies like viacom don't sell channels like mtv and vh1 individually but rather bundle them together which then leads to a tea companies -- pay-tv companies with little choice but to do the same thing to consumers.

this bill says if you bundle your programming on the wholesale level then you must unbundle the distributor programming à la cart too here the choice remains with the programmer here the outcome for the consumer is à la carte and a lower cable bill. in addition to à la carte also it ensures that the public spectrum resources are used in the most efficient and public way beneficial ways possible. finally, i want to and blackouts that teams that play in publicly financed stadiums. the stadiums are publicly financed by the taxpayer and today the practice of the nfl's is that if they don't sell out the stadium than all the people in that area don't get to see the game. i think that's outrageous. if that stadium is is not taxpayer financed and that owner can do anything they want to with it but at the taxpayers pay for them by god i think the taxpayers of to be able to see the game whether they sell out the stadium or not.

obviously i am a sports fan as you can easily tell. so i believe the consumers are at a tipping point when it comes to their monthly pay-tv bill. in my view the à la carte option is nonregulatory and get a consumer friendly way to provide consumers with the freedom to lower their bills and pay for only what they watch. i hope that this committee will examine this issue. i truly believe that a lot of americans are fed up with the size of their cable bill and they ought to be able to do the same thing we are able to do when we walk into a restaurant and not have to buy everything on the menu in a bundle and pick out what we want and choose it, and i think my colleagues for allowing me to appear and i look forward if you choose for any questions, comments or insults that you might have for me. thank you very much. >> thank you senator mccain and you are certainly welcome to join us and ask questions of the

next panel if you would like. thank you for being here today. see i'm sure they look forward to it. [laughter] >> he i don't know if they do but we do. >> thank you. >> if i could ask the next panel to come up and take your seats at the table we would appreciate that. as they get situated here, let me just say that, i will just go ahead and introduce them in order to save some time. first we have senator gordon smith president and ceo of the national association of broadcasters. next we are going to have former fcc chairman michael powell presidency of the national telecommunications association. and our stance in dodge president of dish network and then we will have john bergmayer, senior staff attorney

for public knowledge. with all of these we would ask them to give an opening statement. we have their written statements in the record and we would ask that each would if possible keep their opening statements to five minutes. first senator smith. >> good morning chairman pryor and ranking member wicker and members of the committee. it's always a privilege to be in this room whether on your side of the dais or mind. it's nice to be back. as you know i had the great honor on behalf of america's local radio and television stations, stations play a vital role in informing protecting an entertaining and entertaining every local community across this great nation. that is ever more apparent when a disaster strikes as senator wicker noted, reminding us as broadcasters important role as first informers. we have seen this time and

inansas and mississippi. we saw the largest tornado outbreak that took hundreds of lives across the cell. whether an earthquake in washington d.c. or a hurricane in new york, terrorist attack in boston, if no doubt you can tell a similar tragic story from your own state but i'm also confident that each story involves a response from your local broadcast station. these stations kept residents safe and when there was no cable, no satellite, no broadband no phone service, broadcasters were there to provide a lifeline to their communities. when it was time to rebuild, local stations were there for their neighbors holding fund-raisers and food drives to help them get through the hardest times. so i ask you this is not a public good? isn't this a role that should be supported because if broadcasters are not there to lerve in this role, who wil

even with all the spectrum in the universe the wireless industry 121 delivery system could never match our unique architecture and their ability to broadcast for the masses or large events. it is crucial that broadcasting in broadband work hand-in-hand to offload congested wireless systems and deliver the content consumers want and emergency information they need. in this regard it's also critical that congress implemented the necessary state guards through the legislation granting voluntary incentive option authority. while these options will present an enormous challenge to the fcc, to your constituents into local broadcasters, we stand ready to roll up our sleeves and conclude this auction and a successful and timely fashion. broadcasters not only inform and entertain, as content producers we create the most-watched shows

on shows are on broadcast television last year. this content is valuable. the viewers and the stations this apply it to the companies that retransmit it, broadcasters ability to serve a local communities to produce the best shows on television and to deliver that content free to over the air viewers is sustained by two revenue streams. one paid advertising and the other fees paid to us by those who rent our signals and seller contents to subscribers. without this economic foundation, we could not do what we do. this revenue in able stations to meet their primary goals, serving the public interest and policy decisions that threaten this economic foundation can cripple an industry that provides an indispensable, even a replaceable lifeline service to americans. i am always surprised when some of our competitors try to

describe broadcasters as yesterday as part of a bygone era. i would have to ask these critics, what is it about free and live and local that you don't like? our communities not only like broadcasting, they depend on it and despite a changing media landscape, broadcast television is as relevant today as ever. with tv stations transitioning from analog to digital transmissions in 2009, it revolutionized free and local tv providing viewers more choices than ever before. most stations offer extra channels called multicast channels that deliver diverse and local content. its coverage of local sports and community events, your local weather and traffic match to your zip code and programs reflecting vast languages and cultures and amplifying the voices ofomirities in our community. broadcasters continue to

innovate and deliver the content viewers want when, and where they wanted. including interactive tv, customized to your needs sending two tablets, cards and smartphones. the future of tv is mobile and on the go and more vibrant than ever. in the past month alone we have seen new services rolling out to viewers. networks are investing in and launching mobile services to provide viewers with live local and national tv on all their devices and even on demand. we also saw just just last month that the n.a.b. show and i encourage you all to see this when you can, ultra-high-definition broadcasting which to my eyes was literally 3-d tv without glasses. the pictures simply astonishing. 's consumers have a limitless options for content and countless ways to access programming and yet they continue to turn to broadcasting more than any other medium.

that is an enduring value we provide. i would ask you that as you consider public policy that impacts the future of this great industry, remember the critical services of the local stations delivering consider the consequenconsequen ces of decisions that could impact broadcasters ability to serve our community and to serve your constituents. thank you very much. >> thank you. >> good morning mr. chairman and members of of the subcommittee. my name is michael pollen i'm the presidency of the national cable and telecommunications association. thank you for inviting me to testify on the state of video. video world is undergoing exceptional transformation. the power of technology and the insatiable consumer appetite for video content are remodeling the video marketplace. it is both exciting and challenging for companies working to deliver value to the

american consumer. gazing into the future isw hazardous but a few critical trends paint a picture of what is on top of this emerging video landscape. if video is flooding into every crevice of american life from the moment video content can be digitized to the live streams of video anywhere and everywhere was inevitable. video will be a ubiquitous and as ubiquitous as the web itself. in fact today as this morning nearly 68% of all internet traffic today is video and as one ceo recently described it, the internet is not related to be as much as tv has invaded the internet. internet traffic is able to crawl across the web and internet call and surface on nearly any screen with an internet connection. this is why we have seen such a great renaissance in video on

devices like ipads and smartphones. the diversity has long been a paramount public policy objective in this country. in the world we are stepping into people see content of every conceivable stripe, every genre, short clips and lungs series, programs from every ethnic and racial community and every political viewpoint with a voice. individuals who make videos in their basements while large studios produce some of the most compelling stories in visually arresting format. the video stories will not just be about -- it will also become a dimensional experience. tv was the original social network driving water cooler conversations about a favorite show but social network platforms will expand tv conversation and make it much more contemporaneous. we see growing second screen tv watching as consumers post and tweet along with their viewing.

my kids are grown up with digital and have come to expect highly personalized products, the bailout to interact with them. as the video model evolved a channel lineup that are personalized and an engine that modifies constant choices to your preferences. choice is good. we sometimes hear consumers the frustration of finding something to watch. true rating consumer rating offer sings in a consumer usable way will still have values to many families navigating their options. as netflix recently noted instead of trying to have everything we should strive to have the best in each category. the cable industry has long been an innovative force in in the tv landscape and is working hard to bring much of the decision into reality. the industry has unveiled applications through content out of the tv set and into the portable devices. are companies that work to

shrink the aggravation of the set-top box by offering cable service over devices consumers are ready on gourmet preferred like an x-box. new platforms are emerging that will put program and consumer tools and services in the cloud thereby vastly improving the pace and quality of innovation. it is critical to note that as broadband providers we continue to invest massively in the network that makes so much of the decision possible. we have invested over $200 billion since 1996 and at best their team million dollars per year continuously. as a result of this investment we are increasingly pushing internet. >> over 50% a year. a thousand% increase in the last decade. beyond the confines of the home, we are opening up the airwaves to video and internet access by implying -- applying major

networks across her market. this transition will be chaotic most of the time. as a marker marles itself it will put a strain on the video model that we will all have to work through. the cable industry is highly focused on meeting several key challenges. first we need to innovate faster to keep the changing habits of consumers. second need to continue working on greater flexibility for consumers and channel offerings for continuing to deliver the content they love and third would need to manage the cost of our service to ensure that we are meeting the affordable constraints of consumers. the 1996 act covers the video marketplace. increasingly incomplete and out of sync with the reality of the marketplace but knowing that something is broken does not tell you what you replace it with pure we are not presently calling for comprehensive rewrite of the video was because we believe that in this fast-moving period it is difficult to try to made and

full-scale conference of regime but this is not to say that everything is fine with existing law however. rather we believe it's prudent to evaluate changes to liberally as they arrive. today the video is a common discussion i thank you for holding this hearing and for your attention. i look forward to your questions. see thank you. mr. dodge. >> chairman pryor, ranking member wicker and members of the subcommittee i appreciate the opportunity to testify today. i'm a little bit under the weather and i've apologize in advance if i cough on occasion. on occasion. my name is stan dotson and executive vice presidents and general consul of dish network with more than 14 million subscribers in over 25,000 employees. we are the only provider and local tv service in all 210 -- award-winning innovations through the d control of their g experience. our dish net service offers

affordable high-speed satellite throughout the country. the recent offer to merge with sprint what about cable quality fixed wire band service to 40 million underserved and unserved rural household. for this congress we have updated laws that needed to be updated to reflect changes in the market and how consumers view their content. public policy should support the preservation and expansion of consumer video choices. unfortunately estes jupiters like dish offered advanced technology some programmers are again crying wolf. this time the threat is real and they won't be able to survive the onslaught of innovation. the challenges to our dvr perfect example. the networks are accusing millions of subscribers to of copyright infringing merely because they want to skip commercials more easily or watch tv on their ipads. we believe in consumer choice and to preserve and expand that i want to make three points. first we believe congress should protect consumers against

blackouts caused by disputes. the proof is in the numbers. in 2010 they were 12 blackouts and by 2012 the number soared to almost 100 impacting millions of viewers. the consumers are the victims of these one-sided negotiations. the appropriate programming is full by the broadcasters and the monthly bills go up-and-up. as part of a stellar reauthorization the proposed by local station is pulled from a consumer to trade dispute the video distributor should be able to provide another network signal. this reform will at least allow consumers to keep their network programming while negotiations continue. second, americans living in remote underserved areas and especially benefited from stella and its predecessors. among other things stella allows americans residing in predominately rural areas to receive distant network signals for any missing paid for stations in our market. the distant signal sunsets at the end of 2014 and without

reauthorization approximately 1.5 million american households will be left without access to a complex of network channels. third, three years and was enacted the video industry has not been sitting still. consumers can increasingly want to watch news sports entertainment on the go using increasingly high-resolution screens available on their smartphones and tablets. over the years consumer preferences. now just stand ready to make a significant investment to the growing appetite in consumer video. the recent 25 billion-dollar offer from sprint would create game-changing abilities of fixed and mobile service for voip video data and an outside home. in summary we believe government should work to ensure its laws mere two days competitive realities in consumer expectations and advances in technology. thank you and i look forward to

answering any questions you may have. >> thank you. mr. bergmayer. >> good morning chairman pryor ranking member wicker and ours as many thank you for the opportunity to resist a process paper today but to talk about two things. first a few remarks in the state of video marketplace today and i marketplace today and i'll present as few ideas on the video marketplace more competitive and affordable. new technology and new services have given people more ways to watch tv. in fact they are changing what it means to what cbp or people as chivian smartphones and tablets and computers to people watch more on-demand video from on line services. the dvr controls what they watch and how they watch it. but there is still a lot of must be programming available through traditional pay-tv services. to keep up with game was drawn drawn -- viewers have to describe teachers additional bundled channels. one study has found that the cost of the cable prescription is approaching $90 per month here that is just for a video not broadband. content prices keep rising and they they are passed on to consumers through the retransmission fees the

broadcasters of cable and satellite providers keep going up and it will collect 400% more and retransmission fees and 2013 than in 2012. retransmission lead to fewer blackouts as well. sports fees are going up up and average cables driver pays $80 a year just for the nfl. nfl. large content companies do everything they can to make sure the cable channels are carried in this is drive down independent programmers. cable companies would have to pass on the cost to the viewers and these problems are interrelated. congress and the fcc heaven above and video marketplace for decades. sometimes they protect incumbents and sometimes they promote competition. in 1990 cable x-rated policies allowing satellite providers and telecom companies to offer video services. these policies protected smaller cable operators too did however in in the market would have to string wires the town to watch satellite and competition will be limited but broadband technology changes that. there's a longer the longer necessary to operate a dedicated network to offered to video

content trade the policy should reflect this technological shift. inter-that is changing but there is a difference. dominant players of video control of the content of their nascent competitors need for their services. it's inevitable that new technology can play a large part in video delivery but it's not inevitable the market will lead to full competitive potential. consumers will suffer from a lack of choice and struggle for each viewer but there's a solution at hand. congress picture that is procompetition video policies are technology neutral and if it does is for protecting internet openness it will clincher that viewers have more choices. on line video is a success story but it can be much more than it is now. it's not driving down cable prices. for most users it's a supplement to cable and not a replacement for video services offer a full range of content should be as competitive and open its e-mail services. congress and the n.a.b. can help congress developed in three easy ways. first they can clear away some of the outdated rules that slow

down the video marketplace and second they can extend successful policies that protect provider symantec competitive conduct from certain on line providers. or they can detect internet openness and prevent discriminatory billing practices that could hold back video here this will increase competition meaning lower prices better services and more flexibility and control for consumers. to be sure many of the regulations that permeate the video marketplace can be repealed today. some of them exist only protect the business models local broadcasting or enhance revenues of major sports leagues. these rules include the sports blackout ruined prohibitions on distant signal partitions. the rules like copyright licenses are dated. they should be reformed but cautioned. at the same time measures that are designed to mitigate the market power and certain video provider should not be repealed until a second competition develops at examples of these kinds of rules include the program access and care program

carriage rules and should be extended. for example on line video providers that wish to voluntarily operate as multichannel video distribution be able to do. this would ensure consumers have more choices for high-value content like they did today and would eliminate incentives to keep certain content from being license widely. finally the senate can help ensure the internet remains competitive and open to traders of all sizes for work and to prevent data caps an open internet violations. violations. senators might be testament today can only touch on a few subjects in my written testimony contains more detailed analysis and regulations. thank you card inviting me to speak and i look forward to your questions. >> thank you. i will go ahead and start the questions with senator smith. senator smith and know that broadcasters have an obligation, which i like and i think are based on good public policy. we have seen decades of good results as a result of that but the same obligations do not exist on the internet.

so could you help the subcommittee here what might happen if for some reason those allegations went away? >> mr. chairman, broadcasting is in competition with everyone else providing video. we believe we are in our licenses every day with all the public service that we do and the agency rules that we observe. children's programming we provide, the local news weather sports and information and emergency information. these are the values that broadcasting represent and are valuable still. i think i heard -- infer from your question that if you take broadcasters spectrum away will the same regulations of public service applied to the internet? i would simply say my experience is that would be a real steep climb in the u.s. senate but the

question is if you compromise broadcasting, who serves those interests? the answer is no one steps up to those kinds of obligations. if you impose to indecency regulations on the internet you would collapse the business model of many of the people involved in that but notwithstanding an episodic expletive or a wardrobe malfunction i am very proud of the fact that broadcasters work hard to make sure that we are not purveyors of indecency and families have a place to go where they can have some confidence that their families can view what is on the television. we compete with the lowest comment of nominators of reduction and that is the other pressure on the other side of us. as best i can tell you our spectrum comes with public service obligations that only w.

>> can you tell theu what your industry is doing to creasesso your programming for on line and mobile platforms? >> well, just recently abc announced they are putting the extreme process of their programming. i am pushing very hard by members to deploy more stations mobile facility so that the 130 states that provide 130 cities that now have mobile, that expands all over the country. that is the very best way you can get video to the broadcast to everyone in the locality. iit t's free. it's live, big offended those are the qualities that i think make ,-com,-com ma as i said in my testimony, when it comes to

video, we are indispensable and even a replaceable. there isn't enough spectrum in the universe to do all video 121. you've got to preserve broadcasting if you want those emergency events available to the american people. >> mr. powell let me ask you, i want to get a chance to respond to senator mccain's opening statement and the bill that he has filed. on one level makes common sense that all consumers would have all consumers would have the choice and be able to go all a card and pick out their programming. that is kind of intuitive than the yeah that make sense. i would like to hear your response from the industry perspective on what problems at present. >> thank you for the question. first of all we have a long-standing interest in this and i had the privilege on this

issue in many quite extensively. as you point out mr. chairman the objective seems entirely reasonable and noble and quite intuitively right that somehow if you bought less you would pay less. it seems logical but many independent third parties decided to look at is very careful and concluded that's not likely to be the case. the gao in 2003 and the fcc again in 2004 and the congressional research service again in 2006 as well as a bunch of academic reports have concluded it's a very serious question mark whether consumers would have lower bills for cheaper services as a consequence of all a card. the reasons are relatively clear when you think about it for a moment. if you take a channel that comes to a large audience and allocating services across the big bass in the advertising of revenue and prescription revenue

that goes with it and haven't sold directly to the consumer habla card a couple of things happened. one the audience size has shrunk dramatically so to make up for the revenue loss associated with advertising and the revenue base they are very likely to have individual prices prorated quite substantially and the $45 senator mccain was referencing when it is provided in a bundle. it doesn't take long for consumers putting those pieces together to put together a package that cost something similar to what they were paying for if not more. it's not a good deal for consumers to pay $10 for 10 channels when you are paying $10 for 100 i think there is quite serious academic work to show that is a likely possibility. while the concern is respectable and noble and one that we should continue to work on a think we have profound -- at à la cart

would deliver a lower cost product to the american people. >> senator wicker. >> mr. powell, let me start with you. i believe you testified that the current statute needs some work but you don't think this is a good time for an overhaul of the act. we need to do something surgical because the state of the industry is fast moving. we are in a period of transition. when will the government be less fast-moving than it is now and when will we ever not be in a transition era? >> very good question because we may never. that's a fair enough question but i am a big believer that we

can migrate existing regulatory regimes as well as throw them out and try to replace them with the grand scheme and i think by tackling the problem you have demonstrable evidence and very specific fact patterns and understandable technology that even if directly address. i think it's very challenging to do it in a big comprehensive way. again i would emphasize here we are not saying we are enamored in every act aspect of the man to act in no change over time is necessary but i think there's a more prudent and deliberative approach. the specifics as they are arise in which patterns are available for us to address. it is stated as you know in the sense that it was based on a lot of factual pmi 1992 the cable y was unquestionably a monopoly provider. we had have 90% of the multichannel video market here

today that percentage is under 60%. at the time the act was written it was integrated with program providers closer to 57 to 60% and today that number is down 14%. many of the rules in the 1992 act are meant to address those concentrated consideration and i think those rules over time will have to be modified. >> okay, what specifics recently have arisen that would be the target of your so-called surgical changes? >> i would say among our members there is a difference of opinion on that envy is an association and not particularly prepared to present a list of specifics for you. >> you're not advocating an overhaul of the act nor are you even suggesting that short of surgical limited changes in your

testimony seems to advocate? >> i would only suggest that the surgical changes that we might make or members might make would be done -- >> tell me this. for the overall industry or the consumer, what do you fear might go wrong with an overhaul, a general overhaul act? >> i think we could easily dissent the enormous revolution that would be taking place. number one the programmer atreides along uncomplicated program that hangs over the industry while it's being written and tends to regard taking risks and making business model changes because you are

erasing the understanding what the rules have been. i've been as regular as many rewrites. in 1996 television provision took almost a decade to settle down. multiple church to the supreme court and the resolution of rarity. i think the country underinvested and underinvested and taking risks in innovation during a period. i don't think some of the problems that some of matter for two are necessarily clear enough for a government response. so that said, think we have members to be perfectly honest who are very concerned about consumer affordability and will talk about ways to manage costs to deal with that. >> mr. berer would you like to briefly comment on senator mccain's proposal, the à la carte proposal? >> yes, senator. i support senator mccain's bill in the first statutory

reforms. the senator like so many americans is clearly outweighs by ever-increasing cable bills in the bill promotes the proconsumer goals by taking note of various predatory advantages that broadcasting cable already get anna requires these companies serve the public interest to qualify for them. as i read the bill came out recently but i don't think the bill outlaws the practice of bundling. simply requires feelers have a choice. i would especially single out the bill's response to broadcasters high-value content on the air. this would clearly be an abrogation of the public trust. senator mccain is right to require broadcasters serve the public if they wish to be -- and is just a general observation i would say as theàa la carte bundle tends to polarize people because they think it's a choice between buying a bundle that is every channel or simply assembling your entire subscription on a channel by channel basis. now there is room in the marketplace for bundles of content. something night like netflix is

is is the bundle the subscribing to get access all want to many services are like that and frankly i prefer the net x. model to get access to everything to the itunes model of buying every show for every series episode by episode. that said i think what people want is a lot more choice. not bundles per se if they don't like the feeling that they're getting ripped off and a lot of people feel like they are getting ripped off. i support senator mccain's bill because it's aimed at giving consumers a lot more choices. >> thank you. >> we have been joined by senators then the ranking member the full committee. senator thing you are recognized. >> thank you mr. chairman. i don't have a lot to add. i think you ranking member quicker for having this hearing and i want to make her former colleague senators met for coming back and joining us here and chairman thank you for being here and mr. dodge in mr. bergmayer. we had earlier this year in fcc oversight hearing and i mentioned a time we need to focus on establishing 21st

century legal and regulatory structures that leads the red latina for 21st century economy and as we move this year and continue looking at various aspects of our communications marketplace i want to learn where our current laws need to be modernized and every law that we passed is based on assumptions and tends to address issues in the moment in time and a great deal less change always been a video market in just the past five years not to mention since 1992. as we look at these issues and think about them i think there are basic questions that need to be asked, do the laws work and are they relevant did they provide consumer choice? i appreciate all of your testimony and your good work and thank you mr. chairman again for holding this hearing and for the opportunity to share those comments and i look forward as we address these issues moving forward in a way that will reflect what i think is a 21st

century economy and some amazing changes over the years in technologies that have really given the american people higher-quality, more choices than those are all good things it we want to continue in that direction. thank you. >> thank you. >> thank you mr. chairman and think you ranking member vitter. in nebraska the way that the nielsen dma map is currently john many people don't get in-state news especially those living around the borders of our state. and as i understand it the map was developed years ago for the purpose of assessing advertising revenue and then congress codified it and now determines where those broadcast signals for cable and satellite can be. if i can watch a nebraska

broadcast on my computer over the internet, i can tell you the internet doesn't represent those boundaries. but i can get them, but i can't get them on tv. my question is, senator smith and mr. bergmayer, does this law make any sense in the current era because my neighbors in north central nebraska, we love our neighbors to the north but we would also like to see the nebraska news. >> senator or remember vividly sitting in the seat of the commerce committee and being very frustrated by the very issue that you raise. i introduced a bill to fix fix . the n.a.b. that i am employed by unfortunately didn't remember when they hired me that i did that. [laughter] >> but you thought it was a good idea?

>> i understand exactly what you're saying and the frustration. unfortunately wednesday boundaries were drawn -- it did not follow that state boundaries be drawn on the basis of, in other words groups of economics. the nielsen ratings which we do not control, reflect those economic basis if you will. and yet if you go to oregon they don't want to listen to the cougars and the huskers. they want the ducks and the beavers are they want their local news. we worked with satellite and cable providers to in one case one of the satellite providers were willing to add a portland station. it relieves a little bit of the pressure but it did not solve the problem. so what we have done and what we will do with you is if you have

a particular situation such as the chairman did in arkansas, we work to try to resolve the specific problems. i understand the problem and i'm entirely sympathetic. we don't have a legal statutory recommendation for you because the statute can't change where the money is. the advertising goes. people in oregon don't necessarily buy chevy's in portland. they buy them in pasco washington. this is the problem and i wish i had an easier answer. to work with you and your office to see if we can't get some of the other providers to help solve that problem. >> i appreciate that. >> senator i think the rules that would limit the ability of cable and satellite and mvpd to carry satellite should be reformed because they demonstrate the current revelatory freezes the status

quo and prevents the industry from evolving to match our technology and to match expectations and i think for the most part the broadcast industry should be able to control most of its relationship with cable providers or satellite providers. through voluntary contracts and not necessarily i don't think those should be backed up by fcc rules that set those contracts in the form of law. >> would you try to reconfigure the way the formula is drawnout? >> sure, that might be -- >> what would be some good examples off the top of your head? >> for reformulating the boundaries i don't have any on the top of my head. they are extremely technical and i'm sure there are people out there who can better assess that to me. i would reconsider the basic idea of things like distant signal protection where the signal in another market is willing to be carried by a cable

system and another market i don't see why those two businesses can't reach an arrangement to do so and i don't see what the fcc had to say about it one way or the other. i would attack issues like that at a more fundamental level however i certainly acknowledged and assert short term changing boundaries might make a lot of sense. >> thank you mr. chair. >> thank you. senator johnson. >> thank you mr. chairman. there is either breakdown in the competitive model or there is not and i guess what i would like to do is, i don't know who i should ask, whoever has an opinion to chime in. if we have a constitution or sufficient competition, in other words what is preventing the competitive model from offering à la carte? where's the breakdown their down there? >> senator johnson if i might

offer my perspective from my experience on this committee. i served here with senator mccain and the chairman. i remember wrestling with the issue of allah card. i will tell you that i have members in broadcasting who are for allah card and i have members who are against allah card. i am with my members. >> again why don't we have à la carte? >> i did not vote for it despite senator mccain's considerable pressure because i saw it as a new market and is michael indicated in his testimony there are tremendous market forces any way that are creating types of adjustment. i foresaw markets developing that would put pressure on this issue and i believe and i can't speak for michael but i believe there are some cable offerings now and satellite offerings that are beginning to offer different

kinds of of packaging. >> sir simply not enough competition or is there a law and regulation that prevents à la carte? that is really what i'm asking. >> in terms of -- i believe there are. for example there are certain provisions such as the basic if the cable operator wanted to offer a broadcast free cable package and after a you can access over-the-air broadcasting with an antenna. what do you need to pay your cable provider for? they can do that because there were rules passed by congress and the fcc that prevent that flexibility so i certainly support repealing those because i don't think it makes a lot of sense anymore. ..

i have seen some improvement. >> but there's really no legal impediment from the internet to be able to do that? >> the internet market right now can't get access to the same kinds of content partly in response to the overall regulatory system and most of the messy content is available on cable. so that pose particular challenges like data caps and other things are preventing online video from becoming the full competitors. right now it's simply not a full competitor but in the end regulated online spacers that

they stopping some services like itunes have mentioned before are all occur. >> mr. powell, by going all occur doesn't mean the services are reduced. consumers voluntarily pay these prices. so there is the marketplace working. but is it fair to subsidize the other content, basically the bundle? why not let each individual programs stand on its own and fight for its own audience click >> a couple things might be informative. the way the market is evolving, consumers of all occur on the window intended to want to watch it appeared the distinction between a what to watch and it's one of current premium window à la carte versus you're willing to wait sometimes the next day, a few days before it's available on itunes or netflix or other services that offer those

programming offerings in the show bundle. one of the challenges in our market is the economics of funding high-value content. the average television show today's reader for $9 an episode to produce at the first window. it often runs on cable in effort to recoup some of that expense. >> will people pay for that? >> the challenge in a country committed to contact, there would be a whole host of content that is a collectively we value but probably would not survive being sold all occur. the television business if you're standing alone, were depending 100% on the subscriber base you can attract. the challenges for niche audiences or minority idea of a high intent to do that for particular content or programming would not appeal to

survive sold solo to which the whole subscription model allows it to be. >> you do support subsidizing programs over others? been a cable model supports a wide range of diverse channels that are difficult to survive on their own. >> okay, thank you. >> senator warner. >> thank you, mr. chairman. great to see you all. i guess is the anchor back here broadcast cable satellite company and outcome each along the way have periods of dominance and now your kind is being evidence of content distribution. this is hot topics, but as we

see the next wave with some of the litigation talked about another members have mentioned netflix number of the others. how does -- how do you see these -- what role if any of the government should play a season or disrupted technologies come in and potentially threaten each of your core business model. maybe a subset of that being, how do we factor in the new revenue stream about rights, which is basically a whole new revenue stream that doesn't fit within our existing legal structure quick >> senator warner, i think the thing that congress can do is to

be faithful to what is our country and constitution and copyright. if you have copyrighted material, right go with that. they deserve compensation with it. i think that is a principle that is valuable in the beginning and hugely important today. >> that goes to the aereo question. >> i would simply say members of litigation and i can't speak to the facts are technical details of it, but it seems to me if someone takes copyrighted material, distributes and charges sorting does not do what other mvp -- mvpds to the best piracy. if you're faithful to the principle of copyright, the

constitutional principle, ultimately the courts will settle this and see if there is an exception. i don't believe there should be because i think that begins to undo the creative community. >> that bad, it also needs to keep peace with the times. so for example, are there any devices that don't have a first come example? does the buffer make a copy and show that copy be entitled to a royalty? it all depends on facts and circumstances of the particular case, but our boxes today really computers. if you make a transitory buffer copy, should that be an additional royalty to the owner? at the fourth if you pay when royalty at the beginning, the consumers fair use principle should be able to do what they like with the content. >> senator, i would just say the rival of the internet is a

genuine and viable distribution platform will shake up the market place. i read every article ever made. while they are the greatest threat to the industry ever seen, the next air complement. the language in the very ceos can see a different disney. it is really compulsive change. the best part about it i would observe is that is creating economic stimulus to force come any to innovate at a much more rapid pace, try to provide much higher value service to consumers and compete with the pressures of contents that exist in the internet space with an even better punctuation mark on our need to continue to find ways to provide flexible channel offerings and provide affordable services. so i think an balance all these things are exciting and positive and not continue. it's typical like a spinning jump rope to say to congress

comprehensively that we know enough to step in to that and write entirely new responsible effect of regime and i still think it's program to evaluate issues on a specific basis as they arise. if you just sit here from the perspective of the numbers, what is not to like about the future merging? it's very, very exciting generally and something we should be excited about. >> one other quick question if i could. >> on the topic, two courts have found antenna rental service does not require license in both of those were correct and would be a very bad idea to change copyright law to make it show the services would require license. you don't need rabbit ears and it's hard to see why you do do not license cousy writes an

individual antenna which happens to be located another town. i think that's such a growing part of our economy today and would be a bad idea. services that exist today without having to separately negotiate licenses, for example, services with your content online would suddenly get public performance licenses because they allow people to access to an individual content? that would be disastrous. for that reason i don't think the limeys to change to match aereo. roughly answering your question which is how should regulations cope with the rise of new technology, one of the primary basis ensuring services are able to reach consumers over the broadband pipe and they're not discriminated again and data types and prevent the next netflix them off for an innovative viewers. >> appreciate that.

i just want to ask one last question. i'm struggling with this because i absolutely understand your concern about piracy and the notions about content, but also i heard mr. kerry from foxy recently that if this continues, fox or others might start taking content off broadcast putting on the cable. i've got to tell you, that raises a real concern for me because your broadcasters, unlike some of the others have public spectrum you got for free, unlike looking backwards, the government said let's go ahead and auction the spectrum. as a public good.

if he had this in our messiah for free under threat and to withdraw content because of these other challenges, then it really raises for me the question of whether you have to be able to keep the spectrum for free, which is a public good and could be utilized for better public services. >> senator warner, i don't speak for senator kerry. i think he was speaking of hypotheticals or potentials. fox produces an enormously valuable content that case huge viewership. they got to figure out how to pay for it. i understand the concerns you raise, but i would also say we don't feel like we got our licenses for free. those licenses come with significant public policy choices of the congress that those airwaves should be used for localism to produce news,

weather, sports and particularly emergency information that letter really is the lifeline in an major natural areas. so broadcasters are most late as every day by obeying and observing, being faithful to the conditions of those licenses. i will speak for mr. kerry. i understand what you are saying. he is simply saying we are not going to sit still for piracy. >> and i would only simply say, sir, that i would imagine if we were to take the spectrum and let's go ahead and put a require men out there since releasing the local content is broadcasters move more and more content upstream and say we are going to sell off select digital component of that doctrine to entities that provide that very local content, that emergency response, verifiable items would

be a lot of access additional value that could be better utilized for the public and candidly the government could receive revenues from that as well. thank you, mr. chairman. >> thank you. senator begich. >> thank you, mr. chairman. i want to follow-up, mr. powell and discussion with senator johnson if i could. is your company talk about this description are packaging, is the thought that there could be some new entries to product that because people don't know they exist or put them into a package that people like me that surf channels might stumble across that and say well, i didn't know this existed. where did this come from? is not only someone who wants that content. is that the thought?

is that witchery thinking there? >> the one you've described very well is an element of the television experience about discovering. someone you didn't know you'd love to wanted. i can certainly list a long string of shows that i discovered that i don't know i would've thought to buying and then with full knowledge of what i am buying. or overcome i'm not so sure in the course of the manchester patterns with change, that i got tired of the program for the program on off the air and there's another program on another channel i have a subscribe to the same centrist day. that's a complicated movement of the way consumers consume television. the second point was let's say you're interested in launching a brand-new network and a brand-new network to survive has to have subscription. right now you still have to come

than convince them that it's worth paying the price they're asking for european access not subscription. if you basically have to knock on doors that would be a challenge >> from a network standpipe like a pilot if someone had a pilot channel to get the share they need to get their customer base to be expensive. they have to convince a company to carry some thing, it's a little bit easier. is that a fair statement? >> passenger thought is quite >> another dimension is all the

marketing, all the sales, although work is done by the cable operator. if you had to saw all a car company would have to observe the cost of doing that yourself. >> i'm going to come back to one more issue. i'm going to go to mr. dodge if i can. you may not want to answer this because it is regarding your company's effort to merge with sprint and also softbank is also considering her in the process of going through a process predominantly a foreign process. i don't understand the process of your domestic come to me and their foreign company and theis. how that process works in ensuring that we understand when

a foreign company buys them up of our networks would have business and is very different between which you have to go through what they go through in the race. this may be unfair because you obviously preferred account any to buy, not bad. i'm guessing not, i may be wrong. >> that's true. >> i'm going to try to rescue his nonbiased is possible. the process issue, nearby a company that lakes sprint, don't they have to go through a whole new process? >> they do. for a foreign company to acquire fcc licenses they have to go through process and the fcc also. ccs -- and which takes a look at the national security concerns this is needed with the

broadcast fcc authorization generally. we do think there is a difference between us requiring sprint for two primary reasons, one of which is a think a wireless nationwide network today is an asset that has import national strategic significant in all things being equal we think it's better to keep it in u.s. hands and specifically assuming the spectrum is rolled up into sprint or sprint controls its interest are the 2.5 gigahertz spectrum is evolving as a global standard for lte mobile deployment, so we think it's preferable for u.s. companies to own the huge spot the spectrum of united state and sprint has about called knotwork with numerous government contracts that rely on up for national national security reasons. all things it was better for an american company to hold those. >> one last question on that. do you think from a rural state,

extremely world the description you just gave, this is how the self-serving, so i'll try to be as nonbiased as possible here, but obviously my end issue is how much can we provide to rural communities and what would get the most access to rural communities? at the end of the day that's what i look forward. give me your thoughts on that. >> our proposal is to use 2.5 gigahertz spectrum to increase broadband capability in rural areas were uncertain underserved households, which we estimate is 30 million people because we have a rural-based provider today we need installers in the country to go and put outdoor antennas on the size of people's houses, which allows 2.5 concurs specter to go further in breach

40 million uncertain underserved households in rural america for broadband. >> mr. chairman, one last question. thank you very much for that answer, but i have another question. i have a 10 and a half year old, so i am always wondering what he is watching. i won't say the company name, but i do that the system and i want to suggest one piece added to it. i was on cocoa and are not on the plane, sent a note to my wife saying what is to channel my son is watching right now? she said i literally went on and changed it online. if it did notice a change? he said yes without i'm going to change it again. [laughter] i literally used my ipod and changed it again. that is really testing the system. i was flying back to alaska, changing his channel to a more

educational channel in my view. but what i wanted to do this at that moment also love canal. so i'm just giving you -- i think from a parent standpoint, it is an incredible tool. literally, anywhere i am, i can see what he's up to. if i don't like the channel he is on at that moment, i can knock him out. from a parent, give me a couple more extra tools because as a parent a lot of channel choices have on the mechanism manner to not want the wholebut sometimms channel because later you may have content you don't want them to see. so i'm just giving you a thought to the industry.

my wife was very impressed so now it is on her. he can be watching any more movies. but it's really very impressive. >> out of debt and i take this suggestion. i tried to block him a 24-year-old mostly because he's running up the cable bill. >> by the way, there may be ways to do what you're trying to do and some of our systems. >> i think could be great from a parent standpoint because so much as mobile now and you can make that access point. >> we were a in channel changing capacity to do just that she's fat as well as invigorate the parental controls and are set-top boxes, so anything to make those work together, we will happily pursue. >> thank you very much. >> kind of humor questions. senator johnson.

limit go ahead recognize you, senator johnson. we are going to have a vote on the floor at noon, so go ahead and ask a few questions. >> again, i want to follow up on the model. use the term convulsive change. that's really how economies move forward. what i'm getting a sense out of a lot of people on the panel as we need to proceed cautiously. i understand senator begich in shame and a something like is something the private market ought to institute, not the government solution. so obviously a hearing like this is about legislation. i guess i am asking the competitive model works for the competitive marketplace as a model. we don't want to screw it up. are the things government needs to do? is there other legitimate government roadblocks to the

competition versus roadblocks taking care of over the course of time through market competition. maybe they're not sure quite yet because the type knowledge he appeared but let's not have government step in to screw it up. autoscan overt, less -- worked that santan seen here complain about the government regulates. on that list, the table. a comment was made earlier that >> i'm a big opponent of there's a lot of rural representation on this panel. markets. i also know many of the rules a lot of these rules are to try to protect residents in wisconsin. if you get rid of not duplication compulsory license, things like this, what are you getting rid of? you're getting rid of the congressional intent to foster localism. if you go with the money has come to go to new york, chicago, los angeles, a few other big cities and rural folks and get left out. so congress made a decision with all of these rules, compulsory

license, whatever. how do we foster this marvel in this country that unique to this country, where you have local broadcasting in the steadfast country that serves so many public values that are valuable still? always ask yourself when it comes up, i don't like this, why? the answer is localism. >> i would concur that i think we are in a tumultuous and competitive market that is generally operating well. but i would say is i'm obligated to on behalf of something sooners -- some of our members, a lot of rules -- a lot of aspects of the market have government at the table. they shape the terms and conditions under which things can be done. so while i'm not in a position to say which ones who eliminates

an up way or if we ever will, but i would preserve the discussion of our government is a party to how market conditions unfold, there can always be a question about whether that would be a productive place for government involvement. we deserve what that might be. >> i would love to follow up to you when you his issues. i'd also love to hear what goes in regulations or members disagree on in the reason that we can that offline. >> we at taste of competition and free market, figuring out the right answer for business questions. there is one area today where there is not a competition and it's partially government created, which is the system did i mention in my opening remarks because when this all started, there is one local broadcaster and one cable company is a pretty fair fight. a symbiotic relationship, but

they both need each other. today's cup on broadcaster plan through for distributors against each other and the result is price circling up at 100% with the renewal consumers the same programming and it's not a fair fight. we suggest in those cases to level the playing field to be fair. >> you don't have a problem paying for retransmission. you want competition so you're not for us to negotiate with one supplier. >> when you look at the way people watch content, it's created by the network. the fcc has rules about that and goes to the affiliate or local broadcaster. i support localism, but i think there's better ways to foster localism and essentially subsidizing through this

regulatory apparatus that holds that change in the mysteries. so i support a lot of the same goals that are broadcaster fred supporter. however, i think there's other ways to accomplish those goals, particularly with the change in technology we've all seen. >> thank you, mr. chairman. >> thank you, mr. johnson. you mention in your testimony one of the answers to one of the questions, you mentioned that online video distributors are having problems getting access to some content. do you have to explain that a little further? >> sure, online providers are successful and i don't think they want to change their business model and become virtual cable systems. that said, we do see content available for traditional channels is not available online and i would imagine it's not for want of trying, but it not

available because the current incumbent of control over the business models and incentives of the content creators. we've seen a number of providers, sky angel is a company that wanted to offer family-friendly christian cable system and they were in on system. they lost access because they were in online to send for that reason only. that's just a hint of the competitive services we might see entries present controls if these providers are about to basically do the cable model except online. >> is that because of copyright considerations? >> or a telecom considerations, ways to handle it. i don't think it's an intractable problem though. >> mr. dodgers do know, one of the things we have to do in this

committee in the senate and house have to do this reauthorize before the end of 2014. you suggested in your statement that retransmission consent is one area congress should consider when reauthorizing the measure. you know, retransmission consent deserves a much longer conversation. i see some had bobbing behind you. i think somewhat agree. but what other issues do think that to be part of the discussion when it comes to the conversation? >> in area proven his dna reform or the county issue which is to use colorado's example folks in the southwest corner in albuquerque and every time the fall rolls around asks the question, why can i wash my dilaudid denver broncos? for that we proposed a pretty simple fix, which is folks in a

county, meaning from the neighboring state should be able to get some in c. programming paper happy to provide them with the programming if he will abide to requirement. given the estate program. for example, there might be folks to senator smith's point want to buy their cars. i'll probably watch albuquerque stations to see those advertisements. if they watch denver, they should be the split. >> with respect to reauthorization generally, there are several categories we think should still be protect at first and foremost folks in short markets don't have a network affiliate who drive around and directv also has some legacy customers who are true subscribers that are in insert households. >> mr. powell, let me ask you.

then know you offered your comments, your response to senator mccain's proposal. is there something that might give consumers more transparency and more choice that might be sure to occur? >> well, i think it's been mentioned as a whole range of product configurations one could imagine would improve the value from the perspective of the consumers than all of our companies believe in that and are working hard to create much more flexible offerings to give consumers that choice. time warner cable is offering has attempted to provide an essentials package for a much lower price without the traditional programming. i think our operators are they too have even more flexibility to make those offerings and

that's a positive. i also think we shouldn't underestimate the role of the cable company as broadband provider, and ability to provide an infrastructure that opens up the world of video far beyond what we provide over the proprietary system. in that area, working hard to be transparent about consumption patterns, clarification. these are issues have been focused on. those are some of the things we are doing. >> with some of this desire for more flexibility, whatever they may be, would that also include more transparency on what each channel costs the consumer? >> entry sandlin of come i can speak factually. there's nothing that prevents them. we have operators who break out on the bill some of the costs associated with specific

programming, even after obligated to carry by contract, some of them let the consumer understand what pieces are. >> me ask also about perot. changing gears a little bit, but i believe of course you've all mention several senators on the panel -- on the committee and subcommittee that have large areas of rural constituents in their states. 's fr to say we believe they should have the same ability to view the programs, not just -- i think they showed the feedback sister programs generally. so let me ask you vacant stare but do i miss, is that your experience that customers of small cable companies, does not to be rural, the small cable companies end up with the same

choices in the same viewing options and offerings the folks at the larger cable companies have? >> small companies do a very terrific job of providing service even in rural communities. they are very proud of that and they were very, very hard to provide a lineup that is compelling. it is factually true that being a small programmer, buying programming to match what may be provided sometimes can be a bigger challenge, both because it's not as large, not as profitable a company, some of the premium programming that is understandably relatively expensive is a bigger challenge to purchase, but they were carded trying to make sure they can replicate that the best they can. >> senator smith.

>> mr. chairman, and he does a word defense of returns mission consent. i understand why my friends don't want to pay for broadcast content. we literally represent a few pennies per dollar of a prescription tv bill, but it's the most valuable content if god. this stuff that people watch the most. it is reason in terms of years when we've gotten paid for that value. we are not the driver of what is driving up the cost. we are one piece of it in literally cents per dollar. somehow if you want to support localism, please remember the two revenue streams that provide and pay those costs, advertising

and consent. mr. dodgers company has technology to get rid of broadcast at. it gets rid of your ads, too, mr. chairman. it does not get rid of cable where they are ads. so somehow if we do business with them, we need to be paid for the value of what we provide because it is expensive. what is a preserve? i've got to thought if they bring in a signal from ally and to force math, it's not going to mean a lot to them when a hurricane is airing down rhr nato. these things cost money, have only two ways to pay for it. i've are tracing every transplant to eliminate advertising model. it doesn't matter. >> tijuana, now not?

>> sure, and a couple points. senator smith was referring to the entire broadcast safety someone's hard drive and people to skip ads. the ads are still there. two, it's my understanding that an increasing proportion of retransmission consent fees, which are in the name of localism are being required to be sent back to the networks in los angeles and new york. i ask you to view this statement of the 100% support localism of skepticism. >> it does involve votes, networks of local affiliates are hugely important to localism. >> let me ask you if i may a little bit of a change of gears here that i've heard you talk about a little here today, but also in other contexts.

average attack of the spectrum in the spectrum crunch in this country, especially when it comes to the most distant populated areas. i am wondering if he would share with the subcommittee your thoughts on how the broadcast model hops to alleviate some of the spec crunch around the country. >> when they say they predicated there is any misunderstanding from the n.a.b. supports the voluntary spec of option. we believe should be done as soon as it can be done right. but the uniqueness of the broadcasting signal is this one to everyone, local free and live. that's a huge value. the architecture which is not shared by broad and, which is one-to-one as i said earlier commanders and not enough in the university law video one to one. so when it comes to big events

and emergent these, the broadcast signal becomes a matter of extreme public safety importance. that is why i think as you calculate all of the various regulations around that, pull back to the original intent of congress as to why they set up to foster localism, to have it. if everything is pay on tv now, if you have to go to -- or whenever to see television, what does that do for the elderly, the shut-ins, the poor, minority communities who disproportionately reliant broadcast television for these days 20, 30 broadcast channels they can access. they should be commented, too. those are the things which broadcast part of uniquely

provides to the american people. it is valuable in the beginning of valuable cell and it is a value that come to support. >> to have anything else? >> rebroadcasting. i'm looking at a schedule here about $2 billion last year. it's come from 3% in 2067% of the total fees paid cable. if the percentage of the cable bill. what is the total amount -- what is the total value of and in the broadcast? >> the general rule i would say somewhere between 15% and 30% of the revenue stream is retransmission can send. the balances advertise. >> in terms of revenue streams to make it about $2 billion per

year nationally in fees paid by to get in in terms of advertising? hundreds of billions of dollars. >> it's a lot of money. >> the retransmission is a small amount of the revenue stream. >> as telecommunications fractures in the model gets smaller, how do you maintain the quality? how do you provide out the content of the people that demand the most? >> the business model is changing dramatically. i don't think government is good at trying to redirect the business model very effectively. the other quick question in terms of the total value you have right now, yes i realize the broadcasters are providing local content, but there is a huge value locked up, correct? anybody have some estimate put

in somewhere around $15 million? >> typecasting has 230 megahertz of spectrum. wireless has over 500 major hers, much still inventory. the government has the other half. >> the truth of the matter is that the digital technology spectrum gets more and more all the time. >> campaign for their spectrum? >> in some cases. >> do you have any idea how much that has caused >> we paid $3 billion in the bankruptcy option several years ago. >> that's a pretty good deal, right? >> i'm just trying to get some sort of feel of overall number

errs to throw red generalities and when you start putting a dollar, that's where were talking about here is dollars to and from different individuals. that's a competition is created. i'm just trying to get the basic information to tony was here. that's all, thanks. >> you've been outstanding and affirmative. we appreciate your time in the fact you are here today. we are going to leave the record open for two weeks and allow members to ask questions. we appreciate your answers as quickly as possible. since there is no other business before the subcommittee today, we will adjourn. thank you very much. [inaudible conversations]

>> this is a painting that shows lucy during the civil war. two causes important to her were better than soldiers and also orphans, children who have been made orphans as a result of the civil war. and people associated with this causes sitcom here to visit, david ct or ms formal welcome h. and so, this is very david discussed the issues of the day. they would've posted a number of figures here, including future president taft and mckinley as well as a number of other local and national political figures. so as a political partner with her has been entertaining these

figures and serving in the role of host is that these dinners would have been incredibly important. >> the senate agricultural committee approved a five-year farm bill, which sets policy in agriculture, nutrition, conservation forcer programs. this bill could stoop went for billion annually and includes subsidies for farmers. here's the markup session that led to the vote on the bill. it is three hours. >> good morning. i asked government to take their seats. we are starting off with some chicken chocolate and send georgia peanuts. a good way to start this morning. we will call the senate committee on aquaculture nutrition to order. we are here of course to mark up our committee bill for the 2013

farm bill, the aquaculture reform food and jobs that pay out last year in the middle of a hard-fought election year and the swirling partisan battles on capital hill, we in the senate were cultured attrition committee came together. we sat around this table. we worked together in a bipartisan way to craft a new farm bill, one with nature reforms, deficit reduction and a commitment to the diversity of american agriculture. even more important, i worked last year reflected our commitment to the 16 million men and women in this country whose livelihoods depend on aquaculture and on whom we depend for our food. 69 people at the end of a long day's work gather with their families around tables very much

like this one. in the wake of the worst drought in decades, each out that persisted any parts of our country that talk at those tables is about worries for the future. we saw last year and deniable prove that farming is the riskiest business in the country, which is why the farm bill is a very. but senator cochran and i sat at the beginning of the year, we agreed we wanted to build on the successes of last year. together, we've crafted another strong farm bill that gives farmers the ability to manage their risk and streamlines programs and cuts red tape for farmers and recognizes the diversity of aquaculture from the cut field in the mist sippy delta to the cherry orchards in michigan. we also continue our commitment to deficit reduction of the

$23 billion in savings that we will be working with cbo as we move through and the manager's amendment and fine tuned as in terms of our final school, but i'm confident we've had about 23 billion in savings. agriculture has been willing to do frankly more from the first debate in the super committee at a farm bill that passed last year. this reflects past from the sequester goes beyond that and spending reductions by making tough decisions and setting priorities that make sense for farmers, families and taxpayers as well. the agriculture includes a stronger commitment to conservation. one born out of the efforts by both conservation, environment or and agriculture groups effect

on themselves to find a way to protect our soil and water resources necessary to keep agriculture strong for generations to come. this bill continues our support. people fall on hard times to no fault of their own anyhow putting food on the table for their families. we've cracked down abuses in the system without attacking the basic structure of support that many families have needed to get themselves through the tough economy. the good news is spending on nutrition services is going down as our economy is growing and more people are getting back to work. i want to thank my ranking member and friend, senator cochran whose deep knowledge has been valuable as we sit in this room, we see a wonderful portrait on the wall because of senator cochran's readership is

chairman of this committee and has been and continues to be a real pleasure to work with someone with such incredible knowledge annex variants and agriculture. he's been a great partner and i appreciate the hard work of his staff and i also want to thank my staff together. they have done an outstanding job. this is tough for all of us as a look at changing a system, moving to our risk based approach is and yet make sure we're addressing regional differen i believe as we consider the manager's amendment today that we have in fact done not in very many people around the table that deserve a lot of hard work for getting a spare. let me just conclude by saying that it is our job to make sure the 16 million americans who work in agriculture or other long-term policy that works for

them because they are the ones giving us the safest, most affordable food supply in the world and that is why we are here. i'd like now to turn to my friend and ranking member, senator cochran will alternate opening statements between the majority and minority in order of seniority today and if you would like to submit a longer version for the record, we would be happy to accept it. senator cochran. >> bottom chairwomen, thank you for your leadership in drafting this farm bill. it is going to save off the baseline $24 billion over the life of the bill. the bill reflects fiscal responsibility, but provides a workable and strong safety net for families and producers of food and fiber we hope they never need. we have made some reductions. we've streamlined and consolidated programs. is also significantly less mandatory money authorized for

energy programs than in the 2008 farmville. i think it is important to note the bill through the congress and the president for signature could farmers and ranchers need to search the data comes from a five-year farm bill. we tried to be fair to those affected by the bill as well as those who pay the bill. we hope this is a workable bill that encourages conservation of land and water resource is at the same time reports production of reasonably priced commodities. we need to move the process forward, get to the senate floor and negotiate ultimately what the house of representatives and conference and resolve our differences. we hope the president will sign our bill. i think it deserves his support. thank you. >> thank you very, very much. i would now like to turn for opening statements. we will start with senator

brown. i want to know we want to thank senator brown for the brevity of his opening statement. >> i think he may go after me. >> senator klobuchar. >> apologist have to go back and forth to the immigration markup, none of chairwoman, thank you for your good work. it's been 327 days since the senate passed the last farm bill in june of 2012. since that time, farmers, ranchers, rural communities in america have been through a lot. in 2012 with the worst drought since 1956, causing the country billions of dollars had in minnesota, 74 counties were eligible to disaster relief due to the drought. the drought threat to farmers and ranchers across thursday. but we can't do much about the weather, we can do a lot to make sure farmers and ranchers have the safety net they need. we should not be delaying the passage of this bill in congress.

i'm so pleased with the work the committee has done, the bipartisan work this committee has done and i'm also pleased we found a way to do this was still reducing the debt. they've eliminated direct payments are further focus farm programs on family farmers and i urge the committee to stick with a $23 billion target to ensure we have the strongest possible to go to the floor and have a conference with the house. in minnesota specifically were pleased with disaster relief provisions in here, the energy focus, the fact the sugar program, which is tens of thousands of jobs in our state remains in the spell a no-cost program and overall it's been a great job. i've loved working with members and i went to thank you for leadership and we look forward to getting this bill to the floor and not having another 327 days past. >> thank you very, very much. let me turn to senator bobbers and say as we look at the bill going forward, it is based an

overwhelmingly remains the bill we passed together last time. it was a pleasure working with you at that time and we continue to work together to make sure we have the strongest possible. the senator roberts. >> if she could please don't take this out of my time. i'll pastorate now. >> would you like to read that now? is this like passing a note in class? [laughter] >> you could just nod your head if that'll be fine. thank you. none of chairwoman, ranking member cochran, it is a privilege to be here today as we mark up the new farm bill, the jobs the 2013th for the last

two years as you pointed out that the kerry to say reform oriented alan to love. unfortunately, were unable to do this in 20 taliban were back again around the table once again that that's nothing unusual for a farm. buster is proud to say we put together a bipartisan bill to strengthen and preserve the safety net in all the hearings we've had for farmers, ranchers, lenders. i think this certainly benefits all of our producers and rural america, too. we also provide a 24 billion deficit reduction. even pass a bill to the senate with regular order. imagine that. let me be clear, i so want to pass the farm bill and provide long-term search each farmers and ranchers and their families all across the country. ..

to $13.30 and peanuts jump from the $4 95 to $523. these prices are set so high, they may cover a producer's full cost of production. essentially guaranteeing they are average or above average. in the budget environment time when we are looking to make

smart cuts to farm program, i don't know how to justify a program that pays producers more than the cost of production and essentially becomes nothing more than another income transfer program. not a risk-management tool. and trying to speed up. to be specific, it is guaranteeing a producer $2.40 per hundred profit at the average yield of 7900 rate per acre. it would profit about $190 per acre. the farmers planning for a government program and not the economy. they extend the period of low prices. we know it's not good policy. and bound to have unintended consequences like impacting planning decisions. when base acres established over twenty five years ago, kansas plan planted 2.8 million acre of corn, 4.8 million acre of or so gum, 1.6 million acre of

soybeans we were agricultural. in the most recent three year period kansas farmers planted 4.6 billion acre of corn, 2.6 million acre of or so gum. that's about five million fewer acres. and more corn and soybeans. they are mirrored in many other cropping regions especially in the midwest. these occur because farmers made the decisions. not washington. our producers have planned-- planted for the market. decouple target price of the program. it's not right -- i hope we can

improve upon the bill today to resimilarble the risk of or . >> thank you. senator browrn. senator browne. all right. senator gillibrand. >> thank you for the hearing. ly submit my statement for the record. ly just articulate one priority. obviously it is a priority for all of us in the senate to reduce the debt and deficit. t something we are here to do. it's to create a growing economy. i want to make a statements the families living in poverty, our children, veterans, seniors, active duty personnel are going to suffer if we cut food stamps. i don't believe we should be balancing the debt or deficit on the hard working americans who are hungry. i want people to think about what they're doing offering the

nature of the amendment. thank you. the rest of my statement will be submitted for the record. thank you. >> thank you. first of all, let me commend you and the ranking member on working hard once again to produce what we automatic know from firsthand experience is a difficult bill to produce. the process is always, always difficult to go through trying to matchup all regions and crops. but i want to commend you. i think we all agree it needs to provide a effective safety net to rely on in time of need. they face a combination of challenges such as whether input and market volatility 2008 farm bill provided strong safety net programmers for successors.

i appreciate the comment of my friends from kansas relative to the approach in the changes that were made between last year and this year, you have to look at the reaction of the marnght to determine that. we had less payments coming out of washington on the 2008 farm bill i'm certain without doing the research of any other farm bill in recent memory with the proposal and the 2012 farm bill that was going to be reversed. with the approach and the chairman and the rajing member made here, i think our commitment to having a market oriented policy from a long range standpoint is being reconstituted. the biggest issue facing our country now is the growing debt and deficit with the impact of

best and ration taking in to account, the bill provide around 23 billion in savings for mandatory programs. to go toward deficit reduction. that's remarkingble. with that kind of number it there and the conditions we're operating in. i understand there are different ideas around in the table as to what is the best safety net. i urge my colleagues to recognize that one program does not fit all. the bill before us attempts to provide producers with options to find what works best for them. that's a step in the right direction. it's something behave never done before the new program known as adverse market protection seeks to serve the needs of those who are not protected by the agricultural risk coverage

program. it's imperative it provide protection for the multiyear declines. ease spshly for southern crop. also i would like to recognize that the cotton policy contained in the represent fundamental reform in the support provided to reform contribute 2.8 billion in savings toward this committee's budget target. legislation eliminate all change all tight one programs. providing direct support to those involved in cotton production and puts us down the path to resolving the dispute with brazil. this is going to be my fourth and final farm bill as a member of congress. i'm in a strong support of georgia agricultural for many years. i witnessed several dispute especially regional resolving those and doing the important work for our country's agricultural industry has been

the business of this committee since and i am confident that we can plan these interest between commodity and region. in order to reach our common goal of getting a farm bill across the finish line. miami chair, i thank you for your great work. i thank the ranking member. i look forward to our discussion today. >> thank you very much, senator channel police. i also want to recognize your leadership over the years. we also also have a wonderful opportunity to look at another portrait on the wall that is a symbol of your leadership and you will be missed in the committee and i know by the senate. we appreciate your dedication over the years. and your involvement and expertise and agricultural. senate donnelly, we welcome you to the committee. it's great for me to have another great lake senator.

senator browne and love adding another one. we appreciate your leadership. >> thank you, miami chair. and i'm honored to be a part of the committee. i look forward to a solid farm bill and the work involved. >> thank you very much. senator boseman. >> thank you madam chair. we appreciate you having the markup today and for your hard work in bringing forward the bipartisan and reform-oriented legislation. like all of the other members of the committee, i recognize that our producers a strong five-year farm bill that ensures our nation will continue to have the world's safest, most affordable, and reliable food supply in fiber. we know that the only way to accomplish this is for this committee to report a bipartisan bill that provides a safety net for all crop and regions, invest in the future of rural america, preserve a safety net for the most vulnerable member of our

communities with ab finally a bill that includes significant reforms and contributes to reducing our photograph dell sit. the chair and ranking member as well as the staffs have demonstrated tremendous leadership in negotiating the delicate comprise that brings us closer than ever to achieving these capstone principle. i appreciate the manager's package includes the amendments. while the bill before us leaves room for improvement in terms of meet all the needs forest fire our producer. the framework is a tremendous step in the right direction. i think we're all well on our way to getting a five-year bill that achieving all of our objective and can pass both chamber of congress. i have strong reservation about the inclusion of an amendment that lowered target prices to 55% of simple average except for rice and cotton. this leaves gap in the price protection part of the safety net, and puts rice and peanuts in a separate calculation from

other crops. it is true that rice and peanuts are in need of an update on of the refer price but providing them with the own special calculation separate from other crops raising serious concerns. this committee on behalf our nation's producer of food and fiber included $23 billion in reforms from 2012 spending levels. we have eliminated the direct payment and program which is no easy task and replaced them with a new program we have reformed the conservation title in the bill reducing the number of programs. in a way that gives them the tools they need to protect our environment. finally, i would like to say that i realize that there continue to be regional

differences. i think everyone sees things in the bill they may not like. statement i have to offer my appreciation to you and ranking member cook ran for finding common ground here and gets us to the framework where there is greater equity for crops and region. if we cannot work together to preserve and improve on the delicate balance we have created. we undermine our ability to move up to the responsibility of getting a five-year done. i'm confident the only way is by moving legislation that brought bipartisan support and supported by member from all region. the framework included in your mark is indicative of yours and the ranking member's commitment to the principle. i look forward to continue to work with you throughout the rest of the process and seeing a five-year farm bill signed in to law this year. i yield back. thank you because we are going back and forth on seniority. i want to turn to senator heart

attacken. t your last farm bill of many. and senate chambliss as well. when we look at the the incredible expertise on the committee we look at the walls there are four sitting senators on the committee who have pictures that we get an opportunity to look at through their portrait every day and remind us of the depth e of the experience and commitment and certainly you have over the years so many areas from nutrition to, 0 conservation to the right kind of policy in so many areas. tremendous leadership. we'll miss you as well as our other colleagues that are leaving us. but we thank you for your leadership. and look forward to working you as we get it across the finish line. >> thank you for the kind remarks. i appreciate it very much. i loved the committee ever since i got on it in 1985. my previous service on the house agricultural committee, senator

roberts. you weren't on the house committee were you? that's right. and then you came over here. who? [inaudible] yeah. dave was on the committee. yeah. i've loved my work in agricultural issue for so long. madam chair, thank you for your leadership. there's a lot of expertise on the committee, and i would not want to let the moment pass again without thanking senate for the work we did together on -- first of all, one farm bill we did together in 2002, and then we did the 2008 with senator chambliss and that was one where we had up and down the ladder. [laughter] two presidential veto. and overwriting veto. it was something else. anyway. [laughter] we won. final analysis, we did win. so i -- this has been an

enjoyable tenure on the committee. i thank you, madam chair for your great leadership of the committee. i also marvel at the fact that our chair was unique distinction having served on the agriculture committee at the state legislature, the u.s. house, and the u.s. senate. i don't know the anyone else ever had that kind of a career. and so i thank you. thank you for your diligence in getting this bill through in tremendous terrible hardship and budget fights we had. we had the bill i thought put together. last december and you know what happens outside the committee. we didn't get it. again, hopefully we can get it over the finish line now. just a couple of things. look, i know there's a lot of problems we have budget problems we have to solve overall generally but again, i take

great solis on the fact that on a bipartisan basis on the committee we worked hard to limit those kind of budget impacts on rural america. we are small in numbers. we don't have the clout in the house. we still do in the senate, thank goodnd, but not in the house. a lot of tough to focus on the areas. rural america. and so this committee, i think has been a limiting those kinds of impact on farmers and small town on rural america. i would note on the nutrition cuts, we should take great pride. i think we should take great pride, all of us, in the fact that in america we don't -well,o say they're not. there are. but basically we take the lead of any nation in the world in ensuring that people who are having a hard time in poverty,

out of work, for whatever circumstances can access good nutrition food in this country. that had to be a source of pride for us. and continuing source of pride. and i hope that as we try to work ourselves on a project problem, we don't just kind of scum to the fact well, people like that don't have much of a voice or much of a vote and therefore we can take it all out of nutrition. we took -- as you know $4 billion in the house over $20 billion. i hope we can stick wt number, madam chair, that was a great opponent on bipartisan basis. i want to mention briefly the conservation title. again, i want to commend both you senator cook ran and roberts for the strong improvement in the program. including the conservation stewardship program. i regret; however, that the conservation funding is cut from the levels. i thank you for limiting those

conservation budget cuts. lastly, let me say it contains a strong crop insurance program. that's wonderful. in fact it makes it more ben foicial farmers. it's a substantial economic value to my iowa farmers. i'm sure farmers all over america. i specialsly want to express my congratulations on the agreement that was reached between the farm community and the conservation community to reinstate the minimum conservation. i think it's a very important policy reform. lastly on energy programs. again i commend our senator so again thank you and thank you senator corcoran and so many others that worked to bring together, i think, a truly very good bill.

>> thank you very much. i would like to turn to senator jo jo jo hanson. we have a former secretary of department of al churl. i don't know any committee that has a wealthy of expertise and depth of knowledge as this one. and we very appreciate your leadership and experience with the committee. >> thank you very much, madam chair. i might note that during the time i was secretary of agriculture i had the pleasure of working with two different chairs but a the senate flipped and started out working with saxby chambliss. it is an honor and pleasure. i had the opportunity to work with senator harkin. honor and pleasure and the thing i would say that most impressed me, there was no difference whatsoever in the level of partisanship. whether i was working with tom harkin or sax by chambliss. we worked on policy issues.

we had our agreements and disagreements on policy issue. there was never an issue about partnership. i sure appreciate that back in the day when i was a secretary. let me also start today and say thank you to the chair and the ranking member. i want to tell you i appreciate all of the work you have done. i also thank the staff i'm guessing all of our staff are working on a few hours of sleep, and it's because of their hard work we can if be here today and start marking up farm bill. i certainly know that creating a farm bill is never easy. there's a lot of different philosophy about farm policy. and of course, we come from different parts of the country and different crops. as many of you know, i have concerns with the farm bill. first, let me start kind of at the macro level and talk about the savings in the bill. the bill in its proported 2324

billion worth of savings double counted $6 psht 4 billion in savings from spending. it's not from it was signed in to law in 2011 in the bill that was resulted in the sequester. second with, it contains -- what i'll describe as a gimmick. it hides 3.1 billion in payments outside the budget window. it reminds me of the days back when i was governor of nebraska. times were tough, and somebody was suggesting what we can balance the budget by just delaying the school aid payment until the next fiscal year. that didn't solve any problems. and this doesn't solve any problems. it's no way to deal with bdget issues. i also fundamentisagree with target prices. congress should get out of the business of setting prices.

that's why we have markets. farmers don't always get the price they want. and farmers recognize it's a part of agricultural. if we keep telling farmers to plan for pricers that are higher than the market or cover the cost of production, even. they will simply respond to that and the end result is you have planting that is too much and lowered prices. that drives prices down. continuing the cycle of low prices government payment. it's not the right policy if for government agricultural. i don't recall being at the meeting in nebraska where a farmer said, mike, we don't need payment anymore. we can use higher target prices. i don't remember them saying to me we need a shallow loss progm. farmers just basically said the basic crop insurance program

that we have is workinging to do everything you can to sustain that program. having said those things, there are some things in the bill that we can't ignore that i would rate on the positive side. it does have the tie us a g.i. in payment limit of any farm bill i'm aware of. it make sure that farmers are actively engaged in the farming operation. further more, this farm bill preserves end -- i would say does a good job with the basic crop insurance program. i appreciate that those reforms are not always popular and some regions of the country. i certainly never know that having proposed some reforms in those payment limit areas when i was secretary. i lawed for you includg those. i especially pleased with the effort to stream line and simplify the conservation programs.

that's an issue i've heard a lot about. i suspect we have. i propose some similar changes asking a secretary. i'm pleaed you followed up on. the improvement reduce cost as well as make the program more farmer friendly. needed to immediate demands for farmers to produce more food and less land and helps us address the challenges of the future. my hope is that we can do more on that area. it does so in a way that includes new avenue new to ensure that important work continues in times of tight federal budget. finally i'm pleased that the bill builds on efforts to support beginning farmers and ranchers, veterans, and others looking for a career in agricultural. my hope is that during the

markup today we can improve upon this bill miami chair. thank you very much. i thank the ranking member also. >> thank you very much. senator, welcome to the committee. we are glad to have another strong agriculture voice from north dakota and appreciate your leadership. >> thank you chairwoman and ranking member. there's not a lot of members of my freshman class who would sit at the table like this and say this is the primary reason why i want to in the united states senate to represent north dakota agricultural and represent our producers and economy an in north dakota where 90% behalf we do is agricultural. we are a huge part of the $16 billion people strong effort. we are very, very proud of what we do. because we do a lot of diverse things. somebody might be concerned about commodity. we are concerned about specialty

crop and bee keeper and custom combiners. we are the bread basket and the great food producer for our state. and for our country. and just want to make the point where you lead l heard a lot about energy. we yes produce a lot of fossil fuel. we are very concerned about the energy title. concerned about continuing the efforts for all of the above. which has got to continue to include bio fuel. i'm going submit the remarking for the record. i want to tell you how grateful i am for your leadership and the leadership of the ranking member to bring a bill al bit not perfect. there are i think thises in the bill you've heard the gentleman on the minority talk about that i wouldn't necessarily agree with. i promised the people of my state i would come with the attitude toward comprise. what is doable? i would close with one final thought. the farm bill has never been a

-- we will be judged in our state and country if we can in fact get public policy out to an area that provides 16 million jobs in timely fashion. and so hopefully we'll be able to do this and chive the comprise we need to move it forward. but we're extremely hopeful that the house will do this. for once if we can get a goal of getting it done before the exper ration of the extension that would be an meeting feat. thank you, chairwoman. i look forward to the markup. >> thank you very much. thank you for your leadership. a strong advocate for reform and conservation. and appreciate all of your involvement in this bill. >> thank you i want to thank you.

so we are back and i hope that as the bill moves forward we can shape in a way that moves us the future of agriculture that is more based upon the market and less on planting for the government. the -- thing bill, i hope it's going to be back in the future. i think it's past to the past in some respect in ferm of the architecture that is used in past farm bills and encouragers plant more for the government than the market. i believe it's a starting point and in the current climate a budgetary and fiscal constraint. it's important we subject all area of federal spending to close examination and the farm bill is no exception of that. we have to our do our part.

of course we can't exempt any program from reform. over the past two years in preparation for the particular farm bill, i introduced various piece of legislation reforming several component of the farm bill and save more than $50 billion. i think the economy can write a farm bill that provides an -- delivers assistance under the nutrition tight for those who need and deserve it. and makes available the tools need to preserve, protect, our forest, soil, and natural resources saves taxpayer dollars. we must face a reality that the commodity title programs need reform. they provide a safety net and not an unnecessary that distorts planning and detention. i comment the member of the various commodity crop insurance who responsibly came together the past few weeks and on their

own solved a potentially contention issue. support the agreement which they arrive and pleased it's included in the bill we are markingup today. i propose common sense reform to the significant savings without altering benefits to needy families. it's complex. we should be individual throont ensure that 760 billion of the taxpayer's money is indeed going help left those indeed out of poverty. holding states accountable, reobesity grants and ensuring that able-bodied adults work part-time or participate in job training are small steps we can take to improve the program. i'm hopeful we can adopt these and other reforms and save tax bayer -- payer dollars.

.. >> because of your leadership so we welcome you and in addition to the secretary of agriculture it is great to have the chairman of finance on that

ag committee. >> thank you very much. i highly commend you the way you put this enterprise together, the bill and members of the committee, groups, so forth, a terrific job. i could speak to all members to express my appreciation how well you have put this together. it is a long road. it is important we have a five-year bill and many of us believe the short-term extension still make sense for obvious reasons i want to thank you for coming up with a five-year bill. one out of five montana jobs related to agriculture the number one industry. i thank you from half of one

tannins also the national disaster provisions are important for the state of montana we have droughts, floods, fires we need something permanent provision to address national disaster and we appreciate that also addressing also in ways that is important to our state and we appreciate as well and the bill still saves taxpayers a lot of money that is a feather in your cap but reasons why this is legislation and i thank you very much for your efforts. >> faq. i appreciated. i believe senator, we

haven't heard from you if you want to make comments at this point* we would like to have you do that. because of the importance of agriculture in north dakota we have both senators on the committee from north dakota to make sure it is covered. >> figure madam chairman and also for the opportunity to comment and to both you and the ranking member for working to get us into committee with this markup and i appreciated very much with our farmers and ranchers across this great country. i also appreciate the spirit with which you have approached this farm bill building on the work of the pryor bill of the last session and and to add some things that i will be sure we go to the floor united with this bill. i have been very clear about

my priorities starting with crop insurance and i will offer amendments there but my objective has been first and foremost, to get the best possible form bill for our farmers and ranchers recognizing the highest quality low-cost food supply in the world but to make sure we're all together to get the bill to the floor and over to the house and get the task done. thank you for the opportunity to comment and to both of you for all your work. >> thank you for being involved in this process. as we move along i appreciate it. last but not least senator collins, your first farm bill and you're on the farm bill and we are happy you are a part of this. i was pleased with the senator from massachusetts wanted to be on this committee in the short time you have been here you have given us important

employment i know is important to your state and their fees to have you a part of the committee the. >> figure madame chairwoman and your staff the effort to get us to this point* to provide a strong free-market over the next five years it is an exciting time for the committee and me personally and i want to thank the committee members to work with you in this is given a a tremendous opportunity to travel the great commonwealth to visit the farmers in the industry who are concerned about the issues than they are excited to have a representative on this committee who has a voice and i intend to speak for them as to take this bill to the floor. as a set of my first gathering a speak not for the farmers do till the soil and cultivate the land but those who cultivate the sea. i also want to applaud you

for the agreement on conservation compliance as represented in the market but i think it is a good compromise and everyone will benefit. i want to join senator delivery and to recognize this is an opportunity to have an honest and important discussion of snap benefits. thinks you for trying to protect this bill i know it isn't easy and there is more work to be done but i must admit i have heard from many constituents about the cuts proposed and others discussed and there is concern also me personally as at various points in our lives we had to rely on public benefit provide fully support efforts to root out waste fraud and abuse but it is not my opinion to that end and as the program is implemented those who did

ministers net benefits it is coordination allowing us to streamline and coordinate multiple programs serving grilled -- low-income families and i will continue to have a voice to fight for those benefits by the accord to the conversation today in the amendment process to take a bipartisan bill to the floor. thank you. >> senator brown. >> operating under the illusion people would stay but never missing an opportunity but many saw the movie lincoln and there was one quick episode the conversations made me think about this when lincoln was under pressure from his staff to stay in the warehouse to win the war and abolish slavery and save the union and he said i want to do get out and get my public opinion back and as free travel around this day and i

listen to senator cowan the importance of snap and allstate's several development and the conservation title and the more than all of us get out and hear people talking about their daily lives to tell their stories as lincoln heard people tell the stories before the aids would come in to say this is what the public thinks he had as many personal connections as he could. the more we know of the struggles of people's lives especially with emergency food assistance and senators cowan nn gillibrand and her kin will offer an amendment and i hope members as we have talked around the table will keep those of public opinion path in mind as we deal with difficult questions. >> thank you. i believe we have heard from all members now we will move to the stabenow conference

of the plot package and we will go to individual amendments circulated to members earlier consistent with the goal to save over $23 billion and let me comment on a couple of items but it i do feel the need to remind us as we move forward , that we have significant reforms in this bill, 95 percent of what we have done and the one block amendment adds several things that are significant items to go to reform but i want to remind members have the eliminated direct payment, increased crop insurance, a drafting reforms, eliminated over 100 different programs or consolidated them to streamline the operation of farm programs for farmers and ranchers and those

involved in the program. we have the lowest ati limit on farm programs that we have ever had. so for those who say there is no reform in the bill i would counter that by saying we have very significant reforms and we are adding in this amendment to other important items. one that relates to conservation compliance and i want to thank everyone who has been involved with that. groups work together to make sure conservation compliance would work for crop insurance recognizing the point* is not to penalize farmers but to conserve resources and allow farmers to be the best to words of our land and also senator robbers and grassley and soon to work on a compromise title that bridges the gap between commodities and regions that we make real reforms to ensure the safety

net by taking the of roll your -- five-year average to use that in the camp program as well so these are significant reforms that are in that case of title one of the size of a market-based system and we appreciate that. senator cochran i don't know if you have comments on the block amendments at this point*? >> madam chair i am happy to urge you to have theendment. >> any other comments on the block amendment? if not those in favor say aye. those opposed? it is adopted. now we move through the titles that we marked up last year we will start first to run-throughs and everyone is aware of the miscellaneous and titles of conservation, a trade, were

coulter, research, a credit credit, forestry, nutrition, a commodity programs, and finally crop insurance. we are open at this point* title 12 -- title role metall for any amendment. >> i ask to be recognized to ask cowan amendment. this would benefit the farmers of the sea as i referenced in my opening remarks a few weeks ago to provide disaster relief to require the funds transferred under the kennedy act be used by the department of commerce the way the law was intended not the way it is used today as this committee knows fishing is a critical part of massachusetts and economy the commercial fishing industry persons over 77,000 jobs in massachusetts unfortunately this way of life for generations of families is facing a serious challenge after groundfish

surveys have shown dramatic decline and just this month fishermen of the northeast are living under a cut of 77 percent of the fish they can catch. as a result of the secretary of commerce and declared a fishing disaster for the northeast. similar to have occurred in mississippi and belasco last year. with the supplemental appropriations bill had a hundred 50 million in disaster assistance that received a disaster declaration in 2012. unfortunately this was not included in the final bill. the act established a fund from terrace at the customs service but under the law of the proceeds from the tariff are transferred by the secretary of agriculture to the secretary of commerce to be used only for fishery research and development projects related to u.s. commercial and recreational fishery is unfortunately

increasing years the department of commerce has failed to comply with the letter of the law and instead has been using the fund for the general operation of noaa not with what the law requires it would give the secretary of agriculture 100 million of the next fiscal year to provide disaster assistance for fishing areas including the northeast eight mississippi in alaska which received a disaster declaration from the department of commerce last year. this amendment would require the secretary of agriculture to withhold future transfers of tariffs under the act and tell the secretary is assured that the funds will be used as the law requires. this is a simple amendment we don't allow citizens to determine whether they should comply with the laws passed by this committee and we should not allow federal agencies to do so either. madam chair i know there is concerns about this amendment so i will withdraw

it for now because i understand there is conversation with stakeholders' it that needs to happen and i will bring it to the floor. >> thank you very much i appreciate you willing to withdraw but we will hear from members on this amendment. >> cover like to associate with senator cowan -- cowan they should be used as directed and because of the nature of the streams storms taking place all across the country and our fisheries have been hit very fisheries very hard and massachusetts, rhode island, a trade along the coast and we need to have that money necessary to do the research and development so these industries continue to thrive given extreme storms we have seen in the past few years so i strongly support his amendment and i know there is a consensus among many senators who experienced these very

significant losses over the last few years. >> madam chair i would like to call of my amendment to repeal mandatory country of origin labeling. this amendment would repeal whittling livestock and poultry regardless of the maritime we have been off more than we can shoot now we face the prospect of $2 billion of retaliation from canada and mexico this significant piece is canada and mexico or two of the biggest trading partners in agriculture the polls -- fda would even have more of a burden instead of labeling product of u.s. and canada and now we have to say born and raised in the u.s. and slaughtered in canada and you cannot even combing goal meat from animals that don't fit that exact combination.

talk about a regulatory they bear. even if the wto somehow determines that this does not cause discrimination against canadian and mexican cattle it is for policy. if consumers when cattlemen and other livestock producers to incur the expense to track the movement of their animals there are ways to do that in the marketplace that don't require a federal mandate. i understand i will not ask for a roll-call votes but i hope we can resolve this issue before some of the largest trading partners retaliate against our exports and i withdraw the amendment. >> we look forward to working with you as you raise important issues. >> if i could just comment senator johanns brought up the excellent point* and to

go back chairman roberts roberts-- in the house when his ranking member used to give the example that i have used over and over when it comes to labeling where a meat product comes from if sickout is slaughtered or the animal was raised in georgia but a product of the heifer born in canada and sent to georgia and artificially inseminated from the ball from mexico, where is the country of origin? this is the most confusing issue i have ever seen in all my years on the ad committee i hope maybe senator johanns will think about bringing this up on the floor to see if we can figure out a way to resolve this because it is confusing and causing us problems now with mexican and canadian

partners. >> just a quick comment and obviously there isn't unanimous opinion in this committee and i have long been a supporter to let consumers know where their food products comes from but this is a process where our ranchers and farmers who have been promoting country of origin labeling have been asking and it comes from a lack of clarity from regulators who don't agree with the process and if you look at the ted wto, canada moving in this direction along with 47 other countries so it is a process if we like it or not i think we will be confronting labeling before the debut keogh than it is important for consumers they know where their beef comes from. >> i agree with senator heitkamp and he sings to i hear more about at home in

terms of consumer labeling whether producers or manufacturers whether consumers people want to know where products come from. food safety issue people want to the trace ability to feel reassured if it is produced in this country. nothing unless we reach consensus is a domestic -- a mistake. >> senator baucus? >> by a joint -- i join with brown there are a lot of problems with the sanitary restrictions on products especially animal products and plant products and if a lot of people do want to know where the food comes from my know it is complicated but a lot of

things to do here are complicated but we have the obligation to figure out to address consumers' wishes with the way with the concerns that have been raised. binders and you can make this wto compatible but we need to find a way. they believe we can work out an accommodation. >> that would like to ask senator johanns question with your experience when you were secretary and you kept a close watch on this are you aware of any study from the usda as a new way to implement this has shown it has there been any measurable effect of

consumers to basically buy american and from the labeling process and in addition with regards to safety that is a multi committee concern that everybody has and has there been a steady that this bumper sticker i don't think it will include everything with senator chambliss said maybe not just a bumper sticker all the way across the back with flags and i don't know to be -- and i mean to be sarcastic but you know, it would accomplish what people would like to see it do? >> senator roberts i am not aware of such a steady but having said that there is a big body of studies out there and i would hate to say there are none because i will walk out of the hearing and somebody will probably hand me half a dozen but having said that the interesting thing about a

country of origin labeling this issue has been and republican and democrat and democrats have struggled as well as republicans it is impossible to define this at least under the guidance that we have given. when it ends up being is a trade restriction. americans have shown tremendous flexibility to buy all kinds of products from all over the world. i guess that is obvious. athe end of the day i think we have to do is figure out how do we deal with this without getting hammered without another day to beat -- dip buteo case that cost us a lot of money and there has to be a better way than where we are at today i think we're headed for trouble i met with the canadians, they are great people to work with and tremendous allies but they have been very, very clear to say we will enforce our rights just like we would.

i think we have to come to grips with this or we will regret the results. >> thank you senator. i would like senator johanns and i don't know how many other members or where the canadian ambassador came to visit and i am not saying he promised retaliation but he made a very firm and with the retaliation could be about $1 billion situation and that deadline is may. we have to be awfully careful with this hopefully we can work together to come up with something that doesn't put a cold hand on the hot stove. >> obviously this is an issue that deserves a lot more discussion with strong feelings on both sides this

is something we will continue to discuss and work together to make sure whatever is done works and that is the bottom-line. are there any other amendments to the title 12 miscellaneous title? >> i have the amendment with respect to cash sales to cuba is sensually 2005 the department of treasury with the office of foreign assets control e essentially ruling cash payments to cuba have to be made prior to the shipment to cuba and that in

the fact all trade to cuba was halted because there is a potential problem of private seizure of u.s. products. now this issue clearly is politically charged. if you look only at the trade issues and not just the politics and my judgment was right to buy america's farmers and ranchers that to change the fact so that cash sales can be made. with the title transfer and virtually every other can come up with it and it does

and i think this is dated and the problem that needs to be addressed the political stuff gets in the way know i will not push this amendment at this time but this is a no-brainer. this makes sense if we want farmers and ranchers to sell our products meant a change needs to be made. and then certainly with my good friend in kansas we met with the help president day. >> e he preferred to be called commandants. [laughter]

another time i met'' with see head of the minister pedro alvarez with montana farmers by forget what other products by right there on the spot he said sure we will do of a deal here we will buy x amount of dollars and in this case montana. that caught them by surprise but we put the deal together a three -- the few months later. and it worked but the rules change and to stop all cash sales to cuba. it makes no sense. before we could figure out a solution. >> think you're i just want to do echo that senator

brown and i had the opportunity a few weeks ago to go to cuba with a delegation and we have a chance to see some of what they we're doing in agriculture to meet with the leaders and no question we should be addressing this and i will never forget meeting last year with the louisiana rice growers to figure out the commodity title and i said what do you need? they said open the market to cuba. that is all we need. that has stuck with me ever since. senator robert. >> excuse me. woman. person. chairman. it is true the senator and die from montana went to cuba and i think we talked until about 4:00 and lasted until about 3:00 in the morning and we learned about the world according to castro.

that we have spent working on this for some time and i know most of the focus is on markets it ought to be in regards to cuba as well and you can use, if that's the proper term the agriculture production and whereas all as a tool not only for peace but stability and also for countries to recognize when they go through tough times