mentioned michael powell, the former chair of the fcc and is now head of the national cable and association. he has an op-ed piece in "usa today" and he writes about this. ask, is the internet so heavyhat you need injection of rules and regulations to fix it? answer is no. guest: we are going down the path on the internet that we radio, cable,nd television, more consolidation, controlled by a few and gatekeeping. this ought to be a golden age of media. it ought to be a golden age of reporting and journalism. exactlyeaded and just the opposite way. we've got the tools but we will not use the tools but i think my friend michael is wrong on that. host: michael copps served in

robert 2001-2011 and mcdowell served 2006 until just this year, 2013. and both have appeared on c-span's "communicators" program on a regular basis. this weekend, current fcc .ommissioner senior republican here's what he had to say about the decision on the open internet rules. [video clip] >> to be sure, there are some who argue there should be invested back to the future solution to internet regulation. that and looking at this innovative dynamic, broadband industry, we should apply the outdated, in my opinion, 19th-century railroad style regulation. but i think the key for us if we really want to incentivize broadband deployment and greater investment in broadband infrastructure is to have an approach that leaves behind a heavy-handed economic

regulations of the pass and recognizes the marketplace for what it is today, which is one of intra-modal competition, telephone companies, cable, satellite, wireless and other companies competing to provide the same service. if we do that, i am confident it will take care of the problem without the need a prophylactic regulations from the fcc. host: that to your calls. rory calling from virginia. go ahead. going to have to move on. it reminded to viewers, when you get through, turned on the volume on your tv. there is a delay. we are able to hear you through the phone and you can hear the program through the fun as well. huntington, west virginia, democrat. taking myink you for call. i am scared to death of this internet, especially in the school system. -- 90% of theunty students cannot even afford the

public lunch. that's why you have 100% free public lunch is. internet, they go home and they have zero access. [indiscernible] thank you. to talk abouts school? guest: i will. it is so important our schools do have the kind of high-speed technology that enables students to be able to keep but with their competitors in the urban areas of foreign countries. thank goodness to west virginia senator rockefeller, there is a program that enables a school to access this kind of technology and in many cases use it as an anchor institution in the community. but if you are a student in you arest virginia,

competing against everybody else. not just in your country but around the globe, for johnson opportunity. you are trying to do your homework or research on low speed or no speed tools while the kid in the urban area or a student overseas has access to really high-speed technology. you are trying to start a business in rural west virginia and you don't have any bandwidth, you don't have any markets, you don't have any opportunity. though you are absolutely right. thathis is not something the marketplace by itself can resolve. we have never built infrastructure in this country that way. it has always been to a public-private partnership with a national vision, goals set by the government, incentives provided by the government to get infrastructure built. whether it is roads, highways, interstate highways, electricity, you name it. going back to the founding of the country. why should we expect business to go into an area where there is no business plan for it to go?

it has to have some incentives and it has to have encouragement from the government. au put your finger on just tremendous problem for this country, if we are denying our kids access to the kind of tools they need. we are denying the future of the country. it's good jay rockefeller is currently chairman of the commerce committee in the senate. here -- host: jay rockefeller is currently the chairman of the commerce committee in the senate and this is what he said about net neutrality -- host: robert mcdowell, a viewer who tweeted earlier i wanted to follow-up. she is asking -- guest: the one i talked about

the engineer giving your video get priority over the e-mailed it to make the experience better for you, that is because of consumer demand. just to make an assumption -- is there some sort of anticompetitive conduct going on? the answer is, no. early not in any systematic way. and there was not before the net neutrality roles. what is interesting the fcc never did conduct an economic study, market study of the broadband market. that happened was the federal trade commission in 2007, and it have a unanimous -- had a unanimous bipartisan vote that found that actually the broadband market was robust and competitive. and it warned in a bipartisan way of the unintended consequences of regulation, that actually costs go up especially for low end consumers who just sip bandwidth may be subsidizing

higher and consumers who guzzle it. something also want to point out. you want to go into the title ii direction, the phone monopoly style regulation of the internet, it actually allows for tiering and a two-sided market that all of these things that proponents of title ii do not like. it allows for that, but just in a regulated way. it would stifle competition. it would stifle investment. i think it would be bad for america. is the oldr that black rotary dial phone that was there for 60 years because of this type of regulation, rather than focusing on competition. but just people of that you mind. --t: would have been would've you been doing since you left the commission? visiting fellow at the hudson institute. a wonderful think tank here in washington, for their center on economics and the internet. speaking and writing and

spending more time with my family as well pit until this week. until this court decision came out, then i have been doing media interviews. host: michael copps, since you left? g come i thought i was retiring -- guest: i thought i was retiring but ended up spending time at common cause and a reform and democracy initiative, really to study civic dialogue in the country about the future of our media and the internet. i have had wonderful experience as a fellow at the harvard university center this past semester. i am keeping busy. but also finding a little more time for the kids and grandkids. host: what is your biggest concern when it comes to telecommunications today? createshat it opportunity and serves democracy. and these are not questions about terminology and semantics. these are questions about the future of where this country is going. all of the communication things are going to translate to the internet, that internet becomes hugely invested with the public interest, and as a

country would have to face up to that if we want a free and open internet, if we want people to have access to all of these communications tools and if we want a civil dialogue that is forms rather than diminishes the state of the nation. guest: my concern is there would be some public policy adopted that would have perhaps the best of intentions but unintended consequences that will actually harm innovation, investment, and the consumer experience. market.us look at the i think the fcc should wait and see. it should do a market study. again, peer-reviewed bona fide economic analysis -- what it has not done. i think it had done, it would find that the competitive, dynamic, robust and consumers a much better off because the internet was unfettered. the concerned about unintended consequences and sometimes intended consequences of government action. host: rich in marion, ohio.

go ahead with your question for two former fcc commissioners. caller: what a fantastic discussion. available topes get information in and out quickly. or someone downloading a movie, is it important for them to get it done and half a second or two minutes, or can they get a discount for taking mother to get it so we don't jam up the highway with things that people don't really care about having right away? other types of common occasion should go the speed of light and should have the right-of-way. the other thing, we build bigger pipes -- how long would it take to download library of congress? who will it be sent to? sent to our students are sent out to china within a half an hour? important questions. business, they are loading up a lot of junk -- "mob wives" and stuff like that you

can step out of your bill, but there are a lot of great things coming through. host: we will start with you, commissioner mcdowell? up a lot ofring issues. but under the net neutrality roles there is a disincentive to try to foster pricing freedom. if you wanted to download a movie and you wanted it done quickly and you didn't want to -- big,a 24 by seven fat, expensive broadband hype to your home, if you could for $.50, let's say, download that movie with an extra burst of speed so you get a very quickly, that is good for you. , ifare actually paying less speed is important. paying less than if you had a full-time big fat high-speed pipe to your house. it gives the movie to you quicker. you are happy. there is an economic efficiency for both the supplier and the buyer.

is the time for experimentation. if that becomes anti-competitive , then let's look at it and stop it, obviously. but i think this is a wonderful time to try to experiment with pricing freedom because we don't know. the private sector there are billions of ideas and decisions made. some succeed and some fail of their own merits. we want them to continue to succeed or fail on their own merits. but this is one possibility that offers a great deal of benefit to consumers going forward. i think there is an expectation on the part of consumers for really fast downloading. one reason why it is more and more difficult to establish i think we ought to see this discussion in a different perspective. we're talking about rationing scarcity.

companies are saying we need data caps. big companies saying, were not going to build that much fiber anymore to the country. they're prospering on the current scarcity they have a broadband capacity. if we had a national mission to every cranny of this land, we would have fewer discussions because we would have capacity to facilitate quick transmission of everything. host: unfortunately, we are out of time. thank you for being on the "washington journal." we do have to close with one more tweet.

[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]

>> he talked about the legal marijuana and recreational use and jobs, education and health care. [ applause ] >> thank you and good morning. it is great to be back in the people's state capital. to the four members walking in, i offer you my sympathy.

just kidding. luckily for you and all of us who will have the leadership of morgan carol and house speaker and senate minority leader and house minority leader. another veteran hand -- [ applause ] >> another veteran hand is our great lieutenant governor joe garcia. thanks to joe and his wife claire for sharing so much of his time. we are honored to have the vice president of the southern indian tribe. [ applause ] >> and the vice chairman of the mountain youth trial. welcome to you both.

i want to thank you awesome cabinet and senior staff who are with us and along with all of the state employees who have worked so hard. especially this year. thanks to everyone who has been dedicated to the flood efforts, the florida national guard, department of transportation and public safety, and our chief recover officer jerry stead. i want to recognize his team from ihs as well. we are indebted to all of you. and thank tooz the attorney general, and the treasurer and to our secretary of state, the honey badger, jeff. [ applause ] thank you to the members of the

supreme court and to the colorado state board of education. denver mayor michael hancock is here. thank you for your partnership with the state. and i want to express gratitude to helen thorpe for being there today and every day for our son teddy. [ applause ] on behalf of all colorado people i want to thank the broncos for giving us something to cheer about this season. and how could we not congratulate the colorado state rams. after that forth quarter win over washington state scoring 18 points in the last three minutes coming from behind was nothing short of amazing.

[ applause ] >> that victory was a reminder that when we are fixed with challenge situations we pull together and get it done like always. colorado has always been a good place to find what you are of. earning your keep, making your own way, looking out for your neighbor, that comes with the territory. and colorado we know that there is going to be times when we will be tested. times when we will take action that shows who we are.

during the spring, our executive director was gunned down. when we gathered for our last state of the state address, in the wake of the waldo canyon fire and the aurora massacre,

many of us thought we would never again experience a year like 2012. that was not the case. every season of 2013 presented another unthinkable test. during the spring, our executive director of the department of corrections, tom clements, was gunned down in his home. throughout the summer, wildfires burned: the black forest, royal gorge, west fork, and red canyon. in the fall, we got the flood-against the backdrop of the politicians in d.c. who couldn't get along well enough to keep the federal government's doors open. in the winter, came the reports of a shooter in arapahoe high school and the heart-wrenching reality that 17-year-old claire davis had been fatally shot. this past year, colorado has been scorched. colorado has been flooded. colorado-once again-endured senseless, inexplicable violence. yet, despite all of it, we did not let that define us. that is not our story. our story-and what we showed the world is: colorado does not shutdown. colorado does not quit. colorado does not break. we know there are folks out there still grieving, still recovering. [ applause ] >> we know there are folks out there still grieving, still recovering. we know there are people out there feeling the impact of the national economy's downturns. and we are doing everything within our power to change that. but make no mistake-the state

of colorado has not only endured, it also has thrived. my fellow coloradans, despite every unforeseen test, despite everything that was thrown at us the state of our state is strong. [ applause ] >> and according to just about every forecast, trend and study, the state of the state of colorado is only growing stronger. while the national economy around us remains sluggish colorado's unemployment rate has not gone up. it has gone down. to the lowest levels since 2008. this is our fourth consecutive year of economic growth. according to a study from the university of colorado's leeds school of business, we can expect robust job growth in virtually every sector of the economy this year. [ applause ]

>> colorado is ranked among the top five states in the entire country for business, careers and job growth. four of the top ten-and five of the top 20 communities in the country for startups-are here in colorado: boulder, fort collins, denver, colorado springs, and grand junction. we are also one of the very best environments in the country for small business. according to the kauffman foundation, when it comes to creating a small-business climate, this year colorado earned a grade of "a." that's up from a "b+" in 2012. and people like what's happening here. colorado hosted a record number of tourists this year. we gratefully welcomed even more hunters than last year. [ applause ] >> agriculture-employing 173,000 people-keeps our economy strong,

last year contributing $41 billion to the state economy. between 2009 and 2013, colorado agricultural exports increased by almost 80 percent. [ applause ] the fact that the state is strong and growing stronger is no accident. in colorado, we work for our luck. shortly after we took office three years ago we launched a strategy to be a thoughtful and supportive partner with the business community. we reached out and built relationships with people in 14 regions from around the state, and based on what we heard, we designed a colorado blueprint that focused on six core objectives: build a business friendly environment / increase access to

capital / educate and train the workforce of tomorrow / retain, grow, recruit companies / cultivate innovation & technology / create a stronger colorado brand. because we know the economic hard times have been especially hard in some rural communities, this past year we launched the rural economic development grant program, and are in the process of awarding $3 million to our rural communities. one of the recipients is here with us today. keith (ber-dorf) buhrdorf. with $350,000 in grants awarded to tk mining in delta county, keith's company will be able to add 5 to 10 employees, which is almost doubling the workforce of tk mining's delta office. [ applause ] >> together, we launched the

advanced industries accelerator program making seed capital available to start-up companies in aerospace, engineering, advance manufacturing, biosciences, electronics, energy and tech. we created a unified brand logo, which is almost universally loved. two hundred companies have requested to use the brand. 117 of colorado's companies are already using it. we launched coin-the colorado innovation network-which brings together innovative thinkers and entrepreneurs from around the state. we expanded the biennial of the americas, which is rapidly growing into something like a colorado's world's fair. we created the pedal the plains tour to promote all of the beauty and opportunity of some of colorado's most gorgeous rural communities. with labor and business working together, we passed legislation that made the state contracting process more transparent, while also making it easier for colorado firms and colorado workers to secure state

contracts. when there's work to be done in colorado, for colorado, we should look to skilled coloradans first. [ applause ] >> my friends, in 2010, when it came to job growth, this state was ranked 40th in the nation. now-three years later, in that same ranking, colorado is the 4th fastest job growth state in the country. [ applause ] >> 40th to 4th. since january 2010, we have

added 170,000 jobs. in 2010, companies were leaving colorado. today, they are moving here. while we are disappointed whenever a company leaves this state, colorado is gaining employers and jobs. three fortune 500 companies have decided to call colorado home along with 26 additional companies. your budget decisions played a significant role in this success. one of the most recent companies to establish headquarters in colorado is ardent mills. while we were pedaling the plains we got to talking with our friend, darrell hanavan, of the wheat growers. darrell told us that two of the nation's leading flour milling companies-conagra mills and horizon milling-were forming a joint venture, ardent mills. they were six months into a search for a new headquarters and colorado hadn't made the final cut. undeterred, darrell requested that i call the executives of

this new company. in roughly a month, darrell and his team helped us persuade ardent mills to locate their company here in colorado. we pointed out that colorado is a place defined more by its future than its past. which was clearly the case with ardent mills. landing ardent mills is a little like winning the super bowl-or at least the flour bowl-especially for rural communities. it all began with the colorado blueprint relationships we forged across the state. we have bill stoufer, who will be the chief operating officer of ardent mills, is here with us, along with brad berentson, who will be the chief financial officer. thank you. [ applause ] >> bill and brad, you have the support of everyone in this room to help make ardent mills the most innovative and successful milling operation on earth.

the economic infusion and energy of colorado's new companies, along with the hard work of colorado's entire business community, has gone a long way to take colorado past pre-recession job numbers. the unemployment rate in colorado has dropped from 9 percent in 2010 to 6.5 percent, outpacing the national rate. unemployment in both grand junction and greeley has dropped by even more, by more than 30 percent. but let's be clear, the unemployment rate is not low enough, and all of us share a commitment to keep a statewide focus on this issue. more jobs all over colorado is our highest priority. [ applause ] >> as some of you know, i took what you might call an

unconventional path into running for office. i started out here in colorado as a geologist. during a downturn, everyone in our company got laid off. next thing i knew i was making beer and starting a brewpub business. it turned out pretty well. but as every small business person knows, it's not easy out there, especially when bureaucracy gets in the way. i didn't run for public office until i was 50. before that, i'd never run for anything. not even in high school. i ran for public office as a small businessman. i thought government needed to operate with more common sense and less nonsense. so while we have been doing all we can to make it as easy as possible for business to succeed in colorado we also have been streamlining the state government, making it more efficient. three years ago, we started with a budget that was facing staggering shortfalls. balancing the books is not the sexy stuff, but if the budget is wrong, nothing else can be right. just ask congress. when it comes to this

nitty-gritty of governing, you could say we have borrowed the motto: "be prepared." we have funded core priorities while preparing for future needs-and unforeseen events. because, together, we have made hard choices, been disciplined, not spent more than we have-we've put ourselves in the position to save more money for rainy days. and as we've seen, when we get rain, it can be "biblical" and all at once. the single most critical factor in colorado being able to stay open for business throughout hellfires and high waters has been reserves. three years ago, colorado was setting aside only about 2 percent of its general fund money for reserves. that 2 percent gave the state only a seven-day cushion. last year, we more than doubled that rate, to 5 percent our budget request is to grow the fund this year to 6.5 percent. at the same time we have also shored up our tabor reserves to

$48 million and are requesting that they be increased to $78 million. this money in reserve is what has enabled us to respond quickly to the disasters and get assistance to local partners. it's what enabled us to get roads rebuilt and open-ahead of schedule. if you were to have asked anyone in jamestown, estes park or milliken, if they thought we had a snowball's chance of getting those roads open by dec. 1, they would have laughed out loud - some did laugh out loud. it is because of the cooperation of the bipartisan joint budget committee, that we have been able to build this budgetary bedrock. d.c. should be looking at our j.b.c. to see how collaboration gets done. [ applause ]

>> to ensure that we are maximizing state resources and providing as responsive customer service as possible, we have gotten lean. lean, as many of you know, is a type of business audit that scours operations looking for ways to make processes run more efficiently. we have re-evaluated how every state agency does business. and we have initiated more than 100 new lean processes, more than any state in america. colorado's department of transportation recently reported a 19 percent decrease in combined with other improvements their efforts are saving more than $2 million. in 2008, only 33 percent of property assessment appeals were resolved within one year. now, 79 percent are. the division of real estate reduced the average time it takes to complete an investigation of a mortgage loan by 44 percent. these are only a few examples of our leaner customer service, where we are doing what we can and should be doing: responding quickly and effectively when

needed, and then getting out of the way. we're lean, but we're only getting started. one of the places where just about all coloradans frequently become aggravated is the department of motor vehicles. our dmv has made great strides. but they have done so with a computer system that is nearly three decades old. while many of us play around on our iphones while waiting in line at the dmv, the employees are struggling to update the files in ms-dos. our budget aims to change that. this will reduce the average wait time in dmv offices throughout the state from 60 minutes to 15. prauz [ applause ] [ applause[a]

>> through a statewide effort called pits and peeves, we have also reviewed, modified or repealed nearly 11,000 state rules -- many of which were redundant and flat-out dumb. and we launched the responsible acceleration of maintenance and partnerships program-ramp-a more nimble cdot operation that is on its way to freeing up $300 million annually for five years for accelerated construction. this smarter way of doing business is what enabled us to deliver on our promise to complete the eastbound twin tunnels project, the first capacity increase on this stretch of i-70 since it was built in 1961. just about everyone of us has sat in a car on the way to or from the mountains, frustrated, or even worse, stuck in traffic with a kid needing a restroom. this project will reduce travel times significantly during peak sunday hours, and decrease the number of crashes in the area by more than a third. the second twin tunnel project-the westbound lanes-will be completed by the end of this year.

and then there's kathy nesbitt. two years ago, a full third of state workers were approaching retirement, and the state's hiring system was 92 years old and loaded with countless hurdles to hiring the best people. kathy is the executive director of the department of personnel and administration. she and her team successfully created a talent agenda and worked to pass a bipartisan bill to reform the personnel system. supervisors can now focus on finding the best talent. merit-pay is now based not only on an employee's seniority, but also on performance. hiring times, which previously had taken three months, already have been cut in half. just weeks ago kathy was recognized as one of only nine recipients of governing magazine's public officials of

the year award, which is something akin to an oscar for best starring role in cutting red tape. thank you, kathy. [ applause ] >> moving forward, our priorities are clear: we are going to remain focused on jobs, education; and ensuring that we have a state that is as healthy as it is fiscally sound. we are going to continue to improve colorado's customer service and efficiency; and support our military families. fourteen years into the 21st century is well past time to reform our telecommunications laws. this session, we ask you to pass legislation that will accomplish this, but at the same time rural

and other unserved parts of our state should have the same broadband internet access as urban areas. [ applause ] >> with your help, this year, we will extend the job-creation tax credit from five years to seven, enabling more businesses to maintain employees and hire new ones. economic development demands infrastructure. we will propose the formation of a non-profit enterprise dedicated to fostering public-private partnerships to fund infrastructure projects such as transportation and water. this will not only bolster economic development, it also will lighten the burden on taxpayers, and harness minds and resources outside of government to address unmet needs and keep

colorado competitive. such partnerships offer a path toward financing solutions to existing challenges, such as traffic congestion, in places like fort collins and colorado springs. in the wake of the floods, we proved our ability and commitment to rebuild bridges and roads. we've seen what can happen when we lose that infrastructure. but the single most important investment we can make in infrastructure is in our bridges to tomorrow-our children. we must support effective teachers, students and parents. we must find a way to address key reforms that have made colorado a national model. colorado voters made clear they will not make new investments in education until they are convinced that current resources are being prudently managed. we are going to request that the general assembly fund a plan to make the budget of every public school transparent. let's put the numbers on the internet and make the web a window.

[ applause ] >> under the current statewide public education funding system, a school's funding is based on an enrollment which is counted on a single day, early in the school year. we are going ask the general assembly to pass legislation that will ensure a more accurate assessment, by counting average-daily-membership in our schools. it is nonsense not to have a powerful economic incentive for student retention. while we are choosing to adhere to the prudent budgetary strategy that has been the cornerstone of our policy, this year we are seeking an increase in per-pupil funding of $223, for a total of $400 per pupil in the last two years. we are also requesting a significant investment in higher education.

in recent years, college tuition has been steadily increasing by a rate of double-digits. please join me in supporting our request for an additional $100 million for higher education, which would cap tuition increases at 6 percent and put college within the reach of more families. blauz [ applause[ applause ] >> another priority for colorado families and for us, is supporting the energy industry while protecting the environment. the viability of the sage grouse has bedeviled western states for a decade. as chair of the western governors' association, i believe we can protect the sage grouse while at the same time allowing ranches, farms and other economic activity to flourish. at our invitation, secretary of the interior sally jewell has

agreed to visit colorado and observe mitigation efforts firsthand. colorado's oil and gas industry contributes $29 billion to our economy. critical to the success of the oil and gas industry is that operators recognize their moral and legal obligation to protect our air and water. fortunately, we have been able to bring many in the industry together with the environmental community to work toward solutions. as a result, colorado is now a national leader in developing a strong regulatory environment. we brokered the nation's strongest frack fluid disclosure rule in 2011. we are proposing the nation's first-ever methane capture rule, making colorado the leader in the nation for controlling emissions. we've said before that we're committed to holding the oil companies to the highest standards to protect coloradans and our air and water.