sign them up, and later determine they were not eligible. this is similar to the problem with flawed data going to private agencies. we will not know for a few weeks it fits into a larger story for what we have known for a few weeks about some number of people who believe they are going to be signed up for health coverage next month to find out partly that they are not because of systems failures outside of their line of sight.

>> host: and joining us this week on c-span's "communicators" program is walter mccormick who is president and ceo of association called u.s. telecom. mr. mccormack who do you

represent here in washington? >> guest: we represent the nation's broadband service providers, companies large and small, urban and raymack public we traded privately held cooperatives. these are companies that is starkly were telephone companies but today they are brought and service providers and they offer service on a wireless basis. >> who are some of your members? >> guest: verizon at&t centurylink wire string and companies much smaller that serve rural markets and sparsely populated parts of the united states. >> host: what are some of the major issues right now being confronted by the companies that you represent? >> guest: i would say the single most -- the biggest issue is the transition to the new ip environment. i mean internet protocol communications is the future. consumers are driving it. ip technology is the technology that enables all devices to communicate with one another and it's that transition from an

analog world to an ip world that is the biggest single issue. >> host: is there any room for our wireline world anymore? >> guest: i think the wireline world is really the central circulatory system of our economy and the veins and arteries that really cannot what is now the information economy in the united states. we are seeing data traffic on our wireline networks increase at the rate of 40% per year in its wireline networks that connect all forms of communication whether they originate in the wireline environment of the wireless environment so yeah i would say america's future is a wireline future. >> host: joining our discussion is howard buskirk's "communications daily". >> guest: you have party been talking about the move to broadband and one of the things the fcc is looking at his ip transition. do you feel today the fcc is

moving quickly enough in the area? i think there've been concerns about the process taking a little bit long. >> guest: i applied the task force. i think it's extremely important that we have a managed transition to ip. the commission and the department of commerce worked very well together and transitioning us from an analog world to a digital world. you wall were required it wasn't long ago the folks were worried about having to get rid of their analog television sets and how it was managed in a way that was done with a hiccup. the broadband transitiotransitio n from the analog world to the i.t. world also takes planning and takes execution. i think that we have and the chairman of the fcc is somebody who is very attentive to that end he was going to be focused on it. >> guest: 's the what would you like to see the fcc do next on this under mr. wheeler?

>> guest: i would like to see the fcc proceed forward on a number of fronts. i think what the chairman has done is to say that he is going to have three load stars. one is competition. one is the nature of the compact between networks and their users and the third is content capabilities. all three of these are implicateimplicated in the ip transition. i think it's important to allow companies to begin to have some trials. at&t is proposed a trial in two of its wire centers. other companies are experimenting in a friday of ways as to how best to make this transition and i think it's important the fcc partner with the industry to make sure it's done. >> guest: but there hasn't been anything concrete that says today those trials are definitely going forward. there are a lot of questions. >> guest: as you know the

chairman has only been on the seed for. >> host: what is the hesitation for allowing those trials to go forward? >> guest: i think that -- i don't think there should be any hesitation. the fact of the matter is every day we are putting ip technology into our networks. everyday we are seeing manufactures building more and more ip equipment and less and less analog equipment so i think it's important to let those trials go forward. i think it's important to sort of measure the results of those trials because they will be informative. >> host: walter mccormick are there lessons to be learned in your view about how to regulate ip when you look back at traditional regulation over traditional telephone's? >> guest: i think definitely. but i think to begin with, the question of how to regulate is really the wrong question. the question is how to assure robust competition.

if you think about the nature and terms of competition of lodestars is directly consistent with the very purpose of the 1996 act, the preamble to the 1996 telecommunications act, that is now 17 years old. the purpose of the act was to promote competition and reduce regulation. and so what we are seeing in this environment today with ip is we are seeing the kind of internal competition that was never anticipated by the act. it has gone far beyond the acts of a few take voice telephone service for example, today you can get voice service from a wireline provider from a cable provider, from up to three wireless providers in over 90% of the markets. you can get it over the top through a voip provider. we have another -- number of options. if you take video it was video

from broadcasters or cable but today you can get video from a telephone company. you can get it from a satellite company. in fact netflix now has 30 million subscribers, 10 million subscribers more than the nation's largest cable company so we have real intermodal competition and in this i.t. environments the goal should need to incent further investment to accelerate the kind of investment we need to lead to greater capacity and greater capacity and it shouldn't begin with the question of how to regulate. i think the question needs to br objectives going forward and how do we best accomplish those objectives and what public policy should we adopt to do so? >> host: what could the fcc do or congress do in your view that would decrease competition? >> guest: well one of the things they could do to decrease competition is to continue to overwrite one segment of the

industry at the expense of investment. if you take our industry for example ,-com,-com ma at the time of the 1996 act we were considered to be a monopoly service. today only 25% of american homes have a wireline telephone. today, over 95% of americans have a wireless phone. 25% -- i'm sorry 45% of american homes are wireless only so we are seeing vigorous competition in phone service but we are still saddled with regulations that come from the monopoly era and there are regulations that really are kind of without purpose. i will give you an example. we have to keep uniform system of accounts separate and part from gap accounting. we are the only provider of voice telephone service that has to keep the uniform system of accounts that is a second backus

from gap accounting. now the fcc five years ago told her companies, we don't want to see those records anymore. we have no use for them because these companies are no longer rate-of-return regulated. so we said we would like to no longer keep accounts. they said we are not ready to allow you to do that yet great as a result today when we look at our investments we would like to be including all of our investment in the news staff but we are required to continue to put a lot of our investment in the old stuff. one of the things the fcc can do is to follow the act. two prongs to the act. promote competition and reduce regulation. the fcc is very good at promoting competition. the fcc could be better at reducing regulation. >> guest: let me ask as specifically as possible but what are a few things mr. wheeler could do right away that you would welcome that would be helpful from your

perspective and promoting competition? what are a couple of things they could do right away? >> guest: i think when you look across-the-board at those who provide voice telephone service to eliminate those regulations that obtain to us and not to our competitors. for example the informed system of accounts. equal access requirements that really have no meaning in today's environment. the idea that, if we had only 25% of households that are subscribing to a landline telephone, how do we deal with the requirements that we still have to make a network available to the remaining 75 or send that aren't using our service? these are issues that really go to the competitive talents and we go to where investmeninvestmen t lies. finally, the requirement that no matter what even when we deploy

fiber, that we have to make a voice capable circuit available is one that is not imposed on others who are deploying fiber. ended many cases it is letter companies to have to maintain two networks, a fiber network and a copper network. the copper network is quickly becoming one that the people don't use. in fact today only 1% of the nation's communications consists of the original voice traffic, 99%. >> guest: the fcc chairman says the procompetition, i don't know anybody nowadays he doesn't save democratic or republican and everyone is procompetition. why is it that these rules are still on the books and what you need to get them off the books? i would like to be as concrete as possible on that. >> guest: what we need to get off the books is due you have been repealed or the fcc announced it will flood

regulation. the 96 act provided that. we have filed for variance petitions and i think what we need to do is to have the fcc acknowledge that we are -- where consumers have choices for a service like voice telephone service, that does choices can be intermodal in nature, and so the commission needs to expand its thinking to not think in terms of simply wireline voice service but to think in terms of voice service and the competition for voice service. where consumers have multiple choices for voice service ,-com,-com ma then the commission should no longer engage in economic regulation of that service. >> guest: would you like to see some kind of maybe special committee at the fcc or some kind of task force review all of these regulations? is that the sort of thing you are looking for? >> guest: i think this is something the technology

transition task force can take a look at. i think the appointment of jonathan sobel and will be inspiring. yes go he will be the new general counsel at the fcc, the fellow who you just mentioned mr. sallet. >> guest: rivera has led three beers at the fcc and he was the architect in the 1970s of some of the original sort of computer one and computer to requirements aimed at introducing competition i think tom wheeler himself is one who has led industries and has been seeking to expand into the ploy and invest. he has a very keen appreciation for those things that limit investment. there is nothing that limit investment more than lack of certainty and predictability.

so where there is a regulatory overhang that creates some certainty and unpredictability, that limits investment. so i am very optimistic that we are going to see a commission that is going to focus on objectives and goals, investment, deployment and not focus so much on the traditional regulatory means that has been the hallmark of the fcc. >> host: you're watching "the communicators" on c-span and our guest is walter mcclintock residency of u.s. telecom for broadband association. our guest reporters howard buskirk of "communications daily" where he serves as an executive senior editor. mr. mott korn, looking at the fcc with five members you see net neutrality net management coming back? >> i cannot imagine that it would be a front burner issue.

i think it's one of those issues that has been resolved for a long time. i frankly think it was resolved long before the adoption of the current regulation because it was over 10 years ago that the commission promulgated his internet prince of old and for over a decade now companies have been operating in complete conformance with those principles. things like do not block, impair, degrade, attach any device running the applications so 10 years ago that was really sort of established in today we have so much competition in the field that no company is going to change the terms of service for its consumers. >> guest: there's a court case right now that net neutrality refers to as the d.c. circuit reducing your expectation that particular owing to be overturned for an early mandate?

used to be a general counsel for the department of -- so you are pretty good court watcher. what is your expectation based on what you have seen and heard so far? >> guest: from what i've seen in heard i think the court began to ask questions which courts usually do about ambiguity, about the extent of the commission's authority and about the impact of certain words that they are not completely clear. you know i think the reason verizon bought this is because the regulations were crafted in a way that it would appear to potentially limit companies from offering to consumers in the future services that consumers may well like to pay and it was that ambiguity and that uncertainty that i think led verizon to say you know, this could be problematic not just for us but for public policy.

that having been said howard i don't have a corporate role and as i said before no matter how the court rules i believe that there has been established at this point sort of vague commonly accepted set of standards for the way people do business with regard to internet access and i can't expect consumers are going to see any changes in that regard. >> guest: one for the question. do you feel today the rules that are in place for more than a year now, have they had any effect one way or another on competition of your members? >> guest: i haven't seen them have any effect whatsoever on the competition for the way in which we do business. >> host: mr. mccormick you came into tech and telecom. that dori. you have a transportation background of the transportation lawyer as well. how did you get into tech? is, that round is both communications and transportation. i began inch communications and

moved into transporttransport ation and moved back into communications. so what you could say is that my back round is in networks. my background is in railroad networks and trucking networks and highway networks and communications networks. what we have seen is that the telecommunications networks historically were structured along the lines of transportation networks and the fcc was modeled on the interstate commerce commission and the federal communications act was modeled on the communications act so it's been kind of a natural professional discipline to be able to move in both environments. >> host: what percentage of the u.s. population has access to broadband today? >> guest: today let's begin with phone service. 98% of americans have access to phone service today with regard to broadband, the latest statistics at the end of 2012,

more than 95.8 are sent of americans have access to a fixed broadband provider and nearly 90% of americans have access to at least two fixed broadband providers and virtually 100% of americans have access to broadband delivered over satellite. so we have about 4% of america that still is not covered by a fixed broadband provider and they think that one of the areas we haven't talked about is what to do with those ripp areas of america that need to have access certainly it has never been more important than today. we are an information -- and the federal government on important initiatives like access to health care and signing up for health care, making that i merrily available over the internet. so if extraordinarily important

that we get broadband out. the 4% of americans in the highest cost areas where couples can't make a reasonable business case and it's going to require government support. in that regard the fcc i think has been proceeding forward very favorably with regard to the price cap carriers that are publicly traded companies. i think it's reforms have been very helpful and they are leading to very significant investment. in fact the fcc made available nearly half a billion dollars in investment this year to those carriers. for the smaller rate-of-return carriers there remains some uncertainty in the fcc reforms and i think there will need to be further refinement. >> guest: there've been a lot of questions about what's going on with the usf and it gets very technical but if everything where it should be right now or at things a little bit of a mess

with usf and what is the? >> guest: i find myself having to write something about that the other day and i set i'm glad i'm mostly a wireless reporter. >> guest: for the smallest companies in the nation serving the most rural areas these are companies that tend to be the sole provider service areas because they are so remote. it's the 4% of america that does not have access to broadband. these companies want to invest in broadband, now that is what their consumers want to have but when the fcc reforms the prograa mechanism to cap support. the idea was well-intentioned.

the idea was to make sure that companies were not over recovering from the universal service fund but the mechanism that was adopted had an adverse affect of creating enormous uncertainty about the predictability of funding going forward. as russell, applications for loans from the federal government's utility service collapsed. private lenders which is one of the lenders of choice for small companies decided they could no longer lend money because it was an sure about the predictability of funding going forward. 80 members of congress have now written to the fcc and said the way in which you have adopted reforms for great -- rate-of-return companies are creating problems with investment and deployment. to her credit share worman

clyburn took a couple of actions to offer some immediate relief that would provide some predictability for the next year or two but this is an area that the fcc is going to give revisit and revise. >> guest: if clyburn called you tonight and said walter tell me how to write access, what would you tell him and what would be your device to him? >> guest: my advice with the focus on broad and investment and look at the object that just as you are doing more nationally. the usf program is one that rate-of-return carriers continues to be primarily based on calculated subsidies that are based upon the provision of voice telephone service. it needs to be a program that's based upon the cost of supplying an operating broadband infrastructure and so i would say look towards investment in

to this last 4%. >> host: to follow up on howard's line of questioning if mr. wheeler called you tonight and asked you how you would like to see the spectrum auction structured what would be your response? >> guest: what i would say to him is that going back to the lodestars promoting competition the whole idea of having spectrum options was to have an open competition that you put your money up and your bid. nothing could be more open than that and the whole is these are public access -- assets that are being sold to private interests and the goal is to maximize the return to the united states. i will tell you frankly, tom wheeler is probably more knowledgeable about structure spectrum auctions than the rest of the fcc staff combined but i would also tell them this. as that spectrum is auctioned

off don't underestimate the importance of the need for dramatic investment in terrestrially based wireline fiber infrastructure because all of this data is going to travel that last connection via wireless is going to drop into a wireline-based network and we are going to need to have the wherewithal to make dramatic investment in the fiber infrastructure and that wireline networks of policies regarding wireline ,-com,-com, fiber in the ip transition continue to be just every bit as important as anything you do on the wireless side. >> guest: the money is centered around verizon and at&t and no one else has the money to compete in this auction. should there be set there be set-asides? >> guest: these are large companies. t-mobile ,-com,-com ma sprint,

these are large multinational companies and so historically they have the wherewithal to pay for spectrum. you know it's a balance because the more rules you apply the less money that is going to come in from the auctions and these are again publicly held. this is it public asset and the american people deserve a fair return on that asset and the goals the commission has to have is to maximize the return on that asset. >> guest: since we are talking spectrum auctions the department of -- has raised concerns and wants to see limits on at&t verizon. do you think that as a loyal member of his party in an administration there will be a big break between what the doj is recommending and ready fcc is

ultimately going to come down on these issues? >> guest: there is always a balancing of interests so you lay out the ironies, maximizing their return to the people of the united states, making sure that there is a full and fair competition for the spectrum assets and making sure that at the end of the day consumers have choices with regards to wireless providers. i think it will all go into the mix and there is going to be ample time for comment and discussion as to how those options are restructured. but what i do think is you have to have consensus on the rovlin before you have consensus on the solution. i think there's a pretty clear consensus on what the objectives are here and now the question is how best to resolve that. >> guest: also in usf-i wanted to ask you, do you expect to see

what the e-rate expansion in schools and libraries, will that be a controversial thing? the way we are interpreting it is going to be another priority for mr. wheeler as chairman. do you expect that to be a controvercontrover sial enterprise especially with republicans in congress opposing the expansion of the program? >> guest: i think everybody agrees that access to broadband communications on the part of schools and our nation's schoolchildren is an object that everyone shares. i think that the issue is how best to fund the need. today we are taught in about the initiative is one that is admirable. the object of his admirable. i don't know anybody who has any concern what so ever with the object if. keep in mind that the current

usf fund is funded by a surcharge on voice telephone service so you are imposing a surcharge on a service that is going down, the down, down to fund broadband access and brought and it's a different service that offers many more capabilities and you want to expand funding for broadband. i think the big issue isn't what you fund. i think the big issue is how do you aggregate the money that is necessary to fund the object if? that is where there is going to need to be a discussion. over time -- >> guest: could this be an obstruction for the new chairman? >> guest: i'm not expecting a great. >> host: walter mccormick is the ceo of u.s. telecom and