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[inaudible conversations] [inaudible conversations] welcome. thank you for coming. today's briefing is about the internet committee titled circuit court decision on fcc open internet roles is it random or is it a law. such short notice the decision came on tuesday. we've been awaiting it and

wanted to do a briefing as close to the decision as possible. this is the congressional internet caucus advisory committee. we take no position on legislation or regulation but the proposition that the internet is extremely important and that we should try to insure a sound decision making so what we try to do in these meetings is any issue that affects the internet, we try to have a balanced perspective. a lot of perspectives on the issue and have a collegial issue on the topic. the so-called net neutrality rules lend itself to that type of debate. hosted in conjunction with the congressional internet caucus and its co-chairs, congressman bob goodlatte, congresswoman eshoo and senator leahy has less senator thune. i applaud the caucus for hosting the dates that pose a variety of perspectives on important issues with which they themselves may not agree so i want to applaud them for that. hash tag for today is

#netneutrality and this is just the start of the conversation on the fcc open internet rules. the moderator today is david stone, general counsel for democracy and technology. david works for the center of technology, which is a civil liberties first amendment organization. and david has agreed to try to moderate this as impartial and in as fair manner as possible. so i will hand it over to david stone. thank you. >> neutral, you might even say, tim. thanks to the internet education foundation for pulling this together as promptly. as tim said it was to stay the court decision came out, so it should be a great opportunity to get some initial analysis and initial reactions to the case means. as tim mentioned, i'm going to moderate. i will try to be impartial. we filed a brief in the case and that is why he mentioned that.

to introduce the panelists to my left we have marked who is a partner at johnson and general counsel to the internet association, then we have got christopher yoo professor of law, communication and information science at the university pennsylvania law school. to his left is matt wood policy director and free press and to his left is russell hanser at wilkins and barker and hamilton nbc. what i would like to do is offer a background of the fcc open internet rules and on a recent court decision, then i will turn it over to questions for the panelists. so in terms of background, there's been an active policy debate over what is often termed internet.org at neutrality going on for quite a few years. as most of you know it is a debate that centers on whether broadband providers of internet access, the internet connections that people use to get online, with the should be required to carry all traffic in a

fundamentally neutral manner, without any kind of interference or favoritism. or on the other hand, they're imposing this kind of requirements would be unnecessary, or would impose actually harmful consequences for the carrier's ability to run their networks and run their businesses. back in december of 2010, after a long set of proceedings and multiple rounds of public comments, the fcc adopted a set of rules on the topic which it called the open internet rules, and those devotee main components. there was a nondiscrimination requirement, there was in no walking requirement and there was a transparency requirement. now, the blocking rules prohibited broadband providers from blocking access to the lawful online content service. the nondiscrimination rule prohibited broadband providers from engaging in unreasonable discrimination among the online content and services. but interestingly, that rural exempted the mobile providers. so that was for internet access

only. and then the transparency world require them to provide public disclosure regarding their network management practices. now, after the fcc put out rules, verizon challenged them in court and they made a number of arguments including that the rules or arbitrary and capricious, said they were impermissible under the communications act and even that they were unconstitutional. this past tuesday we finally got a d.c. circuit decision that struck down the rules pertaining to the blocking and discrimination. it didn't lead to transparency rules in place. the court held that the act does give the fcc some authority over broadband providers. but it concluded that the antiblocking and anti-discrimination rules are inconsistent with the fcc previous decision to treat broadband providers as information services under the communications act. without getting into too much detail on that point, i think the details of the statutory

framework are important here that the communications act establishes two broad categories of services. telecommunications services, which he will sometimes hear referred to as title ii services because they are regulated under the information act, and information services. and the law also has a provision that says that providers of information service and providers in that category shall not be treated as a common carrier, which is a term that has a long history in the common law. and the core of the court's ruling on tuesday was that the antiblocking and the anti-discrimination rules amount to the common carrier for rules. and that means that the fcc cannot impose the inside looking and anti-discrimination on information services, which is exactly what the fcc had previously said broadband service providers are. so, in fact, there is a level at which the court was saying that the fcc cannot have it both ways. they can't decide that prague

and is information service and then turn around and impose the kind of nondiscrimination requirements that have characterized the common carriage. with that background, i would like to turn the discussion over to the panelists. i think i would like to start with just the question of where exactly this decision leaves the concept of net neutrality and nondiscrimination on the internet. is there any leeway for the fcc to call for some form of nondiscrimination or is that now basically totally out of bounds in the wake of this decision, i will start with whoever would like to start off on that. >> and full disclosure i do represent an intervenor in the case, intervening on the side of the fcc, the ( coalition. so, you know, as a matter of law, the decision means that there are no rules currently that would preclude bup internet

broadband access provider from discriminating against the content or even blocking content. the court did uphold the transparency rule which means the broadband internet access still has information about the broadband internet access practices. procedurally, the decision can be appealed to the full d.c. circuit. within 30 days if you are an intervenor for the government, it can later be appealed to the supreme court. and there is nothing of course to stop the fcc from animating several of the pockets that are currently pending around the net neutrality to do this. the court did uphold that the fcc has broad authority to come up with rules that would prevent them from blocking content, but

there still has to be room to allow broadband internet providers to differentiate different content and to avoid being classified as common carriers. as a comedy severely limited in that regard what the advocates have typically thought of as net neutrality rules. and if the fcc wanted to, it still has an open dhaka to classified abroad and internet services or some internet access service as a title to common carrier service in order to adopt nondiscrimination rule. so they do the title to classification. the fcc is precluded from the rule and the classical affect is that they can then charge providers new grant that hasn't been charged before to ensure that those providers can reach the subscribers for different

tiers of service and video service to ensure that a video provider has ample bandwidth to be able to reach the subscribers and if theoretically, they could certainly block the content that the isp felt was not appropriate for their subscriber to it so i think there will be some action, but what that action will be is not clear. >> it is a fascinating set of questions. i think that the theme of for this session is was it a win over a loss and i think the answer is yes. everyone found something to like in the decision and everything to hate in the decision. i think the fcc worst nightmare was on the goal to say that they had no authority whatsoever. and in that sense, the d.c. circuit agreed, and yes, the fcc

still will regulate the internet. the second part of it is has the fcc exercised its authority in the proper way? and when we see words like common carriage and a title ii -- at the risk of oversimplifying, and anytime you boil things down, it's the old rules that apply to the telephone network going to be applied. and what the d.c. circuit decision says is no. when you exercise the authority, you are not allowed to send these old rules developed from the 1934 act for a different type of context to the internet. and in that sense, that is the part that they have. and what they say is that it leaves very little room to bring in the service aspects of that regime. they will still explore them. and to offer predictions, one of the questions is in the appeal to the d.c. circuit.

this consisted of two democrats and republican. currently my guess is this is i know nothing about the parties, they are probably not going to get a different result. they don't like taking cases that don't have the authority on one side or the other side you might think because it's politically important and taking a lot of attention, they might take it in my experience, you would be surprised. sometimes the political nature causes the court to stay away from it, so there is a pretty good chance it won't happen. and if that is the case, then frankly, it is at the end of this long road that we have had where we are all waiting for the court to decide and the politics proceeded and it all became law. we are going to see the return of the congress'' rules and overlooking what should come next and the agency has a much more active role not going to

happen. and if we turn it back to the policy-making relevance of waiting for the court to decide. >> i guess we will keep trooping down. thanks so much for having me here. i want to go back to one thing that chris said and two points that are sort of in the name of the panel in the way that david said this at the outset. a little technical here but i would say that it's not that the fcc can't apply the common carrier rules using the power it has. it can't apply common rules using the power it chose to use here. and that is because as mark mengin, the fcc could go back and say you know, we are wrong. we are changing our mind. circumstances have changed, what everyone to use for justification and say that broadband internet access services should indeed be title ii services or common carrier services. there's a lot of jargon here but they are all basically the same thing. they could treat those services like the internet access that you and i have today like a common carrier service by classifying it as such, and then we would have a very different

conversation about authority. and just to put it out there what we in the free press think the fcc should do there is a lot of debate about that. to agree with what chris said, there is a lot of political to come over that and the fcc action and the court action following up on that as well. so, never over until it's over and even then, it's not over. the fcc that's one thing i heard one time. back quickly to the question as david raised and the panel put it, it is a win for the fcc. kress said yes, they win a lot. i would say that it is not neutrality. the rules are vacated and i think it is pretty clear that the fcc cannot reinstate them in any queen and understandably and frankly useful way for protecting internet users using the authority that they've been left. it is all for the net neutrality but it's not a total loss for the fcc to have some power and to have some authority to regulate broadband internet access. released to the word though to regulate access. that's what we think the nec

neutrality rules do is to protect your access to the internet. as chris said, there's been some companies saying this, too. the 706 route protect the at the court stands up and the fcc has authority. that could allow them to regulate the internet, period. meaning on some to say while we are seeing less broadband deployment because of something else out there in the internet ecosystem or some kind of more fuzzy term like that. the free press, and i think it is fair to say every net neutrality advocate or everyone i've talked to is not in favor of regulating the internet. we want to make sure your access to the internet is open and clear and broadband providers cannot block or discriminate against where you go and tell you what you can look at or how much it costs for certain website. you want facebook and plater? but on the social media platform and that is an extra $5 a month. that kind of thing when mark talks about the providers. so again, lots of the data and disagreement whether we need those kind of roles and it's important to note the fcc didn't lose all power here they just lost the power to do the thing

we want them to do in this proceeding. and they might have the ability to do good things with the section 706 authority and the ability to trade at things as well. it's more of an open question. people say they want regulatory certainty, and i think it is anything but that because the fcc has sort of an open mandate in ways to provide a broadband kind of like taking the fcc has a doctorate taking it to the internet. we know it when we see it. it will tell you later and you might not know beforehand if it is a bad idea, but we will come back and report something. i just don't know how they do that in a very useful and helpful way for the doctrine we care so much about. >> so, the last sohn was asking questions about 15 years ago when he was interviewing me for my first-ever communications blog. and i never really knew what he felt because i got the job and by the time i got there, he had left. [laughter] so, you know, contrasting

evidence. so thanks for having me back. i want to sort of agree with that before i turn and disagree with him and probably a bunch of topics ultimately. and i agree with the court did is struck down. the thing that mattered to the free press the most, but resuscitated or at least they'd found a great deal of fcc authority to do other things. so, that brings me to david's initial opening question, which was where does net neutrality stand? and that's the question that everyone's been asking the past few days, but i think it might be the wrong question. the right question is where do the internet stand, where does the power of the fcc to regulate the internet and an inappropriate way going forward stand? net neutrality is a particular means to an end. it's not the end. so, foley agreement neutrality as it has been traditionally perceived as a strong anti-discrimination component is unlawful under the statute under section 15351 of the statute, which says you cannot free them

on common carrier service as common carrier. that i think is a very straightforward piece of the decision here. and there is very little question about that proposition. some question whether we should have treated rather than the title to service but once you treat it as a title one service, that provision is pretty clear and that section of the ruling i think should be relatively uncontroversial. but where does the rest of the decision leaves the fcc authority and consumers? i think the rest of the decision is really a victory for the fcc in many ways. the fcc can do a lot as long as it doesn't pose strict common carriage obligations, and i -- many people have been contemplating what that means. and i think that it is wholly reshaping the field of the internet. and the amicus in the case wrote a brief to the national

association of manufacturers to copy and e-mail me i like to think of this 50 shades of net neutrality. a great weekend reading. about my clients generally, fries and obviously argued against the section 706 power, but the isp generally accepted this is the court ruling that there would be some fcc authority. so, then i want to go to mark's suggestion that there are no rules now on preventing discrimination. it's true there are no fcc rules now. there are other mechanisms though. i think the things consumers worry about with respect to nec neutrality is will my isp sabotage and indeed they are trying to compete with it principally in the voice service and video service, the things the isp tend to do otherwise. if they do, we have the entities right now of preventing it at the competitive theater, the federal trade commission does that. section five of the act gives the fc see the power to take

action against the deceptive trade practices. that is what will exist. but the principal power that is going to stop discrimination that we sometimes hear about is the marketplace and consumers. it is a fundamental matter just like any other business want their service of their product to be useful to their customers. the services in this case are useful to customers when they can use them to do the things that they want. we can talk about the competition which is a big question in the debate but most americans have a choice the vast majority have a choice between five or more but there is a choice and the customers are going to play an important role in preventing the kind of behavior that people said just as the worst possible.

let me push more on what steps could potentially be. one thing that we have heard a couple of times in your comment is the idea of the reclassifications a one question i have is where would that fall, with the procedure to do that look like? another thing that they had done previously for the rule was back and 2005 it had something called a policy statement that expressed the rule that users should be able to access the content of the choice. is there any evidence for the fcc to take for the reclassification. is their anything like another set of principles approach like it did before that could possibly be an option. >> there is an open dhaka -- docket. they proposed to the internet

broadband service as a common carrier service and there was a substantial violence in the dhaka said that the fcc could reanimate that and refresh it. this also doesn't get a lot of discussion, but the borders the classified the internet access service and information services are limited to the really broadband internet access service. and there are things that broadband providers do that are not broadband internet access service that could be clarified to be the common carrier service that could get you some amount on the road in helping to create a more even playing field with regard to content that is transmitted by the providers so that is a possibility. and they could move relatively quickly on that. if it works under 706 and it

constitutes something like the internet policy statement, it likely would have to be adopted as a rule with some clarification that allows them to affirmatively engage and differentiated services. so that they are not common care services or have a rule consistent with 706 high level rule, no walking and how that at adjudicated on the case by case basis. and chairman, we noticed on the case by case basis it would be appropriate, and that would not necessarily involved. so the fcc has a lot of tools at its disposal to move forward, but if it wants to have no discrimination rules it really needs to do some sort of a clarification or classification

of the broadband service providers. >> it is an interesting question. if they want to reclassify the internet in the categories of the telephone service, there are people that advocate that and people think it is a possibility. i actually think that they have a couple -- there is a supreme court decision to stand in a way that is called red neck and there are technical things we could say that it's not an absolute obstacle for them, but in fact i wrote a recent law review on this and when the fcc proposed it they relied entirely on the supreme court opinion, and just in the general matter building the argument on the supreme court case is rarely successful strategy, so it is not impossible, but i would say it's overcome. the bigger question to me is whether the fcc politically wants to put the energy into it because right now the chairman

has come in and he has a little under three years at which point she has made the focus of his chairmanship. we traditionally thought of the network as the fundamental connecting technology that runs the country together. in many places 6% of people reside and that is transitioning. the main connecting technology that is the internet and that raises a whole bunch of questions about how we handle certain things in the past such as emergency response, 911 coming universal service, disaster response, disability access. and there are a whole bunch of issues that are more broad than the network neutrality. and it is quite possible that the chairman may decide that he will listen to a broad discussion how we should be thinking about the internet and

make it part of a broader debate. someone told me that when the chairman genachowski and then he brought up the second major initiative in the network neutrality. it you want it to be known as a national broadband plan and i actually think the chairman takes this. do not be known as the chairman or do you want to be the energized and pull yourself back there is a chance that people want to get past this and make it part of the debate that we are talking about. >> we should break out of the pattern of just marching down the table each time. so, where to begin. there are a lot of trends about the choice before the chairman of the political consequence. i think it both ways you can't

get anything like the neutrality backend does he want to be the chairman that says the internet is now the discrimination, so where you can be discriminated against by your carrier for the purpose of being innovative and saving money or whatever and it is exactly the opposite. but putting aside the political question because that is the important thing especially appear in this neighborhood and in the long term. want to go back for a second. justice scalia should be noted wasn't some kind of a raving liberal met neutrality or anything like that he said of course broadband is a telecom service. the fcc red bull all wrong. how can they possibly say this. but justice thomas doesn't say and can't say that the fcc made the right call. they have the discretion to choose the telecom service and

how they might not able to live without cable operators. it stems from the fact that he has to make that call in the first place and justice scalia says that they don't have discretion here and the fact that it's of indigenous, the broadband is clearly a telecom service. going back to david's point what happens next everything about the process for the classification is the dockets that the fcc has opened and i would imagine they would take the comment again rather than just say we have a full record on 2010 and they could try to work with them on that i don't think they will move super quick based on what we have heard this far. not being able to get that back it's hard to dispute that no matter what we might think about the legal position is very unclear that they could do anything like prevent discrimination on line under 706 or anything short of the classification. and what this means take for

example a competitor to the existing internet providers service for some kind of a chat applications. we saw this last year and we were just about ready to file a complaint to happily change the practices. they don't have to block that to make your life more difficult as a consumer to make the choices less available. they could just say you know you are welcome to use as much as you want, all you have to do first is i think is of contract will at all what happens. all you have to do is paid for the unlimited. the house long as you're paying for the voice minutes, you are free to use as much of the application as an alternative as you want me that is why the net neutrality really is based on the projections on the unreasonable discrimination as the telecom lawyers would say. but the simple no blocking world that they may or may not be able

to is not really good enough to protect you against that kind of behavior. one other thing when it comes to the competition and market it's not by most people's stretches because you have the wireless industry that is more complicated than although where the people are really happy with their customer service. but any case no matter how many choices you have with a cell phone provider, for example, we have admittedly for national carriers and some other local carriers as well. very few people in the voice world would say, you know what it's okay if verizon wireless wants to block my calls to pizza hut because they have a deal with domino's, that's cool i will just switch. i will switch to sprint. there's something in the communication network and what verizon said when they were giving the rules that we would be exploring this kind of arrangement. not to write a we block somebody but to find a way to get more money out of the particular edge

provider to fix favorites, facebook, google, pizza hut, domino's who want to launch two kids in the garage and the fcc was trying to prevent those people from having to pay into the system. the customer satisfaction rates are high. we have a very high majority saying they're very satisfied with a surface but i want to put that aside. i want to second with what you said about the political oxygen in the room. having worked at the commission it is the case that the prioritization is relatively limited staff resources and as you get higher and higher on the decision making levels and having the intent of the

spectrum auction going on, these are big issues that take up a lot of time. review the connect natural the classification would take a lot of energy and in very real way is what effect the chairman's agenda and that is the point that people have to make. on the legal issues as the seat with classification i agree with what everyone said the process of the open dhaka at. it always puzzles me a little bit because it is in the context of net neutrality framed and the words used to adopt the nondiscrimination rules and reclassify so that we can act and for me that is the way we look at the statutes on its head. it is not the reverse. the congress set up definitions and said to the fcc to figure out how to get the definitions to fit, and then we will tell you in the other law what obligations apply to the

different rules and the different services. and the fcc's job is to make the best call and to say this ase information service or this is a telecommunications service and then say okay under the congress rules here is what applies to it. and there is something to me that says well, we didn't get to you the thing that we want by giving our best shot and applying the statute in the first time. so in order to get into the regulatory authority that we want to be in, we are going to change our mind. it seems to be the exact kind of outcome oriented decision making that the components of the net neutrality would get aggravated about and very angry about as if it were pursued in the pursuit of some of their ends. so i'm very reluctant to promote or to account the regime in which the fcc to fit into the scheme. let's see the fcc were to do

this and i have to agree with mark that we like it to need it least one last comment. the issues in the order let's say the best case is the last third or fourth quarter. i don't think that this would be a good case. that would lead to a lot as well. not only on the reclassification is soft but on all of the things that the fcc would need to do to make that work. so in 2010, when the proposed this part of his proposal was to use what is called the fcc for parents' authority to eliminate and cross out a lot of the requirements the lead otherwise apply to the telecommunications service. all of those -- i don't know if all of those that many of those would be challenged and people would think that the obligations would still apply and i think that leads to another year or two of litigation and in all three or four years of certainty but that is not a great portion. >> talking on that prospect of the future litigation or the future proceedings.

i would like to change gears and ask where the decision leaves the environment in the marketplace and policymakers and the regulatory certainty is a really important goal. how do they lead the certainty and all of the potential litigation and how might we see different broadband providers and edge providers of on-line services response. >> like the decisions to cannot otherwise my sense is the best portion now is to seek out things fallout and should think about essentially about the chairman approach of and adjudicating cases that come up just like the common law and all other kinds of products.

it is in a relatively good place where there is a cop on the beach and multiple copps on the beat. we mentioned the ftc earlier and it clearly has authority to do a lot of things. matt disagrees that this regime can protect against the kind of thing that the average person would really worry about with respect to that neutrality. i don't know if i buy the pss or an allergy and whether i think there would be outside on the fcc authority under this section. i think they can guard against that and there is a lot that work so the market has done a pretty good job to react much to this decision either on the side or the edge provider side and we should wait and see how things go before jumping into another three or five-year fight. much of it would be good for my pocketbook and my daughter's college fund.

a constant litigation is not the way to govern the most important industries in the country. >> one way to avoid that would be to stop pursuing the rule that is understandable but i don't know i don't have any college fund potential from this spigot i will try to be briefed this time. as i said earlier this does not create a lot of certainty for people because it does not tell them with the fcc can or cannot. it basically says you can prevent some things from happening but we aren't going to tell you in advance what they are because the important part, not just the tail end. you can't have a rule the way that you try to do it this time on the nondiscrimination. certainly they do not jump all over the place and i think there is a little bit of a spike for some and not for others. who's on the internet now and

who are some of the companies that might think about the decision. we have that kind of a status quo and the chairman noted the broadband providers promise not to do bad things, but i don't think that it's dirty comforting for the long term prospects of the companies again experimenting with new ways to monetize the network and take that money out of the pockets of consumers and pockets of the innovators on the network. >> i thought one of the really profound parts of the d.c. circuit opinion is the upheld the fcc's rationale, one of the rationales for developing the regulation, which was that not that the rules or regulations were needed because of the market power of any of the

stakeholders. in fact, some of the actors at the edge of the internet from the market power perspective are pretty deep layers. rather, it incurred its rationale for the rules in determining the access monopoly or the gatekeeper role so whether there is a thousand or millions of flowers of booming at the edge, ultimately every one of the edge providers has to deal with one provider, verizon. so with regard to everybody at the edge of the network, they are dealing with a monopoly for every one of their customers just trying to reach them. and i think that was a profound part of the d.c. circuit decision. i don't think it was necessarily one was obvious that the d.c. circuit with a uphold and the fcc continues on that. i think it does lead then want

to think about how to enforce that and how to guard against that. and, you know, there are obviously of their ways that the verizon and others have said let's have this regulated by the ftc and we will agree to some rules and service and those can be the enforcement but for the fcc universe i think they have to do something without rationale so whether that is to have a no blocking regime or to do some sort of a title to, that does beg the result in some way to have an enforceable rules. we have an interesting experiment going on right now. they've largely adopted the rule that mark and matter are suggesting that they have the traditional rules governing telephone networks. and we see it here how we are behind europe and they've got

these rankings but the 200 kilobyte standard which is by most people's standards crawling. you can't do anything on that. if you go to europe, they have a different discourse you look and they are invested in the networks that's one half per capital it is in the u.s. and there are 35 megabit coverage that is half of what it is in the u.s. and the coverage is one-quarter of what is in the u.s. lead and in fact what they are saying is not just in the infrastructure but where is the google and facebook and they are concerned not just on the infrastructure side but on the other side. and so, the data point i don't mean to suggest -- i'm doing a study on this right now because everybody wants to know what's going on, but my point is that there is a reason in other parts of the world where they are trying to regime where they put back on the telephone regime where they are not happy with

the outcome and opens up the really interesting discussion that we should probably have about policy going forward. >> i would just add on that point, you know, google and facebook, when we had first cable and classified as something the they were all the information service on the telephone offerings were still subject to the kind of carrier rules and then we have the internet principles in place for a couple of years. all of it is to say that they have grown up where we do not need permission from the broadband provider to innovate. so, i think that yes there may be questions to ask about why don't we have as big a presence in the economy from europe or other places. i wouldn't say that we have such a big presence because the internet would come out of the control of the broadband provider to say the opposite we have innovation without pressure and because of a series that is changing and yet ultimately,

somewhat consistent protections for innovation on line in the u.s. internet access ecosystem. >> is this decision helping move

us towards a more coherent picture of what the fcc's proper role is, or is this where congressional action is necessary? >> well, one aspect, speaking in the halls of congress, it did clarify a couple things. some people wanted this to shift from the fcc to the ftc. interestingly, that would have very few implications in the senate because the senate commerce science and transportation committee has jurisdiction over both. on the house side, it would have shifted jurisdiction of which committee was responsible from the energy and commerce committee to the judiciary committee which would have been a big change in terms of how to process would have happened here. as of now, that didn't happen. it remains within the jurisdiction of energy and commerce which the leadership on the house has indicated we need to start rethinking the laws and moving forward. so if i had to guess, there's two possible outcomes. one is the traditional narrative, what you hear outside the beltway right now which is we have split government where

the different houses of congress are controlled by different parties, and it's an election year, so, therefore, after about june everything's just a campaign. and this is a very difficult time to get something done, and it's very unlikely to proceed in which case the statements that take place in congress and other places will be more or less about, not about getting things done, but about positioning, images for different voting constituencies. i actually brought a class to washington, d.c. last week, and we met with both the majority and minority staff of the house and senate commerce committees. and what was striking to me was they all said that this is an area where there is broad bipartisan consensus, the kinds of dissension that characterizes other parts of the government over more controversial policies are far less important and, in fact, there's much more room for agreement here. and my challenge and my invitation and my prayer to congress and all of you here is to prove those statements right and prove the skeptics wrong.

the leadership has opened up a broad-based discourse about what the future may hold. i think a lot of people agree that right now applying rules that were written in 1934 to a new technology that didn't exist is probably a bad idea. how those would apply will be an accident because no one had them in mind, and the rules we had draw a distinction between cable and telephone-based services where most consumers at this point don't care, they just want the internet. i think there's a real opportunity here, and i think there's some reason for hope that they can take a few positive steps down the line towards promoting meaningful reform which i think everyone in the industry thinks probably eventually is going to happen and, frankly, needs to happen because the internet didn't exist in 1934. >> christopher, i was just curious, the folks that your students were talking to, were they speaking specifically about net neutrality or broadly about communication law issues? >> i think broadly. obviously, individual issues

will divide any committee. but, in fact, what you see is there's much more room -- if there's broader agreement, there's more room for compromise and discussion and working things out. and i remain hopeful. >> i guess the reason i ask is that it's long been said that this issue has been less partisan, and the fcc, within the fcc and with respect to congress the issues tend to cross party lines more, the '96 act certainly was not sort of broken down by party piece of legislation. but net neutrality really seems sometimes like a bomb in that room. and i wonder about its effect on broader cooperation on these sets of issues. i'm not a hill expert, and i won't purport to say what the hill will do, but i just wonder how the injection of this issue back into the political field will affect the prospects for a rewrite. >> well, you know, looking at it from a normative perspective, i think there is broad consensus that isp should not block a

content or significantly degrade content, there should be a minimal level of service that edge providers have the right to access consumers, and consumers have a right to access those edge providers. my sense is that there's broad consensus about that. i would further say that i think there's fairly broad consensus that there should not be arbitrary discrimination against similarly-situated entities at the edge. so if you have two entities at the edge that are providing the same sort of video service with the same sort of characteristics, isp shouldn't say, okay, we're going to charge one x and another y. and the difficulty the fcc will have and policymakers will have is the court actually went out of its way to say since we're striking down the common carriage rules, verizon has the authority and should have the ability to charge similarly-situated entities completely different prices. now, that is true that as a matter of law they're able to do that now, but i think there's a more normative perspective from policymakers that that probably shouldn't be the case.

>> i speak to that? so i want to speak to blocking for a second, and markham talked about charging one x provider one and another y. if you're allowed to charge for service, that is blocking. the fcc said that in 2010. that is true. if you say you can come on my network if you pay me x, that is blocking. can isps really block? i really don't know, frankly, i know of very few, i can think of few cases in which is ps would want to block. i'm thinking about child pornography and things like that. ipss don't generally want to block. as i said, they get revenues have customers wanting to use their services. they recognize that in a nation of 900 some odd -- 300 some odd million people, customers are going to want to look at different things. the transparency rule remains in effect. so if isp a blocks news to fox

news or msnbc, that's going in its policy, and it's going to be well known, and i think we can be fairly sure that senator franken or representative eshoo are going to be hauling them up quickly and say, what are you doing? so i guess i have a lot of doubt about the incentive and the defacto ability to block and really charge and charge a x amount and b y amount. what net neutrality is about in these cases is not perniciously degrading content. what it might be about so today google has this new contact lens that can monitor glucose levers and use a wireless -- levels and use a wireless transmitter to send it to your doctor. that kind of thing, maybe we want prioritized access for those packets flowing across the web, maybe we want to have rooms full of people monitoring in realtime what my pacemaker is saying so that they know maybe before i even to that there's an issue going on hypothetically. those kind of -- that's the kind

of issues, those are the kinds of services that the ipss i talk with want -- isps want to provide. they're not going to degrade service indirectly by using up all the network resources. we're not talking about the network we had when this debate started around 2005, we're talking about a network as someone said earlier where vast majority of americans' access to 10, 20, 30, 50, 100 megabytes per second service. it's a completely different web, and i don't think there's any real risk that prioritizing some of these services is going to relegate anyone to de facto blocking. so when people talk about net neutrality, it's very common to go right into the evil machinations we can imagine. there's no ability to do that, there's no intent to do that. what i think it's really about for the providers is the ability to get the services that customers want to them more quickly. >> let me pick up on one quick thing russ said. ask a question about it, and then i am going to turn to the

audience for questions, so if folks in the audience have questions, be thinking about that, and i'll give you an opportunity for that in just a sec. russ, you mentioned the transparency portion of the rule, and i'm interested if other panelists have thought about the one portion that were not struck down, how useful they are and how much of a check they potentially provide on behavior. >> i mean, yeah, they have to tell you if their blocking -- they're blocking you. it doesn't give me a lot of comfort. here's how we're messing with this service, and i don't want to get into this debate, but we can talk about how many choices people really have in their broadband provider, five, sure, maybe if we count the wireless ones, and there are differences between what you can do with wireless and wire line. you know, it's something. to me, it doesn't offer a lot of comfort to say i will now know how they are trying to keep me from going certain places or if not, at least take a few more nickels out of my pocket for getting to them. the managed service, as an example of what russ was talking about with the contact lenses, i

just want to stop and say if, indeed, we do have more capacity, i don't know why we would have to prioritize something like that because it would probably be a low level data usage. the fcc and the rules were struck down on this too, did make allowances for other services so everything you transmit today as data doesn't have to go over, quote, the internet. you can have a separate channel for things like that, and that's something the fcc rules have already allowed even though it wasn't necessarily crystal clear how those kinds of things would work going forward. >> i actually think the transparency rules are potentially or very important. there is a british isp called plusnet. it has the highest customer satisfaction ratings this all of britain. and what they do is they prioritize service but clearly disclose what they're doing, and they appeal to a certain kind of customer. they say this is about -- they can't say exactly, but most friday nights, this time of day you get this speed, and they work it out, and you can't predict exactly what the traffic is going to be, but they give

you a pretty good idea. and i ill tell you who they cater to, they give it to online gamers, they give that the highest priority. they're appealing to a small set of the overall world. that, to me, is one of the great questions we face. here is a standardized product at one price. everyone gets it, you can't change off it, you can't enhance, you can't degrade it even if people need different things. and the nice example contrasts in the modern world for me is we should see a proficiency of business models like the amazon kindle. normally if you have a reader, a tablet, the you download apps, content, you're paying the minutes, the badged width -- bandwidth, the limitations apply. amazon has said, you know what? we want to pay that freight. we want to make it easier for you to receive that content. they changed it a number of times and business models change, but i guess my reaction is they should be allowed to try

that. maybe that's creating new value for consumers, and they can negotiate a different deal, and you get a different kind of product that way. and that is a form of discriminatory service because one person gets service that doesn't count against your minutes, and some don't. in my world, the internet's gone so many different directions, i would encourage that kind of experimentation, not discourage it. >> so i think transparency does have an ability to be helpful in that there is a sort of name and shame component to things that if there's bad behavior, that it has a corrective ability with corporations. i think where it may not go far enough, it probably doesn't go far enough is creating enough certainty for innovators to know what the rules of the road are when they're planning where to put resources and innovation. so i think -- and i think the fcc throughout every administration has recognized that, right? there need to be some baseline rules, and i think the isps recognize there have to be some baseline. how those are enforced is where

the debate is. there should be enough certainty so the people at the edge can rely on more than just name and shame when they're thinking about how to allocate their resources in their r&d budgets. >> can i ask a quick question? plusnet in the u.k., is that a facilities-based provider, or are they sort of an over the top isp? >> they are that silts based -- facilities based. actually, they were acquired by british telecom. as of now, they've kept them as a completely separate entity. they're trying to learn from them and trying to preserve that culture, because they're worried if they fold them into the larger company, it'll just disappear. >> so in all those cases i just want to say it's not that amazon shouldn't be allowed to pay the freight, my concern is when amazon is paying for your connection and you're also paying for your connection because if you stay under your data cap, you don't get a big refund check at the end of the month. that's the kind of, again,

experimentation is maybe should be allowable in some cases, but in our current system, i think, doesn't actually save people money. >> all right. i'd like to give members of the audience an opportunity to ask questions. are there folks who have questions? and i think -- is there a microphone over there? tim, do we have a mic? yep. [inaudible] yeah. i think i see a question over here. john? yes? >> um, so the -- am i on? okay. the ruling tells us that this nondiscrimination and nonblocking rules look too much like common carrier without being called common carrier. it also tells us, for example, that the roaming regulations are not common carrier. do we know more about where in the middle, what is the edge of

common carrier, or do we have to wait to find out? >> the court did give some guidance. it pointed to selco which is the case that sort of gets the same question, and the court noted that in the selco case the isps were allowed to engage in commercially reasonable, that was the standard, something that was commercially reasonable differentiation. and the court noted that in the nondiscrimination, in the open internet rules, they really used the common carriage language of unreasonable discrimination. and so, you know, theoretically there is something -- and it noted that there's a gray area and, indeed, the fcc noted it gives discretion to how it defines that. so somewhere that's not unreasonable discrimination, it's close or to commercially reasonable. i think the court would say to the fcc if you can move toward that, we'll give you discretion on whether you call that common carriage or not. >> so trying to put it even more simply, if the company has to do

the, carry the service, if they have to do the deal, it's common carriage. if they have discretion to negotiate terms, possibly refuse, if they have room to maneuver, then you can potentially get out of common carriage. but if you have to take it, it's illegal under this ruling. >> any other questions in the audience? see one over here. >> [inaudible] great conversation, thanks for coming today. i was thinking about how sew sopa died in congress a year ago, now a little more. do you believe that isps may change their policies towards copyright violating takedowns? >> interesting question for somebody like comcast, nbc universal who has movie properties as well as an isp access network. so could they? i think, sure. and most importantly, the 706 route leaves open the

possibility of an argument to the fcc. pirated content on the internet is slowing our, is decreasing the studio's willingness to put it out there. people don't get good content so, therefore, they don't adopt broadband. i mean, it's the kind of thing that verizon in the case called a triple cushion shot. admittedly, it's a long chain of arguments, but you could go to the fcc and say you've got to block piracy more strongly because people won't deploy broadband, and that's the kind of thing i started out by saying, the sort of mischief we wouldn't want to see out of a 706 regime along with a lot of people who fought against sopa and pipa. >> so i can't speak to what isps will or won't do, but as a legal matter, the decision, i don't think, changes their ability. so the open internet rules adopted in 2010 contained express exceptions for either unlawful content or the unlawful transmission of lawful content, the later category, i think,

meaning transfers that were in violation of copyright and other intellectual property requirements. so that was already a cardiovascularout from the rules -- carveout from the rules, and i think whatever they can do today they probably could have done a week ago. >> yeah. i think the law didn't protect copyright infringement material, but now there is this avenue for saying the law should do more to stop piracy as hollywood would say. >> this is where i think i disagree with russ this that one could see because esps rely -- isps rely on local franchises and local rights of way that in certain communities, they'll be inspired to cater to their communities to block certain types of content that is not considered to be acceptable content. and i think the order was very careful even when it described blocking unlawful content or blocking the transmission of the unlawful transmission of lawful cob tent. there's -- content. there's very few categories of

content that one would put in that category. i wouldn't put copyright in that category because an isp doesn't know whether the transmission of a copyrighted work is unlawful or not. they don't know whether there's a license. child pornography is really the only sort of thing that comes to mind as something that's cheerily unlawful on its face. -- clearly unlawful on its face. so one could see that in certain communities there are things that are not acceptable being blocked or degraded, and verizon, in fact, in their docket thosed that they might want to provide -- noted that they might want to provide a service that would go to a family-friendly isp service for a community and say this is just going to go go to family-friendly sites. and that might be okay. the question is, if you are in a community that doesn't have a lot of isp competition and you want to go to something other than a family-friendly site, do you have are recourse under the rules? the answer is, no. >> to me, it has more to do with business which is isps gain

nothing directly to their bottom line by blocking the carriage of illegal content, and they piss off their customers. and there is a misalignment of interests. it's interesting, there's actually some studies. france has done a law which is a three strikes law. that is, the content provider finds an infringing person, they get a letter saying you really should stop, and the third time they're supposed to cut them off. there's some evidence that it actually has an impact, it actually helps stop a degree of piracy. even if it works, the isps really don't want to be caught in the middle between the content provider and user. what's more interesting is maybe they could enter into a cooperateoff arrangement where -- cooperative arrangement where, look, we're the content provider, maybe they may make a contract. the only thing is does it remove some of the overhanging, blocking rules particularly ambiguity? maybe, but that's not really what these rules have been

about. >> i see another question in the back there. >> hi. so on the copyright point, i think the most important thing is that the fcc has no jurisdiction over copyright. so while everything markham said is right about the regime, the regimes that do apply and the fcc was really careful to dance around what's legal and illegal content. not only does the isp know whether something's infringing or not, but the fcc doesn't know either. it's not their jurisdiction. but i just wanted to agree with russ on the point that if the fcc were to reclassify internet access, telecom portion of internet access as, in fact, telecommunications for the

purpose of imposing a particular rule, that would kind of be suspect. but there's another possibility, and that would be -- and i'd be interested to see what the other panelists think finish possibility that the fcc might just want to clarify their authority over internet access for a whole range of things be it e-911 or, you know, whatever in the new ip transition. scenario. >> so the question is, is that something the fcc may be attracted to? >> yeah. i think that's right. exactly. the fcc wouldn't have to readopt net neutrality rules, but we think they need to clarify authority because it would actually, i would say, help, chris would probably say hurt, but it was clarify their role in the ip transition, and it's not resulted based. i would stand with justice scalia there and say they should read the law correctly and do it not because there's a result at the end, but because the law is, in fact, technology-neutral. it's not from 1934 only, it's

also from 1996. you know, we had the internet and people pretty smart crafting technology and laws we think are still good enough today to account for changes in transmission mets but not really a change in the underlying use and function. to network which is to send my information to you and yours back to me. >> well, if i -- i take the question as sort of adopting, endorsing the idea i suggested which is make this part of a broader discourse of rethinking the internet broadly. and what's fascinating to me is we see an alignment of the need to do that coming out of both the chairman's office at the fcc and out of the house leadership. it is becoming time. we've twisted the old rules and stretched them as far as we have. we went through this with cable. cable came in the '50s, we hemmed and hawed and finally said we need to create rules made for cable. and i think we're seeing the exact same thing happen hoar. we've lived under the old regime, we've stretched it, twisted it, mutilated it, and it

may just be time. the chairman sees time, it's time to sit down and think about not from the previous world, but ground-up, square one, clean slate rewrite what should we do with the internet. >> i totally think that this is a time that the fcc's going to have to take to think about what its section 706 authority means and how it changes, as you say, its approach to a whole range of issues. and just to give you one example, another case that we haven't discussed today but is a big case pending in the tenth circuit having to do with intercarrier compensation. section 250 -- i'll speak to the usf piece of it, section 2354 of the act tells the fcc how to set out a subsidy system to make sure all americans have access to communications service. historically, that wastelephone service. in 2011 the fcc shifted that program to aiming at broadband services. that issue and the fcc's authority to do that in specific ways many which it has done can

it has been pending before the tenth circuit which her argument a couple months ago, lots of open questions. yesterday -- sorry, tuesday's decision may really change the dynamics in that case because suddenly it's not as much a case about what section 254 says about the fcc's authority and how how it must structure its program. and actually just before this panel started, the fcc's counsel sent a letter to the tenth circuit saying, hey, just want to point out this new case that gives us all this authority in this area. that should influence your decision. i don't think usf is alone. i think there's a whole range of issues where we now have a new authority, and we have to see how it will be used. i don't want to say it's unlimited, and i suspect i'll be writing comments to the fcc explaining why it can't do what it wants to do. i think there's a risk we're going to transgress what's known as the doctrine in law which

says congress just can't give an agency free rein without providing standards. that might be what 706 looks like, but, yes, these are a host of questions we're going to have to all together address in the coming years. >> other questions? i think we have time for one or two more maybe. yep, one here on the aisle. >> i have a business question. you mentioned google and amazon. the edge providers, but they're also part of the internet as backbone providers. so what do they do now? i mean, they can bar gain with isps so that because of their importance they don't have to pay differential prices, also they can try to become isps. but are we looking at perhaps a scenario where you have more consolidation in terms of content and isp activity among big internet players? >> >> i actually think it's the opposite incentive. if you thought that the verizons and the comcasts of the world, people who provide last mile of

service to end users were subject to regulation, you might not want in the previous world to vertically integrate because all of a sudden you're swept into that whole world of potential regulation. one of things about the decision that's potentially the farthest reaching is that it potentially expands the reach to anything that affects the comcasts and the verizons of the world. so it's not just them, but the things that influence what they do. and why do we protect applications and content? because it affects what they do. well, so do broadband, so do backbone providers. so do content and application providers in the raw. and the question is how far are we going to read what we can only think of ancillary authority or necessary and proper authority attached to that? now, we have a wunsch of cases saying -- bunch of cases saying they have no jurisdiction over copyright or devices. is that enough of an effect on

infrastructure investment and dedecision in local telecommunications? competition? does that have enough of an impact to bring up the jurisdiction recognized by 706? and the answer is potentially yes based on how these other cases come out. so in my opinion, does it make them more likely to consolidate, i actually think they were reluctant to consolidate before. now they're potentially regulated whether they consolidate or not. it may. the bigger point to me is a bunch of players who didn't they they had to worry about what the fcc's going to do now have to pay attention to this because they don't know how broad that authority's going to be intercepted to be. interpreted to be. >> it's a little bit of an aphorism at this point, but we're worried about net neutrality not just for amazon and google, but for that next start-up that none of us can identify yet. so i think i agree with much of what chris said if not all of it just now. there's a lot of changes happening here. i think those big internet players can fend for themselves,

but they didn't have to when they were just getting off the ground. >> if the question is whether the decision means that backbone providers or middle mile providers now are subject to regulation under 706 in if the way that they weren't, you know, i'd first say that the broadband internet access clarification didn't apply to them in the first place, right? it applies to the consumer facing broadband internet access. to those '05 orders and before don't apply to those to begin with. so those could have been -- the fcc is free to classify many of those services as common carriage services. so that regulatory hang, i would say, exists anyway. you now have a clarification that 706 potentially applies as well. i'm not sure that 706 as a potential area of regulation does a lot to change that middle mile dynamic or long haul dynamic. >> okay. i think we have time for one

more question if it's quick and the answer's quick. anyone have one last quick question they'd like for the panel? yeah, right here. >> [inaudible] didn't they agree to certain open internet requirements til 2018? and where does that leave a company now like comcast versus the other providers? >> that's right. i mean, they are bound by the rules that were just struck down. so they were willing to take that gamble in getting their merger approved, and i think that speaks to some of loopholes that we saw in the existing rules that were struck down. we were not entirely happy with how strong they were, and i think most wired internet providers -- and wireless -- thought they could live with 'em. at&t came out and supported them in 2010. >> there's one direct analog that happened, i don't know, about ten years ago where two cable companies merged in this accepted what was a national subscribership cap, the number

#ubgd do, and hen those rules were struck down by the d.c. circuit. in that case the fcc chose to step in and waive the conditions saying you did that thinking this was law, this is no longer law, we're not going to hold you to that. that is entirely up to the fcc. because technically, that's not a regulation. and because it was a voluntary condition, it wasn't even agency action, it's not judicially reviewable. it's one of problems of micking these one- making these one-party rules, but technically they're still bound until the fcc tells them they're not. >> i think comcast is saying we'll still abide by them. i don't think they're going to ask for it right now, but they could, for sure. >> all right. this is clearly a debate that's going to continue for some time. in the meantime, please thank our panel for an interesting initial analysis. [applause] [inaudible conversations]

[inaudible conversations] >> coming up live this afternoon, former defense secretary robert gates talks about his new memoir, "duty," in which he offers an account of his experiences serving under both presidents george w. bush and barack obama. hosted by the national constitution center in philadelphia, it'll be live at 6:30 eastern here on c-span2. and then tonight in prime time at 8 eastern, on c-span,

president obama's speech today on changes to the nsa surveillance programs. here on c-span 2, a collection of some of the past week's state of the state addresses including colorado, iowa, vermont and indiana. and on c-span3, the release of the surgeon general's report on smoking and health. this year marking the 50th anniversary of its first release. that's all tonight on the c-span networks starting at 8 eastern. >> yes, internet service providers are gatekeepers, and they also are two-sided networks or two-sided gatekeepers, like any gatekeeper, there's somebody on one side and somebody on the other side. and so the situation then is very similar to the credit card industry. so we all have credit cards, and then there's credit card company, and then on the other side of that, there's the restaurant. and it's or very useful for restaurants that we all have credit cards, and it's useful for us that all the restaurants

will take them, but it's not so useful if the gatekeeper says, now, some of these restaurants we're not going to allow them to participate in the system. translating that to the present be, if the internet service provider were to say, you know, not all the people that are putting the content on their computers, we don't want all of them to be able to have access to all of the users, that's a problem if the gatekeep or or behaves that way. >> this weekend on c-span, a look at the impact of the d.c. circuit court ruling on background and high-speed internet regulations saturday morning at 10 eastern on c-span2's booktv, author gary young examines the speech, the story behind dr. martin luther king jr.'s dream. saturday at 3:30, part of three days of programming this holiday a weekend. and c-span3's american history tv looks at emancipation, reconstruction and race, atlanta after the civil war. sunday morning at 11. >> up next, a house hearing on

copyright protection. the subcommittee on intellectual property examines what material can be protected under copyright law, the extent of that protection and what specific rights should and should not be included in the protection. from tuesday, this is about two and a half hours. >> this morning the subcommittee will continue its review of our nation's copyright laws by hearing testimony concerning what is in the scope of copyright protection. our witnesses will present contrasting views on three important copyright issues; the making available right a, should broadcasters -- should broadcast be protected with additional laws; b, and c, how laws, codes and standards be protected under the copyright law. i and others have worked to bolster our copyright laws and protect local broadcasters whenever possible, and i've also advocated that these efforts be generously laced with common sense. common sense, it seems, is an ingredient that is sorely

missing sometimes op capitol hill. and i guess all of us are guilty of that. maintaining these philosophies has become complicated by evolving technology and, hopefully, our witnesses today will highlight the most important issues confronting our copyright laws. piracy and online infringement are an enormous concern, and we have repeatedly heard testimony over past decade about the harms caused by file sharing. it was disturbing to o'hare that judges were un-- to hear that judges were uncertain at times of how to respond to this crisis. i'm pleased to learn that one of our witnesses, mr. nimmerrings has updated his treatise and made it perfectly clear that copyright that works for others is infringement. that being said, i do not want to steal the thunder from this morning's testimony, but i encourage all members, especially those who have not focused on these issues in the past, to carefully consider today's testimony. in closing, i thank our esteemed panel of witnesses for participating in the hearing today, and i look forward to

your remarks. i'm now pleased to recognize the distinguished gentleman from michigan. by the way, john, this is our first meeting since mel watt let us, so -- left us, so for the first time in years, there will not be a north carolinian on this side o the aisle, but i hope we'll survive. >> thank you and good morning to the chairman and the members of the committee. the very small number of of witnesses that we have before us this morning, thank you for a very important subject. the hearing today provides an important opportunity for us to consider various provisions of copyright law and to examine whether laws continue to adequately protect creators and promote innovation many light of developing technologies that were not contemplated when these provisions were originally enacted.

and to that end, there are several factors that we should keep in mind. for example, the making available right which gives copyright owners the exclusive right to authorize the manner and terms the make their content available to the public. i favor strong copyright protection because it benefits creators and promotes innovation and economic growth. strong copyright protection laws also helps create a marketplace for content that viewers will enjoy as well as the latest technology that can be used to watch the content. the making available right is especially important today where one copy of a work over the internet without authorization could provide access to millions of users around the world. the making available right helps

prevent infringing conduct. for those reasons, we do not need to change copyright law for the making available right. existing law already includes a making available right. i don't believe that there's any ambiguity in the law, and some federal appellate courts have recognized the making available right. in addition, united states is a party to various international agreements that require signatories to implement the making available right. congress has repeatedly demonstrated by ratifying these agreements that the united states law already includes this right, and no change is necessary. in any case, as we study this issue, we should consider guy dance from the copyright office. and to that end, our former colleague and ranking member of

this subcommittee, mel watt, sent a letter to that agency last month asking it to study the current state of the making available right ask to make relations -- and to make recommendations. in particular, we need to know how american consumers fare under current law in the context of digital, on demand transmissions such as peer-to-peer networks, streaming services and music downloads. additionally, we need to know how the competitiveness of u.s. technologies can be strengthened in the global marketplace under international treaties to preserve robust protection for creators. in conjunction with the testimony we received today, this report should provide us with valuable guidance.

secondly, evolution of technology has had a major impact on the debate about copyright rex -- protection for broadcast and has generated many unresolved legal issues. just last friday the supreme court granted certiorari in a case where the nation's largest television broadcasters have brought suit against aereo, a streaming video service. this decision could have a wide-ranging impact on internet streaming, cloud computing and the television industry. whatever the outcome of this case, i believe the law must avoid any anti-consumer ramifications including higher fees and restricted access. to be clear, moving forward in this copyright review we must insure that creators are

protected. strong protection for creators will insure that consumers continue to enjoy the works that define our culture and enrich our lives. and accordingly, i thank the chair for his leadership on these issues and look forward to further collaboration on them. i thank you. >> i thank the gentleman. i now recognize the distinguished gentleman from are virginia, the chairman of the full committee, mr. goodlatte, for an opening statement. >> thank thank you, mr. chairma. i appreciate your holding this hearing, and i want to welcome all of our witnesses and this capacity crowd in the audience to a hearing on a topic that goes to the heart of copyright law, what is the scope of copyright protection. of the committee will hear testimony on three related issues. the first issue, concerning a making available right, seemed to be settled by the u.s. accession to two separate wipo treaties in 1988. however, uncertainty has arisen in several file-sharing cases and most recently in a library

case in the tenth circuit in which the opinion was released only three weeks ago. i look forward to the thoughts of professors nimmer and lunney on prior jurisprudence and whether congress should bring greater clarity to this fundamental issue of copyright law. the second issue concerns the scope of copyright protection for broadcasts. although the u.s. is not a party to the rome convention, ongoing discussions in geneva could result in additional copyright or other protection for broadcasters in an effort to deter signal theft. broadcasting has changed significantly since the rome convention was signed in 1961. smartphones with an always-on internet connection now make everyone in this room a broadcaster in ways that were unimaginable 50 years ago. i look forward to hearing from professor schultz and mr. love on this topic. finally, we will hear about an issue that has received less public attention that the other

two, but is one that does go to the heart of how systems interact with their government. it was also the summit of the -- subject of the very first copyright case heard by the supreme court in 1834. copyright protection for laws, codes and standards appears to clash with the fundamental ability of our citizens to know what laws and regulations they must live by. it is to have chew nate that the number -- fortunate that the number of states seeking to claim copyright protection on their laws and regulations despite longstanding copyright office and administration views to the contrary has sharply declined. however, the issue of copyright protection for codes ask -- and standards incorporated within them is more nuanced. recognizing that codes and standards are developed at some extent by private sector entities, i look forward to hearing from a representative of the american national standards institute and an individual who has made greater access to government information including the videos of congressional hearings like these his

longstanding mission. before i conclude my opening remarks, let me turn to a few other issues not being heard today. i'm sure that there is no one in this hearing room who isn't aware that supreme court announced on friday that it will hear oral arguments later this spring in the aereo case regarding another issue related to the scope of copyright, the public performance right. the court also announced trade that it will hear oral arguments in two cases with implications for the patent troll issue, something this committee and the house has already addressed. these three intellectual property cases are in addition to earlier patent cases taken up only a few months ago by the justices. it is hard for me not to notice ls that once again this committee continues to lead the way on critical policy issues. i want to thank the witnesses again for their time here today and more for their flexibility in their schedules to enable them to be here. thank you, mr. chairman. >> thank you chairman goodlatte. we have a very distinguished

panel today, and i will begin by swearing our witnesses in before introducing them. if you would, please, stand and raise your right hand, if you will. and do you swear that the testimony you're about to give is the truth, the whole truth and nothing but the truth so help you god? thank you. let the record show -- >> mr. chair? >> -- in the affirmative. >> mr. chairman? >> yes. >> in order to have this in the record at the time of the hearing, could i ask unanimous consent to put documents in the record at this time so they can be copy for the members? >> without objection. >> thank you. do you want to hear them all, or you'll take all of themsome. >> we'll take all of them without objection. >> thank you. >> thank you, witnesses. i'll introduce the witnesses. chairman goodlatte mentioned the standing room only crowd, and this shows me you all have more than a casual interest in this very significant issue, and we're leaded to have all of you with us today. our first witness today is mr. david nimmer, a professor at the ucla school of law and an attorney in private practice

with the law firm of r roll and ma nil low. in addition to numerous books and articles on international copyright law, mr. nimmer has updated and revised volumes 19-92 nimmer on copy rite. he -- copyright. our second witness is mr. glynn lunney jr., a professor at tulane school of law where he teaches contracts. he earned his bs from texas a&m university. he also earned his ma and ph.d. in economics from tulane university while teaching at the law school. our third witness today is mr. mark schultz, professor of law at southern illinois university. senior scholar at the center for the protection of the intellectual property at george mason university school of law.

professor schultz received both his jd with honors and ba at the international economics at george washington university. professor, is that -- [inaudible] >> [inaudible] >> that's a name most folks without any connection with the university know the nickname. was it dog? >> it's an egyptian racing dog, yes, sir. >> all right, thank you. are you awarding me special credit for knowing that? i'll accept it. good to have you with us, mr. schultz. our fourth witness is mr. james love, director of college of international. mr. love earned a master's from harvard university, the ken key school of government and a master's in public affairs from woodrow wilson school of public and international affairs. our fifth witness today is ms. patricia griffin, vice president and present counsel of the american national standards institute. ms. griffin joined in 2004 after 20 years of private practice, and she earned her jd from the

albany law school and her ba from skidmore college. our sixth and final witness is mr. carl malamud, president of public -- strike that, public resource organization. mr. malamud founded the nonprofit in order to work on the publication of public domain information for the local, state and federal government agencies. mr. malamud received his mba degree from indiana university kelly school of business. welcome you all. and mr.-- our first witness will be mr. nimmer. it's good to have of all of you with us. lady and gentlemen, if you could confine your statements to on or about five minutes. there's a panel on your desk. when the from the turns to amber, clock begins ticking. you're coming up upon five minutes which will appear when the red light illuminates. and we try to apply the five

minute rule to ourselves as well. so during questioning if you could be as courteous as possible, that would be appreciative. mr. nimmer, if you will kick ball, good to have all of you with us. >> thank you so much, mr. chairman. and thank you to all the members of the committee for the invitation to testify this morning. we gather to consider the scope of the rights that belong to copyright owners. one of those rights is public distribution. the question today is how to prove violation of that distribution right. specifically, does the act of placing a digital file containing a copyrighted work into a file-sharing folder on the internet violate law? or must the cop wright owner -- copyright owner additionally prove that a third party downloaded that particular file before the uploader can be held responsible? in short, does copyright law's distribution right include making an available component?

let us imagine that a user uploads a full copy of the motion picture avatar to a shareholder operated by a peer-to-peer service. anyone else on the p-to-p network can then watch avatar at no charge. i respectfully suggest that the better course of congressional action is to reaffirm existence of a making available right so that the unauthorized upload itself is or considered infringing. the alternative is to force the copyright owners to prove that third parties subsequently done loaded that particular copy of avatar. that alternative unnecessarily clogs judicial procedures and threatens user privacy. as the eloquent introductions at the opening statemented -- stated, it was the intent of congress in 1976 to include a making available right, and the u.s. has joined two treaties that require this country to recognize that right. unfortunately, nonetheless, there have been divided rulings on the subject from the district courts.

although there's one recent ruling from the tenth circuit recognizing the making available right, there is still, as that court recognizes, a discensus in the courts. for that reason, i urge congress to reaffirm the making available right aspect of the copyright owner's distribution right. a brief history helps to frame the issue. reverting to the mid 20th century, the copyright act in effect then gave openers the exclusive -- owners the exing collusive right the publish or vend the copyrighted work. someone who made a work accessible to the public was, therefore, an infringer with no further proof needed. if we imagine a bookstore in 1950 featuring numerous copies of a bestseller stacked on a table near the front door, the case against the store owner was complete. in other words, copyright law at that time imposed no obligation to place undercover agents near the cash register to develop evidence that third party customers actually walked out the door with copies of the book

in hand. translated to today's vernacular, copyright owners at that point enjoyed the exclusive right to make available the protected work. of course, they could have hired investigators the stand in the corner and record every transaction, but that exercise was always considered unnecessary. it should be considered equally unnecessary today. rather than a private eye unobtrusively watching the cash rebelling thester to see who bought books, proof of downloading today is far more invasive. it requires subpoenas being issued to internet service providers, to identify, for example, all subscribers behind the internet protocol addresses who downloaded avatar on a given day. for that reason we have seen case after case confronting procedural challenges to these types of subpoenas. entire exercise can and should be avoided. as opposed to extensive motion

practice over subpoenas or digital dragnets designed to ensnare the identity of everyone who uses a service, there's a much more straightforward option: continue copyright law on its traditional path by holding liable those who make works available to the public without the copyright owner's permission. ideally, litigation procedures against uploaders should be streamlined. the resulting case need not delve into intricate cases of who downloaded on which day. equally, it should not result in a multimillion dollar judgment and massive trial procedures. for that reason, i recommend that the congress investigate two sensible adjuncts to its reaffirmation of the making available right. the first is recalibration of statutory damages to a sensible level that deters uploaders from their infringing activities, but not through the possibility of billion dollar rewards as at present. the second is establishment of a form of small claims court to consider routine p-to-p cases

and to award those appropriately-reduced damages after liability has been established in a fair and expedited proceeding. these reforms will not solve all the problems faced by the copyright world, but they will set the law on a reasonable course designed to protect the interests of copyright owners and to safeguard privacy on the internet. thank you very much. >> thank you, professor nimmer. mr. lunney, i'll talk to mr. schultz about the -- [inaudible] i will admonish you because texas football team was not very genial bowl hosts in their recent duke university/texas atm football, but i'll hold you harmless for that. good to have you with us, sir. >> thank you, committee chair. terribly sorry that the ago geese -- aggies were not polite in the bowl game. maybe not that sorry. if you didn't stay until the end, you missed something pretty exciting, didn't you? i probably have the hardest it

is it is asking of the witness -- task of the witnesses up up front because the first point i'd like to make is file sharing may not be quite the scourge that it's been made out to be, not the scourge of american culture or business. the second point i'd like to make is even if it were, the making available right's not going to solve the problem. and the third point is the we add the making available right using the linguistic framework we see in the wipo tree ties -- treaties act, we're going to be seeing issues like linking, social networking, these things that have been resolved under the existing linguistic framework. we'll have to relitigate them all over again, and i think that's a problem. now, i know i'm sort of -- don't have much chance to persuade you that file sharing's not a bad thing. but for me, there's a fundamental difference between copying and stealing. stealing is basically wrong, and we should prohibit it wherever we find be it as a general rule.

copying, on the other hand, is generally a good thing. it's not just the best thing since sliced bread, we wouldn't have sliced bread without copying, we wouldn't have culture, we wouldn't have civilization. i can speak to you today and you can understand what i'm saying -- at least i hope you can -- because you and i speak the same language. we speak the same language because we are born with the intrinsic ability to hear or see what another speaks or does and imitate that. copying is a fundamental attribute. it is what makes our civilization possible. so when i look at file sharing, i don't see a scourge of culture. i see an invention that has put music in the hands of more americans than any invention since the phonograph. now, i'm told that the problem is it puts them in the hands of those americans without them paying for it, and this is real problem. it's a problem for the economy, jobs are lost, it's a problem for the creation of music, people are not getting paid. why would they remain in the business? and so when we think about those problems, for me at least the jobs argument is reflecting a

very old fallacy that economists have identified since 1850. that money is not lost, it doesn't go out of the economy. in fact, the consumers don't have to pay for music means it remains in their pocket, and they can invest it or spend it elsewhere this the economy, and the jobs are created elsewhere in the economy. there's no loss on the jobs front. now, with respect to the creation of music, this is -- goes really to the heart of copyright. its fundamental premise for 300 years is that more copyright equals more revenue equals more works. and we have very few opportunities to test that premise, but file sharing gives us one of the few. revenues to the music industry in particular have fall been dramatically. and whether all of that's due to file sharing or other factors, it's a little difficult to say. i'm perfectly willing to accept some part of it is due to file sharing, but my concern is what happens what happened to music output. and we turn to measures of music output. by most of the measures we could use, music output seems to be remarkably healthy, and if the goal of copyright is to produce

more and better works to progress of science, then file sharing doesn't seem to be interfering with that at all. now, maybe you don't accept my perspective on that particular issue, that file sharing's not the scourge it's made out to be. so let's move on to the second point that a making available right's not going to enable us to solve file sharing problems. it's not the proverbial silver bullet. the point is basically simple, whether you have to prove a making available or a distribution, you're going to down load the work from the file-sharing program. this the distribution context, you may have to download to show that a distribution was made n. the making available context, you have to download to prove that the link really is to the work it says it is. things on the internet are not always what they say they are. so you actually have to download it and check to make sure it's the actual work. from 2003 to 2008, the music industry sent demand letters to some 35,000 americans for engaging in file sharing.

and none of those cases or instances as far as i know were dismissed because they could not show a download. rather, the music industry gave up that battle because while they went after 35,000, estimates suggest there might be 35 million americans engaged in file sharing. there was never realistic -- it was never realistic to after all of them. and second, these are your clients, your customers. suing them's not good for business, and third, it wasn't working. so i don't think a making available right will change any of that. as a business decision, the music industry's still not going to make sense to go after these individual file sharers. the final point i would make is it's going to reopen what seem to be settled issues, and i think that would be unfortunate, chill business innovation and investment in new technologies. thank you. >> thank you, professor lunney. professor schultz? >> chairman goodlatte, chairman

negotiable, members of the subchief be, i appreciate the chance -- subcommittee. the subject matter of copyright should be one of the least controversial parts of copyright because it goes to the very heart of its justification. today i'll be speaking on my own behalf as a copyright lawyer and scholar. i'll speak first about scope and subject matter of copyright in general, and then i will specifically address how these principles alie to protection for broad -- apply to protection for broadcast. copyright has traditionally had a broad scope for good reason. copyright protects the productive intellectual labor of authors, provided that those labors result in an original expressive work. it exists to provide those who create, invest in and commercialize content. the chance to enjoy the benefits of what they create through exclusive rights. when creators can benefit from their labors, the public also benefits. while many speak of striking a

balance between the rights of copyright owners and the interests of the public, in truth those interests are rarely out of balance at least with respect to core copyright principles such as the scope and subject matter of copyright. james madison recognized the this fact in the federalist papers when he said of intellectual property that the public good fully coincides with claims of individuals. the public will get the works that educate, entertain and inspire and inform them onlybe their creators can obtain just compensation. in the end, creators, businesses and the public are all served when our intellectual property laws recognize the essential core value that those who invest labor and risk capital to create and distribute original content deserve protection of their property rights. which brings me to the topic of

legal protection for broadcasts. in the copyright and telecommunications laws, congress created a legal framework that insures that both creators of television programs and local broadcasters have opportunity to be compensated for their labor, investment and innovation. this legal framework has two purposes. the first is to prevent third parties from undermining the labor, investment and incentives of creators and broadcasters by free riding on their labor and investment. the second purpose is to encourage high quality, locally-focused broadcast television. the laws have been a successful we have a dynamic and vibrant broadcast industry in which the rights of individuals and the public good are both promoted. here are just a few examples. there are nearly 1400 full power commercial broadcast television stations in the united states. 78% of americans get their news

from local tv daily including important emergency news. nearly 60 million people still depend ec clues i havely on -- exclusively on over the air signals, including 30% of households with annual incomes under $30,000. broadcast ors air over 90 of the top 100 most watched programs. perhaps more than anything, the quality of modern programming shows that public is well served by the current system. unfortunately, many underestimate the substantial investment required to the make it happen. airwaves may be viewed as public resource, but privately-created broadcast systems and the programs transmitted over them are not. local broadcasters maintain expensive transmission facilities and invest in new technology including billions in the recent shift to high definition broadcasting. they pay network affiliation fees and sipped case fees -- syndication fees. in an era of shrinking news

budgets, the average local news operating budget is a welcome exception of over $4 million a year on average. in conclusion, there's no such thing as a free lunch. creators and broadcasters need protection of their property rights that make this tremendous enterprise possible. in this context, it's clear that the public good, as madison said about the intellectual property laws generally, fully coincides with the claims of individuals. thank you. be. >> thank you, professor schultz. will love. mr. love. >> thank you, mr. chairman. for the opportunity to testify. i've been asked to talk about the rights of broadcasting organizations including roams or -- proposals for a new u.n. treaty that would establish a set of neighboring or related rights for entities that distribute information. they did not create and do not own.

the u.n. agency responsible for development of intellectual property right property is known as the world intellectual property organization or wipo for short. located in geneva, there's a standing committee on copyright and related rights known as the sccr. since 1998, the wipo o sccr has been trying to contain consensus -- obtain consensus on broadcast organizations. several member states have called for a diplomatic conference on this treaty in 2015. there are major differences among countries regarding every important aspect of in this treaty as earth from the current d evident from the current working document, sccr-24-10 and the new proposals in december 2013. the wipo treaty would create a new layer of rights that coexist with copyright benefiting the

organizations that broadcast information. the broadcasters and several member states of wipo such as japan and the member states of the european union are pressing for an agreement that would expand considerably the set of related rights that exist in the 1961 treaty, the rome convention, that the united states has not signed. the 1961 rome convention created a system of related rights for performers and producers of sound recordings to supplement protections that authors have under the burn convention. -- bern convention. in 1961, the decision was made to give a layer of rights as a reward for the role of intermediary. essentially on a par with actors, singers, musicians and other performers. many consider the 1961 rome convention a mistake, and the broadcaster right as the weakest

type of intellectual copyright because it is provided by entities that plano role in the creation of the content itself. the united states did not sign the rome convention but does provide some broadcasting entities with limited retraction mission rights through the communications regulation system including through 47u is sc325. in wipo, several countries want to expand men if fisheries to include subscriber channels such as tnt, hallmark channel, espn, discovery channel or subscriber-based radio channels provided by xm sirius and also rights in content they distribute. but did not create. a growing number of countries want to expand the 18961 rome -- 1961 rome system more broadly to the internet and expand it to the more broadly-defined group

of broadcasting entities and provide for 50 years of exclusive rights on fix sayses for broadcast. at wipo, uspto has established a compromise to, quote: authorize the smuggles or near -- simultaneous or near -- [inaudible] so far no country has voiced support for the u.s. proposal, and much more aggressive alternatives from japan and the european union are being considered that would provide new economic rights to broadcasting entities for distributing information they did not create or own. this is akin to giving amazon or barnes & noble a layer of copyright in every book they sell. or making bag google a part ownn every web page they locate on

the internet. free over the air broadcasters do face unique challenges regarding the transmission of their signals, and the u.s. pto proposal may be appropriate to address some of these channels. here we have an open mind. but for pay services and webcasting, there is no need to create a new intellectual property right dealing with retransmissions. copyright, theft of service laws and contracts are sufficient to address piracy. for all broadcasting organizations, there is no economic justification for giving a distributer any rights in the underlying content. it does not make sense and it creates a number of grave risks for those who create works in the public to create rights for people that distribute information that lay on top of the underlying interests that

you have in copyright. thank you very much. >> thank you, mr. love. ms. griffin? >> thank you, mr. chairman. good morning, ladies and gentlemen. as noted, my name is patricia griffin, and i am vice president and general counsel of the american national standards institute, a not-for-profit organization. most people don't know how much we depend upon standards to insure our everyday or life work. for example, standards help insure that a light lightbulb fn a socket, that you can use any atm machine in the world and that product on store shelves are safe. in the united states our standardization system is led by the private sector with hundreds of individual standards developing organizations or sdos working in different technical areas in industry sectors. it is a consensus-based and market-driven process that is open to participation by all affected stakeholders. importantly, the u.s. government

is one such stakeholder, and federal, state and local governments are active partners in the development of standards and codes when the activity is relevant to their needs. the government uses these standards in a variety of ways including to establish internal procedures and develop regulations for public safety and welfare. our national standardization system and its public/private partnership are reflected in the national technology transfer and advancement act of 1995 and the associated omb circular a119. the nttaa directs agencies to consider the use of private sector developed standards in lieu of government-unique standards. when adopting a voluntary consensus standard into a regulation, federal agencies are permitted to incorporate the standard by reference into the federal register without publication of the standard itself. for a standard to be incorporated by reference or ibr'd, the agency must determine that the standard is reasonably

available to the class of persons affected by the anticipated regulation. in this case, reasonably available has always meant that the standard is accessible to any potential user. it does not require that the standard be available without a fee. now, recently concerns have been raised about whether the reasonably available requirement should be changed in light of expectations of free online access. for example, in early 2012 nara, the national archives and records administration, solicited comments on a petition arguing that ibr field materials in the cfr should be for free. but just three months ago after a comprehensive analysis, nara concluded that reasonably available continues to mean just that, and it does not mean for free. they relied in large part on another comprehensive analysis of the issue conducted by the administrative conference of the united states in december of 2011.

the question nara was trying to answer was simple: why shouldn't ibr'd standards be free? it seems like a valid point, but the statement misses some very important considerations. first, every standard is a work of authorship, and under u.s. and international law, it is copyright protected giving the owner certain rights of control and remuneration that cannot be taken away without just compensation. second, if sdo os can't charge for codes, the funding has to come from somewhere. an increasing participation fee to offset lost sales revenues would disenfranchise consumers and small businesses. those with the money would have all the influence. lastly, if sdos can't afford to say in business, safety standards would not be updated, and standards for new technologies would go be unwritten. this would affect u.s. competitiveness and innovation.

the government would have to step up, take over what is now a market-driven system and somehow find the money, time and expertise. so what is the answer? the public and private be sector should continue to make standards and codes available on a reasonable basis. for some, this may mean providing read-only but free access, and for others it may mean at reasonable prices. recognizing that there is not one solution to the access issue, nara found that it is for the federal agencies to continue to work with sdos to provide reasonable access to ibr'd standards. nara's recent assessment reaffirms the decades-old guidance contained in omb a119 that when copyrighted works are ibr'd, those works should not lose copyright and government agencies must observe and protect the rights of the copy right holder. and that's just what's being done. ..