and show that and in some places be courageous but also show how basically human that is and how courageous it is in order to really understand the diversity of experience is all around us every day whether it is race or a variety of others because of the ecosystems that we are helping to inspire or the collection of all of those individual aspirations and years

and excitements we have to capture channel the future of our communities. >> to get people in school. teach young people how to read. if we get people at grade level reading we will be strong. first learn to read and then lead to report -- read to learn. the person that reaches out learn so much more about the preconceived notions and how long they work. that makes us all better to be the >> mayor they say that poverty is an education. the strategy for violence is education. and i think intolerance you could say the same thing. it's education. i have to bring this to a close. please join me in a flanking the panelist and i will turn it back

over. >> thank you for your kind introduction and for your wonderful leadership with sacramento and as vice president the wonderful leadership in the united states conference of mayors. i wore a bulletproof vest on the walk to columbia which made it a little more difficult for. and when of the proudest moments in my life. reverend price, my fellow mayors , citizens of birmingham and citizens of our country in 1963i was 20-years-old. i had grown up in the segregated south, white only water fountains, separate balcony's in movie theaters for african-americans. until i was in law school i did

not attend any school or the integrated in south carolina i entered no schools with african-american students. on august 28i was fixated on the television set at our home. miti become -- am i and tama was even more alert. my sister had gone to the hospital for the next grand child of the generation. no one had ever heard -- few people in the countries of dr. king speak. a salt sound bites on television and i sat there as a young southerner. who i might say had been trouble or wondered why my hero jackie robinson in the 50's couldn't have come to a restaurant or

when he played in the minor leagues in charleston. it was a separate area for african-americans to set. but as i watched dr. king, he changed my life as he moved the world. six years later i was in the general assembly as a young member and found myself unexpectedly becoming a leader on the issues of racial justice. i was asked 12 years after that in 1975 to run for the mayor of charleston urged by african-american leaders and white business leaders and moral correlation than at the time in the south as a bridge builder. somebody who could check to the beat to connect the african american community and bring the white people in charleston along

as well. i was elected along with six african-american members of the city council. the first time the city council reflected the racial makeup of our city and its history. i believe that if couldn't be a great city until it was adjusted. i ran for mayor and i told my wife it would be one term. i honestly thought that. i didn't know how fascinating this job would be. but i ran for the mayor has the basic goal of bringing our community together, achieving racial progress. in my 37 years as the mayor, the citizens of charleston have worked together with me in a city council and produced many

wonderful achievement for our city. physically and otherwise some bringing great fame to our city. but my greatest source of pride is my first goal which is a continuing work in progress of achieving racial progress in my city. we come to this secret place in the church made sacred by the religious services that occur in this beautiful sanctuary but further consecrated 50 years ago this sunday of the tragic death of four precious girls. the brutal work of racial bigotry and hatred. this moved the conscience of our

country. it produced the civil rights bill of 1963 and passed in 1964. the bill that gave rights to all citizens that most people in america would have a hard time believing or not naturally there to begin with. hard to imagine that this was not always felt all of the land. but this city, those girls this church played a major role in that achievement. at this 50 year moment, this observation we have so much to celebrate. even dr. king had imagined. a black man, a distinguished black man as the mayor of this city, a black man as president

of our country and their achievements in every city and hamlet in our land the would bring great pride to dr. king and those that worked with him. we cannot let the euphoria of this moment distract us from the fact that we are not finished. dr. king's work remains and these little girls would expect us not to let up. there is so much work to do and that is why mayor of american cities have come together in the city to recover the breach, to rededicate ourselves to the complicated task before us. like the fact that black

children are three times more likely to be poor than white children. like the fact black children are likely to die before the age of one than white children because the lack of access to health care and the fact black children and teenagers of 17 times more likely to die from gun homicide and white children and many more statistics. we see the reality in our communities and we see it in our country. the danger is that we see these problems as intractable. they are not, no more intractable than the challenges of dr. king and his followers saw 50 years ago. those challenges became these

challenges we will overcome. our responsibility as citizens and mayors is to make the way we celebrate and observe this 50 year milestone to recommit ourselves with our fellow citizens in our communities to the unfinished work of the quality and opportunities for all. in some respects the work undone is more difficult and complex but it is no less possible if we resolve to commit ourselves not to fail. why mayors to take up the challenge? 50 years ago only white

politicians have went to washington, d.c. to testify for the civil rights bill was a white mayor ballan to georgia. that is what mayors do. but also, our jobs gives us the opportunity to get close to the heart of the people that we serve. ours is a personal job. it is our duty to make our neighborhoods safe. if to protect our citizens and children. it's our duty to keep our neighborhoods clean and to care for the children on our playgrounds. we hear our citizens petitions. we come to feel their pain. we helped wipe away their tears

and sometimes of sorrow. we celebrate with them the july of achievement and solve problems together. mayors know some of the panelists referred to this many times, mayors know that our power is to leverage, the opportunity to leverage the opportunity in the goodwill of our citizens, and that to move mountains of problems to create new institutions and to solve problems that only can be solved when people work together optimistically to finish the task before us. like early childhood education, and as my colleague said nothing is more important in america than quality education.

we know a child and the first grade not ready to learn is a child likely to drop out of schools and we know every child that drops out of school was likely to be to not have a good job, likely to get in trouble, and so much more. we need to fight for early quality child education and quality child care for every citizen in our country and do everything we can to bring that about in our community. we work in charleston we develop a promised neighborhood patented after the children's sown in new york and took a business and civic leaders with me, came back and created a district in north charleston working together. the four poorest schools in the county with great leadership and people contributing money in their cities and counties and school district and to follow

the geoffrey canada model of the spectrum that every child that is born in the neighborhood we can't lose one and i would go for each child to graduate from college and some say high school is good enough. the thing is for middle class america if somebody comes home, a child comes home with a bad grade what to the parents say blacks you think you're going to get into college? you're not going to get into college with grades like this. that is the goal for middle america. that should be the goal for any child in the inner city to graduate from college. some may go to trade school. it doesn't matter. the goal should be that every child born in our city, every child is born in america has the opportunity and feels they have the opportunity that is given the skills and the intellectual

challenge at a young age to succeed in school. we work with a philanthropist and created a private school in the inner city. they bought important land and while you work for private school for the inner city kids it is a charter school of sorts but they bring in the 3-year-olds and how scores of the charge. one of the most important things that we can do is fight for that and demanded that for the national government and the state of government and put together initiatives that we cannot the local level. we have -- we want charleston to be the memory capital of america. that's what we call with. every child of bringing in business people, city employees, volunteers, retired people mentoring our kids get in that role model lunch buddies,

soulmates, reading buddies, working hard to increase literacy. the most important basic civil rights in america should be the right to a quality education and the opportunities for a child to graduate from college. i created in the city the office of children, youth and families. the city of charleston is one of the many cities that doesn't run the schools. that is the dominant form in america. we have an independent school district but i created it so i would have another lens in front of me to consider and the lens was our communities children and that in the board that we created is leveraged enormous activities. the first day of school there were 10,000 people love them. most of them had been celebrating the beginning of the

school and have to be committed to quality education. we saw that we have the challenge of the lack of hope of the inner-city kids to read a summer school for the inner-city kids operating by our police department. it's wonderful. go to the graduation. these kids have had experience and mentoring that they have never had before. and at graduation, the inner-city child hugs the police officer and an affection and gratitude of building bombs. it was discussed earlier the reentry into the community. this is a difficult challenge in the country because it is one of those where there are scenes. no one owns it. we've got the state prison, the sentencing system -- >> we are going to leave the scene you can watch the rest of

it at our website, c-span.org. taking you live to capitol hill where the alliance for health reform is going to be talking about new ways to save money and time and get better access to health care with telemedicine and other technology. >> good afternoon of. my name is ed howard with the alliance for health reform and i want to welcome you on behalf of

senator rockefeller, senator bond, our board of directors in this program to look at one of the most dynamic aspects of health care in america right now and i'm talking about telehealth, telemedicine. when i heard those terms more than 20 years ago it was from the head of the west university health system who explained to me this new system he was having installed all amount of the remote corners of that rural state to make the rich resources of the university of system available to the remote areas with scarce or no resources. now, telehealth is important to the rural areas for sure with better access to health care services, but it may surprise you to learn -- it surprised me -- that a patient benefitting from telehealth was more likely to be an urban resident of than a rural resident.

so the tasks accomplished through telehealth or more broader than they were a generation ago. everything from remote patient monitoring to robotic surgery to better behavioral health to allowing prior care providers to consult with the most highly skilled but distant specialists are around. now, we are less than three weeks away from the schedule beginning of some key components of the affordable care act. millions of people are projected to obtain health insurance coverage under the new law. how was care to be delivered to those millions? perhaps there is a partial answer in telehealth and telemedicine. there are some potential barriers to capping this with reimbursement practices, licensure rules, cost factors. we are going to try to explore

some of those in our discussion today. we are pleased to have as our partner the wellpoint incorporated and the author of blue cross blue shield plans in a dozen other states covering one in nine americans. you will hear from john from world point in a few minutes. let me just handle a little bit of housekeeping first. in the packets you are going to find a lot of good background information including speaker biographies, more extensive than i'm going to have time to give them. and copies of the power point presentation. if you are watching on c-span, and you have access to computer, if you go to our website, allhealth.org, you can find the same presentations and slides and follow along if you would

like to. there will be -- for those of you in the room now and your colleagues to form a webcast that will be available on the same web site in just a couple days and a transcript a few days after that. there are in your packets green question cards that you can use during an extensive q&a session to inquiry one of the panelists or more. and h evaluation form that i hope you will fill out before you leave so that we can improve these programs and respond to what you think we ought to be bringing to you in the way of topics and speakers. if you are part of the twitterverse you can see there is a hash tag #telemed. that is sent "tell 'em ed,"

that's telemed. so feel free to spread the word by social media. we have a really terrific panel for you today to discuss this issue, which is itself complicated and multifaceted, but i think we have a group that's going to be given to give you the understanding that you need to take this issue up and run with it. and we are going to start with neil, the health tech strategies ed is the detective the institute where he helped policy for the health care information and management systems society foundation, better known and more economically known as hims. neil has been educating congressional audiences on technical issues for as long as the audience has been around for

sure in a series of very respective briefings to the peace chaired the american telemedicine policy committee, and we have asked him today to give us an overview of the state of telehealth telemedicine, how they are affecting change in the delivery of health care. neil come thank you so much for being part of the program. >> thank you, ed. it's great to be invited back. as diana told me i only have about an hour to do this presentation today and to describe the whole -- is he laughing? is ed laughing? we each have eight minutes. i've been warned. and i will do this in that length of time. so my presentation has to do with sort of the state of affairs, the policy adoption status such as it is or is not in many cases over the years and that sort of thing. just give in but ed said, maybe we should call this telemedicine. it isn't for rural anymore

because the true words were never said. as the folks from the american telemedicine association and the audience would tell you, it is very much different than it was 20 years ago when i got started in this whole field. let's see if i can make this -- how do i make this -- we talk about technology. we don't use it at least not effectively. and i don't recommend it for anybody actually. okay. so what is driving all of this activity? health care reforms writ large meet health i.t.. starting in the lower right, we were all concerned about some of the following a 30,000-foot level. public health or population health and how we can drive personal health and consumer engagement, something that has been an issue for as long as i have been involved in health care which is more than 30 years and putting things like personal status monitoring. i will show you a couple of

examples of that. and now as we continue around the circle, disaster preparedness, mitigation response, he stood a lot of work with nasa, the applications have for years been involved in the natural man-made disaster activities to the and the aaa much of the affordable care act and other reforms having to do with quality driving efficiency and providing access and the underserved minorities and disparate communities and populations which is a big issue for the technologies. so here is a definition from the american telemedicine association. it has more famed changed over the years. it's the medical information exchange from one side or another electronic communications to improve patient status including things like video teleconferencing, transmission of still images, ehealth and putting patient

portals, monitoring of the vital signs, continuing medical education and more. so we started exploring these issues as ed mentioned in 1993, at the same time these the association was formed. we formed the capitol hill brown bag lunch series very informal around telemedicine issues including all rural state u.s. senators starting with senator rockefeller really and kent conrad from north dakota, al simpson from wyoming, ted stevens from alaska, conrad burns, like, the congressman from oklahoma and some others. our very first program was about hicva and what are we going to do about reimbursement? the more things change the more things stay the same because not much has changed in the reimbursement in 20 years and maybe some others want to get into that. fast forward we have done more than 190 lunch programs over that time to get lunch demonstrations, technology demonstrations.

next week is niht week in washington for those interested and we will be doing showcases both appear on the senator's visitor center and on the house side and you can get all that information online. here is the definition of electronic of record by my current organization, hims. it's a secure patient care center of information resources for clinicians. it automates and streamlines the clinician's workflow and it's not new. there have been community health information networks that have come and gone over the years and all sorts of efforts. so the big trick is the convergence of technologies to words some of these overarching goals that i described in my first slide. this is a well used slide by the office coordinator called in the cost curved words transformed health. if you start at the lower left of this aero you'll see where telemedicine and the ehr's were

the capturing or the sharing or interoperable buddy of that information, the data points at the end of the day whether it is electronic in a medical record or whether it is audio or video data em thus telemedicine and user to capture that towards advanced clinical process these and eventually improve outcomes. these are tools that are meant 23 enable the health care environment. nothing more. and so, one of my thesis is that is the easy part. the technology is the easy part. and here is a little bit about that. and i think that karen may have some similar slides. today there are hundreds if not thousands of various technologies, applications and content areas that constitute this growing field that we don't even know what to call with any more, right? telemedicine, ehealth, who knows to get a 27 billion-dollar industry just on the telemedicine side coming and if you look at the lower left and

if you see down there the risk watch that is for the life style management for the worried and the intricate runners like me, you know, prevention arguably, not a lot to do with clinical care and the more sophisticated applications as you move from left to right including the next box which is remote chronic disease monitoring in homes and in nursing homes, or further write the role about units in the eicu or as ed mentioned the robotic surgery. ..

the guys on either side of me and women have wooden boxes with plexiglass fronts and lot of electronics in them. can anybody guess what they were doing? illinois independence statute technology judges were over them and they didn't care too much about technology. anybody? the first pcs, right? 1974. they were putting together the first pcs. two things about that. the first is that, you know, if you do this and you pursue this field what happens is you end up, you should be like bill gates. instead you're doing this. the second thing is, if you dress like this even then you

will never get a date. major policies issues. i have only about another minute. there is a whole series of major policy issues. i've used this slide for about 20 years having to do with reimbursement standards, infrastructure and human dimension issues. put postively there are no problems, just insurmountable opportunities as pogo says. and there are a whole series of players at the federal, state, private sector level and i will let you read these at your leisure having to do with all this. of just yesterday congressman nunez and pallone introduced legislation that would make it easier for federal licensure for dod and va types. next week, whoops. next week a bipartisan bill is going to be introduced to move telehealth and remote monitoring closer to reality. congressman greg harper's staff is here in the room. what they're doing is adavantaging some. problems talked about through

the ca -- aca and other reforms. as fp of the national says, you take what the game gives you. doing things at low r or no cost or saving fund. this bill is designed to incrementally chip away at some issues we've been facing for a long time but at little or no cost because i think we finally learned as an industry, right? a whole series of other provisions relating to acos, medical home, telehealth, kinds ever things and various shared savings efforts at different levels, value purchasing and quality reporting that are both in aca and in the high-tech legislation and so over time microssing.is that there are many opportunities as ed alluded to, to begin finally geting a coherent, federal policy around some of these issues at a various, at various levels in congress, the administration which you will hear from in a minute and in a private sector

level. thanks so much and i would be glad to answer any questions. thank you. >> thank you, neal. we'll turn now to sherilyn pruitt and if you doubt that the roots of telemedicine and telehealth are in rural america, note that cheryl heads office for the advancement of telehealth within the office of rural health policy within the health resources and services administration within the department of health and human services. her agency resides within her, as i say, hrsa is the focus after lot of telemedicine activity. we asked sherilyn to guide us through some programs and initiatives that are most relative to telehealth. very pleased to have you with us. >> thank you very much for inviting me. excited to see some young people here. a lot of you grew up with technology so it is not as new

to you as it is to on of us -- some of us who are trying to catch up. ii want to talk a little bit the office of advancement for telehealth. before i get started i will give you over sioux. ote is office of telehealth. hrsa is health resources and services administration. and hhs is the department of health and human services. you will see that feds have a tendency to slide into acronyms. so i want you all to know what i'm talking about, so when i rush through my eight minutes, they have to do it lightning speed you will know what i mean. discuss going to start talking about mission of the office is to, advance the use of, to advance the use of telehealth technologies to improve access for the underserved. and even though we're located in the office of rural health policy and our grant funds go to support rural communities we realize telehealth advanced

urban population. the focus is on the what technology can do for people living in rule and isolated areas. we have four different programs. telehealth grant network program. telehealth resource centers, a new program which is the flex rule access program and we have partnerships. these programs work together hand-in-glove to improve access to health care for people through technology. i will talk a little about the licensure portability grant program. this grant program has awarded two, three-year grants, one to the federation of state medical boards and one to the association of state and provincial psychology board. the purpose of these grant programs are to reduce or eliminate barriers across state licensure. facilitate through telehealth, you live in tri-state area and want to go to your doctor and your draw is in the next state. it will reduce barriers to help

those states willing, make it easier for patients to see their doctors no matter what modality they choose to use. both grant east use uniform online application and expedited licensure processes. telehealthnet work grant program is our biggest grant program. right now we have 20 different grantees. we just fund ad new cohort of six grantees. the purpose is to demonstrate how telehealth improves access to health care. our grant fund go to support rural spoke sites but the lead end/10 can be located in a your lan area or rural area. the funding is up to four years at 250,000 a year. one of the things we've done this year as a result of something i want to talk about a little bit later is we were able to shift the focus from does the technology work because we're at the point in the evolution of telehealth. we know the technology works but what, how does it improve health outcomes? and is that the same as a based

visit? that is what we're work on with our cohort of six grantees. we asked people to submit in their application baseline data and we're going to follow that over the three-year period. we're going to use this cohort of six grantees as a test bed of future of all, this grant program. this next slide talks about our telehealth resource centers. that's one of my favorite grant programs. karen rheuban is one of our grantees. i'm sure she will talk a little bit more about the program in a little bit but what the telehealth resource centers are, they are centers of excellence. we have 12 regional or statewide resource centers and we have two national resource centers. one resource center, the national resource center focuses on technology and the other one focuses on policy. and the technology resource center, they're there to help keep up-to-date with all of this technology. as neal was just mentioning the technology einvolves so fast

that we have difficulty coming up with words to describe it. the word evolved as, the words come behind the technology so we have one resource center that all they do is focus on the technology. that resource is available for everybody. so that's funded, through our telehealth technology assessment program, ttac. you can get to all the resource centers through telehealth resources centers.org. our telehealth policy resource center did a statewide medicaid reimbursement document. center for connected health policy but once again you reach that through the telehealth resource center.org. you see the map. the telehealth resource centers have grown from four resource centers to almost covering the entire country except for my home state, new jersey. maybe one day we'll be able to serve the, yes. karen is very generous. she keeps taking more and more grants, more and more states. because she really, she is able to help them and she is great at

helping them but we don't have any extra money. but anyway,. no matter where you are in the country, in if you need help or interested in starting or enhanceing a telehealth program go to telehealth resource center.org. find the regional resource center and also they have monthly webinars. you can log into anytime they have the information archive. they're a great resource. i highly recommend that you check it out. then this next rural veterans health care access program that is brand new, well it is not really brand new. we just funded a second cohort of grantees, three grantees and it was just announced yesterday that the winners of this cohort are alaska, maine and montana. the first one, the first round the grantees were alaska, virginia, and montana. and the purpose of that grant program is to make sure that veterans that live in rural

areas have access to health care services via telehealth no matter whether they're close to their visit or not. they're are a lot of rules. there are a lot, we want to make sure that veterans don't have to drive an inordinant amount of distance to get to the health care that they deserve. so we're working very, very closely in partnership with the veterans administration to make sure that these grantees and the rural veterans in these states have access to health care services no matter where they're located. another thing that we've done is last year we were able to have a partnership with the institute of medicine and we did a two-day workshop on the role of telehealth in evolving health care environment and karen rheuban was the chair of the planning committee and tracy lit sig is our contact. there she is, she's in the audience. we had a great two-day meeting. workshop summary was published. here it is it was available, made available in november and

anybody who wants to know anything about the, if you want to get a copy for yourself, you can download it for free. go to the institute of med send's website and telehealth and free pdf download. one of the things came out of this meeting that was so important, there needs to be more of an evident-based that looks at outcomes of health care delivered via telehealth. that was, our change of our telehealthnet work grant program was direct result what came out of the institute of medicine two-day workshop this is great resource. i highly recommend it. download it. there are a couple copies in the room. thumb through it and great free resource available for everybody. i want to talk about fedit will el. joint working group on telehealth that neal referenced briefly. it is across governmental work group on telehealth. when i started this job three

years ago, not only did did i want to know what was going on in my office, in orhp and hrsa, i wanted to know what was going across the federal government with regard to telehealth. we called all the people part of the joint working group and we said, hey, what is happening with telehealth? would you like to know what is going on in other parts of the government? we had an overwhelming response. we've been meeting for two years now. we meet every other month via conference call. then we have, meet face-to-face twice a year. we have representatives from going into acronym. cdc, va, cms, commerce, justice, some 6 it is amazing how many different federal agencies have some sort of investment in telehealth. so we meet every other month and we have two, two speakers that present and then we talk about what we're doing in our own offices and then we talk about, we work on actual things together and one of the things we're working on is a paper on the federal definitions of

telehealth. very interesting. so, with that, thank you very much for your time. i just went a little over. thank you. >> great. thanks very much. jon: shiri lynn. let me endorse your endorsement of this iom report. it's a terrific resource. it has everything you are going to want to know at this level about what the issues are in telemedicine and telehealth and it's readable at a level that, frankly some institute of medicine documents might not be from time to time. and, i guess that is, that is a, a trigger for introducing the chair of the planning committee of that workshop, dr. karen rheuban. she has a long list of accomplishments. i commend the biographical information in your kits to you

about her but her primary connection with us today is her position as director of the center for telehealth at the university of virginia. there are 108 sites in uva's telemedicine network so we're looking to hear about, among other things, about some of the day-to-day challenges and the policy barriers that exist in trying to make the best use of telehealth techniques. karen, thank you so much for coming with us. >> thank you. >> there you go. >> can you hear me? perfect. let's make sure i can advance this properly. >> here you go. that's the right one. >> okay. so it's a privilege to be here. thanks for inviting me here and thanks for so many coming to join us today. this is an very important issue as we look at access to health

care services, access to quality and certainly post-affordable care act. our program was established almost 20 years ago and we have fought the battles and we talk the talk and walk the walk as best as we can but we have face challenges and many successes as well. i would like to say that we are a proxy for the many telemedicine programs around the country. all 50 states have telemedicine programs and we have a great resource in the american telemedicine association and gary and latoya are here from ata. i want to thank for all their efforts on behalf of all our states and owl our patients who. are the primary beneficiaries of telehealth service? it is the patients. allows for timely access to locally unavailable health care services and particularly vulnerable population, homebound patients as well. patients are spared the burden and cost of transportation and improves quality care and increases patient choice. for health professionals there are benefits as well especially in era of huge workforce

shortages. access to consult 8:00 tiff services and continuing health professional education. for communities this is a huge benefit as well. more than 90% of patients engaged in telemedicine encounters stay in their community settings. so that's important for families. it is important for community health care systems. it drives broadband adoption and creates an enhanced health care environment an economic empowerment for the community. consider uva's program as a proxy for many problems across the nation. we offer videoconferencing or patient care. livid yo active conferencing connecting health professionals, mostly specialists and patients and providers in remote settings. we do the asynchronous transfir of medical images and medical data for interpretation a classic example is teleradiology but there are many other applications in the world of ophthalmology and dermatology as well. we establish ad remote patient monitoring program.

we call it c-3 or care coordination to monitor parities in the home care setting. we use our network for clinical trials, for distance learning, health professionals an even our students as they are sent out into rural and remote communities. we have a program of workforce development. we created a certified telehealth technology program with hrsa funding in fact because we believe there needs to be cadre of workers comfortable with use of technology and providers don't have to be technicians. because they have tons of patients to see in their own clinics. as i mentioned we have 108-site network in the commonwealth of virginia. with technology it doesn't have to be in our traditional referral area which is always the western half of the commonwealth of virginia. you will see we have a preponderance of sites far southwest virginia, primarily because that's a, when we started, that was a rural area. a lot of grant funding and a lot of our legislative partners were in southwest virginia. but we have sites in tank gear

island in middle of chesapeake bay and eastern shore of virginia as well. so technology while this is not about technology it is really important to choose technologies that interoperable and that has been our guiding force is to choose things that work with one another. plug-and-play. there is continual health alliance of equipment manufacturers that have pledged to create inneroperable devices we have desktop videoconferencing, mobile videoconferencing carts, fixed videoconferencing and ipad and other tablet devices. we've used robotic technologies as well. as far as our dashboard we have supported more than 33,000 patients, patient encounters and when we first started our program we didn't connect to a lot of sites. you can see our volumes were rather low. we had a dip which i think is very interesting between 2011 and 2012 when one of our fellows went into the private practice of telepsychiatry. she took a fair amount of

business. i say it is workforce development and serving patients in gay. that is a good thing. so we're marching back up. and a metric that want to share with you, which we're very proud of, we have saved virginia patients more than 7.9 million miles of driving for access to health care. that's a lot of dollars and a lot of transportation costs for our medicaid program and for our patients as well. so our program is need based and metrics-driven. you heard about clinical data being very important in valuation. just some quick examples. high-risk ob telemedicine reduced predelivery by 25% in our network. that translates into healthier babies, healthier mothers, lower cast for medicaid program and lower costs of life of care for children. these are two of the 40 different specialties. hrsa-funded grant program as well. connecting rural community hospitals to improve access to use of it.

pa, clot-busting medication. we increased use of it. pa from zero to 17% of the stroke patients that show up in those hospitals. huge outcomes an benefits to patients. i have mentioned remote patient monitoring and home telehealth. this is very effective tool for chronic disease management and post-affordable care act very important for hospitals around the country because there are penalties for readmissions that hospitals are facing this is fabulous tool to reduce readmission, reduce e.r. visits and there are lot of data both from va and community hospitals and academic hospitals that show tremendous reduction of emergency visits and rehospitalizations. we believe telehealth should be both state and federally-based market driven service line. our commonwealth of virginia has been incredibly supportive of telehealth since really the inception of the programmatic larly under governor mark warner administration when he -- is

anybody here from senator warner's office? senator warner when he was governor blew open telemedicine for medicaid beneficiaries. they are eligible to receive telemedicine service anywhere in the commonwealth of virginia. we negotiated, anybody here from cms? we have negotiated in our dual enrollee contract which is medicare and medicaid patients, we have 77,000 covered in virginia, to expansion of telehealth services including we're hoping as we go through our final negotiation, urban medicare beneficiaries because they are covered under medicaid in virginia. why not under medicare? tune in. we hope to have the announcement shortly. virginia department of health has been very supportive and are actually consult origination sites and have funded programs. our state systems of care task force has embraced telehealth. tobacco commission funded telehealth programs in southside and southwest virginia. our joint commission on health care which is a virginia legislative body did a workforce analysis and really created a

roadmap what ultimately became a virginia mandate that passed 2010 from the virginia general assembly to mandate third party payment of telemedicine services and we're very grateful for that. our virginia health reform initiative and health benefits exchange all include telemedicine. so we're pretty progressive state when it comes to telemedicine. i mentioned the virginia health workforce development authority initiative. hrsa-funded grant to train health professionals in telehealth. we would not be where we are without the federal government. we have received grant funding from hrsa, from u.s. department of agriculture, usda, anyone here from usda they funded rural phone service. they have a distance learning grant program so we have relied on that for procurement of equipment remotely. nih has funding. department of commerce. arc, all the federal agencies have some involvement. we're, sherilyn talked about 16 agencies and departments, there are at least 16 agencies with

some involvement in telehealth. indian health service, va, the department of defense and huge shoutout to tracy in iom that was just awesome for us. okay, one of the things that we need more than anything else as we are, as we're trying to advance telehealth nationwide is to improve medicare reimbursement of telehealth services. it's still low. in 2011, cms reported less than $6 million in reimbursements for telehealth services, telemedicine services nationwide. that isn't very much. and one of the challenges are some of the limitations and originating sites, the rural requirement for telemedicine and even the definition of rural. i'm thrilled that the 2014 cms physician's proposed payment rule has an expansion in the rural definition which currently is now only non-metropolitan statistical area. and there's a rural requirement for acos. this changing definition of

rural limits the sustainability models and more importantly, access to care for our vulnerable seniors. and also the rural definition is very poorly aligned with specialty workforce shortages. there are many issues that need to be addressed. reimbursement being one. credentialing and privileging. cms issued new regulation two years ago fa silltory of telemedicine. we obviously have to be aware of hippa. very important. licensure portability is a challenge. medical malpractice is challenge. if we go across state borders we need to be aware of malpractice caps or non-caps in other states. non-kick back. we can't buy equipment for referring site because it might be referred as inducement. rural health care support mechanism that provides discounts for rural providers. integration with eemrs. neal touched on that and health information exchanges. wouldn't it be nice to just call up the continuity of care document when we see a patient.

we are all in the states moving forward towards hies. standard inneroperability and plea foreigner agency alignment related to policies. great opportunities. the national organization of black elected women, legislative women, have model legislation in the states and now 19 states plus the district of columbia have passed a mandate. congressman harper's telehealth enhancement act of 2013 about to be introduced. vets act to expand the one state license model at the va. the telemedicine for medicare act. nunez-pallone to expand licensure across state lines for medicare beneficiaries and whatever can be done for, elimination of the rural definition eventually under cms. so i just want to give a, just an example of some of the areas in virginia that are considered urban areas by the current cms definition. scott county, virginia, far southwest virginia, that county has one federally qualified

health center in the middle of the mountains. it is urban area. giles county, virginia, another appalachian county. it has critical access hospital but considered urban area by cms. washington county, there is the mountains. that is an urban area by cms definition and the grand canyon. so, thank you for your attention we look forward to all of you continuing to be champions for telehealth. i will make myself available at anytime. thank you. >> thanks. thank you, karen. finally we'll hear from john jesser, who is the vice president provider and gate man strategy for wellpoint. wellpoint being not only our partner in today's program, but, the outfit that has charged john with finding ways to improve care and improve affordability and improve consumer experience and access, pretty big job for a company that insures one out of

every nine americans. telehealth is one major part of the portfolio that john has developed in response to that charge and he heads wellpoint's live health online project which is designed to improve the connections among doctors and hospitals and consumers and their health plan. we've asked him to tell as you little bit about those efforts today. john, thanks for coming with us. >> thank you. thank you, ed. good afternoon, everybody. tell you a little bit about it. so ed mentioned some of the key points here. so from a health plan perspective, you may not know this, but your health plans are often looking for ways to make health care more affordable, to improve access to care and also to improve the consumer experience. not something health insurance companies used to historically be known for but it is really important, especially in the advent of the oncoming of exchanges where consumers will choose a health plan one by one.

we've been, fortunate, at wellpoint to have a family of blue cross affiliates across the country that tend to attract a lot of the best and brightest ideas in the market that we get to take a look at and i was very fortunate about four years ago to run into a company in boston called american well, and american well was founded by two physicians, it is a technology company, that built an online care platform that really redefines telehealth and telemedicine and you will the ways we've been talking about it. so i will share that with you and help you understand why. so we worked with american health and we built this product called live health online. the question is then, what is live health online? so it's you, it's friday night, you're at home. you don't feel well. and today you have a couple of options. you can go to an emergency room. it will cost a lot of money. you will sit for a couple of hours and wait. you can find an urgent care

center if there happens to be one around that's open. that will still cost you north of about 120 bucks. maybe you live near a cvs or walgreens or another retail chain, kroger that has retail clinics. there's another option. you can see a nurse practitioner. you may wait for an hour. you have to drive there. those are really our options today or do nothing. what live health online has done, we're introduceing a fourth option. you can open up the laptop with a webcam or your mobile device, tablet or telephone, cell phone, rather, whether it is android or apple and have near immediate access to a board certified primary care doctor on demand from the comfort of wherever you are, your home, your hotel, wherever you are. .

you're going to have a hard time getting into your doctor that day or even the next day. so the ability to go to the room to have access to a web cam and have a council with a physician who in many states based on the information you exchange with them and why of real-time video and audio can be used for them to write a prescription for you to feel better and will be electronically sent to the

pharmacy that you choose and the payment is done by credit card. if you happen to have anthem or one of the other wellpoint family plans it may be integrated into the claim will be submitted and you would only be charged your copay, no paperwork involved. sound too good to be true? it really is happening. we are live now in ohio and california. and we will be -- i will show you the map soon where we are going but we are introducing this to national employers. i know many of you are in the federal employees plan, the same ones that are going to come to us. so that is the same one on the list but anyone can use this as a consumer. the website is lifehealthonline.com triet i will talk to you more about that in a minute. why does that matter in this discussion? there has been so much wonderful work done in telemedicine bringing people access and the

role hearing is to the urban doctors and improving access to care. the barrier to that is you need grants and money and you have to the expensive equipment and one side and expensive equipment in another. people still have to drive. this whole idea of the originating site. all of that goes away with the new technology that is coming. so thanks to people like steve jobs at apple, high-definition video compression, high-speed internet, the band width keeps improving. many of you have used face time or skype. if you think about those technologies, they hit the compliant manner built for health care that enables people no longer to need grants to put a lot of expensive equipment around. you can go to a public library room in a virtual clinic.

you want to attach some biometric devices, a stethoscope and some other things and even have a nurse there you can even extend further. i want to give you a little more insight and i mentioned this is meeting the consumers wherever they are with your eddy hotel or at work it addresses convenience there are many people because of the barriers to transportation and care that don't get seen. there are costs to care savings at that price point when you avoid an urgent care visit you are actually saving money and the patient enjoys the experience. these are some of the points that we give our sales people on the road talking to employers to other solutions out there some of them are purely telephonic they are not as robust. i will let you leave that on your own -- read that on your

own for the sake of time. this is the key. this is the home screen when you log in and it matches you up with the state or in this case the district of columbia with where you live and will show you doctors that are licensed in that area. right now the model is if you will the urgent care in the clouds of this is primary care, urgent care, the kind of things that can be treated. it's not dermatology yet but i will tell you think of things like behavioral health. it's fascinating how the mind begins to work when you start thinking about it. two years ago i had people telling me who would ever get care like this? six months ago i had the ceo of a major academic medical centers say i don't think anyone under 40 is going to come to the doctor anymore. the ability to see the doctors up front and read about them, find out where they went to

medical school and if they speak different languages that's very important to the consumer experience. there are solutions to dial and 800 number and somebody has a doctor call you back to achieve something that's better than that. amazon or anywhere else to shop online so go online and register it costs nothing and it takes just a couple minutes. then you have it whenever you needed to. again, i mentioned both of the ios and the android platform. we are testing the final stages right now. i think that's going to be very powerful because and ipod or ipad is one of the simplest conference devices. you wouldn't have to teach her mother how to configure a web cam. you turn it on and it's ready to go to read this is really important. so, there are asterisks and some

states and not in others. some states are red. but me tell you in nine seconds with the issue is. rules of medical boards, pharmacy boards and even state regulators are around telehealth have so many different definitions that it's almost impossible to decipher what is allowed and what is not. but we take it very seriously because if we are going to go into a market and have doctors practicing this way we don't want to put those doctors in the position to jeopardize their licenses to read so many of these rules have terms like originating say which applies to the old technology but not to the new. what i would ask this group to state-owned and think about and help with all the smart people at this table is let's come up with a modern definition of telehealth that doesn't talk about originating site and the important thing is -- and we are working with the american academy of family practice and organized medicine.

can a doctor through live interactive technology gaining enough information to examine a patient and if so that should be how we define it. what are the things around it that need to be important? and we have that information that we will share with you. and then does that doctor in their judgment have enough information to write a prescription? not for narcotics or for viagra but for non-controlled medications that are going to help resolve that patient's problem? if so, that is what we are seeking and what we are involved in a lot of this activity regarding. my time is up triet thank you. we will be talking later. >> thank you so much, john. one of the aspects of the format is if you are going to a second bite at the apple, if you can get the first bite at the apple when we get answers as i

mentioned there is a green card and your material. you can write a question on and somebody will pocket from your fingers and bring it forward for the response by the panel. or we have some microphones there and there on either side of the room. if you come to the microphone try to keep your question as brief as you can so we can get through as many as we possibly can and identify yourself. let me start us off if i can. john made repeated references to something was mentioned earlier as well, and that was originating site. and i wonder if i could ask whoever feels the urge on the panel to tell us a little more

tangibly how is telehealth reimbursed now under medicare -- and under medicaid if there isn't an answer to that or as there is with most other aspects of medicaid 51 different answers. >> want me to do it? >> karen. >> for medicare there's a specific number of originating sites, office of practitioner, clinic, community health center, hospital under medicare. for the reimbursement -- and there's only a set number of tests and providers that can be reimbursed under medicare. and then for the originating site, medicaid put a limit in terms of location and that is where currently is the non-metropolitan statistical area definition of rural. and again that is a bit of a challenge. the home is not in the originating site under medicare. under medicaid, it's also safe to make that decision. so 50 states could have 50 different definitions, right,

gary? in virginia and is primarily clinics and hospitals. community health centers, community mental health centers. so, again, not the home although we've gotten approval to do patient monitoring in the home. and then the private payers we haven't really tested the home with private payers yet in our program. certainly i see virginia is one of the state's covered under your collaboration. so certainly at least for your program the home is an eligible site, not under medicare. >> so we made a big bold move and being the first pay year to convert to this online care business that i just described. the reason was i spent a lot of time with doctors over the years and they said why don't you pay for telephonic care? we are doing so much work on the phone and there is a disincentive that makes us want to bring the child in the office because that is the only way we can get paid. quite honestly, the answer among the papers is rational. it's that we don't know what happens on the phone.

did you talk for two minutes, did you talk for 20 minutes? how much cognitive thinking was involved? if they were to say we will pay for the telephonic visits, what does that mean? so if the kind of technology that i described, when there is documentation of the patient complained, but the issue is, the doctor gets to review that and the doctor and the patient have a live interaction in the doctor creates a medical record from that if there is a prescription written it's done through eprescribing and documented and there is a permanent record. so many of the things that happen in the office visit are built into that technology that we felt comfortable saying okay. that is a visit. now whether it is in the building or not, the same room, we really don't care. and there is a sea pt code for that it is 9444 for the coding geeks and that's for the care

from the private paper standpoint and we have national employers to agree. >> one other thing. skilled nursing facilities and dialysis are available originating sites and then we built the codes with ag team of fire. that's how it is done under medicare. >> here is my quick answer to that. technology eliminates time and distance to the point that we need to stop thinking about this everything being done remotely. it doesn't matter if the patient is here and the clinician is in india for that matter. if you get enough of the right correct information. endoscopic surgery right within the operating room is telemedicine. the image goes from all the way inside of the patient to the physician who is viewing it on a screen no more than 5 feet. what's the difference? okay. there is none is the short answer. so there are a limited number of sites, a limited number of codes that have grown up over the years through a patchwork of

crazy quilt stuff first through hippa and then cms around the state with medicare, medicaid and the private insurers scratching their head to figure out how do we make sense of this nationally. the short answer is we've got to get a handle on this. i think john's suggestion that we start to deal with what it is is the only rational way and we have to deal with licensure as a part of that and stop the practice of state by state licensure, which has zero to do with science or health or the human body and everything to do with business practices in the states by physicians. it is time to stop that. [applause] i don't want to trample on the questioner that is waiting or on your applause line. but getting back to the payment for the second.

medicare differentiates one place from another and we know that the payments vary substantially from one market to another. what rate applies when you're in one county and your patient is in another county? is it the originating site again or is that not a consideration? >> it hasn't been a consideration in the actual rate. the code with the gt modify your on the part for medicaid and in virginia paid on a par with face-to-face care if we are paid. and the same is true for the private paid as well. that's part of the mandate with parity legislation. >> and it doesn't make these difference in medicare for the example of you were in upstate new york or manhattan presumably the rate for a particular service are different? >> that i can't speak -- if the university of virginia is

building its telemedicine code would be the same if we did face-to-face for our hospitals. >> i think that concept of the site of service code will become obsolete. as neal was saying it has to do it, resources were used. if it was an impatient it was in the hospital and there was a load for overhead and then held patient. when you get into the home whether it was a hotel, ho wargo hall in a quiet room i don't think it will serve to come up with enough places for service codes. but i will be for another day. >> you have been very patient. please identify yourself and ask your question. >> the research group to get acknowledging neal's last point, this question is on the type of other telemedicine and not the endoscopic procedures but more on the remote site. so, care and i noticed in your slide you talk about you have a

good process and outcome measures, reduce the delivery and missed appointments which are all good. and i wondered about one other piece of data which is the effect of telemedicine on the cost of care. specifically what sort of data do you have either now or forthcoming that would describe in that latter part of the definition of telehealth as a sort of affect you could have on lowering the cost of care to the i would assume from john's example, that he did the analysis. the folks wellpoint decided this is indeed to better for our patients and costs as well. so i'm wondering was the replete, john, was there a point of return where, you know, the need of the patients are such where there really isn't an improvement of quality and lower cost and to target the telehealth in a certain way or the patient that participate in that program. >> i will take a first swing at this. thank you.

let me just say it makes sense even if it was breakeven a pity they did nothing to the cost of care but it and approved of the affordability and the consumer -- it didn't improve for the devotee but it improved the experience and winans access to care that would be good enough. however, things need to be funded to grow. as a, there is an affordability at play. one of them in blue cross minnesota did a study with their employees and after each online care visit they would be asked a question. if this were done. so we quantified that and they ran it also across our numbers. some people would have went to the er, a small percentage. a large chunk would have went to an urban care and some would have gone to the office. some would have done money said the new costs were incurred for people what might not have done anything. that meant when you add it all up, you are saving anywhere of the estimates go from $45,200

for every online care visit of of the wadable other costs and that is just for primary care. so that makes it makes sense and it also makes us target on your question let's look at the frequent fliers in the er that are going to the er for the mauney emergencies. and let's at least reach out and make them aware. so this is all about marketing and creating the consumer demand. if you look at amazon the original date of the amazon dhaka, it was flat for five years. nobody knew about it and then it went like that. it is really going to be the consumer decides we get it in front of the people that need it the most. >> i am not a health economist but we have tried to get a lot of this data so we can extrapolate the cost of care if we reduce the preterm delivery and the stays in the icy you. it is the papers themselves that have the will get the data.

we tried to gather data for a proposal on the high-risk obstetric telemedicine and it was difficult to get the cost of care even from the medicaid primm on the these that didn't get hospitalized at our hospital because the end up being born in their community at term. and attaching the indigent numbers to the mother. those are very difficult for us as a hospital system and not being the pay year but we are trying our darndest. i think the ata did a study to see the tremendous cost savings associated with it. but for us as a health care system it is hard to gather that data just because of the mix of the patients and pay rivers and hospitals. >> one more piece to factor in. for an employer it is productivity. so, there are teachers and teachers' unions and they have to take four hours or half a day of the pt go if they need to go to the doctor.

so the teacher doesn't want to use a day of their vacation time to go to the doctor so they are gone to be on average people are gonna 90 minutes to two hours to try to get to a doctor so an employer -- we are commencing the study as we roll this out in such a big way with some smart people what some actuaries, and we will be able to come back to it in a year and have some sound data. >> the $7.9 million more by the medicaid program or the correctional programs were by the patients themselves. >> it's difficult. there are not enough folks that have longitudinal lead on those kind of studies. there are anecdotal studies and it's great to see the insurers and we are finally starting to get some of the data but finally the industry has fallen short in the department. we've not committed enough resources to it. that said, we also knew in the back of our mind that the congressional budget office wasn't necessarily going to consider any of that forward thinking or forward leaning

information. what does telehealth do down the road to save the private insurance because that is and how cbo scores things. that is a major legislative fight and that's also looming in the background and house for 20 years and it's not something that affects health care broadly. it's how does cbo consider all of that when it comes to the patient pending and that kind of thing that we have to get our act together in that department. >> yes. go right ahead. >> laura welch and the department of health and human services. mr. neal neuberger mentioned the telemedicine and telehealth disasters. i was wondering if you could speak to that and more to the barriers. >> there are good examples and the of the many conferences and there is language and pop the disaster preparedness act and there were disasters in country now where say for example the clinics in new orleans and many

unheralded waves and hospitals who had some of the early what are those grants called that no longer exist, community development grants, block grants used some of that for the telehealth-like activities and preserved the systems while all else went down. the tornadoes most recently in the midwest and a year ago there are good examples of this program that i have been one of my slides and others that have gone and have done some really good remote planning disaster assistance. about 15 years ago, 18 years ago when i first started to become involved with a consul to russia from the building following the revolution when "the new york times" reporter had gotten shot and senator rockefeller sat there and talked. this is before hippa. this is 20 years ago. long history of nasa using it in

the deep with instance is all over the world. in somalia, bosnia, almost every deployment the healton earthquake and others. physical discipline and by former partner is big in this stuff involving u.s. aid, the state department and the various multilateral organizations and overseas governments around this issue. >> the commonwealth of virginia has invested emergency preparedness dollars and we connect all of the hospitals, probably almost every hospital in virginia is connected and we test regularly for the disaster preparedness so we can communicate and managed together. you think about it also would get the data that can be mined in terms of the surveillance pharmacy utilization in terms of identification and other outbreaks, anthrax. these networks can be used to increase awareness in a very timely fashion.

>> that is disease surveillance is the low hanging fruit in many ways for telehealth and four electronics health records and interoperable health records because there is -- you don't have the same business and other issues you otherwise faced with competing interests in various locations around the disease surveillance and community care records and that sort of thing so that is a really good place to start where there is a comment level set expectations and people's interest in things. go ahead. >> i am a pediatric hematologist by training but a health policy fellow this year. as a pediatrician i was thinking about the point prescribing antibiotics for in each ear infection. so clearly there are going to be examples where you are going to miss medical problems through telemedicine and you might not

miss if you examine the patient. do you envision a separate care for malpractice in the interaction as opposed to one where you actually see the patient and has that been a problem in virginia? >> let me make sure i clarify first of all and not a physician but i will tell you that our goal here -- the point is to allow the doctor to use their clinical judgment based on the amount of information they can obtain from the patient through that intersection. if they do not believe they can adequately dealt eight notes and they shouldn't write and antibiotics that is what they should do. the technology simply now enables that person to get in front of the doctor for many things that are sometimes based that can be described and diagnosed by listening to the patient, seeing the patient and it's up to the practicing doctor and the malpractice standard

does not change. what i will tell you is there is also -- most of us that work with computers and i would imagine that is most in this room don't often have a live web cams and our work place at the desk. so there's some very interesting and fascinating designs on the kiosks and i have some in the slides that you will take a look at. you have a digital schogol and stethoscope and day additional peripherals the will of the doctors more information. think of an employer that couldn't afford a worksite clinic because the cost of employment and all that now if they set up a quiet room with some basic technology in the internet can have a nose or medical assistant take bibles and do things to expand with the doctor can treat so it's a matter of what can the doctor

obtain and what are they comfortable in their license with treating. >> in our network and model and a pediatrician as well. in our model used the video scopes so that is a slightly different model, which i think your model certainly works well for the triage. but we do not establish a separate standard of care and we want our physicians to feel comfortable they have as much information and to be able to manage a patient as well as the what in their own offices and if not the patient has to be seen in. >> and no way is this designed to replace a primary-care doctor back in that relationship. but i will tell you there are physicians to take calls today. they take phone calls and the right antibiotics without having physically examined the patient. that goes on it. so whenever the standard is today we are not trying to change it. >> from a policy perspective in terms of the technology, the quality is job number one. you are a clinician and that is why we care about.

make things better which is the case and in some cases mental health care the actually think that of lead is more receptive and it can be better with some consulates, there is a role for the food and drug administration and there has been ongoing discussion for the last year of around the mobile and wireless guidance of the technologies and what bucket's they will fall into for the purposes of the approval process he's and that is a really good discussion point at which to enter and all of the group's, all of them are actively engaged in how do we sort of fear out those issues and how does it relate to the quality recordings and other things in the accountability act. >> and the pediatric cardiologists and the question i have is susan this simply replacing as you said a physician taking calls like the use to before we enter nursing centers and a way to get the

physician or the entity reimbursed for that call as opposed when we were not reimbursed for it? >> but isn't it so much better to be able to see the images? our colleague in pennsylvania has a clinic and there is a difference in terms of what a physician can i tell you it over the telephone a picture is worth a thousand words. i also want to give a shout out to the telemedicine association with practicing guidelines with different specialties including primary care and urgent care. those guidelines will be out later on this year but the effect is dotted lines in a number of different specialties and i would say we are improving the standard of care in many communities. and our network, no names because of hippa that a patient was being treated in the local community for shingles and not getting better and they asked for an emergency conference and saw a dermatologist and it was a flesh eating strapped not

shingles' so suddenly the access to the specialty service was life-saving and that was the case across the country. >> can i ask for the forbearance of the flux of the microphones to segue to a question that is on the point here and actually to follow-up and also to the previous question about whether there is a data on the costs. are they available yet whether it's a population of basis or anything else that describes the impact of telemedicine on outcomes in other words are people getting better on average or is it just the individual incident are we imposing quality standards by anecdotes at this point? >> there are studies, many. [laughter]

>> yes there are studies. i think in the affordable care act the environment has changed but there are groups that are doing careful studies on these issues. >> many of them are documented in the journal of telemedicine in the telemedicine as the season has been for 15 or 20 years and there are many good peer review quality related outcomes like the studies that show the benefits of various disciplines in the specialties. >> in the summary reports there's a chapter on the current evidence based. >> actually thank you for bringing back. i'm sure one of the reasons i wanted to get to that question is in that summary there was among at least some of the participants some question about

how robust the evidence base was is that still a fair concern cracks was that one of the major takeaways that we needed to do more or are we at the position that we can make those? >> yes. [laughter] they are a very comprehensive discussion about the evidence base that was very well done and it just pointed the fact that many have been done but there is room for more to be done in terms of more robust larger studies the and economic analyses. >> there is a role for the research and quality both within its current mandate of the million-plus dollars under the high-tech funds for these sort of things whether it is on point with telemedicine and things and other directive kind of things that should know how to take place for the office of technology and science policy and a white house and through

cms in terms of just energizing that evidence face has to be done. >> if your left arm is holding out so that you can keep the laptop there by the foot of this lady was up the microphone first. >> good afternoon. i am the executive director for the board of medicine and the district of columbia. thank you to all the panelists for an informed presentation. this question is for mr. neal neuberger you made a comment about state licensure and by a great proponent of telemedicine and want to explore the recommendation for how the allies in church should be handled for the physicians and then probably more importantly the disciplinary aspect of how to state control and regulate those who may not be licensed in the state but have performed. how are those issues to be

handled? >> so there is at least or there was. i don't know the current status. some progress in at least one of the councils or the committee of the american medical association to at least explore the whole notion of the interstate nursing licensing compact which hasn't been that widely adopted but has been by 12 or 15 states in the last several years with reciprocity and energy change and nurses licenses and things. i think the we got it at least get more real about going down that road so that there is that sort of fever reciprocity or some sort of federalized system to start to approach it. it has just been too long. in terms of disciplinary actions, maybe the ama and others that have thought more about that, karen and others, but it can be done.

>> that is the challenging part. most people believe a doctor license in colorado should be able to get a license in the district of columbia or maryland. but you only have the control over the provider unless they are licensed in your state and each state has different walz and rules are around disciplined so the challenge is it's not a big deal because you take and its standardized now. but the discipline part is the issue and i did say the state boards really aren't in the business of necessarily making money. it's to protect the public so from that aspect. >> i didn't mean they are making money. i meant they are protecting the making of money in some ways. like places in california that have to many clinicians but not enough of the right kind were distributed right kind in the

inner-city areas and things. so it could be viewed that they are r-ks, the year we out of date and the stem from the 40's and 50's they were a construct of the state medical associations i used to work for that in wisconsin and they fell out of the backside of the medical associations and that has to all be reviewed and putting the disciplinary part of it. >> i think the state boards are actually on board to understand the importance of telemedicine and the technology getting access to care. the issue though is we get in the position of compliance we have to be able to address those complaints and we can only have control over the person who is licensed in our state so that is the challenging part whoever comes up with that. >> gentleman with the laptop, you've been waiting. >> i'm working on the mobile the petition for emergencies and health care providers increase

the technology and some are not and i wonder what demographics such have you seen embracing telehealth. so who were these doctors? >> telehealth is such a broad term so let me speak to primary care and then karen or others can speak to the specialties but in primary-care this is a fascinating time for doctors working with a group in indiana, american health network and the debt over 200 doctors in the primary care doctors around the state that their experience has been the average length of the courier for the working mom and working parent is about ten years after having a second or third child because of the limitations coming to the practice and in those hours so there's a physician shortage and health care reform will bring more and more people to get appointments with the same doctors did we have these high retrained and able physician

parents who are no longer the work force because of the brick and mortar time distance so this is a group that is interested in practicing evenings after the kids are in bed may be in the weekend tapping into that. a physician with let's say for example a physician with a disability who has trouble getting from room to room in the exam in the office that is an outstanding physician. physicians who are maybe thinking about retirement or a lifestyle and don't want to have a staff in an office and all that expense and overhead. so, telehealth for primary care allows the supply that is dormant and available along with other great physicians who just like the idea. >> so behavioral mental health has been surprisingly robust and we have charts like this, don't we, through ata that show the adoption rates that we can get for you offline and bring them.

but correctional health, big and one of the of the things in the state corrections programs. primary care as john said, eicu so that parents, as karen said of newborns and others can monitor into the nicu or the adult nicu kind of monitoring and that sort. there's a bunch of specialties and sub specialties that have kind of taken off. remote monitoring for the cardiac patients. >> i would like to address the gray hair versus non-and gray hair professionals. it's been phenomenal across the spectrum quite frankly. we have as many gray hair physicians who participated in in the telemedicine who don't say no to us but i would say it's the younger generation for whom it second hand. the good news is with the proliferation of advanced to a being there is like really being there.

for those of us driving all over the state to see patients, it's a whole lot better for us sort of gray hair physicians who travel and do it by video conferencing as well. it is an option that is pretty uniform and driven by the younger generation who is much more creative in developing as well such as yourself. >> several questions in this very large staff sent for word that has to do with payment. we talked a little bit about that. one question has added at its base of the question of whether changes in payment particularly moving towards capitated payments would free up some of the restrictions that we have heard today that flow from the lack of reimbursement for the particular service for a particular professional. >> i would like to make a comment.

to be great if you are talking about the accountable care organizations that are with urban patience. so we need other changes. as a yes and decapitated model which is a great idea. but we still have some ways to go. >> you are talking about medicare. which is almost as numerous. today we embrace telehealth? >> no i don't know that answer. >> absolutely. yes. $10 billion worth have every thing you can imagine going on as far as i know in terms of telehealth and disease monitoring technologies. the medicare model homes and all of that. >> the thing is it is changing out from us for the service reimbursement to sort of make some sense and not be

incrementally done for senator conrad and stevens and rockefeller and a bunch of member is getting us that far. the ground is shifting. so we can't let this train pass us by without consideration of capitated care and all of the shared savings models that are being so actively pursued both within the accountable care organization and the private sector. it's happening in the sector. >> we look at telehealth as a power tool to the physician the senate capitated environment. it's just a matter of getting the money right if you look at what it means and what the health plans or ruling out on the primary care model across the country but what it means is now when the doctor is tie year at the end of the night and goes home to eat dinner they are still worried where the patients

are going to end up. before it didn't matter to them but at the end of that in the emergency care and they didn't mean to be and it's taking thousands out of the risk share or other responses for the little cost of care, they are concerned. so knowing that they had let's say a service to refer to when they finally wanted to go home whether it be board certified doctors and that a deal to see the chart in the morning is a very helpful thing and then practices that do want to provide that care of round-the-clock the no longer have to say we have six locations and this one is open until the 11th and everyone has to drive their they can say we are available on-line until the 11 or 24 slash fax seven and now they are actually able to capture revenue for the people that would have wandered in to the urgent care or to the retail clinic and keep it in their practice. so it really provides a lot of flexibility for that kind of a

position. estimates of the other model is managed care under medicaid. a very low hanging fruit and easy to do the manage medicaid is the program of each state to endorse the telemedicine that works very well in the capitated model. >> let me add one other thing about the disconnect in the government if i could. so, high-tech does a lot of good things. 33.5 billion over ten years in the out lee for medicare and medicaid adoption of meaningful users of the three stages of adoption of health information technologies. for no good reason but for the speed with which it was done and the lack of funding and all the rest there were some groups that got kind of left out on the outside looking in the so the question becomes from the policy perspective even more complicated when it comes to continuity of care around issues from the national association of

home care. home care and nursing homes or on the house side of looking in as well as behavioral health and emergency medical providers. and a couple other categories. nurse practitioners and others and telemedicine to a degree because it isn't mentioned or that talked about in high-tech but it's in the accountable care act so those are some things that go to the issue of the alignment of all of the incentives and the various reimbursement and the models as we look at the various laws for continuity to see if we are on the same side of the wagon on behalf of these organizations and the goals of having the care flow through these systems and things. >> i apologize to those of you that your questions on cards. we are not going to get to all of them. so if this something that cannot wait, you better go to a

microphone some time in the next 15 minutes. what types of child-care services, the questioner asked, are the least amenable to the left telehealth and do you think that will change with new technology or is everything amenable? >> if you look at our model in the pie chart that i had earlier the number one service requested for us is behavioral health services more than 50% of the encounters have been in the behavioral health but we have 40 specialties that participate. they have to physically touch the patient and feel of a module. they've done some research and virtual gloves. that's really not proliferated yet in the general practice. so if the patient needs to be touched and frankly if they need surgery yeah we have robotic surgery examples. but in general you need to see a surgeon in the hospital. the specialty surgeon that you need. so, while there is robotic surgery isn't mainstream for everything that we do connecting

remote hospitals to the hubs. so you have to fill it, probably best to just actually travel to the at some of our specialists request the first would be face-to-face in the office and follow-up visits. it just depends on the sub specialty of the comfort level of the provider but they actively participate in telemedicine. >> do any of you for see the coming of the day the consumer may pay a penalty or premium see to actually visit a doctor matt as compared to telehealth? you want to talk to a teller you will pay a premium. what do you think? >> i don't see it that way. i see these as a series of tools in batt have the changing and more filling advancing goals of health care and physicians and nurses who provide much of the

hands-on care and allied health practitioners. so the notion that the technology is going to somehow replace the clinician is to my mind of surged. i was reading an article about poker machines that can play better than humans and things. that's not health care. these references and things they are doing in computers it's still judgment involved. there's still hands on high touch things that have to take place and should take place and that is what consumers want so i just don't see it to the it >> we have somebody that absolutely positively have to get their questions asked. let me just say as we move into these last few minutes i would appreciate if as you listen to the question of response you

take the form out of your pocket and felt while we are listening. >> i am an intern with the commission of online teaching. i just have a general question. has any thoughts been given to those that live in rural areas who may not have access to best buy or apple to purchase these materials such as a computer or a laptop will be completely excluded because of their lack of technology? >> chapter 11 of the broadband plan for the federal communications commission about two years ago discussed this and related issues at some length and a sort of needed to level the playing field in terms of older populations who for a lot of reasons can't get the good care.

not enough technical support. they don't have access to broadband computers and all the rest. they may not be technology savvy and that sort of thing. so historical the there has been studies that show the underserved minority populations have far less however there is good news. the mobile telephony is a technology that obviates at least some of those problems i mentioned like broadband hard wired communications through fiber or whatever connections are out in the rural areas and we see this around the world in developing countries in africa and asia. a tremendous explosion like billions of handsets. it's incredible. there's two or three for everybody on the planet or something. in a wireless mobile technologies so that may be an instance where the technology

actually offers a really good solution for the problem that we've described which is that sort of access to the devotee has a smartphone now or they want to increasingly pivot stomach i would like to add there are terrific programs and the monitoring program. it's in the association of federally qualified health centers in the world north carolina for medicaid patient and then subsequently by than health care system to reach used all the rhythms to find the offer is patient and then cooperate with the hospital and the nurse and send the patient home with technology and train them on how to use it and actually, they took the most vulnerable patients and had the best outcome. we shouldn't give up on those patients. and i guess the affordable care act and the implementation happened the penalty for the readmission, the hospitals are intended to embrace these technologies for the more vulnerable patient and i think you'll see a project going forward. >> that didn't go well.

there are provisions in high-tech that required one of many reports back to the senate and the house committees and commerce and the appropriations and everything about just that issue. so the staff in their room hold the various agencies feet to the tiger with the accord and coordinator and the rest went comes to that kind of reporting and they want to do that it's just that they have all been so busy standing up to these huge meaningful youth and other kind of related efforts. it's all hands on deck. they haven't had a chance that they are now. and there is a moral effort as was mentioned. not only driven by this but also that the office of the national land cord meter bridge at the veterans health administration. there is a lot of money for the model veterans as was mentioned. so, you know, the agencies are well aware of all of that and it is a matter of resources and focusing attention i think also. >> for those of you that do not have an acronym in front of you,

some of you may not know that high-tech in this context is not an adjective. it is safe now. it is a piece of legislation that is part of this package. what we try to follow-up on this question because we have several cards asking about different aspects of the involvement in this issue. how persisted is the lack of gyroball broadband of devotee in rural areas these days? is it still as big a problem as it was two or three years ago? >> i think not. there is not as much. there is white 7 billion out of the stimulus act that was made available as was mentioned in the utility service, not for the distance learning program which is a long time grant

telemedicine but for the broadband into rural areas and through the commerce department to the national standards and technologies, total of 7.2 billion i think. that coupled with investments by at&t, verizon and so many of the other big carriers in the tens of billions is starting to cause better penetration of broadband, while europe and wireless into those areas. so it is definitely i think getting better and it's hard to get good maps of all of that. we've done some conferences on just that issue as it relates to roll and much of it tends to be anecdotal. but the companies tend to know, and the fcc is definitely working in that direction. many of the policies and programs are designed for exactly that issue. >> we also have a cable industry that has something like 97% of

the homes. and we have had no problem going anywhere in putting on top of the second highest mountain in virginia there was nothing there. we had a very big part of the mountain and that was supported by the program on the rural support mechanism. so i would urge you for those of you other interested in exploring further that has been a fabulous research. >> and one of center rockefeller's initiatives. the provisions in the act of 1996 created the program that was pretty ineffective for a lot of years. they did as much as they could administratively without a reauthorization of the act because there hasn't been one since then to make it more effective so that the 400 million or so per year that gets collected in a few cents on your phone bill it does get you used for that connect program and the other fcc connectivity

program starting to have an impact. >> a question everybody will want to weigh in on a. i'm interested in the view of all of your -- all of the panelists. the simplest question that we have heard all day who are the winners and losers if telehealth becomes widespread? [inaudible] >> that would be the winner part. >> i don't see any losers. it depends on the favorable public policy. everybody's doing it quite frankly. once the test and virginia suddenly all of the health care systems became engaged in a telehealth. so just come on board. >> it's one of the rare things we see where the patient physicians when. the employe years when. so i suppose you could say when the internet can about and the winners and it might have been

the printing press some of the print. so maybe it's the petroleum companies because the taking people in the road to get health care. >> 8 million miles worth. >> it is a win win and it's fun to work on these issues for that reason and as the doctor he alluded to for my part i've never met a member of congress on either side of the aisle, and i've met a lot of these issues that didn't think this was a good idea. and these folks were there because of their political skills pocket. so not much could be said about any other issue in washington these days. correct me if i'm wrong. but this is one that is almost a no-brainer in terms that causes us so much thanks in the field in terms of why it sort of

hasn't happened faster sort of on the regulatory side and things because -- anyway. >> how disgustingly positive ending this discussion. [laughter] i have to say this gives light to the idea that it's bad luck to attend an alliance program on friday the 13th. this is one of the most lively informative discussions we have had on almost any topic in a long time and i would like to thank our colleagues at wellpoint for helping us to put this program to get area i would like to thank you for being such a good audience and providing lots of the great questions and ask you to help me thank the panel for one of the best ones that we have had in on long time. [applause]

.. >> just a reminder if you missed any of this conversation about

telemedicine, you can find it at c-span.org. we will have been attempted in its entirety later today. the "washington post" reports a peace deal in syria is riding on the chemical weapons agreement that the u.s. and russia is trying to come together in geneva. they are in their second days of talks and working details of possible broader future negotiations. secretary of state john kerry negotiations. secretary of state john kerry and russian foreign minister sergey lavrov our meeting. they released a joint statement. secretary kerry says he's working hard to find common ground to be able to make that happen. we discussed some of the homework that we both need to do. now that the assad government joined the chemical weapons convention, we have to engage our professionals together with the chemical weapons prohibition organization -- >> secretary kerry and the

foreign minister may meet again in two weeks. that's about the time of the u.n. general assembly and they will meet there. and in economic news, washington, d.c., president obama's top economic adviser says he is leaving in january. gene sperling, the director of the national economic council will be replaced by the director of the omb. he is a longtime consultant to join the white house four years ago as a performance officer and he was charged with streamlining the government and cutting costs. a national economic council post does not require senate confirmation. >> let me focus on something called advanced persistent threat which is something that is discuss both domestically and internationally and it relates to what stewart was talking about. there are footprints that are left regarding behaviors that go on out there that are indications something is going to occur. one of the reasons the changes

needed in the cybersecurity, continue to look at an executive order and standards in everything else is that we need to move to continuous monitoring, ma and after that we need to move to continually be able to look at the precursor or the context being set for an attack and we do know what those are. a lot of it has to do with basically analyzing social media. >> we are never going to defeat the cyber enemy, whether it's a nationstate, organized crime, any organization, by having the private sector check the compliance box. we did all that congress wanted us to be. that's not enough. it's grossly ineffective. there has to be timely and continual information sharing horizontally, within the federal government, particularly the dhs and then vertically down to the state, locals and particularly the private sector. after all, the federal government relies on the private sector in order to function.

>> this weekend, it's and homeland security committee looks at what the next homeland threats may come from. saturday at 10 a.m. eastern on c-span2's booktv, a secret life hidden from family and friends. the story of america's first female rocket scientist saturday night at 11. live sunday on c-span3's american history tv, commemorating the 50th anniversaanniversa ry of the 16th street baptist church bombing with your calls plus remarks from eric holder starting at 11 a.m. and throughout the day from birmingham, alabama. >> the supreme court's next term begins october 7. now we'll hear a preview of cases with the solicitor general donald verrilli come at the right of "scotus blog" thomas goldstein. the next term includes cases on campaign finance, from the action, block and reproductive health facilities and the presence of three to make recess appointments.

>> good afternoon, everyone. i almost said good morning but it is afternoon now. many of you spent the morning at the supreme court, which was a wonderful opportunity. you got to meet megan jones who was the programs manager in the curator's office, and the counsel to the chief justice of the united states. this afternoon we have a wonderful panel of experts. we will talk about the upcoming docket. i've given you a handout with their bios so that we can save a little bit of time because i know they want to get right to it. i'm sure you want to get right to listen to it. before i turn this over to them, can i please ask you to talk to cell phones, if you have them on. and you might notice that some of the names have changed on the bios. attorneys have schedules that they're not always in charge of, so some of them had to change. but we still have an excellent panel. and just as a follow up for a lot of you who are supreme court

petition not us, we have justice sotomayor coming here in january so you might want to look at that in our associates catalog. so i'm going to turn this over to tom goldstein and he's going to take it from there, and enjoy this session. thank you all for coming. >> thanthank you, ruth. also on half of all of the panelists we really want to thank the smithsonian associates which is an amazing organization, devoting continuing education, for putting on this program. for those of you got to go to the court comes to building and meet some of the people there. i'm going to do super brief introduction and then we're going to turn to the substance. when we do we'll split it potentially into two parts. the first part is getting water. [laughter] after that, no, we're going to look backwards and look forward. we do think the best part is program might well be telling you what the spring core is going to be thinking about other

than what it is already done. you've already read in the past those of you are interested in the court about last terms big decisions but some of those are so momentous dealing with gay rights, a from of action that they really do bear spending a few minutes on. so we'll talk about those first, you will talk about the upcoming term, it will take us to but now have, it will take us to 315. at 3:15 we will stop to take your question. so if you'll hold those until then, we will be really grateful. when we do questions will become the microphone because where the great misfortune that c-span was today and we want to make everybody out there as well here's your question. so in terms of brief introduction, my name is tom goldstein. i'm a lawyer. i run a website called "scotus blog" which is website about the supreme court. to my right is jess bravin who covers the supreme court and has done so for many years for "the wall street journal" and unbelievable reporter. you should go buy his book which

is a fantastic discussion, and really unheralded description of out how cases related to detainees in particular have been handled in the war on terror. next is allison zieve. snr cassation you can donate have to donate to the smithsonian associates. it's a huge vat of public interest work and is a great public service to the court in terms of both litigating at the court, providing to the core and is a huge amount of work outside the supreme court as well. particularly in areas like consumer interest and administrative officer example. next is the solicito solicitor f the united states. an incredible pleasure and good fortune and is able to be with us today. the solicitor general is responsible for princely representing the united states in the supreme court of the united states but has other responsibilities as well. and has been an unbelievable

public servant of unbelievable public servant bot of serving ie department of justice and the white house counsel's office. the only thing that is worth mentioning is that while domino's more about the sprinkler was going on than anyone, he's the one of us who suffers under the greatest constraint. we can joke and make things up -- [laughter] but if the constitution requires that he actually sponsored but. [laughter] as that's the only thing that's holding them back. >> and c-span. >> especially on c-span. to just recognize his expensiveness is limited because of his very, very special role. as i said we'll start by looking backwards and we will start with same-sex marriage and don will talk to us about the. >> thanks for the gracious introduction. it's great to be back. route and the smithsonian associates are to be commended. i've returned ty mathis program last year and look forward to the discussion and your questions at the end. as tom suggested we thought

given the momentous character of the end of decisions last june that it would be worth a programmable bit of a backward look at those. i'm going to talk about the gay marriage cases, united states versus wins it and hollingsworth. windsor country all remember the basics, the supreme court held that a division of the defense of marriage act which is the statute congress enacted in 1996 was unconstitutional. that provision barred the federal government from recognizing for any federal law purpose the validity of a marriage between persons of the same gender, even if the person for lawfully married under a state law. once significant numbers of states started recognize same-sex marriages, the federal law started close very serious consequences them unlawfully married couples, and edie windsor so, a plaintiff in the case, about the constitution chose to the law was unable to

be treated as a spouse for federal income tax purposes. she had to pay an inheritance tax of more than $300,000 that she would not have to pay if the federal government had recognized her marriage. lots of other serious consequences that followed from the law, across a whole range of potential federal benefits and privileges. one unusual feature of the case was that the united states was not defending the law, but instead we were arguing that it was unconstitutional. that's because in 2011 the president and the attorney general made a judgment that laws that discriminate against gays and lesbians ought to be subject to heightened scrutiny, and that the defense of marriage act provision, section three, that denied those benefits couldn't meet the standard. let me tell you, stop for a minute and talk about what it means to say something subject to heightened scrutiny. under the constitutional law, 14th amendment law, it

provides that no person shall be denied equal protections under the law, but lost the people unequally all the time, and often for reasons that are legitimate. the law needs a device to decide which kinds of discrimination between people and groups are legitimate, treating optometrists different than ophthalmologists, and what kinds of differences in the law for some people illegitimate. and what the president is saying, differences in treatment of a law that are based on sexual orientation ought to be treated as presumptively illegitimate under the established equal protections doctrine, because the characteristic of being gay or lesbian is an inherent personal characteristic, and that discrimination is based on that generally don't bear any relationship to legitimate governmental objectives. and that you couldn't rely on the political process to ensure

that no discrimination occurred against gays and lesbians and based upon that announces a decided that section three was unconstitutional and ought not be defended by the federal government. and so we did not defend it, and as a result, the house of representatives stepped in and its leadership decided that they would hire a lawyer to defend the law. so did go to the supreme court in a somewhat unusual posture. the court in a 5-4 decision concluded the treatment did violate the fundamental constitutional guarantees, justice kennedy's opinion for the majority didn't expressly about that heightened scrutiny argument that we as an estate advocated for. but it did focus on a characteristic of the defense of marriage act that it found, that the court found, justice kennedy found to be particularly troublesome, which was heated as an expression.

the statute as an expression of animus against gays and lesbians and was not motivated by legitimate public policy concern, but essentially a desire to discriminate for discriminations of saint. struck the law been principally a on that basis. one of the interesting things is does a fair amount of discussion in oral argument in the case about whether really the problem with this law wasn't the discrimination problem so much as a federalism problem. justice kennedy asked quite a few questions actually going along the following lines. gee, is it not unusual unusual for the federal government to be defining what the college marriage and what is a valid marriage? isn't that the province of the states under our federal statement -- system but at the end of the day the opinion of justice again and for the court in a lie -- rely on a federalism grounded it was an equal protection and fundamental rights kind of analysis.

but he did use that federalism rationale, that federalism notion as kind of a red flag. the way it looked to him and in his opinion, precisely because the federal government isn't very often in the business of deciding what is it lawful and college marriage and what isn't, that's normally the province of the state, the federal government in this particular statute got involved in trying to answer that question and centered it not for any one particular federal program but for every single federal programs across the board from taxation to better service, social strata benefits, that was a red flag that raised suspicion about whether was there any legitimate motivation supporting the law. so anyway, that was winter. the other the case in this edit was perry v. hollingsworth. that was a case as i'm sure remember about california's proposition eight which was constitutional amendment passed by ballot initiative referendum

in california that and a marriage between persons of the same gender, was subjected to constitutional challenge under equal protection ground in federal district court in california, and the court struck it down. and something important procedurally happened during those district court proceedings which was the state government of california decided that it believed this law was unconstitutional, this constitutional amendment, was a violation of the federal constitution and they stopped defending it. because they would not defend anymore, the group that was a strong proponent of the ballot initiative and got it enacted in california stepped in, hired a lawyer to defend the law. so district court thought it unconstitutional of those lawyers intervened to coming to defend the law and took an appeal to the ninth circuit court of appeals where the lost. then they took the case to the

supreme court and asked the supreme court to review. what the spring core and the day was deciding that -- supreme court decided was the party, because this is california have dropped out and this other group had come in, that there wasn't standing to pursue the appeal. standing as a technical legal doctrine, in order to bring a case in federal court, article iii of the constitution that limits, it has to be a genuine case of controversy in order for the constitution to allow federal courts to hear a case. one element of that idea of a case of coach if he -- controversy to get that real opposing party who actually have a personal concrete stake in what's being fought over in court. the supreme court held that that applies not only at the initial trial but when you're on appeal as well. if you want to take an appeal from a lower court to a higher

court and into the supreme court, that you've got to have that kind of personal stake. and the majority of the court ended up concluding that the proponents of proposition eight didn't have that kind of personal stake in the law that allowed them to qualify as somebody who could have standing to take appeal and pursue the case, but they really weren't different from any other citizen in the state of california, essentially, the incident might have an interest in seeing a law or a constitutional provision of the state enforced. but that kind of undifferentiated interest is one that isn't enough to get you standing to come in and pursue a case in court. one interesting thing, the consequence of the court deciding those who stand was that it would in itself reach the question of whether there is a constitutional right to gay marriage and whether proposition it is unconstitutional. they said we can't do that case. the court of appeals couldn't hear that case be the because

the appeal was brought by the folks who didn't have standing. but they didn't have a district court judgment in place that declared prop eight on constitution. what do you do in that circumstance? the upshot of it is that the prop eight proponents then went to california state court and tried to get a district court judgment undone on the theory that this isn't right, because the district court judgment couldn't be appealed and yet it's going to have the effect if it's left undisturbed, wiping out prop eight and making same-sex marriage available and lawful in california. california supreme court declined to intervene, so as a consequent given that the supreme court didn't reach the issue it is the case now that prop eight is an operative in california and the opportunity for same-sex couples to marry in

california is now available, even though the supreme court didn't reach the merits of the case but said that the summary of the gay-rights decision, part of what made last term quite consequential term. >> it may be difficult for you to opine on what comes next, because the united states will have to take a position on them, on the next generation, same-sex marriage and gay rights cases by an interest in you guys, to think about what it is that windsor, the doma kisc case, tes about what the supreme court will do when it does confront the perry question but that is, the foundation question of whether there's a constitutional right to same-sex marriage. so i wonder because it seems to me that case is coming on a rocket she. so i wonder what lessons we might derive from the supreme court said. >> why don't you all chime in, let somebody else talk for a minute. >> well, i agree that is of

course the next question because the reasoning of a windsor case leads one to ask if it's unfair to discriminate between lawfully married couples, same-sex couples and opposite sex couples, why isn't lawful under the u.s. constitution for some states to deny same-sex couples the right to get married anyway. but i have, before that, just a precursor question which is this, sort of a puzzling element of the way those two cases were decided to essentially both the state and federal government did the same thing. the attorney general of california and the governor of california a do the same thing that the obama administration didn't when it came to defending this law. they like the obama administration concluded that the state law under attack was not constitutional. they kept enforcing it but they didn't defend it in court which is exactly what you did here in washington. maybe you could explain. how could the supreme court find

that they can reach the merits when the federal government stops defending the statute he t considers unconstitutional, but they can't reach the merits when the state of california stops defending the statute or in the case of state prosecution review for the exact same reason? >> the supreme court explained that it is a really good question. but there are a couple of differences that allowed one case to go forward with the other not going forward. in california, and the prop eight case, the state stopped defending the statute but also stopped participating in the case. the lawyers were not there. they were just gone. in this case, in windsor when the united states was a party to this case, we stopped defending the statute but we didn't stop participating in the case. we stayed in the case and one reason we do that is because part of the decision was the

president and attorney general made when they decide they wind up in the statute any longer was they would continue to enforce it until there had been a definitive ruling from the court's that it was unconstitutional. the reason they did that was, as expressed in their explanation, was because of a belief that in our system that the judicial branch ought to get the last word on constitution of the law, that that ought not be left up to executive branch on its own. and the way to maximize the prospect of the judicial branch getting glassware is to enforce the law so that there are concrete consequences falling on people. while the law is still in effect and there's a prospect of a true case of controversy that can be decided. and then we're in a different position in the state of california in prop eight and that there actually were concrete consequences that would flow through the federal

government, if the statute were declared unconstitutional. one of them, most obviously, was windsor, the federal government was fighting with edie windsor over $300,000 in tax payments. if the statute was upheld as constitutional, that $300,000 would stay in the federal treasury. if it was struck that it would be a check for $300,000 to go to edie windsor but even though the united states government was the statute was unconstitutional, we would suffer an adverse consequence when the statute was being struck down and the majority of the court decided that was enough of a concrete dispute to justify the case going forward, consistent with the article iii requirements, and that concrete dispute of a similar kinds is wasn't there in the california case. that's i think the best commonsense translation i can give of the supreme court's position. >> not to throw any doubt on the

reasoning of the supreme court but, of course, for the state of california they would have the exact same stake because if there can be same-sex married couples, state tax laws and many, many state laws make similar differentiations based on merit status. california but also the big financial and policy stake in whether or not same-sex couples can get married. >> understanding that half of you are -- let me go to the did your interest in whether the same-sex marriage -- allison, t. have any thoughts on -- >> i certainly agree the cases coming. i think that it will be more controversial to say that states have to recognize same-sex marriage than to say that the government doesn't have to honor states choices.

i have a hard time seeing how they can write an opinion completely inconsistent with windsor that doesn't lead to that result that states have to. i am more often than not wrong about how the supreme court will rule. but it seems to me that it's possible that if they can come up with some distinction for the next case, it won't happen in the next case but it will happen. >> just one word on that from the perspective of the united states. as i described earlier, we took this position as a matter of legal doctrine that heightened scrutiny ought to apply the laws that discriminate on the basis of sexual orientation. and the court in windsor didn't about that rationale as a reason to strike down section three of doma. it adopted a somewhat different

rationale, but they didn't reject that rationale. the united states also participate in the terri case and argued that same principle of heightened scrutiny ought to apply to state laws that discriminate on the base of sexual orientation with respect to marriage itself. because they reach best anyone we've been discussing, they didn't grapple with the issue one way or another. so i think the most i can say is that it remains open to the supreme court to go that heightened scrutiny root and find that state laws that discriminate but deny the ability of same-sex couples to marry are a violation of equal protection. it's open to the supreme court to draft a different rationale and decide such laws violate equal protection, but it's also i think after windsor clearly opens the supreme court to decide that this is principally a situation in which you would defer to the states.

because as i said there was the strain in reasoning and whinge opinion from justice can't that express a lot of deference to the state's judgment about who should be entitled to get married and so i do think, i think cases coming fast. i think tom is right about that, i do think you look at the legal options available after the windsor and perry decisions, and i think you are all available to the court. and i wouldn't predict what's going to have been. >> i think that we are so looking for this vote on that and it is likely to be justice kennedy. he seems uncomfortable at the oral argument has the case before him. he wasn't quite ready i think to go as far as petitioner windsor wanted him to go. and that's what i say it might not come in the next case but it will, i think it's a matter of when he is ready to get there.

but the federalism angle, the indifference to the state is one way that he might decide at least for now that the states can do what they want. >> let's turn, to keep moving forward, to the voting rights act. >> i'm allison. most of you have read about the voting rights act case in which the court held that a provision in the voting rights act was unconstitutional. i'll go through a quick primer of the voting rights act so we're all on the same page. it was enacted in 1965 to combat measures used to restrict minority access to the polls. it was a reaction to a range of discriminatory measures, things like letters attests and morality affidavits. as well as to the murder of some voting rights activists in

mississippi and state troopers marching to the capital in alabama. section two of the act contains a general prohibition against voting practices or procedures that have a discriminatory effect on voting. it's enforceable in federal court by private litigants or the government and the showing of intent to discriminate is not required. you just have to show it has that effect. section five imposes a preclearance requirement on any changes that certain jurisdictions ought to make to the voting practices or procedures. the jurisdictions covered are primarily in the south and some additional counties and states elsewhere, like alaska. so those can affect any change that affects voting without the clearance of the united states attorney general, or the federal dish a court in d.c.

which is a three-judge court in d.c. the jurisdictions are based on a four month that is set forth in section four of the act. the formula has been changed a bit since the 1960s, had some requirements but none have been taken away. and every so often, although some parts of the act just continue on like section two, every so often section five has to be reauthorized or reenacted i congress. it was done several times most relief from 2006 when congress extended it to 2031, 25 years, and kept the existing formula for determining which jurisdictions are covered and, therefore, require preclearance of voting changes. at that time both the house and the senate held extensive hearings and undertook what the

chair of the house judiciary committee described as one of the most extensive considerations of any piece of legislation that the united states congress has dealt with in the 27 and a half years that he had served in the house. the bill was passed almost unanimously in both houses. so four years ago, maybe it is five now, the court heard, except in the case the challenge to section five preclearance requirement, the petitioner argued it was unconstitutional. the court decided that case on a different ground. it didn't have to reach the constitutional question, but the decision of the court noted that things have changed since the '60s come and that congress needed to justify preclearance based on current need. that brings us to shelby county, tha case decided last june. shelby county, alabama, is or was until last june a

jurisdiction covered by section five so that any changes to voting practices or procedures have to be precleared by the u.s. attorney, or u.s. attorney general, or the digit court in d.c. shelby county sued attorney general seeking the judgment, seeking a statement, a pronouncement that the formula of under section four and section five are unconstitutional. shelby county sought to promote a enjoying their enforcement. the district court and the court of appeals was rejected that challenge, held in favor of the government. and in the case went to the supreme court where, by a 5-4 decision, the court held otherwise. the court did not hold a preclearance requirement was unconstitutional. instead, it held section four

formula for determining what is precleared is unconstitutional. the court held that continuing the prior formula for determining preclearance wasn't based on current conditions. the court said it was based on 40 year-old facts having no relationship to the present day, and that congress if it is to divide the states must identify those jurisdictions to be singled out on a single basis that makes light of the current conditions but it was a 5-4 decision. the dissenters discussed the massive legislative record on which the renewal in 2006 was based. justice ginsburg explained that first generation barriers to ballot access like letters attests were dealt with now but they been replaced by second generation barriers, like racial

gerrymandering, at large voting in places where a sizable black minority populations and things like that. she said the voting rights act had been effective in thwarting such efforts in the past and that the majority decision was going to argue for it the country's commitment to justice. in a separate opinion, justice thomas to join the majority, he called for the court to strike down section five, the preclearance requirement itself, saying the majority opinion had left that result from had made that result in inevitable, that was really all that was unsteady conclusion. the supreme court had repeatedly upheld the preclearance requirement in earlier cases, so the outcome is that although the procedure for preclearance have survived, the jurisdictions are no longer covered. they are no longer covered, no

coverage to -- states such as texas and south carolina, formerly covered by section five have already reacted by enacting or putting into effect laws that they could under preclearance not have gone forward with. and although the bill authorizing the to the house and six renewal of the voting rights act passed overwhelmingly, it's generally thought that the current congress will not pass through legislation anytime soon. you may have noticed the current congress has trouble legislating. [laughter] so while we wait, the federal government is using other tools, other sections of the voting rights act to try to protect minority access to the ballots.

section two, which is after the fact, which allows an individual or the government to after the fact, after it changes the challenge having a discriminate or effect. but that was not challenged in the case, and some the government has sued texas under section two the challenge a voter id law. that would otherwise have gone through preclearance pickets also filed suit seeking an order from a federal court that would bring texas within the preclearance requirement based on evidence of intentional voting discrimination. because although there are no -- is a procedure in the act for federal court to determine that a jurisdiction should be subject to preclearance because of

evidence of intentional discrimination. so the government is trying both those tactics in the specific cases. and while the ability to challenge specific new laws remain, the decision is still extreme significant because section five as the court explained in one of its earlier cases is in some ways more effective in case by case litigation. the court had said in 1966 that case-by-case litigation was inadequate to combat widespread and persistent -- because at the time and energy required to overcome the tactics in very late encountered in these lawsuits. and although the tactics that certainly changed it is certainly more time-consuming and thus efficient for the government to be looking at each change after the fact rather than including it in advance

before discrimination has occurred. so i think i've tried to describe this fairly objectively, but i'll confess that i agree with the dissent that it was a decision that is the egregious in the way that it overrides congress' decision, based on really a massive legislative record, and puts the egregious barrier in front of the government's ability to prevent discriminatory practices. and i think that's what makes shelby county one of the most significant cases of the last term. >> so maybe i can draw a couple parallels to the voting rights act case and the gay marriage cases, and then try to draw another one back to the case and i will talk about first which is affirmative action case. two interesting things to know. one is that any same-sex marriage when she case, the supreme court strikes down

section three of the defense of marriage act. that was passed by overwhelming majority. in the same week it struck down section four of the voting rights act. the dissenters in both cases claimed bitterly that it is outrageous for the majority to override the considered judgment of wide majorities such as the congress. the two majority are almost exactly the opposite, justice kennedy is the person shared in the majorities but it is interesting how if you believe that a constitutional violation, then you think it's important to strike down the law. if you don't think is violation you think is an outrageous overreaching by the court. there's no easy listening to was right or wrong. the second parallel i would draw is that you don't really know as we are discussing how exactly to read the winter decision. and that is, do you read it as a decision that's a step forward same -- towards same-sex

marriage, or instead do you read it that the greenlight to states to make a judgment about how it is that the want of marriage in their states? so, too, and the voting rights act case to get a look at it in one of two ways. you can see the supreme court is saying congress, you go back and come up with a more updated list that is more tailored and circumscribed to discrimination that's going on today, or you can read it, a decision you can't impose on the state, kind of the federalism thing, you can't impose on the states the burden of preclearance and villages wink and nod and do it because they know congress will never come up with a new list. so we have to wait for the new generation to take the case to figure that. so the parallel i would draw is between two cases relate to the bone rights act that allison described. it was a case about four years ago. everybody thought the supreme court was going to strike a section five of the voting rights act, and they didn't.

they sort of had a shot across the bow. congress cannot and did this turn. something similar may be happening with respect to affirmative action. so this turn, the supreme court tackle the question whether the universe of texas admissions program which has a preference on the basis of race is constitutional. there was a pair of opinions that were decided when justice o'connor was on the court and she was the center seat. she's been replaced obviously and replace them with justice of the is considerably more conservative. esses o'connor kind of center-right conservative but you really never knew him and in front of action case where she's going to come down. and the supreme court upheld the affirmative action program at the university of michigan law school and struck down the undergraduate program. but the bottom line of the decision was that you could have some form of racial preference. the university of texas took

from that a green light at a preference to his own admissions programs. there were two parts hundred million students. when it comes to diversity, they took the top 10% of all graduating high school students in the state and admitted that to the system, including ut austin. that produced a fair amount of diversity because a lot of high schools in texas are in areas of the state that through segregated housing patterns inevitably have huge minority populations, and so was the case the top 10% of the class might be overwhelmed with hispanic, for example. but then texas added on a preference system and that was challenged by an african name abigail fisher who did not get into university of texas and said she believed that she was not given an equal opportunity to compete for a seat at ut austin because she was white. and the case went to the supreme court. everybody i think pretty much

thought that the program was in big trouble because we have one really important -- we have a recurring phenomena in this report that happened as a consequent of justice o'connor's retirement, and that is there's a variety of areas in which she was in a majority of justice kennedy wasn't in dissent. now that the court has taken a step make you a to the right on these points of law, justice kennedy's dissenting view as a matter of law or practice to become the prevailing view as he has taken on the center seat. and in the affirmative action case, these cases from the university of michigan, the predecessor ones where the law school program was upheld, justice kennedy would strongly of the view that the programs deserve much more rigorous constitutional scrutiny. while justice kennedy, unlike his more conservative colleagues has refused to say that the constitution is colorblind and

outlaws all racial preferences. he has said that they deserve significant constitutional scrutiny. so this case came up to the supreme court and people believe that this is going to be of course opportunity to step back from the michigan law school case and put significant limits on affirmative action. but like in the first voting rights case where we also expected section five of the voting rights act to be struck down, instead the court did something much more modest. it's a bit of a puzzle exactly what you're doing, why they did it. they issued a decision that said, to the court of appeals which was upheld the program, we would like you to try again. it's a very interesting instruction when it isn't backed up by much in the way of explanation. what the court did actually do was it said two significant things. number one, it said were going to continue to assume that diversity in higher education is a compelling government interest. remember dawn's explanation of how the 14th and it works, and

that is the subject is lost-scrutiny to get have a good reason and the law has to be tailored to achieve that. the most conservative justices on the supreme court don't believe that that kind of diversity is sufficiently compelling interest to justify an affirmative action program to assist you to get them to join saying we will at least assume it is. the second part of the opinion said, we want the court of appeals don't defer universities when they tell you that they need these programs. you have to develop an actual record in court to establish that these programs are really necessary. and again, it's a parallel to what happened in the voting rights act. the supreme court majority look at the records that congress had compiled by the university for compiling an affirmative action, look at the records congress compiled and said that's not good enough. but we have in the following

cases the court determining whether or not a state has a history of discrimination so that harsh remedy like precludes is required and chosen to affirmative action. it's been posted to the courts you need to stick we scrutinize these affirmative action programs to and as result justice kennedy's -- not the opinion, the opinion for the court ends up having eight members in it, both the left and right in what was a great surprise. expected to be a 5-4 decision cutting back on affirmative action substantially. so the question i think for a lot of people who follow these issues is, is this term, send back to the court of appeals, is that a prelude to something much stronger just like the first voting rights act case which had a justice majority was a prelude to this striking down section four of the voting rights act. so the last point i'll make about it is, perhaps the most

jaundiced view of why the court did what it did. and that is really, if five minutes of the court had signaled their great concern with affirmative action, why didn't those members support actually take the step of doing something because they haven't had to be aggressive on the important principle of constitutional law. and i think one thing that may been happening is that they would have to hand and the voting rights act decision at the same time to invent affirmative action decisions. and the combination of invalidating such a critical part of the 1965 voting rights act and also invalidating affirmative action or dramatically cutting it back, optically would have looked very, very tough for that majority of the supreme court. it may have decided in addition i'm sure they thought was the right answer, but they may have thought the pacing of, i'm pretty sure, they may have thought that the pacing of the decision was better to kind of leader for another day because they also were undertaking or next to a very significant their

housing case that has significant undertones as well. before we turn on to the follow on come any further thoughts you all want to add about affirmative action? >> i want to say that it's right to focus on justice kennedy and the fact that he really alone among conservatives on the court have agreed that diversity on the campus is a compelling governmental interest to the government has a tremendous interest in promoting it. the other half of the 14th and now when he departs from the liberals who agree to add more supreme court charging, what they call, is the program narrowly tailored to achieve that end. and that is what justice kennedy has departed from the liberal members of the court when it comes to these racial diversity cases. excepts the idea it's a compelling interest but he is much less willing to give government entities leeway to

decide on their own what they can do and what level of racial classification of individuals is acceptable to achieve it. to what the decision in the texas case does is it requires essentially a talk to put the university of texas on trial to defend that the way that it gets the diversity, that the supreme court says is this worthwhile objective, doesn't in a way that causes the least onto people are not in fisheries of the program. so that is where he sort of splits the baby. >> shall return to shall be? >> well, this is also an affirmative action case but comes at it from the other end of the spectrum because it is involved in an attack on a state measure that banned affirmative action. actually, some people were present at there is historical events. i was present at the origin of the modern anti-affirmative

action of the day, because in 1995 when i was in law school, i was the student member on the board of regents for the university of california, or i would be appointed shortly thereafter, and that was when you see under the leadership of the board of regents eliminate consideration of race and ethnicity in their admissions procedures. and the following year, he followed up with a statewide initiative in california called proposition 209 which abolished racial preferences across the board for state programs, including college admissions, he then went on to replicate that measure in many other states, or some other states and one of them was michigan. that is what this case called as don informers, shetty. that's attorney general of michigan case called shetty. comes to us from the sixth circuit court of appeals which includes michigan. michigan we heard before in

affirmative action context because in 2003 there were a pair of cases where justice o'connor essentially said that can't have a strict numerical advantage for minority student to get automatic leak give them points on the scores to get in to school, but you can't as a part of a holistic not very pretty find that sort of holistic measure of an applicant's, take the race into account. you know, perhaps for the next 25 years that would be the time limit she suggested might be appropriate to especially take race into consideration, but that was not a body part of the decision. but it was always cited as the court's benchmark. after those decisions came down in 2003, michigan voters acting

with the help of ward connerly, who sent a proposition 209 to the state decide they didn't want to wait 25 years. they pass something called proposal to mac which abolished the consideration of race in any state programs, including higher education admissions. and a number of groups, including one called the coalition to defend affirmative action by any means necessary filed suit to challenge proposal in michigan. the same group or a related group has often challenged opposition to do in california arguing that essentially by preventing any state agency from adopting affirmative action program, minority were being disadvantaged. that they alone, with a among a few, were being singled out to

the disempowering, being unable to seek a kind of program that they wanted by other groups -- while other groups might be given preferences, and one that is often said our children of alumni or athletes or other types of students who may get preferences. they are not barred by the state constitution from getting a preference. they go and try to persuade university or the universiuniversi ty can on its own give them preference. the ninth court in california rejected the art and about proposition 209 by that argument did prevail, barely, at the sixth circuit court of appeals, which by a single vote, i think is a 7-6-proposal violated the cheney constitution for protection clause as it has been interpreted by the court. the sixth circuit look to their decisions principally for the authority for its ruling. from one to 90 seen 69 and one

from 1982 in which the supreme court has struck down local or state ordinances that made it especially hard to pass anti-discrimination laws. there have been certain measures that city counsel contest any kind of law it wants what it wants to pass a law banning discrimination in housing, they need a super majority. measures like that the supreme court that were unconstitutional because they went out of their way to deprive minority groups that might benefit from an ordinance, the ability to get those ordinances enacted. the sixth circuit court used that same reasoning to say this is the same thing, that pretty much any other type of person, alumni child or athletes or two player or whoever, as many ways to try to get a preference from users of michigan or michigan state or other state colleges.

they can ask the board of trustees. they can ask the admissions office. they can go to the legislature, or they can seek a constitutional amendment. but minority groups, the only way they can get a preference enacted, is to amend the state constitution. and that violates the principle by depriving them of the same way to influence legislation or influence state policy that other groups have. now when that case, so the case is not one that, i mean, it deals with affirmative action. it deals with whether a state can abolish affirmative action on a statewide basis. and it's interesting in a number of ways because it says that a measure that on its face is completely race neutral, it says no one shall receive any preference or detriment based on race, in effect, is unconstitutional because it prohibits some people from seeking a preferential treatment

based on race. and again, as allison said can we can't ever be sure what the supreme court is going to do but it seems that the opponents of proposal, in other words, the ban, coalition of definitive action by any means this is a, has an uphill climb that is a violation of equal protection to enact a statute or rather a state constitutional amendment that says nobody can be treated different based on race. and that will be argued on october 15 at 1:00, if you are free. >> one very brief thing that is noteworthy about this is the way in which the supreme court did tackle a similar issue in earlier generations, and we think of there being a lot of stability and american law and supreme court decisions because of the valley of precedent and

the notion of stare decisis. but on these really fraught, hard questions like affirmative action, race, religion, each new successive supreme court majority feel some flexibility to correct the errors of its predecessors. and so, too, with the current majority's view of the grass case, the decisions upholding the ability to have some former preference, and so, to come on these questions of whether local bans on affirmative action type programs are unconstitutional. so let's continue with our forward march to the upcoming cases, schuette being different is when we talk about. in the next 45 minutes we're going to go through nine cases. so we're going to solidly stick to five minutes a case. which i think will be no problem at all. [laughter] given the relative 20 minutes for the first five. so this very simple and easy to

understand recess appointment. >> you bet. this is a case called national labor relations board versus noel kenny but a caseload of the constitution allocates bout between the president and the senate. and article ii of the constitution of course get the president the power to appoint federal officers subject to license of the senat city but ts another provision called recess appointed clause which i'm going to read you and want you to listen carefully because a language is going to matter in a way that we'll discuss in a minute. the president shall have power to fill up all vacancies that may happen during the recess of the senate, by granting commissions which shall expire at the end of the next session. so in other words, if the senate is in recess, the constitution gives the president the authority to make appointments that he would otherwise need the senate's advice and consent to

make. .. the senate did not confirm their nominations, so the board was in this position where it was about to go out of business. the december 2011 decided it was

going to take a break from mid december until january 23rd. but they didn't just declare that they were going to go out on a recess between sefton september and january 23. instead they provided that they would have a pro forma session every three days during that period in which one member of the senate would be there and called the senate into session. and in 30 seconds or less bring down the gavel and call the senate out of session. the resolution that set this up provided that members of the senate that need to be there for these sessions and that no business would be transacted. now why did the senate do this? they did it because i accepted practice, a break that short of time of three days doesn't count as a recess that would trigger the president's power to make recess appointments to leave so this happens at the end of 2011, the beginning of 2012.

the president decides that actually the senate is being reassessed and that despite these pro-forma sessions because the sessions don't make the senate available to provide advice and consent which is what it has the obligation to do under the constitution and if they are not around to provide the advice the president says they are in recess. since recess is long enough and they aren't going to have a quorum unless we get new people on their i am going to recess the point to people, which he does. and so the board with the to recess appointees on that have decisions. one decision on which it is enforcing a provision of labor law against the company. the company, knoll canning brings a challenge in court and says this was an action that was without authority because it actually lacked the quorum because the people who were sitting on the board the root to enforce law against me were

unconstitutionally appointed. that is how the case shaped up and it was in the court of appeals here in the district of columbia. there was a big fight between the board and the united states governor representing the border are giving these were valid recess appointments because the senate was in recess despite the pro-forma sessions. the company which said no the pro forma session counts and the defeat the recess appointment powers. it was anticipated there would be a decision by the d.c. circuit on the question of whether this pro-forma is enough of a session to prevent the conclusion that there's a recess. low and behold the decision of the circuit d.c. comes out and the court goes way beyond that question peaden fact it doesn't even address that question. it addresses to much more fundamental questions about the scope of the power that has been around since the beginning of

the republic and the first one is what does the recess mean. remember i said it may happen -- vacancies that happen during the recess? will the courts didn't recess. that is in the cingular so it must apply to only one recess and if there's only one recess that can apply it must be the recess between the sessions of congress, the recess that in the end of the first session and the beginning of the second session. the congress is broken into 21 year sessions and so it must be those intercession recesses and a can't be a recess within a session like when congress takes august off and goes on recess. that is an intro session. recess is in the middle of the year so it has to be only in intersession recess and these appointments occurred in january after the new congress convened on january 3rd which the provision of the constitution requires them to do on january 3rd so it was within the new session and therefore it

wasn't an intra session recessed and therefore it wasn't a recess and it was an invalid for that reason that the only problem of course -- the other problem of course was that the constitution says the president can come from all vacancies that may happen during the recess. so that means that the vacancy has to arise during the recess and it cannot exist before the recess because if it did, it didn't happen during the recess. therefore there are two fundamental problems with these. so by virtue of that decision, the d.c. circuit took what was already quite important question of the separation of powers and the authority to in the senate and the united states and threw into a gigantic question about the separation of power and the authority and part of the reason for that is if one goes back to

american history as one will see in the brief that we file on this case, there were hundreds and hundreds and hundreds of recess appointments that were either intra session in other words not during the break at the end of the session or to fill vacancies that of rose before the senate went into recess and including just to highlight one example, the appointment of july eisenhower as commander of european forces in the summer of 1943. [laughter] that there were hundreds of them so it's going to be quite an interesting case. you can tell from the language i read that there's obviously an argument to be made that supports what the court of appeals did. of course the language i think is also capable of being read to support the historical practice with respect to the intercession and when the vacancies arise. then you have a quite

substantial story and something even interesting about that which says if the historical practice accelerated over time you can see examples even going back to george washington of appointments that wouldn't qualify under the court of appeals but as time has gone on there have been more of them say you have history, how to interpret the language are you going to allocate authority to the president and the senate so quite an interesting case to follow. >> let me make just one tiny little planned and that is a lot and maybe even most of the work done on the question of the intercession and when the recess has to occur is actually done by democrats challenging, including me. i represented senator kennedy challenging the judicial appointments of president bush. we have been to get a lot of republican judges all of which rejected a were arguments.

and now the issues have been completely reversed and are being used. >> i ask if you have an opinion or if your brief addresses -- if the court agrees with the d.c. circuit then what is the affect on going backwards for instance? i think one of the appointments challenged by senator kennedy was a judge sitting on the 11th circuit's. so word that to-1 decisions where he was in the majority now be questioned or -- >> the answer is reconsideration -- >> that's actually not an issue the case presents so i don't think it's an issue that we will get to. it's an issue that will have to be confronted obviously but i don't think it will be wrestled with directly in this case.

>> all right. the next constitutional power? >> okay. the next case of what the limits are on the commerce power to implement treaties. some trees are self executing and some require the congress after the senate has approved a treaty requires the congress to pass a statute to implement its provision. most courts have a case from 1920 to hold that as a statute and lamenting about the treaty then the statute is necessarily valid. the united states concerns the statutes that implements the convention on the prohibition of the development and use of chemical weapons on the destruction. it's a concern with terrorist and the rogue states. the case also concerns the meaning of the 1920 case and depending on the court's reading

it may be another one of the instances where this court overrules a prior decision. these complex constitutional legal issues of rose from a domestic dispute carol found out that her best friend was pregnant and her husband was the father. she flipped out and get >> you're not supposed to do that, right? [laughter] >> she decided to make her friend's life a living hell. she was a microbiologist and so naturally she decided to do this using some chemicals. she took some from her place of work and she ordered some on amazon used in dark rooms piggish she put the chemicals on her friend's car and door knobs and mailbox. she also took some mail from her

friend's mailbox. shorthand at this point she wasn't really a friend. [laughter] >> more an acquaintance. >> her friend suffered a rash on her stomach. apparently these are bright orange and easy to wyckoff but she had a rash and the evidence is that she intended to cause irritation and discomfort but she did not intend serious harm. the friend enlisted -- she asked local police. she didn't know what to do. she asked the post office to set up surveillance and found out that carroll was behind this. at this point you might expect the local police to take over. but instead, several prosecutors got involved.

she didn't engage in activities that a violation of the chemical weapons treaty for. her action didn't involve chemical warfare or stockpile of chemical weapons. but the prosecution charged her with using unconventional weapons in violation of the statute that congress passed to implement the treaty. so she argued that a surprise to her conduct exceeds congress'' powers and enumerated powers and article 1 section 8 and invaded the power to the state under the tenth amendment. she called the statute a massive and an unjustified expansion of the federal law enforcement in the state regulated domain. the court of appeals rejected her argument and said that missouri versus holland of 1920

means that if congress enacted statutes implemented on the treaty then it was acting within its authority. so before the supreme court, she reiterates this argument that the statute is unconstitutional and is such a local crime. she argued that the power to enact a statute to implement the treaty can't bring the power to the disregard of other constitutional limitations. and because she says the government could not have a federal law that criminalize her conduct in the absence of the treaty we can't criminalize her conduct under the statute implementing the treaty. she also argues the statute can be read not to cover her crime at all what the supreme court read it that way than it would

have to reach the constitutional issue. the government found the sound of the scope of the statute that the statute is constitutional because the statute that implements the treaty is constitutional even if it covers some local matters that it wouldn't otherwise address because otherwise the government says it would be hamstrung in negotiating treaties and that confidence of other countries in the united states is a global partner with the underlining. >> the ridgeline if you will. [laughter] >> no comment. it's been a the government also makes an argument now that it didn't make at the trial level and the court of appeals that said it had been waived. the argument is that the statute, the provision of the statute is valid under, dress's commerce walls and is a power to

enact the laws that regulate the flow of goods among the states and where chemicals are sold which these are not illegal weapons. this argument hasn't been addressed in its opening brief because as i said the position has been waived. so it is a pretty bareboned description of the fact the government portrays the case differently and explains the two chemicals used had an ability to cause harm to individuals through minimal contact and that half of a teaspoon of one of them could be lethal while few interested could kill a child. the government says they attempted to place in every 24 times over the course of several

months with the substances on the mailbox and door handles and the quantities to be lethal. so do these additional details affect the answer to the constitutional question? >> the brief explains that she was under incredible stress. her hair was falling out and the news of the affair had a devastating effect on her physical and mental health it was completely out of character for her and these factors affect the answer of the constitutional question. probably not. but the briefs per tree the fact that in a way most sympathetic to their clients even if the facts don't necessarily have a direct -- don't leave you directly to the answer. but the court's decision will probably per tree the fact in a way that is most sympathetic to the outcome that it's going to announce. there were 18 amicus briefs

filed in the brief scheduled for november 5th. >> questioned? >> in terms of the implications of the case, i think it is that a lot of treaties that we enter to there would be some other power that would allow the congress to implement them. but there are some that say treaties about domestic violence and the like that the authority could if congress has the power to implement it has to come from the treaty. >> i will talk about a case involving the clean air act briefly both because it will keep us on time and it is incredibly complicated. there is a case called homer that involve the transport role which is thought much about. it involves downstream air pollution. so we are all familiar with the idea that there may be states particularly in the midwest and the northern part of the country where there is heavy industrialization. there may be coal fired power

plants or industrial plants and the like. and emissions from those plans not only from that state but to other states as well. and the clean air act addresses many things and putting that. and the epa implementing the statute went about trying to figure out how to regulate emissions that go from one state to the other and it's a classic state of why you need a federal law and that is is unlikely to regulate itself to protect another state. and so, what the epa did is it put a series of restrictions on these upwind states on the amount of pollution that could leave that state and would end up in another state. and it's a series of challenges to those regulations issued by the epa and there are the same questions about it. but in general that deals with the question whether the epa can set the rules or the states themselves in the first instance are going to set the rules and also some technical questions about whether the claims were

bought in time in the first instance. beyond the clean air act, i would note one other feature of this case and the knoll canning case. and that is, you will have heard about the curve awful about whether we are going to appoint the new judges for the d.c. circuit and the question of whether it moves the judges or not. and also, the notion the d.c. circuit is the second most important court in the country. that's not because it sits somewhere in it for together hierarchy as the judiciary. it is that a lot of these usually confidential cases involving the federal government are brought in that court to take a recess appointment case that happens to be going to the supreme court involving the nlrb and take the eplf and you can see why it is there are such political struggles over the appointment to that court. let's turn to fair housing. very well. >> if you follow in the earlier season of the supreme court, you know there was an exciting

episode that took place in burlington county new jersey. in fact tom was involved in marketing on that case involving the strip search of a prisoner in burlington county. this is a different type of issue coming from the same location. the county seat is called mount holly and then will say you might say the urban renewal type of program. the town wants to and has already begun to bulldoze a neighborhood called the amount harley gardens and build new housing there. they feel there is a lot of crime and they wanted in the town to improve. but now found hawley garden neighborhood is also the one part of town which is a minority neighborhood and that is not under the federal fair housing law and one cannot discriminate against people based on race.

the question is how do you determine when the protections of the fair housing law go into effect. mount holly, the residence of the neighborhood in that town sued to stop this redevelopment project from going forward and they argued that it violated the fair housing law because the people who were bearing the impact of this development for disproportionately minorities. now under the we the fair housing law and other anti-discrimination laws have developed over the decade there are different ways you can try to see whether or not their protections are triggered. uncertain planned the stopped being fashionable to say we dislike discrimination. we are in favor of segregation and we are going to adopt rules that discriminate against people of color so that stopped being the sort of things politicians could announce on all the law of

course it was for a long time the kind of thing that the question what a rise since they no longer are outwardly declaring that is what they want to do how do you find out if that is really what is going on. if the doctrine that some agencies have developed is known as disparate impact if the policy that the agency is undertaking has a disparate impact on a particular class of people often minority groups, then it may be illegal for them to proceed. the way that this works in practice is at the agency wants to do something they have a redevelopment of this neighborhood. the residents say that it's a violation of fair housing and it has a disparate impact on us and we are minorities and we are getting shafted here again.

if they can demonstrate there is a desperate impacted doesn't mean the project can't go forward. it means the city in this case has to show one wants to do a legitimate goal similar to those compelling interests that we talked about in the affirmative action context earlier and it also has to show there isn't a way to get to the same result without having a similar kind of impact on the group that is also similar to the s concept we talked earlier about the near wing of remedies. so once the city raises the defense and says this is why we have to do it this week even though it is a disparate impact and there is no way to get to the same legitimate goal without having it, then the burden shifts back to the other side and they have to say you are wrong there really are other

ways you can get where you want to go without bulldozing our houses so that is what the third circuit court of appeals said has to happen before mount holly can be believed to redevelop this project. this type of process of hitting the ball from one side or the other has to be examined by the trial court before the city can go ahead with this project. the city has appealed and the arguing for third circuit court of appeals and others to have similar rules to this type of situation have gone at it wrong. it a dose not have to be a disparate impact type of analysis before we can go forward with this sort of project. sure we can have discrimination and we do not intend to target people because of their race. but this type of burden that you are placing on us is not required by the federal housing law or by the constitution the

you cannot go through these hoops before we can complete the redeployment of this neighborhood. and so, the court is going to look at that and has a lot of implications will only for the housing law that for other areas of the anti-discrimination law. possibly including employment discrimination. the same type of tests often rises when you have an employment discrimination lawsuit. very hard to prove someone is intentionally discriminating. so, the majority are going to use the disparate impact as a way to smoke out and in permissible discriminatory actions. so depending on what the court does with it, it could have implications even on housing to employment and other areas of public policy. >> one little vignette about this question is civil rights organizations given the court's conservative some have been greatly concerned about the case is getting it to the court that might produce rulings that they don't favor.

and in this context and in another context, they have worked hard behind the scenes to get the cases to go away because even after they agreed to hear a case it can be settled or it can be withdrawn at to the date that the actually decide the case and there was a case after this one that i actually represented the disparate impact plaintiffs and with the possible and will fund of the federal government which became somewhat controversial that case was settled after the court agreed to unit and then they had taken this follow-on case and there is a fair amount of reporting that suggests there is pressure on the parties of the case to settle it before the justice can decide it as well. >> the settlement in the case would be higher pay to the residents who would be forced to move for the redevelopment. >> the next case is the federal election commission to disclose the office on the amicus brief

supporting the government in the case. as and citizens united, the petitioners are urging the court or partially urging the court to overrule the decision in the area of the campaign finance that prior cases in the 1976 decision in which the court upheld the the congress authority to oppose the aggregate limits on an individual political contribution to prevent circumvention of the one that come specific limits on the contribution to the individual parties. to the aggregate limit is about $125,000 on the contributions individual during the election cycles or individual can attribute during the cycle to the party hacks or individual $74,600.2 year feeling on the contribution per the impact and 48,600-dollar contribution to

this organizations. individual petitions in the case he's a wealthy man that gave a lot of money to the and vegetables and parties during the last election cycle but he wanted to give more. had he given more he would have exceeded the limit. so, he challenged the federal election campaign act are giving along with the petitioners and the republican national committee that the aggregate limit violates the first amendment rights and should be eliminated because the resulting contributions won't be large enough to cause any concern. that's the issue before the court, but the aggregate limits, not the individual limits, but the aggregate limits violate the first amendment. the concern however is the e elimination would allow

candidates and party officials to solicit and accept a very large donations to be shared among the major party and various candidates and committees. the supreme court has repeatedly held that limits on large donations create an important bulwark against corruption specifically the exchange of political favors for campaign contributions. but in the area of campaign finance some members disagreed and the president had shown itself quite willing to overturn precedents in this areas of the prior case may tell us what the outcome should be if you just do the research but they don't tell us what the outcome will be. part of the case is the distinction between the campaigns vendors and contribution. the 1976 case held that the limits on expenditures were

unconstitutional because the was a direct infringement on the first amendment right of the candidate to speak to the highest level of the first amendment scrutiny and the expenditure limits couldn't survive that. the contributions were more like an association as opposed to the speech activity for a lower level of scrutiny and the contributions on the aggregate let's survive the first amendment challenge because they prevented corruption and that is there a quid pro quo. they are asking the court to narrow if not overturned this aspect of the distinction between expenditures and contributions. they say there's a distinction in the case about aggregate limits and not the individual

with the contribution limits that apply to any specific -- to any specific candidates, the amount you can give to any candidate. but the distinction they draw is pretty fuzzy. so if they succeed in that aspect of the case, that would likely oppose a significant threat to the limits on the contributions to individual candidates and promptly see some litigation in that area. the petitioners also argue that they can win even under buckley just because the limits today given other research and campaign research such that these particular limits are not needed to prevent corruption. so the possibilities are that buckley will be limited and at

least some contribution limits will be subject to scrutiny meaning it will have no limits. but we will not be limited to that court will hold these particular limits and don't protect against a government interest in protecting against corruption. bulkeley will not be reaffirmed in the court or will be reaffirmed and pulled the limits protect against corruption. in this area, i don't think that justice kennedy is a swing vote. he is very well defined, long standing views about campaign finance. if bill lovkvist to survive by think that we would probably be looking at justice roberts whatever segment it will turn on whether he thinks the limits actually are needed to protect against corruption.

>> can we turn to the other part of the first amendment on religion? >> this is a case coming from the town of greece, new york and upstate new york and it deals with one of the fuzzy parts of the constitution and that is the role of religion and its relationship to government. the constitution makes no reference at all as a religion in the first amendment which the congress and other branches of government no longer expect the stubble and of religion nor can they make a law preventing the exercise of the religious faith as well. and so even though the constitution itself is it doesn't talk about god and there are these apparent clauses

referring to neutrality between the religion and government we know that the congress and the u.s. congress and many bodies of government began their sessions within the locations and prayers and the prayers and references to god were made by political officials from the beginning of the country through the present day. so it is unclear where exactly the line is and the supreme court has struggled for many years to clarify that boundary. this case is one of those efforts by the court to clarify the boundary between the church and state. the town has a practice beginning with a moment of silence. some may wish it was launder but

they invite the clergymen to say a prayer before the town can deliver its deliberations and the town changed the practice of how exactly it would choose who will be selected and invited but they came up with a system where they would go through the phone book and call the different churches and present the location before the board meeting the call that religious institutions inside the town and there were a couple synagogues that were just outside of the town limits that may have been a buddhist temple inside the town limits as well. but anyway, as a result of

virtually all of the safe leaders who gave the invocation many of the prayers that they gave made explicit references and were more than the sort of generic types of prayers that are less sectarian. to residents of greece attended the board meeting regularly and found the practice objectionable and filed suit under the establishment clause of the first amendment saying that they hadn't gone too far in establishing their religion in the second court of appeals and agreed with them by using, by examining how the town went around and what exactly was being said in these prayers and said that while there wasn't a

bright line across if you look at the circumstances of law school jargon and if you look at the totality of the circumstances you see almost all the prayers are given by the clergy persons and many of the prayers that references to jesus the savior and so on and you look at that and no effort was made to bring in other religions that may be located quite close physically but just outside the town limits. but the totality of circumstances went too far under the 1983 supreme court decision which looked at legislative prayer and said that legislative prayer is okay if it doesn't involve proselytize and more discouraged religion and doesn't serve to advance one religion over others. now, the supreme court has agreed to hear and be examined

at what increase is doing within those limits. just a couple observations before we go on to questions. one is there is an interesting anomaly in the general way the supreme court has looked at the establishment of religion cases and basically, the more i don't want to say trivial but it's the more permissible it is under the constitution because the less it looks like real serious religion and more decorative. i mean it. if another words of the government agencies that depend religious involvement and what they are doing tend to say it's not really serious it's just sort of a cultural traditional thing we don't really mean it because if we mean it, then we are taking a stand on which religion is right and so forth and that of course would be less likely to pass the constitutional muster.

the other point that is worth noting is that where they are on the administration's siding with the town of greece saying that what greece is doing is okay because they are not release the six they have the view that the courts shouldn't get in to examine the content of every prayer and making a list of how many are this religion and that. that is too intrusive and there should be breathing space for the town to decide what inappropriate form of invocation is. and because there is some commentary that has said the obama administration as hostile to religion while in this case and those arguments a couple of years ago they've taken the positions that are very much on the pro religion aside even more dramatically a couple years ago the administration have the supreme court was to reverse and it easy for the religious schools to get tax related subsidies and arizona so for

those in the supreme court they don't seem to have other cases that they've taken another position. they've not consistently sided against religious institutions or pro religious advocates at the supreme court's. >> we have three more cases before we turn to the question in about ten minutes. >> i'm going to not give up a minor passage of abortion and it is an area that fits the bill with areas where justice kennedy must defend the lira and justice o'connor was in a majority of the court and his views had a potential to emerge. the first is about abortion protest. this is about medical health clinics that offer medical or surgical abortion. and you have to step back to the previous president which was

called hill versus colorado and justice kennedy the court upheld an 8-foot floating buffer zone and it means you can approach the person with any certain number of feet. in that case with respect to any facility, a person who is approaching and if you want to say something to them, you have to stay 8 feet away. the supreme court said that was a neutral way of preventing interference with access to health services. so this is a follow-on case that comes from massachusetts. it's a statute that is limited to abortion clinics and facilities that offer abortion and a 35-foot long floating buffer zone that is to say within 35 feet of the entrance of the facility, you have to -- 35 on either side and also the person approaching the facility. you cannot approach and to have a conversation or show them

something. you have to let them proceed from that substantial distance into the facility and the court of appeals upheld 35-foot zone and the court has agreed to review the case and will present a test of the expressive rights of people who want to do abortion counseling or abortion protest in to approach a woman who is going to one of the facilities to offer literature or show gruesome images. there can be all kinds of protests involved. and whether those free-speech rights are entrenched by making someone so far away that they have to shout and the use massive posters. the court of appeals said just said it's possible that they get dressed up as the grim reaper to get noticed and other things that you could do in the context of the buffer zone. so they felt very strongly that these restrictions are infringed

on the right of free speech and then in that previous case of hill versus colorado the chief justice rehnquist who has passed and is no longer the court of justice o'connor has left the court said not possible justice kennedy will have the majority. it is a medically induced abortion case and on the docket but not on the docket at the same time. the supreme court was asked to review the statute that may prohibit the use in a couple of other drugs to have a medically induced abortion in the first month or so of the pregnancy to lead the would be a significant issue of whether it extends to infil the date on that and what the statute may do is say you have to follow the guidelines on the use of drugs or it may

invoke the guidelines and is certain we that the drugs never actually could be used for the medically induced abortion and it's interesting what oklahoma law does and is a rare procedure where they ask what it is that this law does and if the supreme court concludes as a matter of oklahoma law that the statute actually does prohibit the use of the drugs for the medically induced abortion, then the supreme court could take it up and it could present the first real look at roe v wade nurses the so-called partial birth abortion cases and roe v wade on the table for the first time in a while so that case is on hold until we hear back from the court of appeals. a follow-on to the affordable care case on behalf of the

administration may be coming to the supreme court. >> let me just give you a quick forecast on that. this is not an issue that is on the docket yet but we think it is pretty likely that there will be soon and will be decided in this term. this is another affordable care at issue. most people get their health insurance through their employers. one of the things the affordable care act is regulate the terms of those plans to ensure the plans provide coverage for certain types of medical needs. under regulations in the department of health and human services to implement that requirement of the affordable care act one of the things that employer based health plans are going to provide is contraceptive coverage for contraception. now the hhs regulations also gave religious employers an exemption from that, for example of you were a church employer or school employer you have an exemption from it.

but they don't give anybody the ability to opt out. in number of employers who are not religious based employers in the sense that they are not churches or church schools they are regular corporations on the state law and argue they ought to be themselves able to be exempt from this requirement because the religious groups of the company are such that they believe the religious beliefs would be violated with obligations would be violated if they were required to provide coverage as a part of their health insurance to read so the principal argument that the meat is under a statute called the religious freedom restoration act which congress passed some years ago based on its view that the supreme court was not interpreting the free exercise clause of the first amendment in a robust way to get people

protection when they had religious objections to things being subjected to the requirement of the general law like the affordable care at all. this is another when you have to listen carefully to the words which says the government shall not substantially burden a person in the exercise of religion unless the government has a compelling interest and the burden imposed is the least restrictive means so the court of appeals have kind of been wrestling with this and some have come out to say yes actually under the religious freedom restoration act any corporation should be entitled to an exemption to the contraceptive coverage requirements and others have come to the conclusion in the case presents a number of interesting issues. one is a corporation, a person who can exercise religion and

another one is from the contraceptive coverage requirement a substantial burden. the question is it a burden on the employer or is it taking something away from the employee's who might not share the religious belief of the employer. then does the government have an interest in imposing the publication? and is this the least restrictive means of doing so? so that is something to look out for and it's very likely that a case will pop up and beyond the court's dhaka at. >> we have finished precisely when we promised. [applause] >> i will note that you didn't applaud any of this side. [laughter] your side of the bargain is that we get to hear your fantastic question.

>> i was just going to suggest that on the interest of everyone being able to hear everything being asked, we have two microphones on either side. so if you wouldn't mind winning at the microphone if you have a question and will make it easier for everyone to year. >> does the fact of working together working and playing well together with other justices result in decisions that may in the particular cases really fall short of logic and consistency just to reach the magic number? >> well, you know, one justice was the same as we are talking about a rule of five and a that was the justice john clerked for. i would suggest you would answer

that one as someone that has been there. without a chance. [laughter] but thanks for suggesting it. >> when the chief justice roberts famously adds his confirmation hearings and talks about the need for the court to provide clarity and to come together you can look at that in one of two ways. you need to have a broad majority. as we talk about those that are surprisingly 8-1. as we know the supreme court has divided and we used to say the chief justice delivered the part of the of the court and justice o'connor joined part clich except for the ai but including footnote for other than the third sentence to be it would be very difficult for people who are trying to apply the court's decisions to know what the rules

are. so i do think in any collective party including the supreme court there are compromises being made in order to have some kind of rule that people can follow. >> i would just add -- and you don't have to think of that as being politicizing it. they do have different judicial philosophy's. but there is a real imperative that comes together with one rule if they can't do that. and that seems to me a perfectly legitimate in polls to accomplish that. it's much better for the company if there is a rule that comes out of the case. >> if i could add in some of those decisions on what could have been the big cases. justice ginsburg more recently indicated that she wasn't going to be drawn into that again. she was the 1% in the case in june because sometimes there is a compromise to get more people to sign on. but there are sentences that set up the analysis for the future case in ways that make some

people unhappy. i think in the voting right fewg set up the overturning of those important parts of the voting rights act of years later and she's indicated that she wasn't going to concur or join the opinion of the case this year for example because she didn't want to the linen direction. >> the panel has identified some interesting things coming in this term. i wondered if you can tell us about some interesting days. that is if any of us would care to go and watch the supreme court and action but not over the line of her rise in when what we most likely be successful in a shorter line? [laughter] >> so god has the responsibility to argue the most important and interesting case in america.

you should come to my cases. [laughter] >> if you are just not going to get in line for the sake of obamacare or anything like that on the first day of the term, i will argue about whether the security litigation uniform standards act prevents people from filing suit under the state law in texas and louisiana to bring the claims arising from stanford ponzi scheme you remember the international bank the salt $7 billion worth of the certificates of deposits but actually was buying polo ponies and antigua and whether you can bring the lawsuit about that. so that is an interesting set of facts for the technical question of law but that is just an illustration of the fact that nine cases of the supreme court out of ten present relatively ordinary questions in the federal law. what happens is we have

disagreements over the contraception mandate and that is the supreme court's job as they define it. there are conflicts in the court of appeals and the supreme court says we have to have a rule for the country so they take that case and it can be fantastically boring question and it may not even be a hugely important question. but i would say nine times out of ten you can go and see a relatively technical case that will have lines coming out the door. i will say the cameras in the courtroom for having c-span which is here with us today, there are not many seats. there can be as few as 100 on any given day of people are coming from out of town the should right ahead of time to try to get the research. but it is tough and the view is if you see the supreme court in action you will be very proud of them. you won't think they are a bunch of political factors but they are working hard on this question. >> you can look on the web site

similar to the questions are. you will be a good number of those questions and those are the ones you have a better chance of getting into. [laughter] >> there seems to be an increasing politicization of the court. part of that may be media driven. it certainly seems scotusblog driven to get in on the airwaves or something like that. i appreciate you may not be able to pause of the answer this. but i am looking for more of a historical perspective. the court today verses -- and its apparent politicization versus what we have seen historically. >> let me start and then the rest of the panel can join in behind me to the i guess what i would say about that is what is

portrayed sometimes as politics being politicized, what you are really seeing is the operation of different judicial philosophy is at work. there's different members of the court that have different judicial philosophy's. legitimate philosophies that hold them quite deeply. and they tend to drive them in a principled way to different answers of the same question. and it's easy enough to perceive that as politics. but in a lot of times it is in my mind at least not the right way to think about it. that's not the politics. this is a well thought out philosophy about law and the constitution and how to apply it but they don't have the same philosophies of the generates different results. i do know the saying you can say the same thing about the great thousands of supreme courts in the 1930's over the new deal. they've had different members of the court had different philosophies about how you interpret the constitution and the difference you ought to give to the legislative bodies and

what areas and it generates, you know, some contention, some sharp differences. but that doesn't mean that it's politics. >> and i would say that i think in the earlier period of the court it wasn't just political in this order of the sense that there is a line in the political ideologies. the richest actual politicians. i mean, we have it in 19th century what justice hughes ran for president. we had another former president, chief justice taft who was appointed to the court. they're coming you know, there were sometimes justices -- the first chief justice resigned to run for governor of new york. during the new deal era justice frankfurter would continue to advise the president of administration and the justice remained very close to president johnson and would give him advice. some, you know, there are -- there were periods where the court would be even more involved in the actual nuts and bolts of the politics and the

justices, you know, publishing op-ed articles under a pseudonym and so forth to try to implement policies. so it may be one of the things we're coming you know, we always opine for the good old days no matter where we were. so i am not certain that however political that is now it is more political than it has been in other periods. >> i do think i am thinking that maybe tom will correct me but the court seems not hesitant to disregard prior year supreme court decisions not because -- and i wouldn't call that political because they think they are wrong and they are not going to be deterred by with the prior court held whether there was ten years ago when it was the rehnquist court or after years ago and that is why so many cases the we look at we

talk today about maybe they will overturn any number of cases or limiting them or change them in some way. and i think that seems to me different than during my adult life. >> the only other prospective i will give is that you can think of the court is becoming politicized from the outside. that is as the country has gotten more divided and more harshly divided and the supreme court has of the same time tackled these big momentous issues like the affordable care act, the court itself becomes something of a political football. people who don't like the outcome of the given case tend to portray the majority of the case as themselves political actors. where i think the people that studied the court very carefully and follow it i agree with don that people are applying the consistent about the philosophies and acting in complete good faith. ..

as rapid a way possible, consistent to be careful and diligent and really thinking through the legalities of it. as you can see, there are makings of considerable progress in one area or another. >> i think we have time for one more.

>> is that legally possible for the court to say they want to review a case that they have previously decided? for example, citizens united, can they get together and say look, we made assumptions. the assumptions were not ready. can we review this hour do we have to wait for another case to come up so we can review it at that point? and if they can, do you ever see them do it? >> as described, the fight in the perry case about dna and that there has to be an actual controversy. there has to be a person who serves as the denounce. but what you do see the justices doing a signal their interest in reviewing a particular question our president, whether individually addressing my gray that in the later case we might review case x y or z or even the majority might do that. so we are aware of a whole series of precedent that the court has signaled their

interest in revisiting, for example allison talked about buckley versus matteo. they have canceled down the ideas of the contribution of difference between contributions. that's true across a variety of areas. all you have to do is look at the fact that the courts membership changes, you can look at the old 54 decision in think perhaps they try and keep interpretations of law and statutes table. but unimportant question what they might do. [applause] >> they're experts of extremely busy schedules who are passionate about allowed and i am lucky to have them here with us today. thank you all for coming for those of you here all day i hope you enjoyed it. but those of you that the afternoon ticket, i hope you

enjoy that as well. thank you. [applause] >> let me focus on something called advanced persistent threat, both domestically and internationally and relates to what stewart was talking about. there are footprints that are left regarding behaviors that go on out there that are indications that something is going to occur. one of the reasons the changes need to be made in the cybersecurity posture in this country have been made and you need to be looked at in the

executive order and standards in everything else is the need to move to continuous monitoring and after that we need to know to continually be able to look at the precursor for the contacts that for an attacker may do know what those are. a lot of it has to do with a sickly analyzing social media. >> you are never going to defeat the cyberenemy, whether a nationstate, organized crime, any organization by having the private sector check the compliance box. we did all congress wanted us to do. that's inadequate. there has to be timely and continual information sharing within the federal government, particularly the dhs and under the state locals and particularly the private sector. after all, the federal government relies in order to function.

>> blur this week on a house of on the laws governing satellite-tv and copyrighted content. members heard testimony from executives for dish network on the nielsen company and attorneys who work on intellectual property and telecommunications. this is two and a half hours. [inaudible conversations]

[inaudible conversations] >> good morning, ladies and gentlemen. i appreciate you being with us today. we welcome you to the subcommittee hearing on satellite television laws. title 17 of the u.s. code. not unlike the other copyright issues before congress come the circumstances surrounding disputes over our satellite law are exceedingly complicated and important to every congressional district. when it comes to video, i believe there's some board on which we can all agree. americans love to watch television and want to have as many choices available at the lowest possible price. this committee has created three compulsory licenses to make content more available.

while some instances they are served in stakeholders efficiently and affect every. i believe it is safe to say the compulsory licenses are not without their shortcomings. the classic example is when a local sports competition or popular show is suddenly unavailable. you go home looking forward to see that particular show involved which are unable to get it. you're likely to turn off the television and call someone to complain. it's a natural result. regardless of one perspective a member of congress has on issues, we can all learn one truth and our constituents are shy about telling us to do something that deprives them of their favorite shows. as we begin to review -- as we begin this review of the satellite licenses, one of our goals will be to find solutions to situations where the law will

take the benefit of one party over the other. throughout this discussion, our top priority will be to protect the interests of consumers. when there's a dispute and rolling blackout, consumers are left with no recourse. this is an extremely complex area of copyright law and i am pleased by our talented and highly qualified panel of witnesses who are participating in today's hearing. another is to recognize the gentleman from north carolina, ranking member, mel watt for his opening statement. >> thank you, mr. chairman. today is the first of what i will consider the first hearing to reauthorize the extension and localism matter what we call stella, which among other things expanded to 119 licensed through december 31, 2014. enacted in 1988, the satellite

home viewer act created a copyright compulsory license for the benefit of the satellite industry to retransmit distant televisions signals to my subscribers. the license codified in section 119 of the copyright act was originally intended to ensure satellite providers and to foster competition with the cable industry, which has enjoyed a permanent compulsory license to retransmit copyrighted content contained in both local and distant broadcast television's signals and passage of the copyright act of 1976. the intent of providing compulsory copyright licenses was to facilitate men's and new creative works by the satellite and cable industries by

eliminating direct negotiation with the copyright owners with the use of distant signal programming. through the 119 compulsory license, although the 119 compulsory licenses temporary and therefore the focus of the reauthorization, we will be considering, it is part of a complex statutory and regulatory framework governing cable and satellite retransmission of broadcast signals, making it virtually impossible to consider whether to reauthorize the provision in a vacuum. for that reason, the committee on energy and commerce, which has jurisdiction over key regulation and statutory provisions that govern the broadcast market has held multiple hearings in this congress on whether to repeal,

revise our real her eyes still a period four years ago, under the leadership of chairman conyers, the judiciary committee also grappled with a number of issues that had emerged in the marketplace in an effort amplify and modernize what was largely pursed the as an anachronistic regime for the provision of broadcast programming. most immediately, we address the impending trip to shift from analog to digital television. other issues the committee considered a bad time remain unresolved, while new technology she's have further disrupted the market with innovations that we couldn't foresee less than a decade ago. i believe we have a unique opportunity to tackle some of the big issues that will define the future of video.

compulsory license is, i think everyone will admit represent a departure from free-market negotiation and are usually the last result in the event of market failure. when the compulsory license as were first enacted, the cable and satellite industries were in their embryonic stages. today, however, it is estimated over 91st and of american households subscribed to a pay-tv service. so there are a myriad of issues that may be relevant for the duration. for example, these license lives are still necessary to foster competition or should they be saved out as the copyright office and others have recommended? how many consumers truly benefit from this license is?

on the other hand, is a current overlapping web of communications and copyright the functioning in a way that meets the goals of national media policy. it cannot be denied or disregarded that marketplace incumbents, including broad cast through cable and satellite providers and content creators have entrenched interest and investment in a complex framework created by law. what an abrupt dismantling of the structure be unfair to those industries and harmful to consumers? can current law keep pace with new technology she's that seek to exploit ambiguity and the legal framework, for example, what constitutes a public performance for reach

transmission consents purposes. recently, the cbs time warner cable retransmission can vent dispute resulted in a temporary lockout person can dimmers. is that dispute evidence of a broken system or does it reflect a robust free-market? also, how should we address or should we address the nascent online video distribution models that in the future may very well displays the distribution methods altogether? are these internet-based video distribution models to new kids on the block entitled to comparable statutory imposed rights, obligations and prohibitions or is the time for government intervention over? these are all made a few of questions that i think are

relevant in this space. i believe we must determine whether the current regime is working to ensure that content providers and distributors, old and new are appropriately compensated and incentivize no way that provides a competitive environment for american consumers. we have an impressive and diverse group of expert witnesses today with very different views on how the marketplace works and how it has developed and most probably what the rules of the road should be moving forward. i look forward to the testimony today and to continuing this dialogue in the future and mr. chairman, i yield back in thank you for the time. >> i think the chair for his opening statement. now from mr. virginia, mr. bob goodlatte.

>> thank you, mr. chairman. i appreciate you holderness in thank you to the witnesses. the vast majority of americans have relied on cable services for access to a wide variety of good content ranging from a 10 entertainment for families, educational shows for their children, local and national news with information that forms than in public access channels than empower americans to see their local state and federal representatives in action. as the number of channels and sources of video content continued to increase come a growing of americans now subscribe to additional services such as red box on amazon and hulu, about which create their own content. americans are embracing new services to such a degree that society has claimed two new terms. korda shavers and cord cutters, for those reducing or eliminating traditional video subscription. according to the fcc's latest competition report, in addition to free over the air broadcast

content, 100% of americans have access to satellite services. 98% have access to to satellite services in one local alternative and 35% have access to to satellite services into local alternatives. marketplace competition has grown significantly since the last major committee act to beauty in this area in 2010 when congress did the satellite television extension and localism act. there are three compulsory licenses in title 17 impacting this industry. one of which expires at the end of 2014. this committee will consider the next year whether he reauthorization of this compulsory license is warranted. however, as the written testimony for this hearing demonstrates, some interested parties are advocating to congress to advocate more than a simple reauthorization and look at other matters surrounding the video marketplace and competition policies that appear

to have become more prominent recently. one core factor that this committee will way is because it are these important issues is ensuring that copyright owners to maintain the right to distribute their intellectual robert diaz shoes. this committee has traditionally disfavored compulsory license is although their are three in effect today in this marketplace. another core or we will play is ensuring competition in the marketplace. consumers and intermediaries benefit where there is robust competition. as a committee of jurisdiction for competition policy, after it's about competition issues deserve the committee oversight and ongoing attention. the written testimony the witnesses here this morning highlight importance of both issues to the video marketplace. as the committee continues oversight and legislative act committees, a word to hearing from all interested parties about their dissent concerns and i thank the chairman daniel

that. >> i thank you, chairman goodlatte appeared to recognize the distinguished gentleman from mr. john conyers, ranking member on the statement. >> thank you, chairman. the satellite television extension and localism act as all of options that we have witnesses to distinguish. i want to thank the chairman for keeping the witness list down to seven. i understand we ran out of tables and we weren't able to put on any more people than are here. i want to consider these options and i look forward to the witness testimony. two considerations.

one about copyright owners and the other about consumers. we must protect copyright owners because it is there property that forms the basis of the entire scheme. compulsory licenses are generally not favored because they distort the marketplace and results in below market rates being paid to content owners. second, we must enact policies that protect consumers and safeguard competition. consumers benefit from increased competition because more competition usually produces lower prices and copyright owners do not benefit financially from retransmission

consent agreement, which is at the heart of these disputes, despite the fact the signal only has worth because of the programming contained on the signal. and so, i think we must focus on principles of localism, people who subscribe to cable or satellite television have so many options, there's never a shortage. people still highly value their local news, their local sports and needs local channels to deliver community service and emergency information. and localism in the traditional network of affiliate relationship also benefits copyright owners by allowing their programming to be publicly

performed in every market across the country. now i conclude by observing there will be circumstances in which these principles will conflict. i look forward to working to ensure the public interest can best be served through satellite carriage of broadcast television signals. i thank the chairman for allowing me to make these few brief remarks. >> thank you, mr. conyers. appreciate that. we have a distinguished panel before us today now begin base during the wit is. if you would please rise. do you swear the testimony you're about to give us the truth, whole truth and nothing but the truth so help you god? let the record show while witnesses concur with that. i will now introduce our panel. we appreciate everyone's

attendance at this very important hearing. our first witness today, mr. paul donato, research officer is responsible for overseeing the development and evaluation of research while also serving as liaison to his clients and industry associations. he received his ba in psychology and sociology from the state university of new york at stony brook. our second brightness, mr. stanton dodge, general counsel for dish network. mr. dodge is responsible for all legal and government affairs, for dish and subsidiaries. he received his bs in accounting from the university of vermont. the third witness is mr. gerald waldron, testified today on behalf of the national association of broadcasters. with mud and 25 years experience in law and public policy as practice focuses on education and technology. mr. waldron received his degree

from the university of virginia. chairman goodlatte now has permission to introduce our next witness. >> thank you, mr. chairman. it's my pleasure to welcome our forthrightness and my constituent, mr. earle mackenzie cut executive vice president of chantel cabal, testified on behalf of the american cable association with 35 years of telecom experience, mr. mackenzie is responsible for daily operations of many subsidiaries. he received his ba in accounting from the college of william and mary. earl, welcome. we are delighted to have your testimony as well. >> i thank the chairman. our fifth witness today, mr. james campbell. mr. campbell is responsible for the company's regulatory and legislative affairs and received his bachelor's degree from santa clara university. our six witness is mr. robert garrett, who has testified today on behalf of major league baseball. mr. garrett joined 1977 and has

served as outside of two major league baseball copyright and telecom issues for more than 35 years. mr. garrett attended the northwestern university. our seventh and final witnesses, mr. preston padden with extensive career, served as former president of the abc television network and former executive vice president of the walt disney company. he received his b.a. from the university of maryland. welcome the wall and we will start, mr. donato, with you. you'll be the leadoff hitter. as is obvious to all, this could take a long time. we try to apply the five-minute rule. when that gray light turns to member come investors signal. you have a minute to go. at that point, we would appreciate you to us as well.

if you will respond to our questions, that would be helpful as well. so mr. donato, when it started soft click >> thank you, my name is paul dinardo in an executive vice president chief research officer for nilsson. i thank you for the opportunity to join today's panel, commenting on the role of satellite transmission statutes such as stela. nelson is the media market company that measures the people watching by an hundred countries worldwide. in the united states were widely known for our measurement surveys. the nielsen providers of broadcast, cable and satellite programs. over the years nielsen has innovate technologies allowing us to expand measurement services to include computers, tablets and smartphones. through these technologies and our panelists, nielsen has the capability to measure consumer

habits, and how consumers utilize social media. our audience measurement reports are relied on by a range of public and private sector stakeholders to facilitate business transactions engaged consumer trends. nelson's dna varies by the federal government to define market and satellite television retransmissions statues. most discussions of stela began with a conversation that will be the focus of my testimony today. the designated market areas is a collection of counties, which share predominant spewing to broadcast station's license to operate within a given standard metropolitan statistical area as defined by the omb. her dominance or dominance is to find to indicate that for a particular county, homes may be of broadcast stations licensed to operate from different but genuinely nearby metro-area spit

the dna with the predominant viewing his broadcast stations have a higher share of audience for that county. so mr. with the metro area such as new york or los angeles and can you through the 2001 dna markets in the united states. each marched using data collected from homes or at the last year, existing dna regions are tested in order to verify the dominant share of each dna county continues to be from broadcast station licensed to operate from within that same home metro. all assignments are based on shared household tuning between 6:00 a.m. and 2:00 a.m. sunday through saturday and while this is the basic premise behind the dma, durables which is up for exercises the predominant view in to be shifting. these rules try to balance the need for stability and television markets. at the same time, they need to assure counties are assigned to the dna were the highest broadcasting occurs.

for example if larger county sjostrom its current dna family to broadcast stations from another dma, the ship must be significant and occur for two consecutive years. nielsen institute of the sub by system in the 1960s to measure the number of viewers in a particular area were specifically to connect sellers and buyers of advertising. the dma allowed for the creation of a market where buyers and sellers of local television advertising could do business with each other based on impartial information provided by a third party. advertisers need to know their direct to the audiences they want to serve. the tv advertising estimates in q1 of this year with almost $18 million. with an estimate of $72 billion for the entire year. that is a market that feels the great entertainment and news programs this country produces and watches. ..

it was a decision was made entirely by congress. finally, as you work to learn more about the future trends we

would be happy to assist you in any way we can. if thank you again for the opportunity to appear before you and i look forward to any questions. >> you beat the elimination of the red light. needless to say, gentlemen come in your statements will be made a part of the record. mr. dodge. >> mr. chairman, ranking member conyers and members of the subcommittee i appreciate the opportunity to testify today. i am the general counsel of dish network. the nation's third largest tv provider with 14 million subscribers and 25,000 employees. the only provider for the telephone service and 210 local dna is. the innovations included the consumers can use to upgrade the trice and control over the viewing experience. billions of dollars a year for the right to distribute programming to subscribers and

fully support the fair compensation to copyright holders. as a sub committee examines the video marketplace we believe the outdated laws need to be updated comprehensive flee to reflect changes in the market and help consumers view their content. public policy should support the preservation and expansion. distributors offer the technology and some programs are again across dewolf saying this time it's real and the onslaught of innovation. the challenges to the dvr are an example. we believe consumer choice and to preserve and expand it i want to make three points. first, the congress should protect consumers against the problem of blackouts caused by the transmission consent dispute. the proof is in the numbers. there were 12 blackouts and in 2011 there were 51. in 2012 the number was almost 100 the piece is yet to level off. so far we have had 84 blackouts

which puts us on track for the record-setting year of 120. making matters worse the length of the blackout and number of consumers impacted our increasing. the consumers are the victims of these negotiations. the programming gets pulled by the broadcasters and the monthly bills go up. an increasing concern some broadcasters are coordinating their negotiations with each other and colluding rates that the demand from the video distributors like desha. the american television alliance coalition whose membership encompasses cable, satellite and telecom providers independent programmers of public interest groups and which dish is a member is unified and pertains to the outdated the transmission consent rules as a part of the stellar reauthorization. we and others in the industry proposed among other things the local network station is pulled from a consumer deutsch to the transmission consent dispute the video distributor should be able to provide another market networks signal. the broadcaster who stood will support it would be compensated under the established royalty

rate in this reform will look least allow consumers to keep their network programming while negotiations continue. at the broadcasters' local content is valuable as the research and the import is a poor substitute them both parties will continue to have every incentive to reach an agreement. importing the signal during the blackout simply fills the void for the network programming. second, living under their areas of especially benefited from the predecessors. among other things, it allows americans residing in predominantly rural areas to receive the network signals for any missing stations in the market. the distant signal license in the 2014 and without reauthorization 1.5 million american households will be disenfranchised. third, in the three years since the last three authorization the video industry hasn't been sitting still. consumers can and want to watch news, sports and entertainment on the go and high resolution screenings using increasingly high resolution screenings on

the m smart phones and tablets. over the years - has done much to respond to preferences and the rate to make a significant investment in the market to satiate the consumer's demand for increased mobility and flexibility consuming video. in summary we believe the government should work to ensure the competitive reality of the expectations and advance in technology. thank you. i look forward to answering any questions that you may have. >> thank you mr. dodge. i commend you as well for bringing the eliminating white. good morning, chairman, a ranking member, chairman good luck and a ranking member conyers and members of the subcommittee. my name is of gerar. as the committee reviews the committee of stella we urge you to keep in mind to principles.

first, freed locally broadcast television should remain available to american households. second, the review of stella should not be used to create new exceptions to the copyright law that undermine those contractual relationships between broadcasters and satellite or cable companies that enable broadcasting of the global focus. why is localism so important. for broadcasters, localism is coverage of local news, severe weather and emergency alerts, a school closing, high school sports, local elections and public affairs. localism is for the charity, said the organizations and defense that helped create a sense of community. our broadcast stations are also the way the local businesses educate and inform the public about the services, and in turn create jobs and support your economy. there is no doubt that the viewers coming to our constituents can rely on our

service. broadcast television remains unique because it is free, it is local, and it is always on. even when other forms of communication may fail. as a threshold matter, the subcommittee should ask whether the expiring section 1196 license continues to promote localism and whether it is in the public interest. it could be argued that the distant signal license served its purpose in 1988 when the lack he lured satellite industry was just getting started and that it served its purpose again to direct first launch small receiver services in the mid-1990s. but in 2013 when the dish and direct tv or two of the largest three providers in the country the distant signal license is a vestige of a bygone era. today over 98% of all u.s. publishing house holds confuse the local network affiliates by satellite and that number is

growing all the time. no public policy justifies treating satellite subscribers and local into local markets as undeserved. which would deprive the viewers of the benefit of the locally focused service. as dish has demonstrated, there are no technical reasons for failing to serve all the markets. accordingly, the subcommittee should continue to encourage the localism and consider whether the section 119 license should expire. in re-examining stella, you are likely to hear from those seeking enactment of exceptions to the copyright law that would undermine broadcast regions mission consent rights. let me be clear, arguments the broadcasters have to much leverage and the reach transmission consent process or that we transmission fees are directly responsible for the rising cable bills are wrong. local broadcasters and pay tv providers both have an incentive to complete the transmission consent negotiations. and for that simple reason, they

always do. before any disruption to the viewers ochre. there are exceptions, but they are rare and in fact the disruption from three transmission consent represents one one-hundredth of 1% of all annual u.s. and television viewing networks. put another way, consumers are 20 times more likely to use television programming because of a power outage than because of debris transmission consent. furthermore, in the small number of instances where these negotiations have resulted in disruptions to the consumers, there is one distinct pattern, the involvement of time warner cable, directv and . since 2012, these three companies alone have been the party to 89% of all of the disruptions in july. contrast to what some suggest, it's demonstrated across numerous economic studies that

free transmission consent payments are not responsible for high and rising paid tv prices. just 2 cents of every cable build dollar goes to the broadcast and that is true in spite of the fact that during the 2011 season, 96 of the top 100 most watched prime time programs from broadcast television. last, the committee should understand that the rate transmission consent negotiations on a lot more than just these. increasingly, these negotiations conclude our discussions about how we can distribute our content across a variety of the platforms such as hulu. local broadcast constituents rebuff from the pay-tv industry to expand the narrow examination of stella to give them an unfair leverage a market base negotiations. thank you for the time and i look forward to the question. thank you mr. waldren.

>> since it is a wireless service -- >> your microphone isn't on. >> sorry. good morning. we offer wireline and wireless services to residential and business customers and smaller markets and rural areas in the atlantic region. as a smaller world provider, our cost per subscriber or greater. however despite the cost, we still provide our customers the scene service enjoyed by the urban customers. it's a challenge that isn't made any easier by certain laws and rules that govern our business. for example, one of the simplest issues i raised for the committee today is the competitive disparity that stems from the fact certain laws governing satellite tv industry are three of the price of every five years. the cable industry does not benefit from a such periodic review. in fact congress hasn't made a broad legislative change to the rule since the 1990's. if the congress wants to conduct such a review, one set of rules that has worked and should not

be changed is the cable copyright license. it continues to serve its goal and compensating the copyright goals with the reach transmission of their work. many stakeholders agree no sycophant change to the license as necessary to get the congress were to reveal the license would be very burdensome for the cable firms to anticipate all of the copyrighted works that we need to be clear before they are ireton the broadcast stations. moreover, the repeal would create uncertainty in the marketplace for us and for our customers to be sure the congress reach a different conclusion any change to the existing license must coincide with the reforms to the broadcast carriage rules such as free transmission consent because they are legally intertwined. there are a number of specific problems related to the outdated rules and the commission's governing the cable the industry. particularly the transmission consent that are covered in my written testimony. but with limited time i will focus on just the two that are direct relevance to the

judiciary committee. this committee should be aware that there are dozens of instances where separately owned broadcasters in the same model or polluting against the cable operator with their negotiations to be transmission consent. typically this means to broadcast nations with exclusive marketing rights that are protected by the government use the same negotiator to conduct the negotiations. available evidence shows this anti-competitive broadcaster raises the speed between 22 to 160%. in the end, these costs are passed on to the consumer. the practice of coordinating the reef transmission consent negotiation is widespread. occurring at least 20% of the tv station markets and its increasing. this year there has been a number of broadcast station mergers and acquisitions that could result in even more coordination of free transmission consent negotiations. if you share my concerns, please inform the department of justice

to be another area i would like the committee to consider are skyrocketing sports programming fees to be this amazing in the past few years as a destructive more than $110 billion from broadcast and cable-tv networks and there is no end in sight. these networks did extraordinary amounts because they can pass those costs on to the paid tv providers and other customers. not surprisingly, espn, the sports networks and the big four broadcasters are aggressively hiking their fees. in the end, the consumer shoulders these costs. one part of the sports programming problem is rooted in a 50-year-old federal law of the antitrust exemption to the professional sports league when they are negotiating their tv programming deals. however, like the real transmission concern, sports programming markets have changed significantly since jfk was present. but the rules have not.

while that makes sense -- it may have made sense when it was passed in the antitrust rule in 1961, the dominant market power no longer justifies this exemption. mr. chairman, it's clear that there is a host of issues that need attention. given the significant changes in the marketplace, i hope the issues that i have raised here will be taken into consideration as a part of the reauthorization to the satellite tv license. thank you for the opportunity to testify. >> thank you. mr. campbell. >> jess remember conyers thank you targeting central bank the opportunity to testified before the subcommittee as a relatively new entry into the video marketplace. i would echo mr. dodge's testimony that centurylink isn't trying to avoid paying a reasonable cost, rather we see a fair set of rules by which cannot be unfairly leverage against both consumers and entrance like us.

to give you background century link is the third largest telecommunications company in the united states offering voice, video and data and over 14 million homes in 37 states and businesses in all 50 states and select national markets. we offer cybersecurity solutions to the federal government and multiple state and local governments and as a result of our rica recent acquisitions one of the largest cloud computing and hosting companies in the world. only recently over the past five years have we gotten involved in the competitive video market, launching a fully digital ipt product and multiple products including las vegas, phoenix and central north carolina. and i tell you consumers benefit from robust competition. in the form of better service quality and in the form of more innovation, more investment, and ultimately lower rates. but unfortunately the cost of obtaining broadcast content has threatened the consumer's

ability to get any of these benefits. the current regulatory regime was created in an environment where the federal lawmakers were concerned about market abuse monopoly and incumbent cable operators. as a result over the years, lawmakers have kind of skewed to regulatory and adjust for broadcasters visa fi their relationship with pt keith providers to get a local broadcaster because of the tie down other arrangements can force feed on wanted content to providers regardless of the consumer demand. number two, a provider has no other alternative to obtain this content in most of these markets. third, the fcc's application and interpretation of the good faith standard has rendered it really meaningless given the defacto power to the broadcasters and read transmission consent negotiations. in addition, the regulatory regime has been stated didn't

complicate the explosion of the video competition from a myriad of industries. on incumbent cable operators no longer have a monopoly in the market. and while the current rules create problems for the larger companies, they impose additional burdens on the new entrants like centurylink. every customer we did have a relationship with another provider before the come to us. we have to win every single customer that we sign up. that's capital intensive, and it's for that reason we can't simply just take whatever the broadcasters demands are to be in the case of a blackout, and i know that broadcasters and use this more frequently, there is little harm to the broadcasters if the signal is lost to be a tremendous amount of harm to a company like centurylink as we try to provide competitive service. unfortunately the reach transmission consent fees are providing a windfall not to the local stations but to the national networks.

the original intent of the rules to provide a safety net for the true local stations to be it's not the case anymore. the project we transmission fees will increase to $6.1 billion in 2018, up from 2.4 billion in 2012. that is the to hundred 50% increase. and that is all at the expense of consumers. congress has an opportunity as part of the stella reauthorization to reform and rebalanced the negotiation process regarding the bet transmission consent marketplace. the reason the congress conferred significant regulatory advantage to the broadcasters no longer exist. centurylink favors the the regulatory approach where our consumers could receive national content from adjacent or alternate markets during the tendency of negotiation to the breakdown. this is good for two reasons. number one at rebalanced the negotiation process where both parties have a little bit more leverage at the table and never to, most importantly, it doesn't

punish consumers for to providers failure to reach an agreement. at the end of the day it's not about winners and losers. it's about protecting consumers who bear the biggest brunt of the regulatory problem and ensuring the future of the competitive marketplace and the video marketplace. again come thank you for the opportunity to testify. we look forward to working with the committee to try to enact and enable consumer oriented legislative reform. thank you to read >> thank you mr. campbell. mr. spiegel. >> thank you mr. coble. let me summarize that testimony was three brief points to that first baseball is a major stake in the revisions of the copyright law that affect the television programming. in putting cable and satellite licenses. baseball has member clubs are copyright owners and a substantial amount of the very entertaining and very valuable television programming now offer

their fans access to approximately 5,000 copyright telecasts of major league baseball games each year. i do not believe that there is any single copyright owner and the vehicle that provides the american public with more television programming in major league baseball. second, the vast overwhelming majority of baseball's telecasts are provided to cable and satellite providers pursuant to those negotiated in the free marketplace giving it and not pursuant to the compulsory licensing. there is no reason satellite carriers or cable systems or anyone else require a compulsory license to provide major league baseball telecasts or any other broadcast television programming. satellite carriers and cable systems negotiate every day to offer hundreds of channels, tens of thousands of hours of non-broadcast television programming. we believe that they can do this and to offer broadcast

programming including the telecasts of baseball games. furred and finally, if congress nevertheless chooses to reauthorize the section 119 compulsory license, baseball has one simple request. and that is adopt a mechanism to ensure that satellite carriers and cable systems at the very least pay fair market value for their compulsory licenses. according to the sec, cable systems arrive more than $67 million in revenues by selling access to video programming. compulsory licensing royalties amount to less than one-half of 1% of those revenues. one-half of 1 percent for the most valuable and most watched of all the programming cable systems that are offered. satellite carriers also pay less than one-half of 1% of their revenues for their compulsory licenses. the video revenues amounted to

approximately $36 billion. the compulsory licenses in 2012 amount to approximately $87 million or about $10 million less than when congress last renewed the section 119 license. the current satellite rate is the same as an independent panel of arbitrators determined to be fair market value in 1997, 16 years ago. there is simply no justification for requiring copyright owners to subsidize the low market rates. the major corporate entities that dominate the cable and satellite industries. baseball believes congress should authorize the copyright board to set the rates for the broadcast programming under the cable and satellite compulsory licenses and the copyright board also should be authorized to adjust those rates periodically so that they continue to provide fair market compensation to the copyright owners.

thank you mr. chairman. baseball looks for to working with you and your subcommittee on this in part a matter. >> thank you, mr. garrett. >> chairman goodlatte and ranking member conyers my name is preston padden. i am one of the living souls in the history here to implore you not to just kick the can down the road again. it is long past time to repeal the satellite and cable compulsory licenses and the robert goldberg like statutory regulatory system that surrounds them. as the former president at an abc television network, i know how tv program rights are negotiated. i promise you the earth will continue to spend, consumers

will continue to have access to tv and all sectors will continue to thrive without the compulsory licenses and without the associated fcc rules and without real transmission consent. in 1976 when the cable tv industry was in its infancy, congress granted cable an extraordinary exception for the normal copyright principles. a compulsory copyright license to distribute the programs on broadcast tv channels. the fcc adopted rules including the network and on duplication and syndicated exclusivity to limit the market disruption caused by the new compulsory license. in 1988 the compulsory license was extended to satellite. then in 1992 congress enacted read transmission consent requiring a marketplace negotiation between broadcast tv stations and cable and satellite distributors. a negotiation that is the functional equivalent of the

negotiation that would have been required if the compulsory licenses had never been enacted in the first place. when others argue the compulsory licenses are essentials, please consider this: every day hundreds of non-broadcast tv channels, channels like discovery, the history channel, usa network, bravo and hbo get distributed to nearly every man, woman and child in america without any compulsory licenses. and without any transmission consent. they get distributed because of the general owner and cable and satellite systems have an old-fashioned, simple copyright negotiations. there is absolutely no reason why the broadcast channels cannot be distributed in exactly the same way. when the satellite license was adopted in 1998, it provided a sunset. and it expressed the expectation

that a licence would be temporary and would be replaced by market negotiations. instead, the license has been renewed for times triet -- four times. the study did the need for the license. in 2008, the register released that study calling the cable and satellite compulsory licenses, and i quote, arcane come antiquated, complicated, and dysfunctional. not exactly a ringing endorsement. when you renew the satellite license again in 2010, you directed the copyright to prepare a more specific report to congress. proposing mechanisms and methods for the phase-out and eventual repeal of the cable and satellite compulsory license. and you asked to register to propose marketplace alternatives. the register issued that report in 2011 concluding that the compulsory licenses are and i quote again, an artificial

construct for an earlier era. the register further recommended that the contract set a date specific trigger to ultimately repealed the license. i want to close with what i think are three simple truths and first the compulsory licensing are not necessary in these markets. second the broadcast channels absolutely deserve to be paid by the satellite distributors who want to sell their programming to the consumers. and lastly local broadcast channels are no more a monopoly than oregon on broadcast channels like aamc, time warner cable sports network, bravo and discovery. thank you very much. >> i want to thank the witnesses for your testimony. stay within the five minute rule. we try to apply the five minute rule to ourselves as well so if you can become a we would be

appreciative of that mr. garrett how is major league baseball working to make its content available in new ways with advanced technology. >> mr. chairman? >> major league baseball offers approximately 5,000 telecasts of the games to consumers each season. that is virtually every single game that is played during the course of the season is made available through major league baseball staff they do it in a variety of ways. the debate over national broadcast television networks such as fox. they do it over a myriad of local broadcast stations and regional sports networks throughout the country. and over several cable networks including espn, pbs and major league baseball network's. they make a number of these products available either out of market packages that are carried

by cable systems and subscribers -- and satellite carriers to almost 67 million households across the united states. ..

what would be the rurlt -- result if section 119 simply expires. which i think is december of next year. >> my recommendation that congress provide a short transition period to allow the broadcast industry to get it rights in order, then repeal all of these licenses. all that would happen is the broadcast programming would get distributed exactly the same way the nonbroadcast programming is distributed today. with the stationing as a rights

aggravator. >> i still have time. anybody else want to weigh in? >> sure. i think what what he suggested is similar to a bill proposed by representative at the energy commerce committee. it it's one potential option worthied of gay. we're thrilled that there does appear to be recognition there's a problem, and should be a debate. >> if i may add, i think the section 119 license expiring, this committee could advance a debate by actually getting a number as to how many people would be affected. i would suggest that the committee ask the satellite carriers to submit a certified number is to how many people today are getting the signal. in the past we've heard 1%. we've heard 1 headline. we don't know the number. if the committee would get the information, you would actually have -- we could have a serious debate is it distancing the license worthwhile to extend for the

small number of people. there may be some cases or special circumstances which justify it. right now we are all in the blind alley. >> time for one more comment. in response to that it's true less and less folk unveiling themselves it's an important group of rural and underserved americans. for example short -- market that doesn't have a fox affiliate license allows it to import those stations networking programming to those folks otherwise have no access. >> we wop has -- would be happy to have a conversation and areas there's a spot problem. we do not know what the nature of it is. that actually would be a helpful step in promoting legislation. >> how many people use it? >> the estimates i've heard are one to one and a half million consumers. >> i see it appear.

i recognize the distinguished gentleman from north carolina. >> thank you, mr. chairman. it's become policy to defer until the end of the process. so i'll defer to mr. conyers and go last. >> thank you very much. could i begin our discussion -- and i thank you for the variety of views presented. but do you believe mr. doj and patent that congress should do more than reauthorize the distant signal license? anyone can -- >> i'm happy to go first. as i've said. i think this is one government program you can retire.

it was enacted. the licenses were enacted before there were not broadcast channel. they only apply to the programmingen the broadcast channel. so you hundreds of other channels distributed nationwide with no muss or fuss through normal copyright negotiations. i think that proves that you don't need these licenses anymore for the broadcast program. >> to address that specific point. i believe there's a difference between cable channel and the local broadcasters. the -- the local broadcaster received initially billions of dollars for free under the promise there would be steward of the spectrum and further propped up by rules such as miscarry, nonduplication. that the cable channels don't have the benefit of. to your specific question, ranking member conyers. we think the satellite agent

should be reauthorized so the current beneficiary are not disfranchise. further we think there are two reasonable zone of expansion. one of which is fixing the broken consent system as it stands today. every time around this year the folks in the southwest county in colorado starting asking the question why they can't watch the broncos. the reason is in the al bee qir key. >> do i sense there's a little space between your responses? [laughter] >> yes, we are good friend. >> we're all friends here. ranking member, conyerss. the committee asked the expert education register copyright to study the licenses and their report said it. again, i'll quote there are

antiquated, complicated, and dysfunctional. i can't imagine why you would want to continue such a program. >> i want to give you another chance, mr. dodge. what are the targeted fixes that the american television align, atva is calling for to the retransmission consent rule as part of the reauthorization? >> well, prin belie there are two. the first of which is one we favor which is allowing video providers to import a distant signal on an interim basis during the dependency of retransmission dispute the broadcaster taking down the program. the other would be some form of stand still where the programming stays up and the parties would be interbyning baseball style arbitration to reach a fair rate.

in each of those cases the consumers install access to the programming. and the reciprocally, the broadcaster would have an incentive to negotiate as would provider because the distant signal is an imperfect solution. >> would you add to that mr. walid rein? >> i think it's clear there are thousand of cable systems in america. there are thousand of broadcasters in america. and the vast majority of time the system works there's a marketplace. there are marketplace negotiations. the fact is as i mentioned in my testimony. there's an increase in disruptions and all involve three companies direct tv, dish, and time warner. we see it as a manufacturing crisis. that they are deliberately going and playing the game, frankly, in order get the committee to pay attention to the issues.

we actually think the strays majority the system is working. with respect to the suggestion of a stand still. there's another way of putting that. they get to take my copyright without permission. that's a stand still. i don't want to give them transmission consent. they get to take it because they were taking it before. i don't want to get it to anymore. that seems rather contrary to our copyright tradition. it actually would not be something congress should endorse. >> can i add? >> yes. >> in evaluating the request made by the cable satellite industry for a stand still provision, i think you should consider the fact that the cable industry just went to court and successfully defeated a stand still agreement in program access disputes. they went to court and got rid of the stand still when they didn't want to carry something. now they are back here asking you to enact a stand still

against the broadcasters. >> may i? >> the last comment -- >> thank you, ranking member. companies that he mentioned are very large. we're a new entrance to the market, and, you know, i would suggest that often the larger companies play the negotiation against smaller company like centurylink trying to compete and win customers over. without any leverage at all the, we are the ones getting kind of swallowed up in this thing. it's going stifle competition, investment, and innovation. the other thing, the broadcasters often threaten to blackout it's unlawful for any provider to not carry the signal during the sweeps week, which is the week that broadcasters get the ratings and make the advertisings. that's the one week. >> i can get thirty-second more? >> thirty seconds will be

granted. >> thank you. i want to address one point 90% of the blkout are caused by three entitieses, my company included. i guess that's bit in the eye of the beholder. 100 of the blackout are caused by four companies abc, nbc, fox, and affiliates. if you look at the fact it's not surprising that dish, direct tv, and time warner cable represent 90% of the blackouts because, one, with e represent 50% of the marketplace for paid tv today. the other 25% is comcast, which owns nbc. and 25% is mr. campbell. in in ways dish, direct tv, and time washer are the only folks able to negotiate effectively with the broadcasters. they are fighting for consumers to lower prices. >> thank you. >>. >> distinguished. >> thank you.

i have a number that usually live in a rural area. a goodies assistance from the market that they're in. and closer to another market they prefer to receive the broadcast signal from or the retransmission. i wonder if you might just elaborate on that. these are often lots of people living in rural areas who are 75 miles from the d.c. market but 25 miles from the small harrisburg market. generally there's a few markets which that kind of a situation happen. the dna is what it is. it's created to reflect the viewing of people in that county. so that particular counties you're talking about as i said in my testimony, the predominance of viewing is actually to the home market currently in.

again it was developed as a mechanism to define a geography in which television signals are viewed; therefore, local advertisers would be able to use local televisions and support local television. should they be adjusted? >> we have a -- >> every year we go through. and evaluate the viewing from for each county within the dna. it is perhaps a little bit conservative in you have to have a statistically significantly change two years in a local before we move the county over. the reason for that is the need for stability in the marketplace overall and the advertisers' behalf. there's always better ways of doing things. we general treat these situations on a case by case basis. we often meet with congressman when in their direct. there's a issue when we describe what the numbers are. and so it's a system upon which

$40 billion advertising has been successful. >> let me interrupt you. i want to ask a couple of other questions that are broader. before i do that, i want to ask mr. garrett if he wants to spend to mackenzie's. it should be eliminated? >>. >> mr. chairman, i actually don't have a response. there's nobody that comes to me that ask for advice on antitrust law. my focus is on a copyright law. with copyright policy. and >> in light of that i'll cut you short and ask if you work with and represent people who might have -- >> absolutely. >> and if they would submit that to the chairman of the committee in writing. i would be pleased if the chairman would share that answer with me. >> absolutely. let me ask the member of the panel. what is the -- responding to marketplace

disputes? in order resolve this should congress set general guideline for the market lace to follow? should it set detailed requirements that all participates must follow. and as an adjunct are there ways for business to resolve without disrupting the consumers' rely upon satellite and cable services to access for video content. i gave you a shot. i'm start with mr. dodge and work our way down. if we have time i'll get back to you. >> i'll take the second question first. the way for avoid consumers being disrupted is one. -- mechanism for a stand still. and, you know, i have to say i'm not familiar with the niceties what they have and haven't been struck down over the time. the fact of the matter is, if the broadcasters are going sit here and wrap themselves in localism as a justification for 99% what they're saying, why do they want to take the signal down and disfranchise

consumers. leave the signal up. we're not saying we're not going pay. we gladly will. >> keep moving. limited time. >> two points, one is that congress actually widely decided in 1992 to essentially have the marketplace settle the issues. secondly, where there are problems, frankly, consumers should have more choice. it's sometimes difficult to change your providers. there are news reports that people want to change the time warner. nobody was answering the phone. there are cancellation penalties in the like nap actually would enhance the marketplace competition. >> mr. mackenzie? >> i think our position is . >> hit the button. >> our position is general guideline would be better than specific guidelines. mr. dodge come up with two idea. the distant signal and also kind of the blackout. the distant signal doesn't work for the cable industry. we don't already have the content.

lite already has the content and quickly move it. for us it would be building fiber and trying to get if off. which would be impossible. preventing the blackout while leaving the signal on while we negotiate would be preferable. >> not to repeat what has been said. i agree with them. >> hit the button. >> it's not on? >> much better. to return the negotiations to actual free market negotiation. we hear a lot about the thumb on the scale in favor of one party over the other. we don't seek have the thumb put on the scale in our favor. we would rather it removed from the other side the negotiations become free market negotiation. the world changed a lot since 1992. >> thank you. mr. garrett? >> our major league baseball standpoint they line a great deal of programming they want their consumers and fans to see. they're as frustrated as anyone either here in congress or the fans themselves.

when the programming is not made available. having said that, we also recognize that broadcasters have property rights. those signals. and we believe the best way to determine value of those property rights is through free marketplace negotiations. that is the objective we in baseball have is to have free marketplace negotiations or the very least fair market value compensation for the programming being yiewt utilized. >> thank you. the gentleman's sometime expired. you may respond. >> if i could, i would like to respond briefly to your question about nielsen about the dna. it's a example of the dysfunction built in to the compulsory license in the associated fcc rule. in a free market if you have constituents who want to see station a and station a would like constituents to see it. there's a distributer between them that would like to make money distributing it, they can figure it out. all the nonbroadcast channels

get distributed anywhere someone wants to see them. the problem is the compulsory licenses and the fcc licenses enshrine kneelson's rating data from 19 72 as the basis for what signals can go where. they are sitting in the 1972 rating. if you would just get a broom and sweep it way. the free market could better serve your constituents. >> thank you, mr. chairman. >> recognized for five minute. >> thank you, mr. chairman. mr. dodge, as i understand you said earlier that one to one and a half million his hold in the united states currently get their access to broadcast stations through the distant signal service. it's clear that the number of house hold that are dependent on the distant signal decreases

every time congress looks in to reauthorizing section 119. can you tell us who these remaining one to one and a half million are and located. are they mostly located in rural areas or concentrated in certain part of the country? >> generally located rural and underserved areas. there's really four categories, if you will. folks in short market or montana missing a fox and abc we're allowed to import those networking affiliate to the market. outside it of the satellite. if you think of, utah, for example, a rectangular. it allows us to provide distantial. commercial trucks and rv. covered are by the disassistant signal license. and -- we don't actually make use of the, quote, traditional unserved household exception allowing distancing. but direct tv does. i believe there are fifteen

marnghts where they don't provide the service. they have grandfathered subscribers as well. >> do we have the tomming close the gap to that? >> for example, the short market issue is peerly affected. there is no affiliate of the particular networking in the markets. and with respect to outside of the spot being it depends on whether or not the satellite beam is large enough to actually cover an entire dna which is not automatic cases. it's very limited when it's not. >> okay. mr. wall rein, i'm aware consumers have several options how they'll view video content. they can access it through paid tv carriers or other options through the internet. there's no doubt the online mogd will continue to grow in the coming year. what extend should we consider the newer platform of

reauthorizing satellite tv laws? should we consider them at all? >> i think they can inform the debate because they show how the tv market is evolving. let me also say that we have talked earlier about the conflict between cbs and time warner cable. a significant part of that dispute was about the ability for cbs to offer its programming to a competitor time warner cable. i understand why time warner cable doesn't want cbs make the programming available to hulu, an netflix, cbs is interested in doing that to give consumers choice. you should be aware that is actually increasingly a matter of negotiations. not necessarily the city which news reports said was a deal cut relatively early in the process. but in fact enabling broadcasters to actually have giving consumers choice across the different plat tomorrows --

platforms. >> the digital right of content are playing a more important role in the transmission negotiations. how do you think the issue of digital rights will impact future negotiation? does congress have a role in protecting consumers in the regard? >> i think congress should actually say as it happy. the copyright holder should be able to negotiate an agreement across all of their content. as i said, i think the cbs example is telling in that cbs wants to actually promote competition. that's why they actually went about this negotiations. and we think that actually is a way that consumers can give choices. you want to come back to a statement that mr.ed to son. we don't disflute are some hart cases such as the short market situation or the corners. but what we don't know is how many there are. and -- he said earlier he's heard that 1.5 million. -- [inaudible] the information need and direct

tv has the other half. it's not like you have to survey a thousand companies in order get data. what we would like to do is get what is the number and context. how many are these. and how many are in short market? how many are being spotted. and this has proven there's no technology to that there should be an unserved household. dish in 100% of all the market. >> can you address the issue of localism. the principle embedded in our nation's communication laws. can you tell us how the law developed, and focus on some of the benefits of holding on to the principle? >> quickly. localism goes back to the original broadcast licenses embedded in the communications act of 1934. and it is a notion that broadcasters should meet the needs of their local community. that makes american broadcasting unique around the world. there are national broadcast system in europe and asia. we have a locally focused broadcast system. the reason why we have concerns

with the distant signal undermines the localism. the local broadcaster bringing the local car dealership talking about the local high school sports or the tornado. if you are getting a signal from new york or l.a. you're not going to be aware moore, oklahoma. it's the heart. broadcast and the satellite laws. we think actually is strong argument by the committee should be skeptical that a distant signal license is still needed. >> thank you, i yield back. >> thank you very much. and having grown up as a broadcaster working in radio since i was 15 years old. i kind of grew up in the public interest convenience and necessity standards. i certainly have a great deal of sympathy for the local broadcasters. and i want to ask mr. dodge, and maybe mr. mackenzie. if we take away or limit the

local tv station leverage with respect to negotiating a programming license by awe -- allowing distant signal. what leverage will they have in the negotiations? >> well, if you believe what they say, localism as important distant signal is an imperfect solution. all it will do is ensure folks will be able to continue to watch "american idol" but won't be getting local news. >> also, i think that's important to mr. -- maybe you can tell me some of the benefit we're getting. i can't believe jim is going give me better hurricane information than weather castor we call dead wrong dale effectively. >> actually, that is exactly right. look, we understand the market. we understand that people actually are tuning in on a daily basis for their american "american idol" or cbs or nbc

hit show. when the tornado comes suddenly, there will be an outcry. and i don't think you want to say where is that local station the day after the tornado hits. the localism is being there and serving the community all the time. much of the feeling is -- >> i have limited time. mr. mackenzie, can you tell me -- go ahead did you want to answer this? >> i would. the american cable association primarily very splawl cable providers. often time we're at the edge. so i'll use my system as an example. we are shenandoah, county. you cannot get off air in our area. we have to have that brought in by fiber to do so. i can tell you there are no local sports. i can get that from a distant station which is thirty miles.

>> let's talk about section 119. if we do away with the requirements of local -- or the incentive for local stations to get on or the requirements do we end up with networking affiliate super station. it's the station in new york or chicago or l.a. that everyone gets. then how does the local car dealer advertise? you know, or whatever business there is the local community. >> that's what is happening. for the carry -- areaier to make an arakement with new york, chicago, and l.a. we would a national broadcast system. some other countries doing it that's not the american system. it's not the case that actually would give a plat follow -- platform for the car dealer. >> i have limited time. >> can i say. why shouldn't consumers be able to choose in that case? it sound like he's proving the

case if localism isn't -- >> isn't it cheaper for you to use less less resources for you on your satellite have one national. you do away with the spot beam than and have one station. it's actually cheaper for you to broadcast one affiliate rather than several hundred? >> it would be. the fact of the matter is today we broadcast local in all 210 market. we made the decision we want to be there. to protect consumers from take down. that's not the end game. >> would another option of the one you suggest might be all right you stay up and you go under whatever agreement is eventually reached. twhiewld be? >> of course. we talk about the area. the million or so -- >> the market area. >> we talk about the million or so people that aren't served by anybody. can we -- is there a way we set it up? or just rather than falling -- or even with the dma we stet up to the one most racially close

to them. isn't there a way to start over and do away with the 1972 stuff? if i'm, you know, if i had my choice of local affiliates in washington, d.c., on direct tv i would pick corpus christie local affiliate. >> the 1972 stuff existed at the time the law was written. it's in the appendix and nobody has updated it. we would be delighted to supply the committee with updated. information. it's less than 5%. and the amount of viewing that went to the less than 5%. right now the amount of viewing that goaps to cable stations is 60 to 65%. there has been a shift. the typical the counties in which it feels like it's irrational because you can't get the broncos game are large rural counties. most of the people in the counties do in fact watch to the home market station.

we do have split counties. we have split counties in the past. >> i yeeltd back. >> recognized for five minutes. >> thank you, mr. chairman. you have made a argument fairly compelling argument the current retransmission market in place is incredibly complex. comically complex. i'm sure you would say. your solution is to walk away for us to walk away from that process all together. which would bring all the broadcast nations in the free market if i understand your proposal. and i appreciate your desire to take it out of this and the -- touched on this before. if you take congress out of the business to business dealings,

congress is still going to be tipping the scales. why is walking away together a fair solution? >> i think the best way to explain it is like this. first, you gave cable a as part of that deal, the fcc adopted rules that restrict cable and satellite's use of that license. in '92 congress enacted retransmission consent, which requires a market place negotiation between the station and the cable and satellite people. so you ended up at the same place you would be. namely a marketplace negotiation if you had done nothing except you've got a bunch of regulatory

warts you develop along the way. like the fact that the '72 rules are in the fcc resumes. all i'm saying it's a goldberg system. it's a complex way to do something simple it is a chance, for once, to say here is a government program each step made sense but the end result is nonsensical. we're going back out. >> mr. dodge, let's talk about regulatory warts far second. i would assume you have some disagreement with that proposal, but i'm hoping that you can walk us us through the process that the process that undertyke negotiate with local broadcasters. what makes it for difficult for negotiating the nonbroadcast stations that he hold up as the model how it work. as he pointed out they take

place without any congregation their interference at all. is there a difference why. is it more difficult and if so why? >> it is more difficult because you have the small 210 small monopoly territory, if you will, where the local one broadcaster who he valuable local content that is irreplaceable. no one else can recreate. and that one broadcaster gets to play if not four distributers off each other. tell my consumers to switch to them. the broadcast is the broadcaster might lose an eye ball for thirty day. dish lost a customer for eternity after the consumer goes through the headache of switching. >> can you go through that in a little more detail? several playing off one

another. can you qvc example. how does it work? what is it you would see happen? >> so in some cases the broadcasters literally call up or start running advertisement in the paper saying, you know, crawling, you know, putting to their signal that you're about to lose the signal from dish networking. please call direct tv or comcast or whoever. there are advertisement in the local paper. as he said, maybe it's a smaller amount that actually go to a take down. what he doesn't account for this are a number you get to the 11th hour with the negotiation the consumers have been with the advertisements and message across the bottom of the screen saying the sky is fall fpg. you better switch now. >> can i say. let's take the statement and tread back and swap out the record hbo for broadcasting. hbo country want to reach a deal with the local cable company.

hbo is going pull back the programming. hbo is going run an advertising to say you want to watch hbo your favorite show. go to direct tv. because dish doesn't have the hbo. what is so remarkable about this? these are marketplace negotiations. your point, congressman, what you started out with. what is different about this as mr. he said with every other sort of broadcasters. and the answer is congress depends on hbo and dish and direct tv to have serious negotiations of the deal with the marketplace. that's the same exact thick going on here. >> if i may. >> fifteen stoakdz hear the -- >> are there or movie channels? yes. localism isn't that important. we should be able to import new york. it's not that important what is going on in denver. he can't talk out of both sides of his mouth. >> the time is expired.

the distinguished gentleman from florida. >> you want to chime in. go ahead. >> i would. i think the big difference between direct tv and dish and member of the american cable association are relative. we are small providers. normally with average less than 5,000 sub scriesers. when we start our retransmission discussion with the broadcasters it's after they negotiated with the big company in the dma. when we try to make an negotiation on numerous occasions. i asked could we have a most favored nation to make sure we are treated fairly compared to the others. i have never been to be get it in. i think there's a huge difference between the negotiations between direct tv and dish and the broadcasters. and the small cable operators and broadcasters. >> great. i want to give you a change. this is my first time going around with this.

i'm a freshman. it's really interesting to see. i'm listening to the major league baseball testimony and i'm one of the youngest member of i don't think but yet i remember watching 100 games around we had tbs in florida, wgn for the cubs and wor there were mets game. those were the people i followed. and now when they first came out espn started covering cable. you get more. with the internet, mlb tv came out. you could watch games that work. people thought -- now you can do it on your guys -- devices. it's unbelievable. i think the technology is great. i wonder about the loss productivity in the american work force. but i guess that's just a discussion for another time. so someone as knew to it. i would like you to say. we're hear congress hay have to solve the problem of the american public and that. it's nice to say, but it on secures the fact we create a lot of problems here through the

years. i've seen it in other areas. somebody who is new looking at this, what would you say is kind of something that congress has created a problem with this that we should look to rectify? can you start and give me a quick? >> sure. what perfect example is the compulsory license you enacted give cable system the right carry stations that are deemed significantly viewed in their county. based on a list of ratings from 1972 enshrined in the fcc rules. it a station wants to get carried, you know, somewhere else, and the constituents there want to see it. the station has to petition the fcc to amend the list of significantly viewed stations response they can be carried there. it's crazy. it you sitly rely on the free market. there's people that want to see the station. the station wants to be seen.

>> probably several answers i can give them. one i would focus on major league baseball here. is the fact major league baseball and other content owners are forced to sub diaz essentially a $100 billion industry by providing them with the market programming for student to the likes. you mentioned the variety of baseball programming you can see now. the bulk of the program is made through negotiated licenses. and it with be true. but if it continue at the least we should have market value paying for the programming. >> you mention the industry. what is the dollar loss for major league baseball? >> i don't know the answer. it's not question of power

here. it's a question of talking about what is fair, reasonable, and marketplace company -- compensation. marketplace value is what all within the industry. >> thank you. mr. campbell. >> thank you. i think the biggest problem is that the rules currently in place don't recognize what the marketplace looks like today. and it's ever changing and ever evolving. i think the biggest thing congress can do is make sure rules in place that encourage innovation and investment and competition. because we're dealing with companies there fever. they benefit the most by having centurylink go to a major market invest in capital and compete. i think the rules in place would tend stifle that. i think that's what congress should take a look at. >> good mr. mackenzie? >> carriers the one bringing

broadband. often time the rule and regulation one size fits all. i think one of the things we should look at is changes in the rules rules looked at how it impact the small providers. >> i'm out of the time. the rest of you gentleman would like to submit something. i would like to hear your view as well. thank you for coming. >> the distinguished lady from california. >> thank you, mr. chairman. our witnesses today, i appreciate your time. it's helpful to me coming from los angeles and having just experienced blackout, which again, i thought was specific to our area. and didn't really realize how wide spread this was. or why it happen. i have a couple of quos for you. one of which is do you worry that pulling consumers to the escalading negotiations between cable or satellite and broadcasters means that more people are going to opt out of

paid tv? and whether or not you think this would have a harmful effect on content creators whose somehows are distributed on cable and satellite. that's for anybody. >> can i make one point? >> sure. >> i want to emphasize broadcaster is a free over the air service. the so-called blackout the service was available 100% of the time. i realize some people might have reception problem. i want to emphasize. >> i scrolled -- could have seen cbs if i had rabbit ears? >> absolutely. it was available over the air the entire time. there were reports at least in the new york market there was a run on antenna in radio shack. i want to emphasize the signal is always on and always up. it may not be available on the cable system, and we realize that. it was available during the whole time. >>. >> i take a bit of the issue with that. i don't think -- signal to the entire dma.

ting depends where you live in los angeles. >> i see. >> i don't think people knew that. i doubt whether there was a run on the rabbit ears in l.a. >> shame on broadcasters for not building up the dma. >> okay. [laughter] >> and promote -- it is not free. no. the second question is many local broadcast stations play an important role in providing local news, where, and emergency information in particular to communities they serve. i know that we all agree that viewers shouldn't be deprived of local information. especially during emergencies. specifically, i want to ask what steps can congress take to ensure our constituents don't get caught in the pilgd of -- middle of the commercial dispute. specifically when weather or other information is at stake. >> one person we have if there's a dispute. consumers should be able to change providers.

there shouldn't be a cancellation fee. and frngly rebate if denied service. so the consumers have a -- >> it's not that easy to do. >> that's not easy to do. it you just want to cancel in the middle of the dispute. go ahead. i'm sorry. >> as i understand. it's not easy to do nap is a choice that consumers can have. in addition to getting the signal over the air. it's free to anyone who has antenna. you can pay -- it's free to anyone who has an antenna. >> representing antenna companies. >> can i address a point about refunds and cancellation fee. it'sen fair fight as it stands. he's trying to make it worse by saying let's give another, you know, hammer to the broadcast by saying you have to refund and rate termination fee in the cases. when frankly the fact there are blackout are the dpact reason why our disclosure to are

crystal clear. the programming subject to change. we cannot guarantee we'll be able to provide any local broadcaster signal. because there's a constraint threat of take down. >> thank you. would anybody else like to respond? >> during the disputes then the fees are paid retroactive. no one really is disturbed or harmed by that. it allows the consumer to have service during the period of time. >> okay. anyone else? >> all right. thank you. >> oh. i'm sorry. >> i would repeat that mr. mackenzie's went to court to deeatdefeat a stand still in the program access rule. for them to say they would like that in this instance, i think,

is unusually due accomplishes even by washington standards. would you like that respond to that? >> my company and the companies of the aca were not involved in that suit. and so that's -- the large cable operators, maybe but not smawm. >> the distinguished gentleman from louisiana. >>. >> thank you, mr. chairman. i want to thank you for having the committee meeting. let me just start with -- i guess i show a little favoritism in mr. campbell from centurylink. i guess my question to you would be looking at most of your new subscribers that probably new to the internet and looking at the area where you are located, which if you go down the street

toward monroe you talk about one of the poorest places in the country that is consistently been that way the fact that your new customers are coming in and taking video along with internet access. what kind of effect does it have in the area? >>. >> congressmen. thank you fur the question. it's had taking video product for those shoos not to as we upgrade the market we enter are offering broadband speeds ranged from 25 to 40 megabits. even the folks we can't sign up for the video product who may not want it. everyone else is getting enhanced broadband speed. really the benefit from the video perspective is great. it allows us to compete with the cable operator. from a broadband perspective the

effect is even greater. >> from a price point along with the traditional video and cable providers. >> traditionally in the market we obviously enter lower than they do. what we've seen is some slow down in price increases from the incumbent cable operator. that hasn't -- they slow down the increase. they stimincrease their prices and the content acquisition is generally our price point is lower. >> well, and let me say that many local broadcast stations play an to offer the program.

as the anniversary of 9/11, i believe that with all agree that viewers should not be deprived of local information during the emergency. regardless how retransmission consent negotiation is proceeding. i mentioned 9/11. but of course in louisiana, and in our area we have to worry about hurricanes and tornadoes and other things. so i would be interested in whether the panelists will comment on their view as to whether it's a fair negotiating tactic to threaten blackout given viewers are then at the risk of missing emergency information. what steps can we tyke ensure that our constituents don't get caught in the mid of the fight. particularly when weather and other disasters may play a part? anyone ask start. >> we don't think it's fair for consumers to put in that

position. is 100% satisfactory solution. the vast majority -- the vast majority of the thousand of broadcasters and cable companies reach deal. so for your constituents and the vast majority of constituents. as i said in my omitting statement 1 were lost last year. you're twenty times more likely to use your service because a powerout age than because of retranscription. they have every to reach l the deal. a mast majority of times they are reached and they continue get the service. >> congressman, as you know, our

companies the issue from a video perspective i think mr. dodge mentioned it this. negotiates aren't quite as local as they used to be. it might be a better negotiationing process. we are dealing with syndicates in 30, 40, 50 markets that play them against each other. push them to the national level and tie in the nonlocal content to the agreement and say take it or else. and so it doesn't work that way. >> i see my time has expired. mr. chairman, i yield back. >> i thank the gentleman.

it's one of the issues where my staff and others say it's a terribly complained issue. i read about it last week. i felt like i was in law school. and reading a paragraph and having to reread it four or five times what is exactly being said here. you made a point about it. it's chaotic. then i've been listening today. what i come back the northeast georgia, the mountains, the start of the appalachian trail. what i hear -- people are not the room paid to be here. that's constituents back home. who could really frankly careless about the complexity of. they're wanting to be able to get their news, watch new idea and new tv and watch new programming. and sometimes the complacency of what i've seen today is fighting for the battle and market share

than ending up the bottom line is the person we actually serve. and this is some of the question i want to take up, first. you had a question answered a few minutes ago. i'm going to assume that it was you said it is what it is. you don't always have to there. we can change it. there are other ways to look at dna conservatively. i would like you to explain the process which they decide to review current and tell me whether they are under current situation. the process is annually. we evaluate the share of turning to station from the market. and the market for particular county which has a majority of the viewing or the larger share. it is to that market that is assigned. and in some cases very large or rural or outskirt of the dna

will split county. one in one market and the other in the other market. does safety become an issue. you tend talk about viewership. we talk about safety here. we talk about hurricane and tornado. does safety enter in to what you're talking about. by splitting a county. i was watching i didn't see four of my counties list there had. is there safety to comes in to account what you're talking about. >> it's entirely based on viewing. it's -- >> okay. >> and appreciate that. we have some -- i want to cover here. these gentlemen talked about safety and localism and these things. safety is not taken in to account. the argument is interesting here. we get them talk abouting localism and safety. we get you saying we don't take

it no n to account for dma. >> i guess what i would respond this way. the dma is basically shut up as commercial entity. so that buyers and sellers of advertising understand the geography associated with viewing audiences. it's the basis for literally hundreds of millions of billions of dollars of commercial activity. and it really is a thing that has supported local television all along. it's objective. it's based on viewer preferences. it's not based on any rules. we frequently talk to congressman men and women when there are issues arise. someone not seeing a signal and go to the congressman or woman. >> we're going talk about that in a second. we basically handle them one at the time. and demonstrate where they are. we listen to them, sometimes this is a reason why we going splitted a county. if it appears as if the county

part of a county goes to one market and another market. in term of the viewer preferences. >> i think one of the -- a one of my counties in particular. i think that's a -- i think what is happening here. we're talking on two different levels. when we deal with the issue. one part dealing with localism and the safety aspect and local broadcasting and why the providers satellite and cable providers. on your angle you're not discussing what some of the arguments being made sheer. -- here. that's a concern. i may submit for questions for the record for a later time. how specifically are broadcasters willing to facility the ability? >> i have four counties that are orphan counties. i would like a commitment to work with my office. i know, they are working there to make sure we get the questions addressed. it came up in the town hall meeting. people understand they get it because we're in a different dynamic. and split between smaller markets. i can get a commitment out of

you continuing to work with me on the counties if i have? >> absolutely. it's an over all question. it came to me as i was listening to you. i'm out of time, i believe. mr. chairman, i guess i'll there to submit if for the record. i'm not sure -- can i have thirty seconds, mr. chairman? >> yes. >> thank you, mr. chairman. i read "the new york times" and "the washington post. i read the "the wall street journal," i read the atlanta journal. i get information from all over. why couldn't i have my local broadcasting and the los angeles affiliates if i wanted to? and i'm not setting myself up so anybody in the audience said he's one side or the other. i'm asking an honest question with the way things developed. couldn't you have -- shouldn't the question be either or or not not either or and and? >> you're i think the argument

is that exclusive territory are common in business. that's what a local broadcaster is. they are the cbs outlet, if you will, for cbs affiliate in atlantic. they are outlet. if you bring in another cbs station. you have defeated the exclusivity that they negotiated for. okay. the subsequent lman's time is expired. >> the gentlelady from washington. >> thank you, mr. chairman. i want to thank you for being here today. and continuing as we have more questions. i want to start with mr. padden. you haven't talked about localism at all. with your proposal how that would impact access to local information. >> again, i just suggesting to you that marketplace forces would be a better servant of consumers interest. if there's programming they're interested in whether it's local

programming or something from somewhere else, and you leave it to the market and there's money to be made providing that program to them, they'll get it. .. and get an local information and other race because we have people traveling around a lot and they are not always in their

local area, but this do want news that is happening from home. so given the development of new technologies in the different consumer behavior in terms of access to content and making sure that we have legislation of 1988 and from earlier, how do we make sure to put together a policy that doesn't inhibit innovation or change going forward? as as a care what we should do here and the next step. that is kind of a broad question for everyone, but we want to make sure that whatever we do addresses the issues that consumers have today, but also does not block innovative new insurance that may also want to compete in this space. mr. donato. >> so we measure viewing of television online. we've made an announcement it's a very technical complicated problem.

we made an announcement that would solve the technology starting the end of next year, viewership on tablets will also be in the rating. we've got measurement solutions, the business relationships are very, very complicated. as it to my fellow palace to comments, but we do have measurement solutions worked out. >> if i could comment on the 1972 meals a data point, theoretically can change based on viewership in viewership was measured. only one signal is available in the dma. when you check the dealership come you get the same over and over again. in southwest colorado and the albuquerque dma, we propose a albuquerque and anger to the folks in those two counties and that the consumers decide suing mr. donato calls them out, we can say i'm much in albuquerque and lo and behold people down

there prefer to buy their chevrolets her mother curt e. some people say it's about are the people to decide that this economy should be. >> i said before, but i don't understand the 1972 comment. every year would look at the basis on which dma star construct it. >> i was focused on the speed of legislation and the way people are viewing the way the industry work changes more quickly sometimes the legislation does. i'd would make sure we put together legislation that doesn't inhibit that innovation? >> habakkuk comeback year original question about technology. with sling box than other technologies, watch abc.com, you can use the internet technologies to keep up with your local broadcaster, even in washington d.c. with the cbs issue with time warner, an important part of that is the online digital right so that cbs could make the

program available on hulu, netflix. so the technology is expanding opportunities to access local broadcasting. >> yet, mr. padden. >> new technology is creating all kinds of new opportunities. unfortunately, the the compulsory license decay to the cable industry and satellite industry you have not given to the online industry. so for example, you get the right to broadcast programming to comcast and to directv, but you don't give it to netflix. i don't understand why. i am not advocating that you give it to netflix. what i am advocating is to undo the license you have given to cable and satellite that currently puts online distributors at a disadvantage. we're a party -- the united states is a party to a number of international treaties that prohibit compulsory licensing of television programming to online

providers. the only way you can level the playing field is by repealing the license for cable and satellite. >> batanes expired. thank you, mr. chairman. i yield that. >> gentleman from texas, mr. lamar smith. >> thank you, mr. chairman. first of all, let me apologize for being tardy as well as having to leave early. this is one of those days were all three committees on which a server meeting concurrently, so i have to shift around. also, i may be covering subjects that avert event covered and i apologize for that, but i would like to address a couple questions her panelist today. my first question would go to mr. dodge, mr. waldron. the contemporary license has been numerous times by congress. my question is how well is it working for television viewers and do you feel that it are to be reauthorized for another five

years? mr. dodge. >> i would say it is working wonderfully as a result of the last reauthorization, dishes providing local channels in all 210 subsites. >> with respect to the local channels, i agree with completely with mr. dodge. we think the local compulsory licenses to work. i disagree with my friend on that. broadcasters think the system is working. >> we will go three in a row. >> okay can i thank you. next question is for mr. garrett, mr. padden and mr. dodge. what alternatives exist to the compulsory license? and with those alternatives adequately protect the rights of copyright holders? mr. garrett. >> the copyright office address the very question in a report be prepared for congress here.

they talked about the different types of direct licensing, sublicensing uncollected licensing and the report lays it out in excellent detail here. the one thing i would mention is the actual history here of what has happened with debbie tbs, for example. i have had the privilege of being present at every one of the hearings is a committee is held on this issue since the late 1970s. when i go back, i think about these people debate taking tbs available via compulsory licensing. in fact what happens in 1990 is a converted to a cable network and today it's available, not pursuant, but pursuant to free marketplace negotiated agreements, including agreements that major league baseball has and has kept a package of the program at tbs for several years

and will through the year 2021. >> there are plenty of marketplace alternatives that would be far more appropriate and fair to copyright than a government system, work government word sets the raise. >> thank you. finally, mr. dodge. >> we believe they continue to have utility in part of the reason is that mr. padden noted, which is suggested to broadcaster still hasn't cleared copyrights to the viewer and all instances and that the magic of compulsory license actually. >> thank you for your testimony. thank you, mr. chairman. yield back its >> the distinguished gentleman from new york. >> thank you, mr. chairman. i think the distinguished ranking member as well. it seems to me that many of the disputes over the last several years but haven't some of them says unfortunately resulted in a

temporary blackout in ability for consumers, some of whom i represent back home in brooklyn and parts of queens to get content all seem to occur in and around significant porting events. so most recently in the run-up to the start of the football season was a conflict that was resolved on the eve of the football season, starting thankfully in the past, back at home there was a conflict that prevented some consumers from seeing part of the early yankees run through particular playoff season that wound up resolving itself. and it was a conflict at home is centered around the ability for some people to see msg was broadcast the next. the knicks were off to a terrible start, so nobody cared.

and then sheer amazement came on the scene and it became a big problem and ultimately resolved itself. but there's a lot of conflicts, not all exclusively, they just seem to have interesting timing as it relates to major sporting events. i'm very interested in mr. mr. someone's observations as it relates to sports licensing fees. i believe you testified that this transmission speeds have been skyrocketing in recent times. is that correct? >> i think you also indicated that, you know, as a result, consumers are hurt as a result of the increase, is that right? [inaudible] >> could you elaborate in terms of how you think that consumers are hurt by increase in licensing fees connected to espn or some other sports content?

>> for instance, espn has reported by snl kagan cross the channel salon about $5.50 and that is they cannot required to be carried at the basic tier. whether you are a sports fan or not, you're having to pay for espn. so when you look at the sports programming that's on the cable channel and on the broadcast channels come at the amount the programming caused that can be attributed to spores and i don't have an exact number, but the estimate is a third at the expense. >> now who requires espn to be carried? 's >> that is part of the negotiations you have with these when you're negotiating with them, they only allow you to carry espn on the lowest year. >> okay. >> you also mentioned in your

testimony that she thought the antitrust exemption that exists perhaps should be revisited because of the dominant market share that exists with the major sports league, is that correct? in 1922 there is an anti-trust exemption granted to major league a spell as many mentioned legislation that congress passed in 1961. if we were to revisit the antitrust exemption and adjustments were to be made by recognizing the difference between baseball and the other major sports leagues, how do you think that could impact the landscape in a manner favorable to us consumers? 's >> i think what you have rather than one entity negotiating on behalf of the entire leak, you would have individual teams negotiating and not local. i would allow for more competition and probably lower costs. >> could you comment on that, mr. >> congressman, as indicated

earlier, very few people want to hear what i have to say about antitrust policies and antitrust laws. my focus is on the copyright side. what i will say is that the broadcasting that it is among other things was possible for why you and the american public will be able to see the world series on fox this year. it is that law which gives the commissioner, the nfl and other leaks the ability to pull together rights and make available to the american public the kind of programming that's now made available. the law has worked well. it's not been abused and it's one of the reasons why today i can on him and say to that everyone of the approximately 5000 games played in major league baseball -- i'm sorry, fight doesn't telecast teams in major league baseball is available in one fashion or another to your constituents of. >> thank you.

>> the distinguished lady from texas is recognized. >> mr. chairman, thank you. all of us are expressing an appreciation to you and the ranking member and indicating that our calendars caused us to be delayed in one instance, homeland security committee was discussing the area and i might add the combination of gentlemen before a, content and the various providers have helped to contribute america's education and discourse on this very important issue. and so, we are here are more than just a separation of powers as to who haslett, who is to be regulated, that should be able to thank you for how you contribute to the public discourse on some very vital issues. we are engaged in a regulatory discussion because congress in its wisdom saw fit to regulate

the content and the providers in order to create more robust competition, which i think inside on particularly responsibilities of the judiciary committee on the issue of competition and i might add that there is merit in everyone's position as they've been able to glean as i've said here and certainly to the national broadcaster -- association of broadcasters, i want to just be historic in my reflection on the old days of the black-and-white television, with the antenna we did provide content to chew it to those communities that could get a television and all they had to do was to plug into the socket. so we've come to a new posture that for many was a very difficult change because they had to now pay for something that they had been able to plug-in and receive some form of

content. but in the wisdom of the congress and the innovativeness of technology, we've all come to live together with the new access that consumers have. over the course of that, i want to raise a number of questions. all of us are many members have asked rest certainly the concern of the issue of lack of and how it impacts not so much the two entities that are having a disagreement. i heard someone say that is only a minute percentage that occurred. but it occurs as a difficult challenge for many of us to do with their constituents. with all due respect in reflection, the customer will be: the satellite company or though be calling the cable company and they will not be calling the entity that has the content. we have to find a balance with that because there are concerns this to be a growing problem and

so while does a generic question to start out with and i appreciate those who would it. two so. i might have mistaken us for this is a plain, simple question. do we expect to have these conflicts coming up over and over again? is there a way to industry will lead to solve those kinds of concerns? we know what the issues are. the art i have content, you want my content, but are there ways to handle that in a preferable way into skua congress tried to regulate and balance to protect the comments, which rate the show and give competition. that's one question. the other is should the upcoming reauthorization included discussion of other issues related to satellite cable and big four broadcasters and what do you think they should be and again to those who want to answer that, it should be a green reauthorization. the judiciary committee has jurisdiction another set tears.

specifically mr. dodge on the dish network. are the core patterns or court shavers of those who do not subscribe to a multichannel video program and distributor reduce the scope the mvps ability? are they of concern to dish network? and if congress did not reauthorize 119, how extensive or burdensome would that be for you? can you answer the other by shin about getting a resolution on how you debate the question going forward in the reauthorization question? >> this is for everyone, mr. dodge. why don't you wait on the question i specifically asked you. others on the comment, please. >> jim campbell again. yes, i think something can be done to resolve this. what we need to do is look at the rules currently in place

that are slanted in favor of the broadcasters that were created at a time in the broadcasters are facing issues with the incumbent operators and now the shield is turned into a sword. and so, if some of those issues were removed, such as network non-jew occasion and syndicated exclusivity can't even see much are balanced process. we have incentive to get the local news channel to our consumers and i think the broadcasters had the incentive as well. the problem is so much of the national content is tied to it. if we are to carry the content, negotiations would be more balanced. >> mr. dodge, on your question. >> to miss your first question, is this problem going away for lack of a better term? in 2010 there were 10 local blackouts in 2011 roughly 50. lester roughly 100 i were on track with 120, which is not a record and the others will be

happy to hit. with respect to your question a leather cord cutters were a concern for dish, the answer is no. we welcome the competition and winning to find a way ourselves to evolve and participate in that. >> anyone else? [inaudible] >> i was going to say broadcasters support a green reauthorization and the vast majority to get done. but your opening comment, still today you can get a tv and antenna and a tv for free. the next thank you, mr. chairman for your indulgence. i look forward to talking with you all individually. >> the distinguished gentleman from north carolina, mr. watt. >> i think the chair for convening this hearing and all the witnesses were participating.

it's been a delightful, free-flowing discussion. it's been great to see mr. dodge and mr. waldron seated next to each other going toe to toe. i will always benefit since i started going last in the series of questioning on ours died from what has taken place because there's always want comment that kind of pops up and the whole discussion that hits my mind. that comment today came from mr. dodge when he looked at mr. waldron said, you can't talk out of both sides of your mouth. my thought was that most of us in all of the industries, is my experience have taught out of both sides of the amounts

depending on what is an official to their particular industry. but i did note that he was particularly applicable to the broadcasters because i have been a strong advocate for people being paid for their intellectual property and for that reason had been a strong advocate of your ability to negotiate for payment for your products. i think that's very important. what i have not been able to reconcile, however, is how you apply a different standard to the people who provide copyright , copyrighted material on radio, the performers.

i just don't understand that the economy. and so, i am hope of that you all will maybe come around on the radio side to the same position that you hold when you own the protect good material. understand that there are performers out there that all of the protected material that they produce and they deserve to be paid also. so i am not going to belabor that, although i would note altt seems to me to be unfair for you all to take the position that

there is some kind of reform its tax when the government had no part of the performance rights, revenue, yet there is no performance tax when you get paid for what you have the copyright to. so i hope you all will help me reconcile that. i won't do it here in public, but it is a concern that i have and night and these are inordinately difficult issues. i kind of have come no closer probably to where mr. padden does and must be old. we would probably be better off to get the government out of the way, not only in this context,

but in the performance rights context, too. so it won't be surprise to anybody because i announce today the hearing right before the break that i was introducing a bill to do away with the compulsory license of music. but to make sure that if a performer -- if you play a performance music, that you compensate them and go work out a deal with them if that's what you want to do. i am kind of free market on a lot of this stuff, mr. padden and i was particularly appreciative that your testimony was the last testimony. and so, i thank you all for being here. i won't necessarily ask a

question unless mr. waldron wants to respond to what i didn't intend to be a personal attack on n.a.b. because i started out by saying we all are self-serving and talk out of both sides of our amounts. i think that is the best characteristic of all of us at one time or another. i just use your industry as an example as mr. dodge did, i thought his comment was appropriate. >> i was just going to say we look forward to conversations with you. it's probably best if we don't accept all you said to continue this conversation. >> welcome would continue those conversations on the local and national level might always been cordial and congenial. so as to offset coming, you and mr. dodge and mr. waldron are good friends in you and mr. padden our good friend.

we don't always agree on every issue. mr. chairman, before we close the record, the motion picture association of america has requested the reset it this info graphic illustrating the continued rapid growth of online viewing options for audience is for the record. so i would ask unanimous consent that we make this a part of the record. i am not even sure what it is. [laughter] i am in complete agreement that anything that will help us make good decisions ought to be part of the record. i ask unanimous can vent to submit it. >> i won't hold you harmless at that. we will accept that without objection. i want to thank those of you who've been in attendance the entire hearing.

obviously you're into this more than just casual. i particularly want to thank the witnesses that she's contributed significantly to a very complex and a very important issue and we may meet again. it's been a pleasure having you out with this. today's hearing is now concluded. without objection, all members will have five glitches database to submit additional questions for the witnesses are additional materials for the record. this hearing stands adjourned. [inaudible conversations] [inaudible conversations]

>> yes, the world is changing. now, we can't control every event, but america remains the one indispensable nation and world affairs and as long as i am president, i intend to keep it that way. >> when the president is in an earlier clip talking about indispensable nation, would he do want to talk about, what he doesn't want americans to contemplate is we don't know how to win wars. we have by virtually any measure the best military in the world. we certainly spend more on our military can basically the rest of the world put together. but we don't know how to win

wars and it seems to me they really are to be a serious national conversation wise that the case? where does the fault lie? is that our politicians? is that our generals, are inept? is the size of the forces are too small? or was it, this is my believe, isn't the a fact that by its very nature, war is unpredictable? to go to war is to roll the days and you might win and you might not. >> next, markus rodlauer, chief of mission in china for the imf. he took part in a panel show in the current chinese economy is not sustainable with weaknesses in the areas of local government debt, the financial sector of real estate.

other people on the panel include former world bank country director for china, david dollar and morgan stanley asia chairman, stephen roach. [inaudible conversations] >> a source of intrigue, interest and to some extent, mystery is the second-largest economy in the world and the largest to world growth with enormous interest about what's in china not within the country, but around the world. this morning we have an extremely distinguished panel here to help us with the issues. on my left is markus rodlauer, deputy director at the imf and also the imf mission chief to china. marcus has studied not just economics, but also a lot in

international relations, which makes him perfectly suited to help us figure out not just is happening at china's economy, but also the broader implications for the world may be. on my right, we have steve roach, who spent a long and distinguished career at morgan stanley and is one of the most prominent china economist in the private sector and now he's jumped to my side of defense in academia and is a professor at yale university. finally, we have david dollar, who until very recently was the u.s. emissary so to speak at the embassy in china and he is now also jump to what i think is the right side of the fence, now a senior fellow at the john front and center in the global economy and foreign policy programs for the brookings institution. before that, he was the head of the world bank office in china. cities are all people who know china intimately and intricately

we start out as a presentation by markus, with a report that the imf rates in china and the look of as the basis for discussion and bringing the two panelists and we will leave time at the end for questions and answers. >> good morning and thank you to brookings for inviting us here. thanks to eswar and my friends, stephen david to agree to be on this panel with us here. it's a great honor to be here and thanks to you all for coming. before i start, i would like to at knowledge but the fund has done on china and china's cost is a team effort. so while you see her today a report published on the website is due to steve. he's the head of our china division and of course the team

has many other members as well. let me start by giving you just the main messages of report this to your. a lot of concern early in the year that saw potential in china. we are quite confident that although growth has been moderate, we don't see a major a very sharp, imminent decline of growth. the hard landing in china. at the same time however, vulnerabilities have been going for years. they've continue to grow over the past year and if you compare the tone of last year's imf report to this year's committee will detect some concerns about the growing vulnerabilities in the chinese economy and the greater urgency to financial and structural reforms that now must be celebrated to contain the risks and put this economy on a more sustainable growth path. growth in china is typically

much more policy dependent than it is for many other large economies. the actual growth protection in china and so is closely linked what went takes about the governments policy reactions, how strong and with a contract in a decliner mr. growth. and so far, quite positively would say the government has signaled a tolerance for growth in mind which is about seven, 7.5%. in contrast to the past, whenever there was a slow down, the economy would move quite strongly strong investment is strong credit push. this year the response has been significantly more moderate and the authorities have not appeared to prop up that dvd above the target as in past years. so they are coming out of china to a higher frequency. many of them, over 100 through the third quarter into the first few days of august showed that

activities and destabilizing into the third quarter, second half of the year. there's been a little bit of sewing details in the double digits. we don't see any decline. the trade data recently have come back. so we are confident that the assessment and growth around 7.5, seven and three quarters for the hole is about right. but as i is emphasized, since the global crisis, really a mix of, credit and fiscal stimulus has underpinned activity and this has been good in many ways for china and the world economy. clearly, this growth is not sustainable it is becoming increasingly apparent that it's not sustainable because science of risks are growing. so while there still are significant affairs, we are 19

imminent crisis mode. the margins of safety are clearly diminishing. when we look at the chinese economy, three risks really jump out. the financial sector, vulnerabilities and local government finances and real estate. these three risks which jump out of the sunlight that the finance of the economy, they sort of reflect deeper vulnerabilities underlying problems in the economy along the current growth path, which remains based largely on capital accumulation and credit financed investment. so in a nutshell, these three risks you see here reflective process whereby capacity is being accumulated well ahead of final consumer demand, it's financed by credit expansion and this has led to widespread

capacity, pressure on profitability, diminishing returns to investment and rising corporate and local government debts. as i will discuss that, in order to sustain growth, the economy bounced deeds to be transferred away from this pattern of growth based on capital accumulation to one that is more based on total fat and productivity growth. let's look a bit closer at the financial sector. china's stock of credit on the left-hand scale is among the highest in the world at its level of income. you see the domestic credit, banking credit close to 150% is clearly an outlier in its income class. not only that level, but it's growing extremely fast, especially the nonbank segment, which is not included. other right hand side can be see social financing, bank credit

and credit outside the banking channel. a social financing has increased by 60% of gdp in just four years. by the predominant source of this funding still remains in the banking sector traditionally an increasingly larger share has come through other channels such as the high yielding both management products and other nontraditional, non-banking committee and is very positive in many ways because it is closer to the market. it also carries tremendous risk and is a problem because first of all, it is basically a process of arbitrage, intermediation is trying to move away from the better regulated banking sector. it's in areas where supervisors have a hard time catching up with what is happening in the so-called shadow banking and simply the speed of growth, the speed of expansion is nearly

overwhelming. so the consequence of what you see here is merely an explosion of credit is a steady buildup of leverage, which is averting the string the financial sector, local governments. so this combination of rising leverage, profitability means of course they have also risen. if you look at average leverage, there is still manageable, growing share of firms at least in those we can see, which i have a list of firms, a growing share of those firms are showing ratios below one. you now, while this is still a share, continuing this recent trend would suggest strains on the corporate sector and mac are economically. second point, local government debt. the buildup and credit has an

accompanying at large increase in local government that. infrastructure spending by local government is an important countercyclical tool in china. a lot of the fiscal spending comes to the local governments, both social and investment and has become much more so since the global financial crisis and a large part of this local government spending, investment spending is done off budget. it's not recorded as part of general government spending. now to better assess the macro economic scale, the impact of this off budget spending, we at the fund have tried to construct what we call an fiscal balance that puts the recorded official government data together with the off budget fiscal transactions and of course looking at this together shows us that the actual debt of the public sector, augmented public sector is much higher than the official one from a 22%

official, but augmented that including off budget spending comes somewhere around 50% of gdp. in fact, it's not such a novel exercise. if you look on the bright side, the market estimates and even government estimates have been around for the last two, three years and the size of the government that our choices somewhere between 50% and 60%, depending what you include on the liability side. and of course the corollary to that is official debt is much higher means also the public deficit, if you include the augmented art is much higher than what is measured on the order of 1%, 2% or 3% of gdp, but including the balance sheet items for as high as 14% of gdp during the crisis and have now a percent to 10% of gdp.

real estate on the left-hand side, you see that real estate now accounts for a very significant share of gdp already. it's about 12.5% of output and urban employment, about 14% and has remained in our key engine of growth. however, one has to realize that existing distortions make this market susceptible to very large swings, boom and bust cycles. on the supply side we have local governments, which relied for financing and real estate development for growth, which often leads to excessive push, supplying to the market. on the demand side, the market is prone to bubbles because housing represents a uniquely appealing investment opportunity for the private sector given the real deposit interest rates are close to zero, given the restrictions to put their money

abroad. there's a history of her best capital gains and also favorable tax treatments. on the demand side is the huge incentive for demanding real estate. so this is a risky situation that clearly of the medium, released that development will have to slow down to a more sustainable pace as the market matures and the challenge is to not do this in a way not just by restricting price growth in eswar trying to control it from atop a really moving the underlying this torsion to create incentives to this risk. so as we've said, the three risks that we mentioned sit on top of the underlining deeper vulnerabilities, which remains based on investment and capital accumulation. investment, which is implemented through a mix of fiscal -- cause i fiscal budget spending, state owned enterprise investment.

that investment has been used to support domesticate committee and to offset the impact of x terminal shock. this of course that politics spillover effects for the global economy. it has exacerbated tremendously to the domestic imbalance between investment and consumption. there are signs in the last years that this imbalance is no longer worsening but a decisive shift to a similar consumer based economy has yet to occur. for example, last year investment rose as a percent of gdp slightly while private consumption remained flat as a share of gdp in the urban household savings rate has actually increased rather than falling between more consumption. on the left-hand side he see china clearly remains an outlier with investment as a share of gdp is much higher and consumption must lower than other countries.

on the right-hand side of the chart we see from the supplies i was the composition of china's growth. the secondary set, industrial sector remains the main driver of growth for the whole past decade. these are the economic financial investments china has to grapple with in its growth pattern. but it's also not forget the other challenges, which is, for example there has been a major reduction of poverty in china and at the same time has increased tremendously over the past two decades. if you look at the staff report, we have a chart that shows, it has increased in the past two decades with the largest emerging market economies. last but not least, the environmental challenges because of this growth pattern and

intensive growth are tremendous and not sustainable. on the current growth model, we have been a growth accounting exercise and analyzes the growth of china over the past two or three decades in clearly is mainly factor accumulation putting labor in new factories together and producing for exports. clearly this growth can no longer continue. if it continues, you see the orange line here in the bottom is china. if he continues, and maybe he can go on a few more years but will run out of steam eventually you will create too much excess capacity, profitability reform. some point in time there will either be a crisis or there will be a sharp slowdown in china's convergence process, which is

measured yet the ratio of china's gdp to the u.s., which has preceded continually steadily over the past decades, the risk is the process might simply stall in the income economies that that stage of development. the challenge is to either change its growth model and sustain the convergence process that is a successful shift in the growth model from investment to more product two d. growth. it can continue to converge closer towards advanced income levels. just briefly, what are the key policies? they are all explained in detail. successful transition in china will require a decisive new round of reform which are based on at the same time they need to

address these growing risks in various parts of the economy. didn't make them more exclusive and more environmentally sustainable. all of this is of course an excellent environment, which would remain difficult for some years. the challenge is tremendous. it maintained over the next few years somewhat slower growth in china, not in the 8%, 9%, 10% range, but it is in our view clearly a trade-off that is worth making. what is the strategy? at the strategic level, highlight three-point. an increasingly greater role to market forces. through continued liberalization and government involvement. stronger governance is very important that we mentioned this. as we increase the role of market forces, we need to see

stronger governance at the lower levels of government, the lower levels of economic units. state owned enterprises and state banks. and at the same time, shifting income towards households in increasing consumption. these are the three strategic province. in terms of economic policies a broad set of fiscal financial or exchange rate and other structural measures that need to be taken over the next three, four years. many of these policy object is have indeed been outlined in the recent announcements. we see a great recognition of a challenge, a clear understanding of the policy areas that need to be addressed in the direction policies need to take. we see it in the various announcements that have come out

over the last six months. it is clear and specific policy measures and timely focus implementation. so let me sum up again with our key takeaways this morning coming near-term outlook in china has company growth around 7.5% come of this year may be slightly higher, the vulnerabilities are growing on the current growth path. and while margins are still there, or divination and financial structural reforms must be accelerated to contain the risks and transform the growth model. thank you. >> thank you, markus. [applause] when they start with you, david. you've been back from beijing just a few weeks. do you agree with markus' assessments of the short-term in any of turnout that the chinese economy and specifically do you think what he laid out in terms of what china needs to have the

right ones, and you have anything to add, sub track? >> okay, thanks. i like the imf report a lot. about 7.5% this year, know her then in the risks building up of many need to transfer the growth model. i like to report a lot. i basically agree with it. as an opening remark, which are briefly emphasize the risks are quite serious and then add a couple of additional issues to the structural reform agenda. i agree with the issues market touched on. i just want to broaden the agenda a bit. first on the risks, i would like to figure that shows china's private consumption and investment as a share of gdp can air to other countries. china has extra area and has very come the very high estimate, very low private consumption. we really haven't seen this before. on the investment side if you invest 50% of gdp economy basically double the capital stock in six years.

during the big investment push in recent years the capital stock is then doubled as the model continues to be doubled again. there is evidence to return from investment is dropping and i'm pretty convinced of the double capital stock looking forward, the next six years there's not going to be demand to use the capital stock. you'll run into financial or fiscal problems in the imf report for inside out. i want to emphasize i think that's quite serious. i agree with the reform agenda that was touched on. two areas i also think are. the first is who i reform, reforming the household registration system. if you look at china, there's been some rural urban migration, but is rather limited if you compare the historical experience of other countries. if you include the migrants, china's urbanization rate right now is about 52%. when south korea was at the same

level of per capita income, it had already reached 58%. the household system restricts mobility. one result of china has very large rural urban and from different invirase or 10 migrants, you restrict the ability of many rural people to move and find hiring come. it's particularly difficult to bring families, their children, primo people and that would provide quite a bit of additional demand for its social services. the government would have to find resources for those. they would be challenges. if you think about shifting from investment driven model to them are consumption driven model, easing up on the system and encouraging more real migration of families to the countryside to city enable people to find higher in time and consume more and encourage greater government services. the other area i would briefly

mention a state enterprise reform. china still has a large state enterprise sector that we can argue exactly how big that is. the official statistics takes more than 40% of the investment of recent years have been in the state-owned sector. there's a lot of enterprises with mixed ownership, so that's probably a low estimate. state enterprises operating quite a few sec is, but i see them as especially visible modern services. media, tell a calm, airlines, all set to resent which there is a small number of data on incumbents. china is often referred to these is the monopolistic sectors, monopoly sectors. these firms are a lot of profit or perhaps we would call it -- economists would call her friend. they pay very little dividend to the government. the nice thing in the imf report to state but in recent years

have paid 0.4% in the central government budget. so basically you have a system in which protected enterprises are in profit and then they reinvest it, creating a heavy bias towards investment in the system. if you took more income into the government's budget is a simple reform and expanded the social services, that he shifting some resources from the best to consumption. so my general point is there are important institutional features to the chinese system that encourage investment and discourage consumption. and so i said that the transformation to the model, it makes sense to target some of those reform areas and i strongly agree with the report that the financial system, the repressed financial system is an area for reform, but i'm also adding the labor market institution in the state enterprise institutions as important areas for reform. so we looked at the new

leadership hoping that there will be some relatively bold reforms announced over the next few that tackled these issues comprehensively. >> thank you, david. steve come you a private-sector group@and carefully watched everybody and generally tended to be much optimistic about china in terms of prospects and ability to undertake reforms. do you share the assessment of risks and also the endpoints about where china ought to go? >> i do, eswar. and i like david, i really commend markus and stephen the team for once again laying out a very comprehensive assessment of the agenda of the china faces in trying to deliver on this important and critical growth

transformation. the only bone i would really pick with the assessment, marcus is i honestly in keeping with eswar is the optimist, i would prefer to call much of these issues -- many of these issues he raises challenges rather than risk. i think in assessing the prospects for any major economy in the world today, we can point to a broad menu of risks for every single one of these economies that are equal to if not more severe than the ones that you've outlined for china, including the united states, europe and the new poster child for economic revival, japan. there is a lot of risk in every single one of these economies today. the one area that i would just pick up on and i really agree

with the points david made him who colony after we reform, but i am a little bit on the other side of the issue that you raised with respect to investment and capital stock. marcus, you and your team pointed this out to me before, pointed out that capital stock growth in china, while its high and consistent with the extraordinary high investment share, the level of the stock is low, especially in looking at capital per worker, which is what economists prefer to work out the driver of long-term product to be gross. so i am not nearly as worried about rapid growth in the capital stock as many are, i