and -- >> absolutely. that seems to be -- that's true. it has to go too. you somebody refuses to pay. >> absolutely. we have to right to terminate service under the rules. >> no right to terminate. >> exactly. no right to terminate service for anywhere in the order. we have to -- >> the commission. >> i really -- i read this you can use a charge to block but you can charge for different kinds of services. is not right under the antiblocking rule? you can't charge in such way to make it unusable. you still charge. assuming antidiscrimination. you can charge for different kinds of services. >> 76 is in the section regarding the no blocking rule.

would not be permissible under the rules. >> if that's true why would they need the antidiscrimination rule? >> i think what it does is it basically is the price discrimination. the charge will be zero. and you have to may not deviate from that. then they want to say explicitly just to put a cherry on top with respect to the transmission of traffic, you can't favor some traffic over other. there shall be no favoritism which is a fundamental element of common carrier regular plains property big against any favorite transition of traffic. could i talk about it? you raise a question about the standing.

one of the questions i have is what showing have you made on the market that verizon is in contracting with -- >> under syria club -- >> providers have requested. >> under that we have self-evidence standing. about case of third parties not even regulated by the government , yes, well as i was saying what they have done here is shut down and prevent the development of a two-sided market with respect to internet services. there is evidence that the record edge providers are contracting with broadband providers where they demand payment. espn has a website that is so popular that espn receive

payment for broadband providers in order to allow the subscribers to ak is eases the espn content. the market there certainly in that regard. today the buffer the rule we would be exploring those commercial arrangement. this order prohibit those and in fact will shrink the type of services that will be available on the internet. >> this is to say we -- [inaudible] that party regulates potentially regulated by rule -- >> yeah. >> yes. >> this is not on the adjudication. for instance, the last -- reach that question. [laughter] >> yes. to judge rogers standing point.

there would be a market if not for the rule my client wants the freedom to explore that. >> on soco i was going say it's not a difficult case on the common carrier issue. and you held after refining a lot of circuit and other precedent on this issue. that is a carrier is forced to offer service indiscriminately and general term then that carrier is being real candidated -- relegated to common carrier status. >> can we go to 706 to followup on the question. i wanted to ask you. >> yes. which islet assume -- 706 was a -- >> exument a. or b.? >> together. okay. dp i hear you say under those circumstance you conceive that

the commission planning of the evidence was okay? >> even if 706 a. or b. were ambiguous it's not sufficient under it. in case that have that say explicit in cases like that it's not for a court to conclude that -- [inaudible] delegate authority. at the outset with market power. 706 could be read legitimately to authorize the fcc to fake action but deal with market power because that would discourage it. >> it is a -- your honor, directing their action receipt miewfl of barriers to infrastructure investment. and encouraging broadband. it's an after the fact it's what they're doing is an toafnt regulate the internet as a mean of communication in of itself.

it's just -- boot strapping. >> boot strapping you can see at the outset for the market power? >> i think what i -- it would be legitimate to the fcc conclude that regulate would encourage other broadband providers to get in the market. >> yes, i can see that then was an error. because i think the arguments don't apply that are in the general point i said apply to all of these provisions. you have to overcome all the problems. >> 706 would apply -- 706 suffers from all the overarching. saints a legal argument.

[inaudible] [laughter] for the point of chevron and every statutory construction candidate. they have been clear on this. we will not just the language we look at legislative history. we look at subsequent legislation. we look at the consistent division of the agency which is it has no direct authority and all of this ten years later after the first classification order. it discovers direct implied authority that apparently has been hiding in -- [inaudible] that undermines the credibility of their argument in a real world way. >> ynt do we get to the commissioner.

[inaudible conversations] if it may please the court. the commission consistent with the precedence of the commission's prior decision and with the real estative history and the context of the statute suggested we should look at. i would like to start with the plain text of 706 a. she a seems to find a limitation to authority granted elsewhere in the statute. it doesn't say that.

it says the commission shall, quote, promote competition communication marnght other regulating -- state commission is interesting and state commission with regulatory telecommunications when it was passed the services were understood to be telecommunications service. they did have authority of leaving those to interstate element. in particular as to the federal government i think it's important realize in the same statute -- congress was clear it was not for any additional authority. a similar provision in any way. it's 275 afmght.

commission shall complete a proceedings by the purpose of identifying or -- pursuant to the authority under statute paraphernalia theatrical under the section. it goes on. congress knew how and comcast. court disulings it in other provisions that were explicit in not granting adivisional authority. >> if i might ask you what i think the court perhaps is -- [inaudible] regulate -- >> actually that's -- i think it's important to understand that verizon sometimes talks about the relationship carrying something for the provider espn.com. vieshzen doesn't carry anything to the provider. the only request here is the -- >> what is the youtube. >> because in the the equivalent

of verizon the cable company has the channels. and had to defie the contractors with the providers. right. and how many -- the economic relationship said you can't say you have to take 20 of those first come first serve. the providers were the same position as the providers here. no, they're not. your honor. they have their own internet access provider. and there a millions of providers throughout. i want to call my father in colorado, okay. and imagine the voice call the verizon customer. they can choose to serve me or not. they can charge any rate they want. they can charge me a differentiate than him. but i want call my father. they can't charge my father or

his provider. >> [inaudible] lining up only -- [inaudible] no. [inaudible] just -- this picture. so, i mean, asking talking about the point that the edge providers are not the broadband providers are not serving the edge providers; right? they have their own broadband providers. they have their equivalent. there's no way that, say, can communicate with me; right. except by going through my broadband internet provider. they are serving in their bit to

me. >> right. >> that's the same -- >> that's exactly i'm sorry. let me explain why and interrupt. >> okay. imagine the call. i -- >>let talk about -- we're talking about the internet. >> okay. >> the internet providers. >> okay. since -- the edge provider is the name position as a party on a long distance call. what happens is the internet engineer you referred to talk about this in great depth. verizon doesn't interconnect with the edge provider if it is by law the relationship -- [inaudible] 209 of the overed. the order many -- [inaudible]

just distinguish it from that. and also broadcasters or rate of the canal operator. nay were customer of a cable company. the cable company had x number of -- providing how to -- [inaudible] yeah. and different providers it except for the fact that between the two of them. any dpirches? it's more important. important difference. because verizon has more economic relationship with the verizon -- [inaudible] the importance of this regulation. the whole purpose of it is to prevent the broadband providers from imposing charges on the providers. now the commission eights acknowledges the capability and incentive to do it. the whole purpose of this. that is correct. >> what can you say? right now the service for free.

from the internet broadband. the economies is worried about there is a charging for the service. either way, it's hard say they're not being served the edge providers are being served -- >> absolutely not. first of all, get the sft for free. they are paying their own providers just the way -- the service free from verizon. >> no. access to the verizon customers for free. >> no, your honor. >> provider verizon. >> saying the automobile company phase -- to come in and clean and the dealer. i don't understand why you have to divide them the way you're doing. >> i'm doing it that way because there is a -- [inaudible] [laughter] of course. but the relationship in this market the commission take this

as they were. the verizon has it relationship not only with but with -- that is -- [inaudible] charge viers condition charge it. can charge everybody. the broadband provider to the edge provider to charge them. everybody can charge everybody except for the broadband provider to the use revenue -- >> your honor, i'm sorry. >> you charge that to one customer. >> everyone can charge -- >> they can charge both end of the market. the -- excuse me, the broadband provider to the edge provider against the -- [inaudible] yes. yes. okay. so everybody can then stop charge except for the broadband provider to the -- >> no.

the broadband provider charges the end user. charge any provider. that's the only limitation here. >> no. that is the only limitation, but yes. right. now i want to focus on antitrust here for a moment. you said in your source of more over the commission found the friends would be exacerbated by market power page 14 of your brief. that's -- the politician of the commission -- we are not -- [inaudible] whether there's market power. and so a little deceptive there. that's not usually -- >> your honor, i don't think there was any intention to see it that. make the point that i think.

>> right. >> and the market power. >> to find market power. >> right. >> and your honor, exacerbate the market dr -- suggest the market power. >> the commissioner -- i take your point. let me explain. >> evident area questions are troubling. yes, your honor. >> end users may have limited choice among the broadband providers. so i have a notion to be -- [inaudible] i think that does that should be 70% and 20%. 20% of american only have one choice. i think it's fair to say. >> but you don't make a finding there's a limitation of choice. you may have limited choice. >> then those broadband providers may not benefit from switching it broadband providers

charge. another -- further end users may not know whether charges ares service was -- [inaudible] and the final sentence information may cause -- [inaudible] you have all the hypotheticals. that's no a finding of anything. >> your honor, i think it's an exercise of the commission explained the judgment base order the economic -- it doesn't say and will. we think it will. >> your honor, i think its fair to say commission if you read the session as a whole, friend three specific economic incentives for providers to act in the way it could harm -- the whole key is whether the silver can switch easily or not easily. >> and the commission. and there's much evidence in the record that the consumers had difficulty. >> what you're finding is only the may. they may have difficulty switching. not that there is difficulty. >> your honor, i think not term

of not every consumer. not every consumer face the same. but many would. i think it would be reasonable conclusion -- >> certainly have developed evidence on that question. >> we can and question it did. >> the conclusion is only many. >> well, i think your honor different way than i would. the commission did not say all 1200 million some odd million americans have a same concern. the commission was saying these are reasonable given the record in the predictive judgment. these are reasonable possibilities. i think it's more than possibility. you talk about the future, your honor. i think it's a reasonable predictive judgment given what it is to switch when you have one other choice when you may have to take a day off work. you may have to -- [inaudible] >> day off work. >> there is a reference in one

of the paragraph. and potentially losing e-mail addresses and other effects. you call the broadband provider a gateway. >> absolutely. because -- excuse me. are retail stores. >> not in the same way, your honor. >> oh. [inaudible conversations] they do not explain -- the commission at paragraphs 26 i believe, and paragraph -- there's a suggestion of market power which is inconsistent with the statement that we're not going the market power. >> i think the commission explain exclusively the role here went beyond market power. and the commission rejected the idea that it has to provide define market power as the point -- 141, your honor. and 143 which talked about the issues in want department of justice and the ftc. those are the that's what the

commission said which is entirely reasonable. the statutory language is not to find an antitrust violation. it's to encourage the deploymentment of -- the department of justice position here is quite inconsistent the regulation. we would -- [inaudible] >> that's not -- [inaudible] specifically said they should focus on whether the market power here and other side be very careful. you're going detur it. regulate without focusing on market power. >> and your honor. 143 expressing addresses that. and -- >> the justice department. i don't think that's a fair position. the fair -- >> the justice department said the regulation. what the commission said -- >> in a fair characterization of what the justice department's

position was with respect to the regulation. >> the justice department could believe caution particularly as the price for -- and aware the commission did not engage price in paragraph 72 in particular with commission specifically -- >> [inaudible conversations] >> no. no one is being told to carry free. they can do whatever they want to the end users. wait a minute. goes back to who the customer is. i think it's reasonable for the commission to understand and it goes back to the discussion. >> that's all i wanted to explore a little bit would you. the commission's focuses is on the request obligation that the statute comes -- [inaudible] you said in responding to another question a moment ago that the commission in regulating an entitled to find the market as it defines it.

the prelim i indication if we were presented with an actual situation where verizon entered in to an obligation with an edge provider we would be in a different situation than we are today. so that so-called blocking and cutting off the two sided market simply is not part of this case because the statute refers to entities that request. there is no request that is evidence of the record here from an edge provider for some of the reasons that the engineerings

plain in the amicus brief. can you explain a little bit more? absolutely no one is asking to pay verizon. suppose they seek business from edge providers, they say this rule prevents them contract yule and -- >> and first of all the extent verizon wants to interconnect directly with an edge provider and backbone provider. then the commission is explicit. those relationships are not barred. it does not bar interconnection agreements. second, to say that the edge provider would be requesting to pay verizon would be in a somewhat unusual way. vierdzen would be saying we're

going block you unless you pay us. we're going did degrade your service unless you pay us. the only request comes from the end user customer. go back to the so often refer to. what the court said is important is regulatory scheme is not -- whether inconsistent with common carrier status that hardly mean it is so fundamentally -- as inconsistent with private carrier. and the circumstances with the relationship cannot exist with with the market is there are many intermediary.

explore a second tole from millions of end point on the that is not the fundamental common carriage obligation. there's no record that ordinarily works. there's no record that the parties ask service again. any request would be unusual requesting to pay for something they currently pay someone else for already. [inaudible conversations] okay. i want you to brief then how you would distinguish this the antidiscrimination to the tune of before you than question, you explain to me or give me the answer to the debate i was having question antiblocking

provision by themselves prohibit charging. yes, your honor. well, there is no blocking session. you can't, i mean, the only way to enforce a charge to say if you don't pay it we're going block you. that's what verizon can threaten to do to anybody. that's why this is so dangerous. it was only an antiblocking. can they charge somebody with faster service to the customers? in that instance, perhaps they could. they get better service if they pain. the commission had trouble it didn't actually -- >> the only antiblocking. >> so t the commission said if the only way you can avoid blocking is to pay. that is a violence.

but the consequence of avoiding -- not paying is not that you're block but you get lesser service that's not antiblocking violation. >> okay. so that is why. that's why. that's, i guess, why the antidiscrimination; right? that's what says you can't charge at all. well, no. the commission did not say the commission explain for many reasons it may be concerned about the priority on different pay raise but not find here those would always be illegal they would raise significant cause for concern the -- >> the antidiscrimination, of course, prevents something beyond blocking is less -- >> absolutely. ..

>> so it is not only the nondiscrimination commentary provision. but many are sending political ads as well. >> what does this all mean? >> and mean something less than most. and there is a whole discrimination thing. >> my point is that a nondiscrimination rule is not necessarily consistent with the finding that we have described

here. they are are some non-common carriers. >> operators are prohibited. and it includes what they are doing for access. as far as use of equipment. is that the case? >> there was an existing incarceration and a set quantum channels. and they negotiated already with those channels in the rule set is actually 20% and they no longer have the right to negotiate a new have to do that on a first-come first-served basis. >> all transitions are part of

this. >> it is not justice but there is a limited resource that is being divided. and it's fundamentally different than cable service and this is what they have said. you are not dividing up this. >> from the point of view it as part of this, is that correct? >> deaths. that is what you are worried about, isn't? >> guess, but as for the end user, they should choose not to serve the charge at all. and they should say that i'm not serving you i will i've only serving to pay $100. >> that's not important. but i'm sure if i misunderstood you. so maybe we could talk about this little but more.

okay? so the carrier is forced to offer service indiscriminately in their own general terms and in this case different from that? >> you understand. >> you understand as well. [laughter] >> so i apologize.

>> and so do you want to talk about getting paid for the faster service. >> and so otherwise insurance can connect their images along.

>> when it comes to paragraph 76, and they didn't say that it would never be allowed. and they said given section 706 they didn't want to do this. because if verizon could do it, what they would have an incentive to do is to create congestion and attractive jam and so i understand why the commission had developed all these tools. a double purpose of the rules

was to ensure that all of this was provided with free assets. then disallow the digital part of this to survive. >> and i think the answer of this was part of the situation. you have to look at this in the context of this is not actually a relationship. and i want to make sure that you understand that it is not that cents. and what i haven't heard is the condition and there is an easy fact of what you think and there

was a classic carrier that was self-described and there is a distinction that allowed the digital arrangement to survive. >> we had the judge and has expertise and i agree with him. >> i'm a little concerned about the first amendment issue suppose that they are offering this access with lessons on how to build and construct chemical weapons.

and i agree that there is no first amendment issue and i believe the access to the security limitations will probably apply. >> and there is no governmental security. i kind of thought it and especially within the law school in this case to believe that they were not carrying the message. they were not speaking but they were clear over and over again that it was accounted for other people speech. >> what about the law school

case? but they were able to prevent a speaker advocating violence against united states? >> the difference between not is a different and am renting out rooms. >> okay, so the same thing. the same thing as a hypothetical situation. >> i'm sorry, verizon is not speaking. >> we will chuck that message. because therefore they have no way to check that message. >> yes, i went to "the washington post" and there is a specific story about the game tonight, what crazy thing that they think you? >> just like i would not say what a crazy thing they said in

other ways to. >> they had their own content, which is also true in the context. >> yes, and they were allowed to have their own contact as well. and they had it work for security this. >> bryson has obtained immunity. and bryson is not speaking. >> and in other words you divide verizon into two parts. >> it has many roles and websites. verizon has a counterweight. >> a conduit? >> and in fact, they can be part

of the briefing in particular. >> but you don't have to understand the issue in certain certain circumstances. >> i would like to go back to the common issue. to go back to what james taylor was saying, i think it was part of this, what the commission that was not making a full determination at this point to pay for priority issues on the issue of whether there are instances where these agreements could happen. but i think to suggest that any time that verizon wants to enter an agreement with anyone whether any current economic or technical relationship of that party to say that you can't do that because that would block someone else's call, that it is not a common part of it. i just really want to come back to this instance.

>> i think that there were reasonable factors. is that correct? >> correct. >> so where is that here? the commission uses a language. and i don't see where verizon would have any flexibility. >> the commission is setting only unreasonable discrimination.

and there was a flat factor that we were looking at. all these factors we were looking at. >> it is reasonable under these percepts that drama could enter into and i want to be candid. we still have some significant costs were concerned. >> and second they provided guidances and with very uncertainty and the threat of

there was a barrier to infrastructure. and so is there any chance that the broadband providers would provide any charges which will eliminate the growth of this? >> i think the commission is sent. they are certainly concerned about that. >> that is a very but don't pay attention to that because we might soon be able to learn these rules to do all things that those who raise concern

about charging the providers are worried. >> i don't mean to talk about that. >> to go beyond this. you are arguing your case as well as you can and you are defending the rule that you have. and that's the rule that you have to defend and you haven't shown me everything. so what are the kind of flexibility is? other then you say they still might able to do it and there is reasonable discrimination and is at work on some? >> i think that is correct. >> and i think that one of those situations -- and the commission says take a look at this.

and he sent us right back. >> let me just talk about a couple of things to go to the point. i have no intention go beyond the order and paragraph 76 talks about this. and i do not want to suggest that i'm undermining the rational that the commission said. they identified that there is a significant concern with relationships and that is not something that i'm suggesting to the commission could not be part of the rationale or concern. and second, as to our unreasonable discrimination section 202, they said that the fact that someone was part of

this is very disturbing. >> you're telling me that in paragraph 67 the service provider could avoid being blocked part of the fee. well, that just applies and it does not prohibit verizon. >> okay. >> from charging for the providers for different levels of service like faster service. >> i believe that you are right.

so if they were to knock out the antidiscrimination provisions. it would be limited to prevent verizon from providing the access is opposing mess. >> of your allowed to charge and it's perfectly legal to charge, how can it be illegal to block? >> i think it's a consequence. >> yeah, it is nevertheless illegal for the broadband provider and only if you are

here to agree with that. >> i am legally entitled to charge and otherwise we're coming out with this kind of profit. so no one refuses to pay and you are saying that you want to pay periods where you are saying that under this rule i'm not allowed to block? >> i believe the answer is no. the reason is -- >> i'm not allowed to block? even though you are refusing to pay? >> what i understand the judge to be asking -- >> that talks about my question.

>> that if i tried to answer this. thinking that you would get the regular service as opposed to the faster service. >> okay. so if the edge provider refuses to pay at all under the rule, the broadband provider may not block. >> that is why it paragraph 67 cents. >> ways that? >> it could be illegal to prevent them to do this if the customer refuses to pay? >> i think it depends on the background rule. he had to pay for any service or only for better service so

bryson says do you want faster service in the case with many dollars a month. google says no, then they still have access. and so there was -- so i just want to talk about this little bit. they can take charge for different services. >> that is how i understand it in paragraph 67. >> okay. my question is this. suppose we weren't referring

that the antidiscrimination was prohibited with common carriers. there was statutory authority disclosure involved. what would we do? does that have to go back to the commission? >> there are several rules. >> you told us affirmatively. >> absolutely. but she didn't say anything about the components. >> we are not distinguishing no blocking and nondiscrimination. so she attacks just as much as your honor just said. and so clearly we would disagree with any decision that

nondiscrimination has not allowed under our rules. it is separate and a separate principle in the function separately. >> i understand. but i just can't understand that portion of it. at one point you say the rules say you can't charge, okay. the broadband providers cannot charge it. >> right now it is subject to paragraph 76 which suggest this. >> there's something along the line about too much traffic at the time. and so basically the rules says that the program provided as a reason why customers are not going to charge this much percentage. >> that is because of antidiscrimination.

>> okay. >> well, now that the other says that's ridiculous and i refuse to pay. are you saying that under these rules would still be legitimate assuming that discrimination is illegal? that would still be legal for the fcc to refuse to allow the broadband provider? >> yes. >> because it is the background wolves do you get some level of access and you're asked to pay for a better level of access. >> okay. i don't understand that's exactly but how can you tell a businessman, that he must have a customer that refuses to pay.

>> a couple of points. the discrimination. >> on this asking how can you tell? >> is a businessman is charged, but you have to assume hypothetically. he is charged and how can you tell him that you must serve the customer? >> i don't think we said they are entitled to charge. i don't think the commission has said there is a blocking will entitled to the charge. >> so this is needlessly confusing. understanding of the rule which we think is dubious that so far the dialogue has suggested. it requires the provider to tally the content of the edge providers for free.

and hypothetically that is a problem that we have. so how can you separately say even if that's true. even if that is true. but the antidiscrimination is illegal. it is so appropriate for them to say that they must provide service even if the customer refuses to pay. >> here's the example that i think i would get. it is not common -- >> it is not common to have a basic level of required service to initiate different levels with different people. so that is what i'm trying to say. >> but separating the answer from the antidiscrimination

provision that is part of that that is prohibiting it from happening. >> i think that is correct in paragraph 76, it suggests that we have significant concern and this is a challenge that there is no record of anyone having actually made that request. and i do believe that i'm not going to burn the coeds and i've gone well over my time. and i'm happy to answer any further questions. >> thank you. we will hear from the council for engineers. [inaudible conversations] 's. >> good morning. >> thank you. most americans who watch a movie on netflix or buy cheap phone

calls from vonage must rely for their internet access on a company that would like to sell them a show or phone service instead. most americans who watch this regular programming mobley by means of a sling box must rely on internet access for a company that would supply them with their own programming package. and so internet access providers have the incentive and the ability to discriminate against many of the broad polish and members and with the judges questions about market power it does not make an explicit market power finding. it did find the 70% of households do have these limited access providers. so this is a barrier to

infrastructure and those are two kinds of investment that mutually reinforce one another as horizon has conceded in the bitter 2010 letter. the provider would have to show its viewers blank screens for long periods of times. and there is nothing pushing about this. the direct ability for them to make investments as an edge provider. so horizon heavily relies upon us. but the facts of the case or the reverse from those here. and the fda had in the words of

the supreme court, effectively ratified the agency and agencies prior view not to have jurisdiction and here it was the commission's computer iii that had been subject to much more severe rules with the entire network. mort is right brison won any burden from the network. they don't want any problems from the rules that were made or that had been installed or changed after the rules. sure, they want to double charge the users and providers and safety don't pay me i'll be part of the conduct. and as was debated.

>> and prohibit persons under? >> well, verizon not provide this and they will block your phone altogether. but they do have the ability to negotiate certain arrangements in terms of the priority. >> and antidiscrimination provision? >> yes. an example would be in association with hospitals and it really means high-priority access because of sensitive heart transplant operations and i think under the reasoning of the fcc that would not be unreasonable discrimination. but there is much more to your questions.

and the fcc does talk about specialized services. >> critics say that you have to pay for pastor service. and there's an antidiscrimination? >> the answer is we would probably know about other circumstances. but with specialized services that could accommodate this request broker, that's a different question. do you agree with what i think we have a difference with the anti-blocking and antidiscrimination? that the anti-blocking provisions would have them block an edge provider from its customers and it would not prevent them from acquiring them to pay for faster service? >> in certain circumstances as i

mentioned. and suppose the antidiscrimination will be a part of it. >> it could not charge for not blocking. particularly if they charge for their services now that are free. to get to the customers. >> yes, if it were a service two the same hypothetical on that. that is assumed that it is a service. and does that mean that it is an antidiscrimination provision that were here that horizon could charge google or anyone always for faster service and google pays nothing now to get their customers under the anti-blocking provision which would be okay for them to say to google but they make so much a month for faster service.

>> if the rule did not exist. >> right. if it did not exist, or the antidiscrimination was added, but not box things as well. that prohibits horizon for making that kind of charge. >> many circumstances. matt. >> okay. and so that is the answer to the next question would timely to ask you. which is not how you distinguish this with the standard and doesn't apply to this? >> two distinctions. yes. especially with specialized services. >> it is a qualification because google contracts -- they could contract with brison within the specialized services. and that is a qualification to the discrimination that is

number one. number two is discrimination and number three -- >> could rise and say that they would like this service about another service engine? >> it depends within the services. the answer is probably yes. in other words it is free. so why did they adopt the rule? you started your argument by telling us that what we have to worry about is an internet provider and fees. >> yes. so that is what is going to restrict the investment. right? >> now you're telling me that under the rules they can charge back. >> it does provide a your protection. and it is a fact that is what

fires them and that is why. [inaudible conversations] >> it is what we are talking about in regard to this. there is something that says we will exempt a nonspecialized service platforms. it would monitor those with further action, but it is an exception. >> the case would be an example.

in other the other platform is another one. how about were? >> a programmer says i want to do this with these files. the file says yes. >> it is cable television. and we are definitely talking about how goes across this with the internet service from verizon. it comes across as cable.

>> i think we were talking about the television program and they are getting this to the files. in the latter is what is controlled. >> well, they couldn't get the file services and over-the-top service and is equal has equal access network on the computer as well. >> that is different from what we are talking about. we are talking about straightforward internet service. so could rise and say, i don't

know. for this amount of the or that amount of money for this and not anyone else. >> within a specialized service offering this that might be possible. >> the answer would be know if no that is not specialized unit that is correct. and this is like the regional circumstances. so with the regional circumstances we would have to provide which is the culmination of all of those pressures. and this is different. the programming lineup in the supreme court of the case, those

were part of the control of the public. nothing like that is happening here. internet is not subject to grisons control. and they just give access on end-user requests. and there is a political rally that has a privileged view of the speaker. and so it goes through the end-users and says okay, i can afford you this amazing list of the speech. saying that you cannot go to the speaker as well and say pay me because these are things that we have in this case. so let me say one more thing about the candidates.

because anyone who says you must love her something or you may lose something honest, but then it can be rewarded as a zero charge rule. you cannot charge for doing something that is required in the first place. so then this will make it prohibitive to others. and that flies in the face including internet service providers and they make a home carrier rule. and they recognize the authority but said that it is not part of it. >> thank you. >> thank you, ma'am. >> council for verizon area.

>> i would like to clarify the conclusion confusion about the rules and what they do. [laughter] it didn't cost a cent. [laughter] >> no blocking rule includes the prohibition against charging. you may not charge in that paragraph 67 and it's very clear. and that is why i told them that i should correct. and i accept your concession. >> paragraph 67 is about the no blocking rule.

we have regulation and the nondiscrimination rule, he said that pay for priority and we does have concerns about that. and here's what the paragraph 76 says. it's a sport that concern sentences in light of these concerns it is unlikely that it would satisfy no unreasonable discrimination standard. i think that would enter this court including those that is part of a safe regulation. these thoughts need to be adopted.

and my client would be part of it. >> it is the anti-discrimination provision is that correct? >> yes. >> that is what mr. webb says. >> we so could charge for the access. >> you could save this with a provider and you could say he paid as much a month. >> some people have interpreted that as effectively no blocking. and i don't want to get too technical, but there are those that think -- >> but you still have access because he wouldn't pay for the faster service. >> and this is just a no blocking rule, then i think that that would be different.

>> that is what he just said he was [inaudible] 's is >> especially with us, they don't need to providing a service in and this one. >> these rules do both things.

and we do not show favoritism on that front. >> what we are asking to do is to let you treat them the same areas and make sure that i understand and i take it that you agree with the anti-blocking rules you blocking with the antidiscrimination rules add to that and so without the latter -- >> actually are theories that the no blocking rule which also applies to wireless, imposes a form of nondiscrimination and that is no price discrimination. if we can't block and everyone gets a price of zero and that is a uniform price, that in itself is a nondiscrimination requirement. because then we may not deviate

from the price of zero. and then there is a separate question of this. >> you have to pay this or that a month or we are saying that you have to block this or that user. you can say that we have a deal for you, google. and that you can still do. >> we can't do it under under paragraph 76 onerous conditions that correct. >> that is why they are separate. and i think the point is that i'm just trying to clarify it

because mr. love was completing the tear and suggested that we are inaccurately describing the nondiscrimination rule. and if there was some flexible it is because all common carriers may engage in reasonable discrimination in the first place. this is just like the other case that we talked about. it wasn't the viewers and their relationships with cable companies that was being regulated. the ability to reach the viewers and that is what we have here including this midwest video as well. and there was room for individualized negotiation in here there is nothing to negotiate.

>> there's a lot of anti-blocking position supports. >> correct. but i think that leads us to a brief conversation about severability. >> yes. absolutely. and i think you have to ask the question. >> we have no agency intends but these rules be severable. there is no severability cause and they cannot ring itself to say that in its reply. and no agency intent whatsoever. under the broadcasting case we talk about how the wilson functions sensibly. the commission made clear that all of these roles, whether you want to separate out the blocking of nondiscrimination

and it will be regulated wirelessly without regulating otherwise. so if you go back to your point to all of the reasons why the commission adopted these rules, they were concerned not just about access to end-users. but they were also concerned about creating a first-class type of service that might overtake the other services are not be available to everybody on what kind of a basis. sweden if you accept the commission's very, we actually need all this to preserve this as they say in exactly all of the same terms. so i think to blue pencil be a border would be an extraordinary

act and this would be a typical practice. >> what they said was that if title iii supplied authority here it would be part of this and that seems to beg the question of whether they can operate separately. >> a fully applies an argument works on both sides. >> not only the anti-blocking provision. >> that argument is and i think this is accurate, that the no blocking rule is part of this and if we can't charge for access and that to medicine no payment and that is a zero and setting a price of zero is requiring nondiscrimination in price terms.

and we are only having this in this way. i assume the verizon can walk from user firms on wireless. >> no, we cannot. if you want to reach them faster. >> we think that it is clear that the commission like to say that we may do that on the wireless side. and i think that we would welcome that. >> i think this statement about this has to apply because we could ask them to tell us that if we want. >> is still talking about why that would be a crucial point. because there is a question

about whether the broadband provider can charge for anything. and in other words i will not allow you much he paid this or that. that is how it works. so that means you have to carry and we have the this at a price of zero and that is exactly what happened. all of those who wanted to use that could walk into the cable company can say hello, we are here and we want to use these channels to reach viewers and we get this for free. >> we don't understand how there can be daylight between the two rules. so we can understand how the common carrier talks about charging for access and seems

inevitable to be a legal in this way. >> that was certainly the theory of the brief and that the explicit nondiscrimination standard was just icing on the cake. i think our biggest concern was the price on both sides in the on dissemination and mandate and we have no interest in blocking anyone. that is what we have said with and we cannot do this with a nondiscrimination provision.

especially blocking and charging for more. >> they have a provision that it's hard for them to a understand the kind of carriage. >> i wholly agree that there are also presidential forms of service. and if that is true, wouldn't that provide the flexibility? >> i think that would illuminate the rule against discrimination and you have to talk about this but says he may not charge an access for that. so do you believe that that would be -- i don't think we would be here and i don't think we would be here today. >> there's a charge that someone

refuses to pay. i don't understand. >> i'm positive that the ban on charging for access would be struck that the commission would not say that it is effectively no blocking. >> and i would like to understand the proposition. i keep coming back to the proposition and somebody refuses to pay. >> i think that we should be able to win in the world that i'm talking about you would be able to you. >> but it's illegal for the fcc to fully prohibit you from blocking if your purpose of blocking is to enforce a charge. >> at. >> swire you confusing everyone?

>> let's go back to the two hypotheticals. number one as they say we can't let you do this without paying this money dollars a month. >> and the commission would say that it violates the blocking. >> 's will sluts talk about how there's no antidiscrimination provision. and if you want to get there faster, we are going to charge you $200 a month. and that is okay. right? because if they decide not to pay and they still have free access and they just need to get in a faster way and that to violate it. correct? >> that is correct.

>> i think so. and again i have to reiterate that if there were a no blocking rule and they didn't consider the existence of charges were tied to charging and it was just no blocking and by the way we are not going to enforce this. we are not telling the businessman that you can't charge. >> you can't charge at all. >> not under these rules. they pay nothing for access for basic service. >> it is the ban. >> so why are you arguing? [laughter]

>> we need to charge for faster service that google doesn't want to pay is what you're saying. >> they certainly work together and they guarantee a with level of access. >> council, is there anything else you'd like to say? >> i would like to ask more questions. i'm asking you about his findings which are referred to. and etc. and if those were stretched

around they do not have any choice and they cannot switch providers and they do not know whether charges and there is a change in dates. and that is part of it as well. and i think that you initially agree with the fact with the power that will allow us with the interpretation of 706. ..

>> there of precedent that they cited dawn this access charge explains the commission has the constructive ordering doctrine that means he did not request for order service do not put yourself

in the position to receive the benefits that in fact, do so. that paragraph even though in the case called capital network systems but recognize that doctrine sova every think about that argument on the merits is sadly contradicted by what they brought to your attention. >> i want to be clear but that case is a preference in this section two '01 b. >> we say that is not bad regulation because it does not have that commentary relationship and not just third parties who want to use the service over affirmative requests there is no precedent dickens that also to provide no authority at all not commissioned by the us 303b.

it is not in this order. split. >> that is really not enough and we specifically discuss what is required. for all these reasons he fight against in its entirety. >> we will take a brief recess.

>> is the president stated in march and reemphasize the goal of the united states with afghanistan is to disrupt and dismantle in defeat the allies to prevent its return. the international military efforts to stabilize afghanistan necessary to achieve this overarching goal.

governor christie also talks about hurricane sandy hurricane efforts in his speech. [applause] [applause]

[applause] [applause] [applause]

[applause] [applause] [applause] to. >> thank you. to drive. thank you very much. [applause]

thank you very much. thank you thank you very much. thank you. thank you. [applause] thank you very much. happy to your. lieutenant governor governor, mr. speaker, congr atulations, mr. president, m embers of the state legislature, friends, and fellow new jersey ince. last week certainly tested this administration.

mistakes were clearly made and as a result we let down the people that were interested to serve. i know our citizens deserve better. much better. i am the governor. i am ultimately responsible for all that happens on my watch both good and bad. without a doubt we will cooperate with all appropriate agrees to insure that this breach of trust does not happen again. i also want to assure the people of new jersey today of what has occurred does not define us or our state. this administration, this legislature will not allow those work that needs to be done to improve the people's lives in new jersey to be delayed for any reason. [applause]

[applause] i am the leader of this state and its people. i stand here today proud to be both. [applause] but also those of you who know me know that i am always, always determined to do better. so now i come before you once again for my fourth time to report to you on the state of our state. the good news is today the state of our state is good and getting better.

[applause] remember that four years ago right now we were in the throes of an economic crisis. today, our unemployment rate is 7.8%, the lowest in five years. [applause] four years ago we were losing jobs. today we have gained a 70,000 jobs in 2013 alone and a total of 156,000 in the last four years. [applause] four years ago growth in jobs were leaving the state but today personal income

for new jerseyians is at an all-time high and we are attracting new companies. that has brought jobs. we now have four straight years of private sector job growth. [applause] in fact, in november our employer rate was the largest one month drop ever measured. in the last year new jersey had the second-largest drop in its unemployment rate in america only behind the state of north carolina. we could choose to go down a path of continued tax increases and the addiction to spending but we did not. we held the line emprise spending to a level below fiscal year 2008 promise six years ago. we could have let it grow even while the private sector shrank, but we did

not. there are 6,000 fewer state employees than when i took office four years ago. but there are more 155,000 new private-sector employees. we improved our business climate and today by every measure, business confidence is up. one national magazine ranked new jersey among the top five states of the most improved business climate in america. [applause] it is no accident how we got to this point. no accident at all. we chose, we chose to go away and this new year in the next four years we need to build on this momentum by

creating a new attitude. we need to create an attitude of choice. attitude of choice is not about choosing everything. it is not about saying yes to everyone. it is about us setting of priorities to choose to invest in new jersey where matters. to put in place the reforms that will make that possible. the best part of our turnaround over the last four years is because we have chosen to work together. take a moment. for balanced budgets budgets, pastors bipartisan support. reform passed with bipartisan support. future tenure reform passed with bipartisan support. a cap on property taxes, and passed with bipartisan support.

we acted together. even though the competition is fierce the record on this is clear, no stage in this country has shown more bipartisan cooperation in governance over the last four years there new jersey and our people are proud of it. [applause] let's resolve today we will continue to put those people who are proud of us now, put them first and choose to do our jobs. one of the things we know historically has people of new jersey is because of high property taxes. in 2010 together we capt. those. it has worked property-tax growth has been the lowest

in two decades in -- the job is far from finished and taxes are still too high. i join you to start a new initiative that looks at the root cause to drive it the tax in the first place. first let's get context. the 2% capital already enacted has worked for a reason. the reason is because we have done it by controlling cost. we accompanied it with interest arbitration award system that we knew needed fixing. the arbitration cap was not permitted to but is set to expire this april unless we act. so why ask you today obol size of the i/o let us renew that interest award that is working and making a permit before the deadline in april

[applause] [applause] another reason property-tax says are so high or cities and towns are stuck with the series of costly state rules increase the cost of local government. as it grows, taxpayers grows, taxpayers, property taxpayers pay the price. we have worked with the senate to pass consolidation and civil service common shares services reform but we have not yet got it done in the assembly. we need an effort that includes everyone responsible for property taxes. the senate, the assembly assembly, our administration , and local governments to provide them with the authority to run their government like a business, consolidate commissure services, a cut

duplication and ultimately to reduce property tax. don't think it's possible? look at what happened last year. talking about this for a long time but finally they consolidated into a single government. note to offices or police departments in the savings id one year was $3 million. that is that of a budget of 64 that is 4.7% savings on their budget and the citizens of princeton got this in return cover more services despite a smaller budget and imagine this, a reduction in their municipal taxes. that is not just an opinion. the local unit consolidation commissioned if you think that is easy to sale i will try one more time. [laughter]

no. the civil service the new rules at the top of the list of barriers of shared services. so let's help our towns put away some arcane rules. when it comes to driving cost us not forget, i cannot imagine you could, the practice of the six figures sick leave pay offer government employees. sick time should be used when you are sick. if you're lucky enough to be healthy, that should be your reward. said cleve has been accused too many times and the cost israel. almost $1 billion of liability facing new jersey towns. $880 million and it will only get higher if the system is not fixed. these reforms are common-sense.

so let's with the albatross off the town's liz begin in a bipartisan way let's stop the payout in their tracks apartment does to taxpayers. [applause] [applause] and our pension system is burned by those who collect disability retirement because they claim they are permanently disabled but then they turn around to go back and work full-time. this is wrong. and it hurts our system. the people who really

deserve that payouts so we established by executive order to prosecute pension fraud but we need to go further. and solidify our pension system by reforming disability retirement system to end fraud and abuse. we're not talking about taking away benefits people deserve. but if folks are going to abuse the system it hurts every person who needs the system when you are really, really injured permanently. not only will this help that but to reduce costs and property taxes. here is one of the open secrets of local government the enactment of the 2 percent property tax cap some towns get go around by charging user fees that they used to put in the budget. so let's end this practice.

all of you in this room that voted for the cap did not want it to be gone around. so let's not make people's property tax more expensive by not enforcing its and ending abuse. [applause] i will have more to say when i present my budget next month. i have always believed we have to consider changes to the tax system in the context of the overall budget pitcher back and figure represented choices regarding taxes. when we tell you one choice we will not make because it is one answer that wal-mart help grow jobs in our state. that is raising taxes. the evidence is clear it is

equally clear we need to stand up and not allow the tax burden on citizens of new jersey to get larger but it gets smaller. [applause] it is clear property taxes and other taxes are equally clear that improving our educational system is the key but we have made some great progress these past four years school aid, long overdue reform to reduce teacher tenure in reduce -- and charter schools for some

the most challenged cities. some of the results are promising. last year new jersey high school graduation rate increase by a full percentage point at 87-point 5%. student achievement is strong in many public schools in new jersey students are among the country's greatest achievers. just a few years ago a graduate of my a high school in the kingston won the nobel prize is a chemistry. you are making a large investment in public education. we spend over $25 billion per year. hour per pupil expenditure is the highest in the nation at over $17,000 per year. in some cases i believe our children are not receiving the education they deserve. public's schools are strong but to many are still

feeling. the vast majority of teachers are performing well but some are underperforming and they should be removed from our children's classrooms. the need to be better is particularly acute in the jersey city the urban schools demand our attention and they have my. we have taken bold action that was necessary to make a commitment to kids in our cities to have a right into the largest school system in new york to bring in a new organization and new resources that not only in the form of state aid but collaboration with parents and teachers thank community leaders on the ground. one result? we negotiated a contract with teachers u.n. union to deliver merit pay along with increased teacher involvement with the process. we want to encourage innovation listing specific

needs of the communities. the reason why we empowered our superintendents' to make choices that work best for their kids, parents and schools. in new workers jimmy has moved that stop action failing kids to empower 50 new principles to create cooperation between the public schools and a public charter schools to reorganize the structure to put the focus on kids, their schools and their parents first. what are we seeing? good early developments. enrollment has increased by more than 1,000 students. graduation rates have increased by 10 percent.

newark is leading the conversation to make sure every kid who is behind or ahead or special education needs are lifted up. every kid needs every kid. her efforts have not been met without skepticism but she is a true partner with desexing cares about that city in the public schools. she is here with us today cammie stand up so we can thank you with your commitment. [applause] how bad has it been in camden? how about this. last year only three

students graduated college ready. listen to that again. in the entire public school system and in canton -- camden last year only three students graduated college ready. that is of scene and unacceptable with the of breaching of the face between those families and every level of government responsible for their education so what are we doing? we will bring that same energy that cammie is bringing a in just a short ginger already he has turned around a charter school now showing the largest academic gains in the state and

launched a new program with the mayor that has created safe walking routes to and from school for camden's children. of the 345 that were dropped out last year came on to lead the effort to go door-to-door to be enrolled 50 of those back into school. i am proud of what you have done already. i am excited about what the future of camden schools will bring under your leadership and local officials and stand up so we can thank you for your efforts and dedication. [applause]

both of them have my confidence and support in the administration's confidence and support to aggressive reform for those communities to put kids first. they are emblems of my commitment to assure the opportunity for an excellent education for every child in new jersey regardless of six code. -- is a code. we have to adjust our case through 12 education approach to the parole that we live in. if my children are living under the same school calendar that i've lived under by definition that school calendar is antiquated.