privacy issues and customer data. he spoke at an event on the future of global technology along with arkansas senator mark pryor. from the brookings institution, this is an hour.

>> good morning. i'm vice president of government studies for technology innovation at brookings. i would like to welcome you to the forum on mobile technology. for those of you who are falling on twitter we have set up a hash tag at techcti say you can post comments or questions through twitter if you would like. so, the number of smart phones bald blight has increased this year to more than 1 billion devices. mobile phones are being used to improve education, health care and entrepreneurship and around the globe and given the growth of mobile, we this morning are wanting to address the topic of

what american policy makers should do to respond to this accelerating revolution. where are we going to get more specter in order to enable wireless application, what can both the public and private sectors do to stimulate greater innovation and investment in mobile technology. to help us understand these issues, we have two outstanding speakers, one of whom actually is here. the second one will be arriving and i will introduce him when he arrives at very pleased to welcome randall stephenson to brookings. he has no is the ceo of at&t and since becoming the chairman and ceo in 2007 he has transformed the company into a global leadership position in mobile internet services and i teach business communications solutions. under his leadership, at&t has dramatically expanded its business and enhanced its enterprise capabilities.

the company has expanded its fast-growing platform for integrated television data services. at&t also has initiated the largest education initiative in the company's history. at&t aspire which is a philanthropic program to help colleges and career readiness for students at risk of dropping out of high school. i think we will start the conversation with you as the leader of a major telecommunications company how do you evaluate the current policy, and where can we do better? >> this is going to surprise people but if you were to do a scandal around the globe on the policy concerning our industry, and you would have to conclude that the united states has the policy that has been the most

pro competition and policy that is driven the greatest amount of investment in this industry, more than anywhere in the world. it is probably, not probably come it's driven the greatest amount of innovation in this industry anywhere in the world and any number of places you can point to to demonstrate that. i believe the place that stands out the most apparently is our policy on spectrum and it has evolved rather significantly the last five or six years but what we have done in the pentagon to spectrum policy getting more airways out of the market putting it into the market in a fashion the people that bought eight or license treat it like an owned resource and we are exploiting more than just anywhere else in the world, and i get a classic comparison i've

been spending a lot of time in europe and in europe you're not seeing mobile the internet technology take off the way you have in the u.n. united states and one of the places i point two -- obviously economically in a difficult situation so there is lack of investment you could attach to that but primarily you attach it to the spectrum policy and it is a policy that tends to -- it is different by country which is another issue but it's a policy that tends to get short-term licenses shorter terms, eight to 12 year licenses and when you have a license for a little period of time you think differently how to invest in index point that technologies as a result you look at what is happening in the united states versus europe and europe six years ago was the leader. europe today in the world unfortunately is among the bottom in terms of the trouble

could technologies and the united states is at the top in terms of developing these technologies. >> so they've proposed a new incentive option two for the additional spectrums here in the united states. how should that option be structured and what are your expectations and how it will go? >> i would hope that this structure as to how it's been done in the past. when you have the success that we have had in this country, one what ask why you would change it too much and what we have tended to do in this country as regulators is -- welcome, senator. >> talk about a big entrance, we like that. we will get you miced up prieta we are talking about spectrum and the new incentive options. >> just from a policy standpoint what we've done in the past is the regulator that oversees this sets the cap in terms of how

much spectrum should anyone carry or be allowed to hold. that has served fairly well over time but i will tell you over the last couple of years, they're has been another policy, policy is overstating it. i would say practice, and that is they have combined this they have been far more efficient dealing with secondary market transactions so somebody whose spectrum they are not going to put it to work so allowing the companies to trade and buy and sell licenses to the spectrum have basically facilitated ensuring that the spectrum is being moved by market forces to its highest use and that is an important aspect to this and then you have to pare that with strict requirements so somebody can not just require the spectrum, hold it on a speculative basis. if you put those three policies in place, you know, spectrum

caps, what's been in the government will see how much spectrum the should hold, number one. member to come good efficient secondary market is just absolutely critical and then stringent requirements on building out into the spectrum within certain limits of time. >> i would like to bring senator pryor to the conversation. first elected to public office in 1990 as a member of the arkansas state house of representatives. we know he's smart because he survived arkansas politics for 23 years now. he was elected attorney general and enacted legislation to protect children on the internet and prohibited unwarranted telemarketing. he was first elected to the senate in 2002 and reelected in 2008. he serves on six different senate committees and cutting appropriations and homeland security government affairs among others and most importantly for this conversation, he chairs the

subcommittee on communications, technology and the internet or one of his rarities is helping the communities meet their growing infrastructure needs to be a senator, just to pick up on the theme of spectrum and what we need to do in order to get more spectrum so we can enable a greater mobile locations in the future, what do you think we need to do in the spectrum policy? >> we have been having a series of his state hearings in the subcommittee on the communications and the internet committee. and we are having a total of free we've already had the wireless and the reason is because we have probably 30 to 40% of the committee that is new to the subcommittee and in some cases to the senate and we are trying to give them an overview snapshot of what's going on in the telecom morrill and internet world but also trying to give us

a chance and the community at large to hear or the new senators are coming from. it's kind of a blank slate on these issues but one of the things we talk about in the wireless hearing was spectrum, spectrum. whenever issue it was, we kind of kept coming back to the spectrum. obviously that is the name of the game when it comes to wireless services, so lots of pieces of this that we talked about and again, we did talk about some license spectrum of issues which are important. we talked about the fact that a government owns a lot of spectrum right now. mostly the department of defense and others as well from the intelligence agencies and a few other agencies here and there and kind of how we may transition some of them off and how you do that in the right

way. and one of the things we did, we actually had a classified hearing in the full commerce so committee a few months ago, and it was classified with the dod intelligence agencies to talk about kind of what they had. one problem is we don't have agreed inventory of what all they had and how they are using so there are some building blocks to know where that is going but one of the things that came through in the classified the hearing was just as there is more and more never-ending demand for the spectrum and more gadgets and uses for spectrum in the commercial sector, private sector, you are seeing that same phenomenon with our military and intelligence. they are using more and more of it, things are more wireless and more mobile and global than all these other things.

this is background to answer your question but when you talk about the spectrum there are lots of pieces to it that as the chairman said here there are basic criteria you have to do to get it right and we need to get it right long-term, and again if we are going to ask for example in this case the department of defense to move off the area of the spectrum that is a big deal. they have a big investment in infrastructure, the heavy big investment in technology. they have all these missiles and all kind of things in the spectrum right now so we will work through those issues but i do think it's critical we get this right and we also need to find ways to make our use of spectrum efficient. we need to try to maximize the use of the spectrum and if you are in oklahoma and i am an

arkansas we have all the spectrum and the world. we had no idea what was thought for. nobody really thought about it and now it is an absolute premium. there's kind of this almost never ending set of ideas on how to do that. we need to understand it is a limited resource and in a very valuable and there are good reasons why companies like at&t want to get certain brands and there are a lot of good reasons but we have to do it in the right way. that's one of the things we got in the hearings is that different people, very well intentioned but they may come down on different sides and they have a good rationale to do that so we have to sort through this. >> one more question for the senator. you mentioned the importance of getting it right so on the new

incentive options, how should those be structured and what is your sense of how they are going to go? >> kuran we had two different witnesses that talked about this, specifically in the subcommittee hearing a week or two ago. basically one for example said that we should allow the larger companies to buy these national track of spectrum -- >> footprint. >> lots of good reasons you want to do that. his conclusion is that is how the government makes the most revenue china and to pay through that said his rationale is this is the right way to go and we had another witness come who said this needs to be more regionalized, smaller block etc and that's how you maximize the

revenue. both of them made their case. at the end of the day someone has to make that decision and be the referee. it's probably going to be the fcc with a lot of congressional input. >> this is interesting to listen to because i think you are spot on the and we were making comparisons about the u.s. forces europe on the spectrum policy and i think you nailed it and that is what do you want to accomplish the will dictate what you do with spectrum policy it's what you want to accomplish is maximize the revenue to the u.s. treasury. that may be very different spectrum option than one that says we want the absolute lowest price possible. those can be different answers and if you want an answer that says what important to us is the u.s. not only maintains that extends the lead in terms of innovation, development and

exploitation of the resources that leads you down a different path. so i think the senator is right we have to ask the question what is it you want to accomplish and structure. >> it is a hybrid competitive world there are ways and a lot of those are judgment calls. >> there's been a lot of attention to the national security agency and request for the internet providers. google, facebook and yahoo! have called for greater transparency in the national security based request from the federal government. should they allow companies to publicize the number of records and internet data requests that they receive? >> should they allow us? >> glad the senator is here. >> as a rule, we obviously don't comment on matters of national

security. as said, think about all the things that we have been talking about here already just in a very short order. how we envision these to be taken the advantage of by the consumers and businesses and so forth. we anticipate five years from now that your primary identifier in the marketplace will be your mobile home number and as you conduct commerce and identify yourself and the buildings we believe the mobile phone number will be how you are identified. and so, i go through that to tell you that from our standpoint one of the most important things. as a consumer in the business has a high degree of confidence of privacy and confidentiality of the data that is traversing and going and out of these

devices. everybody that has attached this industry from time to time will get subpoenas or court orders. we strictly comply with those orders and warrants but really can't go much further than that. some of the companies came in and talked to me about this issue of another context of years ago. they were looking at possible liabilities for complying with these court orders. they feel their patriotic duty was to comply with the court orders and the various federal agencies are coming and say look we need your help we are trying to prevent terrorism in the

future and then they turn around a few years later and they are looking at massive amounts of liabilities. i tried to help on that over the years. the nsa and others run extremely careful. we need to make sure that our court system and there are very compelling reasons why these agencies would want access to that data and when there's a lot of integrity and that process and it's interesting after the guardian made the story public. there was an exception. the members of the senate and house intelligence came out defending the programs.

again a lot of this is when you get inside of the programs and know what is really going on you get more comfortable with it and sometimes the headlines don't always tell a whole story and i know the president has been very aggressive and of defending of the policy as well pivoted is an ongoing discussion that we are having in the senate i'm sure we are going to have some hearings. for those of us that want to sit in. setting up the explanations of the programs has been made available to us. >> why don't we open up to the floor for questions to take off in about five minutes.

>> [inaudible] >> i think that the fcc is resting with that right now. we are talking about that in the committee level and the commerce committee. where the sec comes out on matt i hope on planning to have lots of input and discussions as we go through this process. to make sure that we get this right i do think the fcc wants to get a right. one of the things spectrum is one thing and the policies that we set have a long term ramifications and a different

context. we have the telecom act of 1996. the act of 96 the internet is only mentioned twice, and the whole battle back then was long distance versus local. i said i hear what you're saying that if you think about the amazing innovation that's happened, the technology, the deployment, all these things is an off the chart success. why do we want to go in and we write the small that seems like it's working pretty well. the same thing with spectrum, you want to be careful that you're not limiting from innovating and investing to make sure that you're not hurting consumers by making it more expensive or remedying twice as

so it's really there is a sweet spot in their somewhere. i think everybody is trying to find it and i will be part of that solution. what is your motivation? i know one of the key motivators is money in the united states treasury. the excluded or limited you are going to affect the amount of money the treasury yields and the option. those who come in and bid the highest are going to be by the market dynamics and those that have the greatest need for the spectrum. if one company were to acquire a lot of spectrum it's affecting the competitive dynamic they are going after that because they needed and they will put it to work and there are strict

requirements on the spectrum so somebody isn't going to just the housing it. go back again. 2007 as the last big government auction of the spectrum. the two companies people talk about the want to inherit from competing is the two companies that went and acquired the most in the two people would like to see get most of the spectrum are the two companies that did not even participate in the last option. those that haven't competed in the past might come in and try to buy the spectrum feels like a gamble for something so important as the spectrum auction house this. >> the gentleman there is a microphone coming over. you can give your name and organization. talking about innovation and

data plans, the content companies defraying the cost of the content by either paging carriers and doing the advertising. people have since said the big content companies like es p.m. that will give a leg up on the smaller contant companies. so, that might run afoul of the net neutrality. what do you think the plans might be commercialized and how do you think they would stand up to the net neutrality scrutiny. >> thinking about how the global internet world is developing. it's unique from telecom standpoint and what i mean by

being unique it doesn't scale like the way that the look and occasion has had in the past. in the past you have a strand of fiber it's kind of a step change capital requirement and. for a long period of time the world of mobile data you have 1 megabytes of data capacity there is a direct and immediate cost that goes with it, the capitol requirement that goes with it continues to go up and the cost track with that there are efficiencies and productivity gains but it's basically more of a less scalable technology than we've seen in the past and as a result the pricing has followed those economics. now there are a lot of companies i fully expect market forces will take you to replace a lot of companies say i would like

for xyz companies to the alter access our content they might be more inhibited because there's a direct cost to the consumer by the virtue of this pricing may be we would like to do something where we helped to defray the consumer cost to get access and/or content this is no different than what you saw happen in the 70's when long-distance costs and companies like sears and roebuck and they developed 1-800-services from it. they said we want you to come and buy things from us. we will pay for the long distance call to get you to come and do business in a telephone why would you expect that to happen as you allow people accessing apply with the company's not be interested over time and seeing and all like

this develop and where they could access into our network and take advantage of this today, that key devotee is there. anybody that wants to do it and any application developer that wants to do this can afford some portion to the cost of the consumers so they can access their content and we will see if it evolves at all. i don't know. i will be surprised if these models do not involved. i don't see any net neutrality issues open and available if anybody wants to take advantage of these technologies. >> communications daily. that is the main thing people are talking about these days there's been a lot of questions from the 600 megahertz plan to how much we are going to get from the broadcasters who will

be making the final recommendation in terms of the staff how certain is that from your perspective that the incentive option is going to be a success or there's a big question hanging over it. they depend about the questions that we've been deleting hear what is the structure? you may adrienne put him point. if you want to raise the revenue and and the government standpoint enough revenue to pay for the public safety network is really hard and public safety network, then you not only have to have a structure that incentivizes people to come in and buy and pay for the spectrum but also have a structure that incentivizes people.

they are like a broker matching the sellers, the tv broadcasters and the buyers of the spectrum that tend to be the wireless carriers. it's offered in a way that a really large number of tv broadcasters don't bring their supply spectrum to the market and the companies like at&t or sprint. for this to be useful to us, we need a kind of a broad footprint with a certain amount of debt because you scale the technology that we and the service quality is important to be broad and deep spectrum. so if you don't get enough broadcasters coming into the marketplace, putting their spectrum and where companies can acquire these footprints of the spectrum the option will fail in an of itself to make sure you have people with supply and demand come in and bringing the revenue to the table.

>> it depends on how the design. if they have a lot of motivation to make a success i think that is the way lots of different factors. one of the things that is true that's why there is anxiety about it. if you look around the country, we talked about the spectrum, we look around the country there isn't a spectrum in most areas. they really don't have a spectrum crunch and if it is with access to wireless communications where i live. in some areas of the country there will be more so in the

country. one of the places you need spectrum the most is in the urban areas. i'm guessing those broadcasters, that is a very valuable asset for them and they may be the least reluctant become reluctant. so how they try to get all the policies right like i said i'm going to be heavily involved in this not just helping the stakeholders placenta people to try to make sure they get it right. there is a question about. >> pumas too this is a question for both of you. also with regard to the

incentive option. senator, you mentioned earlier that one of the reasons the 96 act is because we have so much innovation than with the incentive option shouldn't one of our primary goals should be fostering competition? >> that's good. depending upon what your goal is and how they will be structured and what you are trying to accomplish what that means by competition. you look at the largest carriers that are extremely competitive with each other and the heiberg competitive industry and it has been for a long time. one of the ironies is scott ford who used to run an arkansas by a rise in a few years ago.

scott is piper competitive. he's a great but he's now sitting on the porch and some of that depends on how you define competition. you need to look long term. there's lots of different aspects to competition in this area. there are some that get down in the weeds about technically almost mechanically, contractually how things work out their so they are huge competitors, they are not afraid of competition and believe every single day has led to a lot of innovation, tons of investment.

one of the success stories in the last 25 years. >> there is nothing i've disagreed with and i would maybe go one step further. that is the competitive environment in this industry. the u.s. mobile industry is as intense as anywhere in the world it is it technological, is it pricing, and in those dynamics it is in the most competitive in the world where you can go in between the zero to $200. i don't know anywhere else in the world you can do that. the mobile voice minutes of use, the average in europe is almost a 200 usage a month.

the dynamic on the day the utilization is exactly the same as the price per megabyte the lowest anywhere in the world. this is a hyper competitive environment. to talk up the structure and option that incentivizes greater competition. there are prices and services to the low commodity levels if you want the low-priced commodity services we have a model for that in europe. you look at how that feels from and innovation and an investment standpoint. and it's not the model that we in the united states would like to attach ourselves to. limiting the commission -- competition those don't reconcile in my mind but your question is a fair one. but i've got to tell you the model as it has been derided the

u.s.. the policy makers i take my hat off to them and i celebrate lock but it's the best in the world right now. stat senator i know you have time pressure you need to take up. [applause] >> that is the microphone. >> you are going to continue the conversation with mr. stephenson. if we can get the microphone over. >> i want to talk about the national security. their reassurances to the consumers say that it is a high

priority for you. it was focused on verizon and in particular the company is in the recent days most people out there are pretty much spreading that across all the company's you dhaka the consumer's right now about the privacy security of the data can you reassure them that information isn't being provided to the government or how else. i will just reiterate privacy and security of the data is critical to less. what we do to receive subpoenas and court orders of information to comply with all law and fulfilling those orders and becomes a public policy debate to engage the senators and

like-minded people. >> kenya took up the process on the national security process how much control you have over how your company is able to respond to that in the control of the responses to the national security. >> in the response to the subpoenas and the court orders for information, yes. >> i'm just wondering on that telemarketing in asia

[inaudible] >> asia is a really fascinating one. i would say it rivals as well as i head of the u.s. and the deployment of the fast mobile internet technologies deploying the same technologies. asia is for example japan is much more broadly covered in the united states of america in the technologies. fortunate or unfortunate, the population density is like 30 times greater than the united states so it takes a lot less infrastructure than a million people in the united states of america. if you evaluate the dense urban communities in the united states, everybody -- the markets which are korea and japan, they are comfortable places. you see then began to exploit

the capabilities far more dramatically. they are a little bit ahead of us in terms of local commerce and some of these type of applications. but in terms of the deployment of the technology, we are in very comparable places. the innovation technology i think the we lose sight in that united states oftentimes of this gem that we have developed in silicon valley because the innovation surrounding all of the technology is highly concentrated in silicon valley. they're focused on the applications and keep devotees and exploiting this technology is off the charts. it's really impressive. there are great learnings they are in very comparable places right now in terms of deploying at. >> as you know, president obama

has nominated tom wheeler as the head of the federal communications commission so how do you expect the approach to change with a new leader if at all? >> so, many of us know him, he's been around for a long time and he is a progressive thinker and understand this industry i suspect we do not agree on every policy issue, but i think i expect it to be a very fruitful fcc. i think will be an fcc that you begin to move critical issues forward. he's written about the ip transition for example. they are deploying but technology across the united states. we have an internal logic to it and we will sunset. plan on the television service.

we expect them to be turned off in 2020. they are moved with wireless. boies should be ip voice or wireless but there is the technological or market-based reason why the legacy service should be in place. for us to do that, it requires a significant amount of regulatory approvals. in the industry we sometimes talk about we cannot have a regulatory environment that actually locks us into technology and that is what we have today. tom has written about this and i actually have high expectations of tom's energy surrounding this and being able to move this forward and move our country down a path towards all internet protocol and why your less technologies a line energized by tom coming in. >> other questions from the

audience? >> other people yes? >> thanks for another great program. we will be developing out content for the developing countries so my question relates to that in some degree. the senator talked about the spectrum crunch in other areas of the world but we do know that talking with some people like sub-saharan africa what are the spectrum options in the united states in terms of its effect in other countries actually particularly with the introduction of the smartphone and so many areas such things as the western coast of africa you

have a connection. >> the options and public policies can affect the technological innovation and deployment and sub-saharan africa. if i were a policy maker in sub-saharan africa and interested in deploying these technologies and getting the spectrum into the hands of people to exploit i will look around the globe and ask who got a right and by what criteria and sub-saharan africa i want the broadest penetration in the service as possible. i would suggest for the developed market standpoint the

places i probably would not look if i made this decision would be india what you are seeing in india is the development of the technology that is achieving riches broadbased penetration at really low commodity prices and low quality but you're not seeing the next level of innovation that is going to be required to bring all the benefits to this. they are derived by the wireless technologies and to get the education, health care benefits that are derived from this coming you need the high quality and with and low price boies commodities service will not get you there and we have to move away from the model and probably somewhere closer to the mexican and maybe towards the united states model to achieve that, and i've got to tell you when you think about developing

markets, it's one of the most exciting things i've been attached to in my career we've made an announcement three weeks ago my frustration with education is the cost routinely does this and we were talking. the quality is going nowhere in the united states. we are the company called viewed acidy and we announced the georgia tech would be launching a fully accredited program degree in computer science, master's and computer science that costs $40,000 to be introducing this credited degree

of $7,000. i think $7,000 is high but we can debate that. we are going to introduce it for $7,000. if a technical credential degree like that can be introduced at 20% of the cost environment, why cannot not be moved downstream of engineering and underground and not be moved and secondary education, primary education and why cannot not be exported to sub-saharan africa and began to introduce the highest quality education programs in the world into these developing economies. to me this is world changing, this democratizes education and it is a major deal. it is a big deal. >> we have talked about about wireless. can you talk about the video and

how you and your video platform are doing? >> video is a lawyer less impact as well because when you look at the why you're less -- winder less it is a fear of the mobile networks are video and if you move it into the fixed blindsided is even higher. video is driving the broadband era right now. we got about five years that number is dramatically higher and the video is driving that and it is not just for traditional what we think of as linear video. espn or nbc and what not it's a whole new video and its future generated content and it is communication, a person-to-person communication, video chat this is what drives the next few years and in fact we are actively working over the next five years we will fundamentally change our network

engineering and criteria around being able to be delivered as a basis for how we engineer the networks. it is a huge item and we think this is what is meant to drive the spectrum requirements over the next five years. we are on the beginning of this. we talk about the chat. this is comical but it gives you an example of where this goes. my wife's and my son-in-law to the store recently to cut something. as most men will do they will get there and they don't know what it was they were supposed to pick up so she puts my life on face time and says is this it? okay, got picked. that is a sell the example but i believe the utilization of the video on the day-to-day interaction, not just a video chat like this, this type of application is going to be massive and it is going to be huge on education as well, so it is all about video.

>> it wouldn't work in my household, too. >> it is effective. >> other questions. >> [inaudible] >> a dense network i was wondering if offering more wi-fi like this building at brookings would help to provide a seamless customer experience of of wireless. >> i will answer your question directly. yes it is a huge priority. if you are and at&t company or your company is an at&t data customer we have deployed wi-fi in your building you are. if you're in a wide area network and to war on a day this session and you move into the building that has wi-fi, it moves.

you don't have to say yes and get that obnoxious client that pops up and says to you what this connection? does it in starbucks if you authenticated and falcon to starbucks you want to authenticate we are moving into the small technology to identify the network meaning that the big sale sites during the first 60 degrees you will begin seeing were deploying what we call the small sales on the side of the building or the lamppost. five years from now if you don't see this than we have failed. you as a customer are not going to know and aren't going to care whether you are on wi-fi or at&t

broadband or your company client you aren't going to know or care because you will be meshed in and out of there. we are getting closer and closer today as five years is a conservative time frame to achieve that. but that is exactly what is going to be required. dallas cowboys football game that stadium is lit up like a christmas tree. everybody is on the device. everybody is taking pictures and the staffs. the year before last is the first measure experience we have heard of with the amount of data going into the stadium is greater than the amount coming into the stadium fascinating, right?

it's really changing how you engineer the networks. it might be pushed potentially 2015 depending upon what happens. it's going to happen or may happen in the market between now and then to the who knows what is going to happen with sprint and whether they are going to require them and clearwater is still up in the air and is integrating the they will use that to expand the capabilities. all that said we still don't have a low band spectrum in verizon has come so my question to you is things will likely change significantly from the market competitive standpoint

how do you think that is going to impact how the fcc looks at how to structure the option? >> it is an important point. public policy sets to pick winners and losers in the particular demands that is moving as quickly as this one is it is chasing the wind because you don't know who the competitors are going to be and who the competitors are going to look like by 2014. if we can pull off this option and have all of these network providers that want to sell and people that want to bayh iain if we can do that and piece together an option performed in 202014i will be impressed and blown away. if uzi is the end of 2014 we are going to do this, you nailed it. we don't let the market is going to look like and by the way, the market is not sitting still in a

2015 option. the way that they will be bouncing around the markets are saying what should we do today in light of this uncertainty in the future and so i think you will see the market itself change in anticipation of the uncertainty that nobody can put their fingers on. >> one of the competitors as you just said in spite of the massive holdings they don't have the frequency to compete they also said publicly besio we have the best position in the industry so, you know, you just have to evaluate all of this and ask yourself the question do we as a public policy standpoint make policy depict winners and losers in time frames you don't even know who is going to be the market leader at that time? >> gentleman right here?

>> my name is eric with ft5k. interesting question and comment. quick question how do you see the development of the predictive data in terms of the ability to locate in individual and the infrastructure to generate that data and how much do you think a customer or ayaan usurp will have access to their own data that they generate to providing it if the government agency and insurance companies and that sort of thing but how do you think that there might be some mechanism a customer can actually ask the data that they themselves generate overtime? >> this is a fascinating question. i will start with the data that you asked how do i see that devolving i think it is going to be some very significant. i go back to we better make sure the customers, but it and secured in the data in allowing

somebody to see where you are at a moment in time i think the customer has to give those permissions and i don't think it is our permission to give so their needs to be a transparency about this the customer knows whether it is a google or at&t or facebook or whoever is using that data that's important, you are seeing this began and business models to follow the marketplace my data, why is xyz company going to make all of this money? is there a way that customers might be able to monetize their own data and sell it and you are seeing business models begin to develop that would allow the customer themselves to begin to monetize the data. this is a huge area. in fact i will tell you in this industry, the data side of it, the big data as we like to say

is going to be a driver. it's going to be where a lot of value is created both for the consumer as well as for companies. the amount of information that is coming into all of the capabilities, i don't believe all of the returns on in this are going to be monetized with sending 100 million customers the bill. i think some amount of this will be monetized by the customer is allowing the company's to monetize it to keep the bill lower. it does that make sense? and said to think about all of the investment coming into the infrastructure in the ecosystem from silicon valley to the vendors and the carriers it's probably a logical to think that the end user bill will generate investment they will allow the companies to use the davitamon modernize that but the key is

the key is making sure we have the transparency to the customer gino's how the data is used and he's getting authorization. >> does at&t have any interest in international acquisitions? >> i won't comment on the specific. >> there are opportunities outside of the united states. and i've spoken to it a bit this morning. and that is think about how this has grown in the united states. the mobile internet revolution has been a radical. some would say magical to believe what's happened here in the united states. you think about the demographics of the united states. you know, there is another country that has -- other region

that has comparable demographics. these technologies and investments and innovations haven't yet taken off and the markets haven't taken off in europe. i cannot in my wildest dreams thought, why they would not. it is inevitable that they will. what we like to participate? they would love to participate. is it by launching some services here in the united states? using an all wireless environment we are going in and putting in the monitoring capability into your home. this is an industry that hasn't changed in 30 years. we are going to come in and in the market now we are using wireless technology become full the quick and monitor your home for a fraction of the cost in the last three years. this is an over-the-top wireless model. can you deploy that as the scale of this year in the united states we are obviously looking at this.

is it transferable and is it going to be done in latin america? we think these are important opportunities and we are looking at them closely. >> okay. we are out of time but i want to thank randall stephenson for your views on the industry. thank you very much for being here. [applause] went before the senate panel today to talk about sires security threats and government surveillance programs. here is part of the generals testimony. >> general alexander let me ask you aside from these two cases is the intelligence community kept track of how many times phone records obtained by section 215 of the patriot act were critical to the discovery of the threats?

>> over the next week it would be our intent to get those figures out. >> you didn't have the figures yesterday. >> i gave an approximate number to them. >> it is dozens of terrorist events that these have helped prevent. >> we collect millions and millions of records to 215 but dozens of them are proven critical. is that right? >> both here and abroad contributing to the disruption. >> they had been critical. >> that's correct.

>> would you give me the specific cases you're talking about? >> i will get as clear as we have and precisely what we've done and we wanted it is exactly right, senator, we won the american people to know we are being transparent. we are giving the specific numbers to congress, connect? >> what we were asking -- the intent would be to do both. >> you can do that within a week. >> i am pushing for that, and perhaps faster. >> if i don't get any kicks from

the people behind me doing all this work because we do want to get this right and it has to be vetted across the community so that what we give you you know is accurate and we have everybody here especially to the fbi and the rest of the community can say this is exactly correct.

during the political career served as the residents they have the house which originally was turned into living quarters with a bedroom and a fitting room and entertainment area and also off of that room and office used to conduct business. >> he is right that side of the ballroom that leader becomes the living quarters of william mckinley. this is set up everywhere they went during his political years.

when he conducted business the door stayed open to the living quarters and she stayed in the living quarters that she could hear what was going on. .. >> the same panel is live and

would have renewed the chain of command about whether military sexual assault cases go to trial. this market is 90 minutes. >> mr. chairman, thank you. i want to thank you for holding this open session. this was held in open session yesterday and it is appropriate that this legislation be marked up. this comprehensively addresses sexual assault in the military and includes the justice improvement and establishing new authority and a new convening authority asked set for specified military. it removes the character of the accused for the rules for court-martial and commands how to decide. it requires command to report

allegations to criminal investigations organizations and includes provisions in the justice improvement act offered by article 62 prohibit convenient authorities from changing findings for certain offenses and requires a written explanation for changes. this bill is a provision that would express that rape and sexual assault should be tried by court-martial. it requires that the disposition of these offenses be related. and it requires retention of forms for 50 years.

this includes enhanced sexual assault prevention and response as well to prohibit sexual acts in this regard and ensures the availability of sexual assault with coordinators from members of the national guard. senators mccaskill and senator klobuchar requires a comprehensive review of training and qualification and experience of individuals responsible for the sexual assault prevention and response programs. it also includes a provision that would amend the military whistleblower statute to require inspectors general to investigate allegations. finally, we adopted six amendments related to the issue of sexual assault.

this requires additional panel on sexual thought. the blumenthal amendment requires independent panel of judicial proceedings under this to address victim compensation. it extends crime victims rights in lieu of this, i want to thank my colleagues for their absolute determination to stamp out the spirit of sexual assault in the military. it will certainly make a difference.

>> this will truly increase accountability and objectivity and trust in the military justice system by having trained legal military professionals handle the serious crimes from the beginning. this is not a radical idea. it is a commonsense proposal that is carefully crafted within the chain of command. including 36 serious crimes that are unique to the military. >> taken from the victims who have said over and over again that they do not report because

they do not trust the chain of command they themselves say that they don't trust us these cases are up from the current rate of 3600. then we have to get those assailants out of the uniforms that they do not deserve the honor of wearing. now, the chain of command has told us for decades that they would solve this problem and that they have failed. we have heard zero-tolerance for over two decades.

we need to let everyone know that we have zero-tolerance policies were sexual harassment is involved. that was over 24 years ago. it is our duty to act on behalf of the sons and daughters and husbands and wives who so bravely serve in our military and make us proud. senator graham, would you like to put in any opening remarks? >> this is to create the most supportive environment.

you have to ask yourself if it is difficult for a sexual assault or rape victims come forward there is no problem in the military that will ever be solved without this. we have the finest military in the world for a reason and it works. this is a problem and an aberration. it is going to the heart and soul of who we are in the military and every member of the military has to own this problem or it will never get solved. everyone has to believe that their reputation is at stake when it comes to sexual assault that is committed.

now, what we have done legally and try to impress upon the commanders how seriously we view this and how society views it. i have been an advocate for over 30 years and the one thing i can tell you is that if you want to get someone's attention, talk about your issue or your presentation going to the highest level in the command change. you will loose sleep because you know it matters. we have a proposal. if a judge advocate recommends prosecution and they say i do not think so, that decision goes automatically to the secretary of the service involved. i cannot think of a more chilling statement to make. this includes having the commander's decision reviewed by the individual in question. that is a huge and dramatic step in the right direction but stays within the chain of command. if there is agreement and the

commander agrees that this is not the right case to go forth what, you have the commanders commander look over their shoulder. i think that we are making great progress. senator ayotte and others have supported this and someone will be there for you and no one else. they will be loyal to you. their job is to help you do the system. there are so many good things that the senator and the passion has brought. so i really appreciate your passion with my colleagues. the decisions we make on how to solve this problem have wide-ranging effects of how the military operates. at the end of the day, it is going to be our individuals who stay behind or go to battle.

>> now there is an offering. we will offer this up for debate. >> yes. >> we have an additional 10 amendments and relation to sexual assault. includes what is modified and authorizing guidance. this is an active duty member who is committed of sexual assault offense. it also includes additional issues about sexual assault in the military.

it requires dod this includes rape and sexual assault and unwanted sexual aqsa military so it is amendment 205 especially without command knowledge. this is modified as directing the secretary of defense and health care providers are appropriately trained as

necessary. includes number 148 as modified requiring the independent panel independent panel on sexual assault and considering all of this proposal this includes the codification on military service. these amendments are moved to be adopted. >> thank you. >> is there any discussion yes, we would like to adopt the amendment. >> it is now open to the amendment and i would now call up amendment number 183. it has been identified as the cosponsored amendment by senator mccaskill and senator mccain and senator reid and senator graham and senator ayotte.

it would replace the provision of personal subcommittee package and removes from the chain of command the authority to prosecute serious offenses. the amendment requires an independent review. >> addresses the problem of retaliation including such offenses without fear of retaliation. we all know that we have a serious problem of sexual assault in the military. we have a problem for the lack

of support of victims for sexual assault and retaliation and peer pressure against such victims. and we have a problem with a culture that was taking an adequate steps to correct the situation the senator is chair and she schedules her first subcommittee hearing and has been a force for change. >> including both sides of the aisle has made important contributions to this legislation of initiative.

>> this includes establishing legal assistance to victims of sexual assault in the military service. this includes criminal investigative service for investigation. a bill requiring the inspector general to investigate reprisals for reporting sexual assault. >> however i do not support the removing of the commander for assault cases and putting that decision in the hands of military lawyers outside of the chain of command of personnel

and subcommittee provisions would do. i believe that doing so would weaken our response to sexual assault. it is likely that they will be prosecuted. the provision will also unwisely removed the power of the commander to prosecute other kinds of serious crime including allegations ranging from homicide to larceny. it will likely weaken our response to sexual assault by taking a responsibility for prosecution away from military commanders.

>> this includes sexual assault cases even one civilian authorities decline such things. we also learned that military commanders have been prosecuting for sexual assault cases this includes the military lawyers and the importance of the message that such prosecution stems to the troops. the air force colonel forcefully testified before us this

includes the burden of proof that weigh heavily on prosecutors including a scenario where a prosecutor could choose to prosecute a case because of the uncertainty of the convention and i absolutely want to prosecute a case including they need to change the culture that needs change this includes the ability to prosecute

offenses. you know that actions speak louder than words. i need to be able to backup my words that is absolutely no tolerance for sexual assault and i need to have the ability to back that up. it's includes an increasing of sexual offenses. including whether prosecute sexual assault and investigate it this includes many levels of command and in the meantime, this would work with the same

people and this includes avenues of peer pressure. it is the chain of command i can establish that zero tolerance policy this can protect them. including the alleged perpetrators and prosecution of the case so this is and they reduced her power to act.

the chain of command and for example, two generations ago when they face problems in the military they did it and they could do it again. those are the amendments that we are offering this amendment takes a different approach and we believe a more effective approach. first our amendment helps ensure that all sexual assault cases that should be prosecuted are prosecuted appropriately. by requiring higher-level review of a decision of a commander not to prosecute a sexual assault case. this is usually a general

officer is is a convening authority that may be criminal or captain in the rare event that senator graham said that the military would recommend this be prosecuted in a commander decides not to do so, our proposal would require a would be conducted by the service secretary. by directing the secretary of defense to prohibit retaliation against a victim for reporting a sexual assault and for the first time.

the commanding officers are responsible for establishing a command climate in which a victim can report criminal activity especially if they failed to do so. no member of this committee accepts this status quo in which we have thousands of sexual assault in the military every year. every member of this committee wants to act forcefully and drive sexual assault out of the military. the question for us is how can we effectively achieve this objective. i believe that the alternative

will be more effective in attacking this problem and provision. our nation has no stronger vehicle for achieving the dangerous aspect of our military no matter what sacrifice we must send to our military including the sexual assault from the ranks and we are counting on them to win this battle. >> thank you, mr. chairman. my commitment is to the integrity of the commanding officer that goes all the way back to the service in the army.

and at that time, that was the thing to talk about. we didn't want to do anything to take away the authority. i commend those who put this together with the chairman that came up with this compromise. it has been explained already and i call your attention to this example you should not go to trial and it will go up to the general court-martial. i strongly support this amendment. >> thank you, mr. chairman. first, let me say with all my heart how much i respect the leadership on this issue we have

an honest disagreement on how to publish our shared goal of putting creditors in prison and supporting victims and supporting him during a difficult time of their lives. this includes handling hundreds of these cases guided by these decisions today. this includes explaining the difficult decisions to victims and no one has more often looked a jury in the eye and ask them to take away the freedom of someone who has been accused of

rape or sodomy. a couple of points i would like to make art about the proposal of today. first, i think it is very important to note that if the commander disagreed with the lawyers, it does not go to a uniform. it goes to the top person in that branch of the military that does not wear a uniform. i think our military is strong for many reasons. one of them is that we believe that civilians should be the top decision-maker in each branch of our military there will be

another review even if the lawyers say no. this is a provision. frankly, that goes further than i dreamt that we would be able to go. when the lawyers say do not go ahead, it gives us another review. i think that is very important. the other thing that is different about this provision is the crime of retaliation. we have heard no evidence that there is data that supports the notion that commanders are refusing to move forward one advised to move forward. it has not been a problem that we have found. in fact, as has been pointed out by the chairman and others, we heard testimony to the opposite effect that there are times that

the lawyers said no and the commanders said yes. under the subcommittee's proposal, it would be over when the lawyer said no. and there would be cases that have their day in court that would never see court under the subcommittee's proposal. because we know for a fact that the cases have moved forward even when the lawyers say now. prosecutors say no all the time with these cases. many of these cases are he said and she said and it is who is believable. i cannot tell you how many prosecutors there are in the military system in the civilian system that cannot get their arms around that evidentiary challenge. so there are hundreds of these cases that are being turned down today in this country. there are a lot of cases that have been turned down by william

prosecutors that will be taken up under these proposals by the military. the military is all of that. plus what we have at our career. what i really tried to look at is where we can be victims of most retaliation. are they more protective

especially when no one knows that we should. or are they more were protected when they are going to court-martial. i can make a strong argument. not only does common sense to me this is true, it is also what i have been told about military prosecutors as well. i honestly do not believe that the chain of command is the military means at the beginning or the end our main problem is the military doesn't even know how many breaks in sodomy is that they have. they have no idea. the only anonymous information is under the broad title of sexual contact.

that could be a lot of things that are not criminal and certainly not rape and sodomy. we need accurate data as we have to make sure that the mission of the chairman that he referred to is getting after that. it is a lack of focus and supporting victims that is the problem. it is a lack of resources of high-level investigation and an inability to track offenders because of restricted reports. i have news for everyone. it is very unusual for anyone to do this one time. from country to country and face-to-face, if we don't get a handle on tracking the perpetrators otherwise we will

never publish this mission and it is a lack of focus on these powers. i know that they will think that senator gillibrand and i do not agree. but we agreed on one thing. we are not going to give up focusing on this problem. we are not going anywhere. one word of advice to the military. do not think this is over once the defense authorization bill becomes law. because we have just begun. we have just begun to hold them accountable and make sure that it is a new day in the united

states military when it comes to these horrific crimes. this is a big one. now it's time to show the steps and show you can get after this problem in a way that supports victims and we will get a handle on one of the most embarrassing moments our military has had in decades. >> a new very much, senator. >> we have a common at this time. >> well, thank you, mr. chairman. a lot has been said on this issue, so i would like to make my remarks brief, etc. i think you, senator mccaskill or senator ayotte, senator inhofe for a lot of hard discussions and compromises and i think that

we have come up with a legislative proposal that should be extremely effective. i would like to remind my colleagues that this is a cultural problem and so if we really are going to address this issue in an effective fashion, we are going to have to change the culture in the military rather than systems overview, which are important. but the culture is the problem. i would like to remind our colleagues that during and following the war in vietnam when we still had an all volunteer force, we had gray stripes on our aircraft carriers and we had other conflicts

during vietnam. we did not solve the problem by taking away the responsibility of the commanding officer. what we did was place additional responsibilities and embark on a very, very vigorous program of indoctrination and instruction and explaining to the men and women of the military what was acceptable and what was not. those who violate it, those regulations concerning the practice of racism, i have great faith in our commanding officers and i believe that when we have the responsibility of sending young men and women into combat at the risk of their lives, that they also should have some complements in their abilities. i strongly support the review

that has been adequately described here. i also believe that when we give these men and women responsibilities of command, we should have them exercises responsibilities. and i would point out in hearing that we have that i ask what her view was about the problem in the military. he stated there have been significant impacts on the environment. we need to do what we can as legislator. an attitude and a climate that reject this kind of behavior that is what we find for leaders that can.

so this is at least a major step forward in trying to address what is an unacceptable situation. >> first let me commend senator gillibrand for her efforts in this regard i think this is helping us move under the chairman's proposal to an approach that is going to be effective. as the chairman indicated, without that trust, no military

can function. i will second senator mccain's observations and we have to deal with serious litigation this is proactive prevention that can only be accomplished by the chain of command. that entails every step and they have to be engaged for the induction of military personnel. including evaluation of military personnel and inspecting goods, and yes, in cases of violation charging those person now. because they are involved in this, holding command responsible for everything they do or fail to do it has to be

measured that well, i think provide the kind of cultural change and i think that this amendment reaches this objective. by making changes to the procedure. that ultimately making it clear to every level of command this translates into cohesion and effectiveness and this is

something that we have to have. we have all eluded to it. they certainly have to trust their commanders. >> thank you, mr. chairman. senator chambliss? >> i commend the senator from new york to make sure that the issue stayed at the profile mr. chairman, i commend you for standing up and providing leadership. now it is up to this committee. hopefully this will be a good

proper oversight in this to make sure that the problem does not get neglected and assault. we look forward to that. >> thank you, senator nelson. >> well, i have wrestled with this. a lot of our commanders did not get it. that was borne out by a survey that the military to 50% of the victims said they did not report because they don't think that it does any good. i, too, served during the vietnam era. my conclusion is if you can't get the command system to work

then accountability has to be held, and the people that are responsible and accountable are the commanders. i will support this amendment. >> senator ayotte? >> i want to thank the chairman. i want to thank my colleagues for their passion and leadership on this issue. really in the subcommittee of having hearings early on including are much better understanding of the public of the seriousness of this issue. and i think that that is why we find all of ourselves here today with an agreement that the status quo is absolutely unacceptable for our military and for our country. i very much also want to thank senator mccaskill for bringing her experience in prosecuting

these types of crimes to address this kind of issue. i feel that having the hearings that senator gillibrand has, the military is far too behind on this including how we deal with this initcluding how we deal wih this initial charge including whether or not we would make the

decision on these types of cases this includes the commanding officer that could go up to the civilian authority in each forest that everyone was driven by the chain of command they are measured by the zero tolerance in their unit and i think that bringing it up to the secretary of the service level will bring us to the highest level if you within your unit did not make tolerance a priority and do not have accountability for it, then you will be measured by

that. as the senator said, you will be fired. you will lose your commanding authority. i think that by bringing the situation up to the secretary of service level, it can send continues the seriousness that it deserves. so i will ever support the chairman of this committee on this issue and i want to also touch upon something that the senator said and that is that our military leaders need to understand that we are giving you more responsibility here and accountability here. in other words, we are not going to let you off the hook on this. and this is not something that we are going to pass something on here today and forget about. because many of us will continue to serve on this committee and we will expect to understand how the system is working. we will expect the real metrics back as the weather victims come forward and how many victims are

coming forward and how they are treated within the system and this will not be the last time that you will hear from congress on this issue because it is not going to be again where you pass something in than 10 years later the issue comes up again or two years later we will continue to have an oversight function on this on a continual basis and a bipartisan basis to make sure that whatever is passed by this committee today to give the strongest laws that we can put in place to make sure that this zero tolerance issue does go to the culture of this military. nothing has offended him more than knowing sexual assault within the military all of you

have worked hard on this. this includes with the chairman has done and i think that this will make sure and we are not going to continue to make sure through the summer and in this way. >> senator shaheen? >> thank you, mr. chairman.

i am not going to be voting for her. i am a cosponsor of the senator gillibrand provision and i appreciate the leadership and work that she has done and the work that has been shown on the committee. i was interested with you, mr. chairman. senator reid and others have referred to the zero-tolerance policy within the military about sexual assault. the fact is that that policy was actually established by the secretary of the navy in 1989. nearly 2.5 decades ago. then the tailhook incident took place in 1991 and there was outrage. there was a call in the chain of command was supposed to step up

and fix what was going on. on june 2, 1992, the secretary wrote a memo that said that while each individual must be accountable for his or her own actions, the commanding officers have unique responsibilities for leadership in ensuring appropriate behavior and attitudes of those under their command. that was the moment much like the moment that we are in now. yet we are here to decades later and the congress has made modest changes during that time to try to address the culture within the military that is created for the circumstances around sexual assault. system remains unchanged during that time. what is also unchanged is the existence of the sexual assault in the rain.

so i think that the question that we have to ask ourselves, and i appreciate the discussion in the commanding officers and the necessities that they are part of changing the current culture. ..

it does make a difference that we follow what's happening in this issue once and for all is stamped out and is no longer on our men and women. thank you. >> let me call on senator gillibrand and then senator kaine and then a senator blumenthal. >> thank you, mr. chairman. so many of the professions that are very strong to provide transparency and accountability were nonexistent. i like the fact that retaliation is now going to be a crime. it is an extraordinarily good measure that i fully support, and i think it is an excellent step in the right direction.

the level of transparency for appeal taking it to the secretary of the services. i also appreciate the congress i wish i could've made it stronger the commanding officers are responsible for establishing a command, climate free of retaliation and free of fear of retaliation. failure of the chief of commanding officer to maintain such command is an appropriate basis for relief from that command position. senior officers should evaluate subordinate commanding officers on how well the establish and commend the climate. those are excellent. it is required and i hope that we as a committee can move forward to make that a requirement that the command climate is part of the evaluation process of commanders as to whether or not they are doing a good job, and i also

hope that we can actually make that a requirement because as senator mccain says, we need to hold commanders accountable they have to be part of this process i think that he was right when he said that and we need a measurable by which commanders can actually be held accountable if they are not showing the command that is productive and actually values all of the men and women serving in our military. so, i would like to hopefully change that ultimately cannot just be a sense of congress but actually make it measurable in the review process. i hope we can work with the committee to address that. i want to address why this is insufficient. there seems to be a misunderstanding that the commanders are not taking the judgment. they are. in fact, the only disagree 100% of the time -- less than 1%. it is rare when they are disagreeing. that is not our problem. so all of the transparency and

review was excellent, but it's not solving the given a problem, that isn't a problem we have today. the problem is very clear because the victims have told us what and i am just distressed the victim's voices aren't being heard in this debate not nearly enough. they say it is the climate that the fear retaliation. without being blamed and retaliated against and marginalized having their career over. that is the commander of responsibility creating another climate of fear and that is retaliation within their ranks they are not maintaining good order and discipline. i disagree with the statements today and previously that the chain of command is a disposition basis as the problem. it's not that their decisions are wrong.

it's that they are the decider and the victims have set buy not reporting because it is within the chain of command. and for those that making these recommendations, those lawyers are in the chain of command it would be like my general counsel making a recommendation to me. it is entirely within the chain of command. asking a set of lawyers who do not command to make the decisions independently said the victims can proceed that it's not within the chain of the decision to be made. the decision of what happens to them there usually someone senior to them. some more senior and decorated and someone that is great acts of bravery. in the decision being made about whether or not to prosecute. it's not that the commander is disagreeing with his lawyer. is that the victim's fear

retaliation. statistics in the last report that we know, we just know 50% said they don't think anything will be done with their case and that is and why they didn't report to the 50% said they feared there was a form of retaliation or it wouldn't go well and 43% said i actually witnessed someone who did report being retaliated against. so, that is their fear. it's the chain of command as the decision maker and so that is why we believe if you take it out of the chain of command, you have the hope that you would increase reporting. they have moved more of the cases to trial but it isn't meaningful if there's 26,000 unwanted assaults and rapes and we don't know how many of those, but we do know is 3300 were reported. huge falloff between incident numbers and report and whatever the rate is. 4300 are reported of the 4300

reported, 70% are sexual assault and rape. so there are thousands of sexual assault and rape every year reported. so there are 302. let's say the commanders is how we want to go to trial more often than my lawyers tell me what's the increased by 25. that is a good thing. that is a really good thing and i appreciate the commanders actually make and take that step suite of 302 cases that go to trial pretty good rate. the problem is if you have 302 cases going to trial but there is a member of 3300 of the cases actually taking place, it is the reporting that we need to change. so we look at our allies that we fight with every time we need an ally and a war. look at israel and the u.k. and canada look at germany, australia. they've made the decision because of the object of the

problem and reporting issues. in fact in israel because they have high level prosecution in the last five years the reporting has increased. we would have the reported cases we had tens of thousands of reported cases. you might get more but a lot more are going to the trial. they say it's in the chain of command that's why they aren't reporting so we can believe them or we cannot believe them. many don't believe the victims been the irish people to support the personnel market.

>> not any back-and-forth on this side. >> thank you mr. chairman. i appreciate my leadership on this issue and i will support the proposal that you have brought forward. i would like to thank all of the members on this committee who have worked on amendments and presented amendments. senator john lubber and ha i would like to recognize senator mccaskill because i think that you've brought forth from your experience of a prosecutor issues and a viewpoint that has been very helpful as we have heard testimony, and as we have discussed this horrific issue before us so thank you very much. >> sexual assault is unacceptable because it goes to

the very core of the armed forces to haiti and so, as i look around this table and i look at my colleagues. every person is going to continue to focus on this issue. they will honor how the military is being. it's for the public and especially to the victim's. we will continue to be there in the future because the changes have to be made. we need to solve this cancer that is taking place within the armed forces.

thank you mr. chairman. >> thank you, senator fischer. >> senator kaine and then a senator hirono. >> thank you. >> let me interrupt you. if someone seeks recognition i'm going to submit to them in that order. >> thank you. one thing i feel very confident about sitting in the stables everyone who is here, everyone who serves on this committee believes the victims have testified and who have been reported on the surveys, we have received. i do not think that distinguishes anyone on the committee from each other. the testimony has been heroin. i was at the subcommittee hearing and at the lengthy hearing last week. every member of the committee, democrat and republican, believes the victims. we all believe we have a major

problem and we all believe the problem of sexual misconduct is assisting on the military and because it is a stand on the military is a stain on the nation we are short heroes right now as good as we get, and when our heroes have a problem like this, that is so serious it isn't just a stand on the military is on our country. there is also much agreement on the committee about a significant and major reforms that we need to take and for that i give credit to all of my colleagues but especially the personal subcommittee mr. jalabert and pity we are agreeing on a package of significant reforms to reporting, prevention, training, recruiting, and type retaliation measures, investigation, prosecution, the benefits and protection for whistleblowers we are pleased to agree to a series

of lighting or significant reforms. the policy disagreement is should we remove to prosecute serious offenses to prosecute the chain of command. that's why i'm supporting the amendment. >> this is the best way to fix the problem of sexual misconduct. i do not believe that we will fix it by taking responsibility. we are going to give resources and tools to commanders and we need to force the janeth command to take this more seriously. we will not solve it by reducing the authority but by increasing their authority and increasing expectations. we send a message not just doing a bad job.

we have no confidence you can fix this that is the message we send if we take it away from the chain of command. we have confidence in 12 years of the war the longest period that the nation has ever been we have confidence making decisions the implementation of don't ask don't tell. we are counting on the chain of command in these instances to change the culture to send a signal of no confidence we do not think that you can get this right and we do not think it's the right thing to do. i think it means a focus on the issue which is sexual misconduct. the proposal pre-amendment is to remove from the military chain of command the decision to initiate a prosecution and all serious non-military offenses.

murder, larceny, robbery and forgery, bad checks, or send, extortion, burglary, house breakings, perjury, fraud against the united states. the proposal is to remove the decision to initiate the prosecution in all of those offenses. there are very smart people around this table. lawyers, prosecutors, those that have served in the military. we haven't heard one bit of evidence to suggest the chain of command isn't capable of handling all of those kinds of offenses and about sexual misconduct. we have heard no evidence the chain of command can. handle these other offenses and set to act on the basis of no

evidence and poll all of it out of the military chain of command both the criminal variety and of the hostile workplace, sexual discrimination. we have to solve all of it with only if we keep a focus on what is the problem. and so for those reasons we cannot fix this without the chain of command and we shouldn't fight these problems we have not yet heard exist. i support the chairman's amendment. >> thank you come senator blumenthal is next. i want to thank you in joining for the serious hard work that you and others have done in crafting this proposal which is an effort to strike the balance and we recognize the competing interests at play. he said a very powerfully we share this interest and we share

the surge as the secretary defense has called it and as every one of our service chiefs when they came before i think the military deserves some credit. the attitudes are changing. the powerful testimony that we heard on the committee from the service chiefs goes beyond the rhetoric and the words that they are taking action. just to give you an example, he is convening a group of his senior company commanders, colonels and lieutenant colonels for a very extended session which will then put showing them the testimony and questions and statements during our hearings. in that connection, i want to say thank you to senator jalabert and for her leadership because i think that her

proposal has helped to move this debate pitting it has moved the line of consensus in favor of a more independent review with the knowledge that trust and credibility are everything. and i have some reservations about your proposal, mr. chairman, that will lead me to continue to support the proposal. first of all, i think that we have to look at this problem from the standpoint not just of the commanding authority but for the standpoint of the victim how the system looks. my fear is could it will look to the victim we are tinkering with the process. the system will remain

essentially a black box. there will be little to no opportunity to participate, and virtually no information during the system review and the review itself in almost every case to go to the senior command enough already and never reach anybody in the civilian authority. that is a fact of the way that the system will work because if a commander decides not to charge and the support then it goes to the senior command authority. so, i will continue to support the have a proposal to make a more telamon demonstrative chain and the system, and i join in the view that the military leadership of the country to the company will not be let off the

hook but they do not expect to be let off the hook. they will hold themselves accountable. and i look forward to their knowing that we will revisit this issue. in fact, i think that we are in many respects featuring to another day a real solution to this problem that will provide for the trained and experienced prosecutors to be making these decisions. there is no need to do these cases. they are a very demanding and difficult and in some ways unique kind of prosecution that the training and experience not only to make decisions but review decisions require and i hope that we can continue to make the system worthy of the

greatest military in the history of the world that is changing because we have a new generation entering it because we are promoting more women which may be the factors of changing the culture. thank you. >> senator hirono? >> thank you mr. chair. i echo the sentiments of my colleagues in the flanking you and the ranking member but in particular senator gillibrand for her leadership and also senator mccaskill and all the other of my colleagues here who have focused on this issue like a laser beam and this has been going on. sexual assault in the military has been going on for decades and while i certainly appreciate the chairman's efforts to move us forward, i will not be supporting his amendment to the although i acknowledge the improvements becerra's amendment does constitute. i think that the people that suffered sexual assault in the

military when they think about reporting this one is a fear of not being relieved because in these cases he said or she said. while i acknowledge, mr. chair coming you have provisions that make retaliation a crime, i know that the language in the amendment really focuses on retaliation as it relates to personnel matters. and that while in your amendment that is just a minimum, there are so many ways of retaliation that can occur in this environment. you can't retaliate -- be retaliated on the basis of not so subtle or you can be retaliated by having to undergo a psychological evaluation that finds to somehow psychologically

having some kind of psychological disorder so there are so many ways that it can occur and it's hard to define and so i acknowledge your efforts to try to define them but i do think that is one of the biggest barriers to reporting and that is the bottom line i believe of them on reporting by thousands of people that have endured sexual trauma in the military and yes it is a cultural issue and to change the culture as one of my colleagues said you have to change the culture, this has been going on for decades and i do believe that sometimes the cultural change can more rapidly occurred when you make a structural change like that senator

jalabert and is proposing. i have nothing against the military and their efforts and i acknowledge their service, but this truly is a very unique kind of crime that requires us to continue to focus and i again echo my colleagues and say that we are going to continue to hold our commanders and military leadership accountable. this is not the end of the discussion. we know that we are going to continue to provide oversight to proceed. thank you. >> thank you. senator cruce. >> thank you mr. chairman. i would like to thank the committee for its good work and drawing attention to this very serious problem. sexual assault in the military is a total violation of the

obligation that we have to the men and women that set forward to defend ourselves and the nation and defend our liberty and i commend the good work of this committee working to improve the reporting and prosecution. i commend the chairman for his good work in crafting this amendment, which i think is working to improve the situation. i want to commend the leadership of a number of leaders on the committee including senator mccaskill and senator shaheen, and in particular i want to commend the senator bill gillibrand putative i'm going to be voting against the amendment, and i'm going to be voting against it because i was persuaded by the arguments that the senator presented in the committee of years ago to the i.t. machine eight powerful and effective argument that the lack of reporting is driven by the

fear of not having an impartial third party outside of the chain of command and which to report a sexual assault. and i think that argument was buttressed by her pointing to our allies that have implemented similar policies. the reporting that has occurred when there's an impartial act to lodge that report. based on the comments of many senators that this hearing, it appears likely that the chairman's amendment is going to be adopted. i would suggest if that is the case it may prove that this amendment makes material progress in solving the problem and if it does i know all of us

would celebrate that fact. if it does not come if the wing forward in a year or two or three, we see the data as the reporting is still abysmal and is not working there is still the fear of not having an impartial prosecutor and tribunal, then i would suggest it may be in order for the committee to return to senator jalabert and's proposal and senator kaine made a very good point about the barrette of the offenses and not relating to sexual assault that i had entered a predicate that there is the same problem with other offenses that appear to be present so it makes sense but merrill and focus on those offenses concerning sexual

assault which are the heart of the concern of the committee so i command but i am going to vote no because i think the senator's proposal is a good one. >> thank you, symmetric rim's. senator cruise. i'm sorry, senator came. >> i have to say first as a newcomer to the senate and the committee this is one of the present discussions i've been engaged in since i've been here and this is the way that these important decisions are supposed to be made, with passionate and well conceived argument on all sides. i find this a tough call. i have gone back and forth as senator john lubber and those we have discussed this issue the past several weeks. there is a national tendency of the hierarchy organizations to protect itself first, and i

think that is an instinct of whether it is the army or any other similar kind of organization and that makes this a particularly tough call. another preliminary comment that i want to make is i think it's important that we focus on the fact that this is part of a package and that there is a long list of initiatives in this bill in the personnel bill and in the ten amendments that we adopted today and all the controversy is about one and it shouldn't take either our eyes or the public's eyes off of the fact that this is the most comprehensive approach to dealing with this issue that in my knowledge has ever been taken by the congress, so i think that is a very important point of context. to me the next what may turn out to be the most important part of

your amendment is the retaliation section. that is one of the major things that is driving people about reporting and data they didn't say we aren't reporting because of the chain of command they aren't reported because the fear of retaliation or because we don't think anything is going to be done. but clearly retaliation as part of the problem. and at our hearing last week when we had the second panel with the officers that are here in these cases, one of the witnesses actually testified and answer some questions that he believed right now the more likely grassroots response is some kind of retaliation against the complainant and instead of against a perpetrator and i thought i was a very damning but

honest statement. ..

matt senator coons said something important. i was trying to think about how to put it eloquently. this is a test. this is not the end of this story. i realize that there is a long history to this we have had to try this for two years. i think this is a very far-reaching and comprehensive a strong proposal since we do not see an improvement and higher

levels of reporting and a change in the culture, i think this committee will have very little option but to change fundamentally the way these matters are handled this in a sense, i see that as a last chance to get it right. for all those reasons, again i will go back to the beginning and i consider this a very tough close calls. but i think that we have done something important here today. i commend the senator. i am very admiring of the compassion and energy on this issue on the other hand i commend the chair we listen to both sides.

>> i will ask the clerk to call liberal. [roll call] [roll call] [roll call] [roll rococo [roll call] [roll call] [roll call]

[roll call] >> the motion passes. >> chuck hagel testified to budget hearings on capitol hill today and was asked about the military handling of sexual assault cases. we will bring you the budget committee hearing next on c-span2 followed by the house budget senate committee hearing. the head of the fbi, robert mueller will testify tomorrow. he is expected to be asked about the use of surveillance programs. live coverage begins tomorrow at 10 eastern on c-span3. later committee will work on immigration legislation. we will hear from law enforcement and civil rights officials. watch live coverage starting at

2:00 p.m. eastern also on c-span3. >> the video library of c-span has reached a library milestone. since the online launch in 2007, there are 200,000 hours of original programming and nonfiction books searchable and free. created by private industry. america's cable company. >> next, defense secretary chuck hagel and martin dempsey testify on the pentagon's 2014 budget request. nearly 1% decrease on spending from 2013. this is a one-hour force portion. >> with that, we will turn to our questions. secretary hagel, let me begin with you. you asked for more time before

the cuts take place and certainly when it comes to the defense budget. the senate budget that we have passed provides both great it starts by eliminating sequestration and replacing it with a balanced mix of savings and revenue including defense and ensures that those do not begin until fiscal year 2015, which will give the department the ability to plan appropriately. the senate budget plan reduces spending by about $250 billion by about 10 years. that is about half of the 100 billion in cuts and sequestration. by replacing the sequestration and ending this budgeting by crisis that we are doing, it provides spending levels for the next 10 years. we have not been able to have a conference yet, and that is ensuring that we will have another round of sequestration on this very quickly, which will be across the board with dod

funding in fiscal year 2014. now, i think the most important thing we can do right now for the long-term good of our military is to follow regular orders, go to the conference, and then pass a compromise budget that replaces sequestration. i would really like to do that if we can have the ability to do that. i wanted to ask you today if you could comment on the long-term budget and the need for that to replace the sequester and how that looks and will affect your ability to plan and execute the national security strategy. >> thank you for the general and broad question. it does frame everything. it frames our ability to respond to the responsibilities that we

have for our national security well into the future. i think that much of what the testimony was about really focused on this. we have the inability to plan and to have was no certainty from the month-to-month and year-to-year as to what our possibilities are for acquisitions and technology and research and technological advantage that we have in the air and the superiority that we have at sea, the training, the readiness, all of these are affected by the lack of certainty for planet. the chiefs say to me when i have spent a lot of time as the chairman has in the last three months, if you can give me any

clarity and i can build you a structure that will match our strategic interest in this includes enhancing and preserving our national security interests around the world. we have to continually go back and adjust and adapt and we have been forced to some of the things that you have noted as senator sessions said nsi and as i did in my testimony, furloughs for people and a good example of that. you are not building a skill set with the civilian employment. when that thread of employment is they are. this gets into contractors we

often hear, and i suspect that we talk about using contractors. mainly why anyone uses contractors is because there is a specific skill set that you may not have in-house. that is more expensive. so you are building nothing for the future because you essentially are using your readiness not only in employment in the military and planning for the future, just to protect the immediacy of a war in afghanistan and our structure and the priorities of the readiness. that is a priority and it fits into and folds into the overall question. that is why time and flexibility are absolutely key here.

a lot of things that we should be doing and can be doing and still protect the interest of the country and be the most effective fighting force. where we are essentially is when you are talking about the kind of abrupt cuts without slowing the growth. the bottom line saying is that you are going to cut your combat power. in the end, the readiness and everything into that, it is the one core assets that you must preserve and continually enhance for the future. >> i would like to turn it over to senator sessions. let me ask you specifically. obviously we hope that we would not have this in effect for 2014. that is not included in your budget request. you mentioned the choices in management review that you expect to have in a few short

weeks. is there anything that you are finding now that you can share with us that would help us understand if we do not move forward and replace the sequester? >> the reason i directed this three months ago was as i said in my comment an opening statement. to prepare for what may eventually be a continued uncertainty of our resources. we ask all of our senior leadership to be involved and participate as they did. we have our nine combatant commanders to come in this week. the point is, to answer your question, is if we have done this in order to project out as to what kind of limitation on trent limitations and planning that you will have to do to protect our defense capabilities

based upon original questions and the uncertainty of these budget issues. as i said in my statement, i am looking at those, general dempsey is looking at those and we are reviewing those. this was not intended to be a set of recommendations. it is intended to be a set of choices based on these different possibilities and scenarios. >> we will see what this is going to be in a few short weeks. michael is to solve this so we can replace sequestration and i think that it's it is critically important. i think that we will all keep our eyes open when you produce a report a few weeks. >> if i could add, senator, senator sessions mention that when we did our defense plan four years ago, if you cannot

sequestration, it is the 474. so the way to think about sequestration is not that it is the deepest cut that we have experienced. but it is by far the steepest. when the cut is steep, we limit places we can go to get the money. a lot of this is unavailable in the short amount of time and we can make long-term institutional reforms. but you cannot sweep it up. >> we very much appreciate it. >> general, i believe that is correct. it is obvious when you look at a that it is too rapid of a reduction. it could be something that we could effectuate over time. but given into such a short-term basis, it requires damaging

decisions. >> just briefly as i understand it, we came out under funding for the contingency operation by about $9.6 billion. i have been surprised to find out and i understand that you are having to take that out of the defense budget and we all need to know how the funding sources work here. the sequester and the budget control act and all that is on the defense base budget and don't have anything to do with this. they are coming down in an independent way. now we have you been asked with the shortfall out of the defense budget and in addition to the other cuts that have fallen to

this. >> let me make a general comment i will answer specifically to budgets, different reasons. you accurately noted that there were 10 million below last year's fiscal 2013 request those numbers will continue to come down and eventually we will be able to phase out that process. but as you know when i was in the senate and on the committee for four years, we financed this out of the appropriations and that is where a lot of this start has been noted. and it includes the additional

cost as re-reset and unwind and transition. it has been significantly more and cost a lot of money to get your people out, do it responsibly, get your equipment out, which we have an astounding amount of equipment and afghanistan. it is a dangerous area and much more complicated than just going to the desert in iraq and then shipping it out. it is another part of this funding. i just wanted to give you that general consensus and ask to go into more detail. >> senator sessions. part of this is by moving money around with equipment that we would have bought to replace equipment damage in afghanistan. and out of our base budget as well. perhaps some of it is coming out of this as well. i do not have the exact split

that some of it is coming out of the base budget. >> to that extent ,-com,-com ma the $1.4 trillion over the last 10 years talked about the efforts and it has been emergency spending. the defense budget has been paid for with the united states. so it seems to me whatever the figure is, whatever the figure is that you are talking about, that figure is in the 52 billion and you have to talk about then you have to find those savings to be used next year to pay for other cuts and now they have to be used as funds with normal funding for supplemental.

>> i would be interested in discussing that. but the difficulty that we have with that on the sequester, it is a part and partial budget control act in 2011 and we have ways in turn raises the debt ceiling and we promised to reduce the growth of spending over 10 years and there was no tax increases in. we do have an agreement that would spread the cuts around. it includes tax increases if they chose. the law that was passed was a reduced spending and my part is 1 trillion as it turns out on how the cuts were to fall. that is what passed. so i think there is a strong feeling in congress that we have to be very corrosive of public

integrity to waltz in and say less than two years later that we are just going to give up and forget what we said we were going to do. what should happen is we should look at this government and see how much more the defense department can handle over time and reducing spending and look for ways to find other savings in our government and stay on track. we just had a 600 billion-dollar increase in taxes in january. i do not suppose any of that was used for this problem. >> as i said in my opening

statement, senator, that budget is a budget that sustains all of our national security interest and protect our interests and keep them strong and viable as a funding source and continues to make the kind of adjustments and reductions that we need over the next 10 years. >> the plan more than the president's request, still allow you to make a strategic on each. >> i think we could manage with that additional and as i have said and the chairman said in the chairman should respond to this as well. bigamous date. in taking those kinds of numbers

that includes adjustments to the strategic interests and how we implement this and the programs to protect these strategic interests. general, you may want to respond. >> distributed the secretary has led allows us to see the impact of not only the president's president's fiscal year submission but also the senate plan in sequestration. it does pose a series of choices which becomes pretty difficult. when we are tasked to reduce the defense department i've the budget control act and added this to a come out and we did some things in terms of efficiency, it comes to about a trillion. it leaves a mark on arms forces that would make it. we have not made this actual

strategy feasible. but it would put it at great risk and could make it feasible. >> when you respect that report to be available for congress? >> as i said, the initial results have been completed. i am going through them. as i also noted, it is not a set of recommendations but a set of choices and simply it is what the chairman agrees with. >> we will have recommendations for our internal use. also sharing this with the committee, we are interested in where we are going. this is also part of the 2015 budget requests and how we played this outgoing and 2014. >> thank you, senator. i know that the witnesses have to leave at 1215 and we are trying to keep everyone on

track. senator? >> i just want to highlight two points. first, let me commend you, madam chair and the senator from new hampshire on your great works. this has gone on and on and it has been debated for a longer running debate. i very much support your leadership in this regard. >> this is a view that i very much share. outside the senate this is exactly the time for a long-term strategy. this is what it would provide us the ability to do. to look look at the 10 year

window to tackle these issues. senator, i am laying out a medicare reform proposal. other colleagues indicate that we should have this like senator portman and others are making as far as a case goes. let me ask you and secretary hagel on the intelligence committee. the first question about the contract. what is striking is the inability to hone in on the numbers so that we can get a sense of how to tackle this issue. last you estimated was that we had about 300,000. according to an analysis last month, there were over 710,000

full-time contractors working for the department. so we will start with you, general dempsey on this point. how do you to explained the discrepancy in the numbers. how are you and your colleagues going to get accurate figures we can get on this issue? >> i think those numbers are accurate. >> with the comptroller said last february when he estimated and said it was $300,000, that was not accurate. >> he is not their. [laughter] >> i was referring to the better data with the operation and maintenance. the best numbers we have all the service contractors is about 700,000 and the number is gao. >> on that point.

>> i will do that the contractor has no idea to tell you what they need to do to get paid. we are going and modifying all of the contacts across the government and requiring that they provide us you so you will have accurate information at some cost. people working on weapons to add to that number. >> let me ask one other question . on the sherpa aircraft, these are the big cargo planes used for delivering the cargo. the message has been do not get rid of them. the army has a response to be

boxed up and then, i guess, it is almost like the army is saying that we won't let the guard do that. both political parties strongly support the role. and these planes are used in hurricane sandy and we are looking at the west particularly in this would be a chance to help a critical and domestic mission. i don't know how we will help those missions. so what your take is on this, what ought to be done? >> this has been the subject of a great deal of analysis in terms of its cost and operating costs and its utility. the air force cooperation was actually quite encouraging in the sense that can be covered by

this. there are some who disagree with this analysis. but if it hasn't been laid out, we can certainly try it. >> that may be. ..

>> there was a report on april 30th filed that the yukon fifth was not in europe, but deployed on a training dpers in croatia; is that correct? >> are you talking about last september? >> yes, during benghazi. >> it was on a training mission in bosnia. >> on the night of the terrorist attack in benghazi; correct? >> that's correct. >> what is the time of deployment of the forces? what is their standing order? >> their response times ratcheted up and down from n-plus-1 notification, sitting on the tarmac up to n-plus-6 according to the tre