working with federal civil rights laws, regulations and programs including title viii of the civil rights act of 1968 and many other federal and anti-discrimination laws in employment, education, public accommodations and publicly funded services and programs. i served from 2007 through october 2013 as director of the district of columbia office of human rights. in this capacity i have been ultimately responsible for the vestigation disposition of filed by individuals and organizations. i've also been responsible for helping establish or modify rules and guidelines to investigate and adjudicate employment in housing discrimination complaints under one of the most comprehensive nondiscrimination status in the country. the d.c. human rights act of 1977. .. so, i have studied and applied federal laws and regulations from hud and other agencies for consistency and the enforcement of civil rights in

the district because this is non-drim law it's substantially equivalent to the fair housing act, for many years the office of human rights has been investigating with hud. this has allowed me to apply the rules and guidelines emanating from hud's office of fair housing and equal opportunity for the proper investigation and disposition of title viii complaints. with respect to management, in addition as management for not for profit, i have provided management for the d.c. office of latino off fairs and d.c. office of human rights. in d.c. i was responsible for designing and implementing policies and programs for the economic and social advancement of the latino community. at the office of human rights, i led a successful agency of talent professionals working on combating discrimination in the nation's capital. i'm confident of the duties that

we after heaved under my leadership, whether in enforcement or racing awareness of the wide range of protections that people living and working in d.c. enjoy. mr. chairman, ranking member crapo and members of the committee, i'm honored by the president's nomination and the opportunity to appear before you today. if confirmed, i look forward to working tirelessly on promoting fair housing and in cooperation with members of this committee. thank you for your consideration of my nomination. like forward to your nomination. >> thank you. mr. mcwatters, please proceed. >> chairman johnson, ranking member crapo and members of the committee, thank you for the opportunity to appear before you today as an ncua board nominee. my wife denise and our two teenage sons clark and parker were unable to join me today, but they are watching over the

net. my sons were intrigued by the prospect of a televised job interview and reassured that such approach is rarely adopted by other employers. in particular i wish to thank denise for her tireless and enthusiastic support in this endeavor and many other endeavors over the past 30 years. truer words i have never spoken. i'm especially grateful for minority leader mcconnell's recommendation of me to the president for this position. it's an honor and a privilege to be nominated to the ncua board, and if confirmed, i will do everything within my power to fulfill the trust placed in me by the u.s. senate. ncua plays a critical role as a regulator and insurer to protect the hard-earned savings of more than 96 million americans. if confirmed, i will work

diligently to ensure the continued integrity and safety and soundness of our nation's $1 trillion credit union industry in an ever-evolving marketplace. on my qualifications i currently serve as the assistant dean for graduate programs and as a professor of practice at the southern methodist university skol of law. as a teacher i found my students often benefit from the rigorous, vigorous discussion of judicial holdings and problem sets. although we may initially approach an issue from divergent perspectives, the process of debating al challenging manner in a transparent and analytical, yet collegial, yet collegial manner often produces common ground and a workable consensus. previously i practiced law for more than 20 years, most of that as a partner focusing on tax,

corporate finance and mergers and acquisitions. my government experience includes clerking for the u.s. ninth circuit court of appeals in los angeles and serve fog congressman jeb hansarling. while working alongside senator elizabeth warren on the tarp panel i sought to to balance and respect different perspectives and reach consensus based on overarching principles just like i now practice in the classroom. ultimately my colleagues and i work to produce an accurate, non-partisan analysis of the tarp and the financial crisis. i'm pleased that of the 15 reports the panel issued during my tenure, 14 were unanimous. if confirmed i'll bring the same approach to my work at ncua. in legal practice i've often found that the fundamental issues create the most opportunity for concern.

for example, does a proposed tax structure have economic substance and business purpose? likewise, in assessing the risk inherent within financial institutions, i've learned that the root causes of seemingly intractable problems are often embedded not in the esoteric but in the commonplace. for example, do financial institutions have the capital, liquidity and risk mitigation programs necessary to operate in an adverse economic environment? in answering questions like this one, regulators need to apply the law with impartiality and look at the larger picture. they need to think both tactically and strategically considering not just the desired outcome but potential unintended consequences. as such my focus as a regulator will remain straightforward,

don't neglect the fundamentals of capital liquidity and transparency. always remember the greatest threat to the financial system may reside where you least expect it, hidden within plain view. in life i've often found that -- i've also learned about the need to earn trust and to never forget that real people are affected by decisions. if confirmed, i'll bring an open mind in a risk-based, market-oriented, targeted ans transparent regulatory perspective to address the increasingly complex issues facing credit unions. i'll also aim to balance competing viewpoints, to maintain the safety and soundness of the credit union system, safeguard the share insurance fund and protect taxpayers and credit union members from losses. thank you again for the opportunity to appear. i'm pleased to answer any questions you may have. >> thank you for your testimony.

we will now begin asking questions of our nominees. will the clerk please put five minutes on the clock for each member? dr. fischer, some suggest that community banks be subject to a different degree of regulation than larger banks. do you support a tiered approach to regulation? >> -- i know how important it is that those banks survive, particularly in a farming communi community. i don't think there should be uniformity of regulation. i believe the small banks do not have to fulfill all the requirements that are imposed on the large banks, but regulators have to do that in a sensible manner.

thank you. >> governor powell, resolving global firms across borders can be a challenge but is a key part in ending too big to fail. what are the next steps to improving cross border resolution? >> i'll start by saying that i'm absolutely committed to ending too big to fail. i think it's fundamental under our system that private sector businesses can prosper or fail as the case may be and it's not something the government as a general rule needs to be involved in in either process. that said, the business of resolving global financial institutions is a challenging project and there's work going on here in the united states and all around the world on that. i think here in the united states we've done as much or more as any nation, and would point to stronger capital and liquidity requirements, these big institutions have to pass severely adverse stress tests

which shows that they can continue to perform their function even in the event of a significant thing like the financial crisis. then the third thing i'd point out is the fdic has developed a single point of entry approach to resolution, very promising. it's getting a lot of support from our major trading partners around the world. that's all positive. there's a great deal left to do here that we're working on. i would point to just a couple things. first, the senior debt requirement that we're imposing on the largest banks to assure there is loss absorbing capital in case they do fail. secondly we're looking at a proposal of some kind to deter the excessive use of short-term wholesale financing. that was a real vulnerability in the crisis. and finally we're about to propose a surcharge -- capital surcharge on the largest firms. the global challenges are, as your question states, very, very difficult, and the work there is also going on. i guess i would go back to 2011

when the nations of the world came together at the financial stability board to agree on the key attributes of resolution mechanisms, and it's a big document-long list. i won't go through all of it. a couple elements i will point to. first, and this is common with our own system, large institutions are to be required to have living wills so that we're looking carefully at how to resolve them now in good times, in reasonable times so that we're not trying to figure this out at the last minute as we were during the financial crisis. we're actually ready for this. another critical aspect would be, our own law provides for a temporary stay so derivative counterparties can't foreclose or accelerate against collateral in terminal contracts in the event an institution enters resolution. that's critical to create the resolution of a run that can spread to the whole system. other nations don't mainly have that, but it's part of the

roadmap they will. there are many other elements i won't even think about going into. let me summarize by saying there's a great deal of work going on around the world, a lot left to do. i'm eager to play a part. >> dr. brainard, an important component of bank regulation and financial stability is the ability to coordinate with our foreign counterparts on rules. if confirmed as a governor, what experience will you bring to the fed in this area, and how would you work to strengthen global coordination for financial rules? >> thank you, chairman johnson. i think that in this world of very global financial markets it is critical to have very high degree of coordination among the largest financial centers in order to ensure the safety and

soundness of our own system. and when i was at treasury, one of my responsibilities was to work with the g-20 and with the financial stability board, with counterparts, regulators, central bankers, financial officials around the world to try to get other countries to follow our lead. i will say that the work that was done by this committee in dodd-frank put us out in a leadership position and gave us a strong place to start, and we have had some successes bringing the rest of the world, europe and asia along with us. if you look at capital, for instance, we moved very quickly to pushing for high capital standards for simple leverage to augment them for a capital surcharge as well as a liquidity framework. we've had substantial, although not complete progress in persuading our counterparts around the world to put those things in place. but i think as governor powell was saying earlier, the one area

where we really are going to have to push very hard, and if i were confirmed, this would be a high priority, is to make sure that other major financial jurisdictions have the capacity and the will to resolve their largest institutions, and they have legal systems in place to do so. that piece is still a work in progress, and that is one of the reasons i think that our proposed foreign banking organization rules are so important, to make sure our regulators have the capacity here to resolve those institutions even as resolution frameworks are moving in the right direction overseas. thank you. >> senator crapo. >> thank you, mr. chairman. i have a number of questions and i know i'm not going to get to go through them all during the hearing. although i'm going to ask each of the individual nominees for the federal reserve a question, i'm also going to ask the other nominees who don't get asked that question to respond to it later. i'd just alert you to that. the first one, i will start with

you, mr. fischer. a recent paper presented at the u.s. monetary policy forum suggests the possibility that the current monetary stimulus may involve a, quote, tradeoff between more stimulus today at the expense of a more challenging and disruptive policy exit in the future. do you agree with that? and if you see that there will be challenges or dangers in the exit from our current monetary policy, could you tell us what you believe those are and whether you believe we can make an exit in a manner that is not disruptive to our economy? >> thank you, senator. i think the exit is beginning, has begun. the extent of the purchases of the fed, the monthly amount that is being purchased is being reduced, and conditions for the

continuation of that have been described. could that theoretically be disruptive? well, you don't have to look at theory. there was the may response which i must confess i didn't think i fully understood why the markets reacted as if it were a surprise, being talked about for a long time. but when the actual tapering began, it had a much more stable impact and that seems to be continuing. what i take comfort from in sort of thinking about all the possibilities is that the fed in 2008-2009 undertook many complicated programs. as far as i know, there were no technical failures in any of those programs, and that's a

good precedent, although here we're relying more, if i'm elected, we will be relying more -- in any case the fed is relying more on the reactions of the market, and those you have to adjust to if they're not what you expected, senator. >> thank you very much. dr. brainard, i'm going to go to you next. you mentioned the dodd-frank legislation in your testimony. i worry that the aggregate impact of the rules of implementing dodd-frank will be immense and that we actually could push some financial companies into basically a regulatory death by a thousand cuts if we are not careful about the evaluation of cost benefit in terms of the regulations that are imposed as we move forward. if you're confirmed to the board of governors -- first of all, would you agree there is this risk? secondly, how would you tend to monitor the cumulative regulatory burden that we are putting on america's financial sector?

>> well, senator, i think the process of reforming -- fundamentally reforming our financial system is a work in progress. the reforms that were put in place under dodd-frank were extraordinarily important, very important to make sure that our largest institutions ran with less leverage, managed their liquidity much more carefully, held a lot more capital to absorb losses, changed their business models and are fully resolvable without any taxpayert any taxpayer involvement. so i think the pieces of the regulatory reform that are being put in place are each extremely important, but as you say, it's very important for us to be mindful over time of the aggregate impact and how business models change and make sure that credit is flowing to small businesses, to homeowners,

to students. so if confirmed i would want to be vigilant, understanding the cumulative impact of the rules. making sure we are eating the safety and soundness goals set out for us in that legislation. but i presume there will be adjustments. the need for adjustments as we go. and obviously we would expect to work closely with this committee as we monitor and tweak the framework. >> thank you very much. dr. powell, i'm going to ask you the same question that the chairman asked mr. fisher. the regulatory work that emerged out of dodd frank made it increasingly difficult for dodd frank and one-quarter of the small banks are contemplating mergers because they can't survive the regulatory environment. would you agree we need to address this by by flexible in the standards we apply to the larger banks as opposed to the smaller banks? >> i would agree.

let me say i believe the community banks and the personal experience with community banks providing a special service in communities that the large national banks are not set up to provide. it's not a better world, as community banks are going out of business. it's a better world with community banks in business. so in terms of regulation, what seems to happen is that most of what we tried to do since dodd-frank passed is aimed at the larger banks, but there's tendency for regulation to run to the smaller banks as well. so, you know, we try very hard to manage that. we have a special counsel at the fed that former governor duke was instrumental in setting up, called the community depository institutions or advisory counsels. we also have a special sub committee of the board that looks at every regulation and

its effect on community and regional banks. so we're focused on this. and it is -- it is separately the case that the community banking model is under pressure from national products, you know, product by product, mortgages and all those sorts of things that car loans become nationalized. we don't want to add any pressure to that at all. we want to not be part of what's putting pressure on community banks, if possible. >> thank you. >> thank you, mr. chairman. i want to discuss an issue of high importance to the people in my state. particularly as a result of the challenges they have faced by hurricane sandy. in a challenging set of circumstances, some of the people in our states have been faced with greater challenges because of the way in which

information has been distributed and decisions have been made on -- which have resulted in the minority community from a series of independent reviews, not receiving fair access to recovery programs. for example, the state's spanish language website contained incorrect application constructions and missing deadlines, and it was not corrected until after the deadline to apply and/or appeal. i've also seen reports showing disproportionately higher rejection rates for african-americans than latinos. and even if i work under the assumption there was no intentional discrimination, the impact would be a cause for a concern. my understanding is the that you are responsible for investigating these claims and ensuring fair and equitable treatment for all the individuals.

yesterday at a hearing i conducted on the subcommittee, secretary donovan mentioned hud is investigating a complaint that has been filed relating to these matters. i know you can't speak to that. but i want to know if you're confirmed will you make this a priority and keep our office updated about the results? >> senator, you have my word if confirmed as secretary for equal housing and opportunity, i will review these manners. i will work with you and members of your staff to follow up accordingly and provide you prompt information. >> okay. because it's simply people who lost their homes and are challenged to pay their taxes like everybody else, but maybe linguistically challenged could have the same opportunity as everybody else. and it is unfair when information that was provided on the main website as it relates to the sandy recovery was missing on a spanish language

website and was corrected after it was brought to the attention until much later and rates of rejection were higher. and when we had 80% of those individuals who appealed their decisions ended up being right. they won the appeals. latinos didn't know about the right to appeal. that's something that is fundamentally wrong. and so i hope you'll follow that. and i would like to ask this question to dr. fisher, secretary brainard and governor powell. a great deal has been written and said about so-called expansion nar austerity being tried by the countries in the europe. the idea was the countries experiencing a serious economic downturn after the financial crisis and who saw their budgets fall into deficit and their borrowing costs rise as a result of the downturn could best move

forward by implementing deep fiscal cuts and monetary tightening with the hope that this would somehow stimulate economic growth by encouraging investor confidence. from my perspective, the way it played out has been quite the opposite. fiscal cuts during an economic downturn caused by weak demand further weakened the country's economy and posed great human cost in the form of high unemployment and canceling out the budgetary savings because of the weaker economy. so i would like to ask you all, what lessons do you think you would know as the country's experiences and have recent experiences such as these or are conversely the enhanced stimulus efforts upside way in japan. >> thank you for the question, sen. the lesson that, the very clear lesson that one draws from experience in europe but

previous experience elsewhere, there was in the 1980s a theory that a contractionary fiscal policy could be expansionary. and there were two countries where it seemed to happen, ireland and denmark. and what produced that in large part was a big devaluation in response to the fiscal action. well, that isn't -- that wasn't present in europe. it can't be pregnant in the monetary -- present in the monetary union. so it wasn't relevant to europe, but that was the theory and the experience on which it was being built. i think the recent experience and also experience in asia in the 1990s suggests that the immediate impact of fiscal austerity is to reduce output. now, you may not be able to avoid that if your budget is a total mess and you can't raise

money. you may have to do that. but if you don't have to do it, then it's negative effect. >> could i hear from the other two? >> sure. so, senator, i would say sometimes nations need to engage in fiscal austerity, and that's a judgment not for fed nominees, but for the legislature. no one should expect that it will result in short-term growth. it will not be expansionary as dr. firer pointed out -- fisher pointed out. the cases where it did were cases where there was currency devaluation and the importance of monetary policy to expand where the central bank is already at the zero lower bound, there's no ability to respond. there's no reason to think that fiscal austerity would bring growth in the short and medium term. >> senator, i think what we can see clearly from the case of europe is that expansionary austerity is a contradiction and

does not work. i think we've been fortunate here in the u.s. to have appropriate support for demand coming off of a very damaging financial crisis during a period where the private sector was deleveraging. in my previous work at treasury, i worked very hard to work with my european colleagues to persuade them that it was very important to avoid some of the terrible human costs of very high unemployment to provide more support for demand. and, of course, it was very important for us here to have a strong partner in europe. so going forward, i think we should continue to hope that europe provides support for the recovery so that we have a strong both economic and strategic partner in europe. >> thank you, mr. chairman. >> senator brown. >> thank you, mr. chairman. congratulations to all of you on your nominations. i'm going to direct my questions

to fed nominees. i will have questions in writing to mr. ve las was and mr. waters, thank you for joining us too. transcripts from 2000, 2007 found that committee members' collective background in macroeconomics seemed to cause them to miss connections between subprime lending and goesic financial instruments with which the american public became all too familiar during the worst, during 2007, '8 and '9. recently released transcripts show that the september fomc meeting which was detailed and was outlined in great detail in a number of newspapers on the eve of the lehman bankruptcy, fomc members mentioned inflation 129 times and recession five times. i'm concerned that a lack of diverse views on the fomc could affect its ability to serve all americans.

dr. fisher, ms. brainard, you are the two nominees that will join, i presume, the fed. what perspective do you bring that actually will matter and benefit the real economy and matter to families in cleveland and mansfield, ohio? dr. fisher? >> senator, i do have an academic background, so i have to accept that. i think it's useful. but in terms of background for this job, i have been a central banker for eight years. i did work through the, as governor of the bank of israel. i was governor during the global crisis. you could not be in that crisis without being aware of the impact of financial problems on troth. growth. and of the absolute need to maintain employment. israel was lucky or whatever that it didn't have a financial

crisis, and so went we reduced interest rates, the banks could lend more, and they did. and israel escaped the bulk, the main burden of the crisis. that's the background. but, senator, in addition i think anybody who has studied and particularly who's studied this crisis knows the cost of unemployment. understands that slow growth is not an abstraction. slow growth is people not finding jobs. slow growth is problems for families in meeting their, even their food bill. and if one doesn't understand that, one can't soarsly be a policy -- seriously be a policymaker. i think i understand that, senator. >> thank you. ms. brainard? >> senator, i have worked all my professional career on making

sure that americans have economic opportunity. i have worked extensively at the white house, most recently at the treasury, on guarding against financial crises, responding to financial crises and, of course, i've worked quite a lot on making sure that americans in manufacturing in places like ohio are able to compete in the global economy and are able to borrow to send their kids to college, to borrow to buy homes, to protect their savings. so this has been really my life's work, and the fed is a critically important place now, probably one of the most important places in terms of making sure americans get back to work, the slack in the economy is overcome and credit flows to those who are going to

create jobs and create opportunity in the future. >> thank you. mr. chairman, i have one other question. this is to all three fed nominees, including mr. powell. basel has proposed capital sur charges on sifis in a range of 1-2.5% over the basel iii standards. when she was vice chair of federal reserve, now federal reserve chair yellen said she agreed with governors stein and trujillo about these capital surcharges should be higher. she said higher capital charges would help, and i quote the future chair of the fed and, quote, offsetting any remaining too big to fail subsidies and forcing full internalization of the social costs of a sifi failure. since then the fed's proposed the leverage ratio of 5 % as you know, but no announcement's been made about these surcharges. my question to the three of you, do you agree with chair yellen that too big to fail subsidy exists, and as a pen of the

board of governors -- as a member of the board of governors would you agree with chair yellen and governors trujillo and stein that the sifi capital surcharges should be higher? mr. powell, you want to start, then ms. brainard and then dr. fischer. >> in terms of the subsidy, most of the studies show a broad range. it's very hard to be precise, you can't really hold all else equal. for purposes of this answer, let's assume -- and i do assume -- there is one. >> and it's significantly high. 50 points or more? >> you know, if you-in the exercise, it's hard to have any confidence in these numbers. you have got to compare a huge bank to a small bank, and they're very different businesses. it's just a hard thing, but i will assume it's real. your real question is are the surcharges high enough, and i would agree that they probable leave more to be done and, in fact, there are, there are ways to get at that. for example, one of the things

we're looking at is the short-term wholesale funding aspect of these large institutions, and one of the ways to get at that, no one's decided yet, but one of the ways is through some kind of a capital surcharge based on exposure to short-term wholesale funding. so we're not done yet with the capital process. >> okay. ms. brainard? >> senator, i think it is very important that market participants understand there can be no institution that's too big to fail. there are a lot of reforms that are underway that i think are important in addressing the perception and the previous reality of too big to fail, and we need to think about them all together. the risk-based capital framework, the simple leverage ratio, liquidity requirements, stress tests, extremely important that overall framework, the order hi liquidation authority and many

particular single point entry model along the recovery and has been stated earlier, there are still rules to come on the amount of senior debt that needs to be held by these institutions as well as short-term wholesale funding. so i think going forward at least in my case i would want to be very attentive to whether that's sufficient and be open minded about taking additional measures which could include higher capital charges on the largest institutions, and i think we'll have to be very attentive to that and be willing to do more if too big to fail perception remains in the market. >> i can't tell if you think that chair yellen is right or wrong in your statement. >> senator, i think what i think i would need to know is the overall impact of those changes

together and, again, there may well be a role for even higher capital surcharges on the largest institutions. so there certainly may well be a role for that, but i don't know that at this juncture. i would need to study that much more carefully. it's a very detailed analysis that i don't have access to that information right now. >> dr. fischer. >> senator, i fundamentally agree with what my colleagues have said, my potential future colleagues, excuse me. i would emphasize the -- [inaudible] bond with financing is another element that can help deal with too big to fail. and this is a work that's going to take a bit of of time to figure out precisely whether puff has been done -- whether enough has been done. you'll certainly get some

guidance from what happens to estimates of the premium that the larger banks benefit from. the markets really haven't had time to understand how the future system is going to work, so i think we're going to have to just keep l following that premium and see what estimates of it look like as we move ahead, taking into account the reservations that governor powell has just expressed which are valid about that to measure. but it's the best measure we have probably. >> senator reed. >> well, thank you very much, mr. chairman, and thank you all for your willingness to serve, your current service, governor powell. dr. fischer, let me ask you a question, and this is from your perspective as not a member of the fed, but as one of the most respected experts in financial institutions and policy. where in the current debate of

whether we should apply bank-like capital standards developed in dodd-frank with the assumption that they apply to bank holding companies to some very large insurance companies which may be classified as systemically important and, therefore, fall within this characterization? just in terms of the nature of an insurance company and the nature of the bank, are these identical or virtually identically appropriate or should there be a variation? >> senator, they're clearly not identical activities, and there are differences in how they run their portfolios with the insurance companies trying to match their liabilities rather than fundamentally being based on maturity transformation which banks are. and so that's a different, it's a different business, and i think the capital requirements should be, should take those differences into account. >> the issue here, and it's not

an insubstantial one, is whether or not the federal reserve has the authority through rules and regulations to do that. without, i believe, i'll ask the governor, a formal opinion they declined saying they don't have that. but i think practically speaking, i concur with your answer. and if we can reach that point, the ted can reach that point -- the fed can reach that point through their discretion, their rules and regulations or their application, that would probable be the most timely, i'm sure, and perhaps the best solution. so i don't know if you have a comment on that. >> well, senator, i certainly heard a lot of senators i've spoken to express that view, but i've also seen that there was a proposal last week to actually change the legislation and not have to deal with the fed's legal advisers or who are very good at their job. >> i know they're very good at their jobs, but having been a lawyer once with, i think sometimes if you know the answer

ahead of time, you can find a way to get there. so, governor, you're serving right now, and i don't want to put you in a disadvantageous position, but thissish i shoe of the regulatory discretion and the ability to do it is central to this whole issue. i assume you agree with governor -- with dr. fischer about they're not, they're different, you know, different balance sheets. how do we get to the point where we recognize this in practice? >> senator, i absolutely agree that the insurance business, the traditional insurance wiz is very different -- business is very different from the banking business and the businesses that all the big banks are engaged in, certainly, in so many ways. and so ideally, capital requirements would reflect that. and i haven't practiced law. it's been 30 years since i've practiced law, but i can still read, and i've read the collins amendment very carefully, and i so far look in vain for flexibility, but i, you know, i

continue to try to look. again, this isn't really my call, this is the call of the professional lawyers at the fed. >> well, i -- again, i think your -- this is a serious issue because it's not so clear cut, i think, in terms of the -- obviously, there are opinions that people have rendered outside the fed that says there is flexibility and just sort of recalling over the years i have at least got the impression that when the fed wants to do something, they can find some very good lawyers on the staff to give them the -- [inaudible] to do that. secretary brainard, do you have a comment on this issue? >> senator, only to say that it is a very clear that the insurance business model is very different, that the capital standards that were designed for banks are not well designed for insurance companies, for the traditional insurance business, and i think it's very important for the fed to find a way forward so that they can tailor their supervision.

as to whether the statute prohibits that or not, i don't have a well-informed view. but, obviously, if confirmed, would want to work very hard to be able to tailor. >> thank you very much. just a final point, and it reflects on the comments that my colleague, senator brown, said about, you know, the damage that slow growth does to real people. and there's another side of this, another current debate about giving them unemployment benefits which have lapsed. so, dr. fischer, from your standpoint as someone who's sort of been through these crisis and you comment upon the value of unemployment benefits not only to individuals, but also my understanding is that they provide economic stimulus, that they provide sort of a payback greater than the dollars that we put in. so not only helping people, they also stimulate demand in the economy. is that a fair estimate? >> senator, this is not my area of expertise, but -- so i don't

know the depths of, the most serious parts of the research, but there are two effects. one is the aggregate demand effect, sort of the helping seem who just can't find a job to live decent, somewhat decently. and then there's the incentive effect which exists, you can see it when it's lengthened, when it's shortened, people tend to go back to work. i think during a period in this which jobs are difficult, much more difficult than usual to find, they should be lengthened as they have been. >> so i, so in this climate where there are three applicants for every job, i think what -- if i can assume, what trumps it is the aggregate demand and assisting people who are in very difficult circumstances rather than the disincentive argument, is that fair? >> senator, i think that's a

judgment which is not the federal reserve board's to make. >> okay. it's, obviously, what i've made. [laughter] just looking for a little encouragement. [laughter] if golf -- governor powell or the secretary wanted to competent? is. >> i can't improve on that. obviously, we all know, we have friends and relatives who have suffered from particularly long-term unemployment, and the damage to people's lives is dramatic, and i think there are the two offsetting effects, but it's just not an issue that we as unelected people have a public opinion on. >> well -- >> senator, the nature of our job market, i think, should be a huge concern of all of us. if you look even at the, not just at the unemployment rate, but if you look at the participation rate, if you look

at the percentage of people who are working part time involuntarily who would like full-time jobs, if you look at the percentage of the unemployed who are long-term unemployed, it is obvious that our job market is much weaker than it should be at this point in the recovery. that should very much color the analysis, the traditional analysis of what role unemployment insurance plays in the system and in supporting demand. >> thank you very much. thank you. >> senator warren. >> thank you, mr. chairman. first, i'd like to welcome my former colleague, mark mcwatters. i worked closely with mark on t.a.r.p. oversight, and he was always smart, thoughtful and principled, and i strongly support his nomination to the credit union board. dr. fischer, after you were nominated we met and discussed too big to fail, the fact that the big banks are growing bigger every day and whether cutting their size would help reduce overall risk in the economic

system. now, i'm concerned that the megabanks not only have the capacity to tilt the financial system, but that they also have the capacity to tilt the political system. you know, we've learned that as big banks get bigger and bigger, their lobbying power and influence in washington also tend to grow. that means big banks can often delay, water down or even kill important regulations. so size can have ripple effects everywhere, and for that reason i think it's a mistake to talk about size without considering how it affects the ability of government to enforce meaningful regulation. a century ago when teddy roosevelt and other progressives worked to break up the giant trusts, this was a big concern. not just the economic impact of size, but the political impact

that came with size as well. so, dr. fischer, you have a great deal of experience as an observer and as a participant in the financial system. is this a point that you've thought about, and do you think it's possible for large wall street banks to amass too much political power? >> senator, thank you. i went back from our meeting and thought about this issue and sort of rang some bells among me, and i did go and look at the speech i thought i'd given at the jackson hole conference in 2009. i discovered the following which doesn't answer your question, but it's on the same point, it says even for the largest economies there's a case for discouraging financial institutions from growing excessively. while it is clear that there are economies of scale in commercial

banking up to a certain point, it's less clear that these economies of scale continue at the very largest banks. and it is even less clear that there are serious economies of scope p in the financial sector; that is, there is little evidence that the financial supermarket view by which the end of glass-steagall was justified, leads to her efficient and cheaper provision of financial services. so i don't have to go into the political side of the issue. as a citizen, i think this possibility you raise is one which seems, seems natural. i've -- when i went off to be governor of the bank of israel, the a friend gave me a copy of justice brandeis' book, "other people's money." and it was a powerful, very powerful attack before he became

a justice. >> well, we have much to continue to talk about. but, dr. phisher, let me ask this question a different way. you know, many big banks are well represented in washington, but the connection between citigroup and democratic administrations really sticks out. three of the last four democratic treasury secretaries have citigroup ties, the fourth was offered but turned down the ceo position at citigroup. former directors of the national economic council and the office of management and budget at the white house and our current u.s. trade representative also have citigroup ties. you once served as president of citigroup international and are now in line to be number two at the federal reserve. now, i know that citigroup has some very smart people, and i know that private sector experience can be very important in government service. when i set up the new consumer agency, i hired many people there the private sector.

but i also think it's dangerous if our government falls you should the grip of a -- under the grip of a tight-knit group connected to one institution. former colleagues get access through calls and meetings, economic policy can be dominated by group think, other qualified and innovative people can be crowded out of top government positions. so the question i want to ask you, dr. fischer, are you concerned about the revolving door between recent democratic administrations and citigroup either in terms of policy or in terms of just public perception, or do you think there's nothing here to see? >> well, there is, obviously, something to be, to be worried about, but i think we ought to look at the other side of this. in my case, my three years at citigroup were the most important element in my education that enabled me to be

an effective supervisor of banks, which is one of my duties as governor of the bank of israel. without that experience, i would have come to it largely with an academic background without ever having seen the inside of a bank or, furthermore, without ever having worked in the private sector. i thought that that experience was extremely valuable. when my people who worked with me who had explained to me the theory of what was determining the exchange rate, i could explain to them, guys, identify seen what -- i've seen what determines the actions of the guys who work, who operate in foreign exchange markets. it's not what you're talking about. >> dr. fischer, i just -- because we're over time, i just want to be sure we're drawing in on the same point. the point i was trying to make is not whether or not private industry experience is important. i would readily acknowledge

that. as i said, i hired people when i was setting up the consumer financial protection bureau and having private industry experience was one very important qualification. the question i was asking about is the tight connection between the same institution and the government and whether or not we need more diversity in that. >> i think diversity is worthwhile. it's true that i worked at the same institution as some of the people now in government. we were not colleagues at the time. they went there, i was there earlier, i left in 2005. after three years on the job. and i don't, i know the people, i respect them, but i -- there are people from other institutions whom i also know and respect very much, and i don't see that as a particular problem, at least in my case. >> well, thank you very much.

i appreciate it. i appreciate your service. i do think it's important that we continue to talk about size and how it not only can tilt the economic system, but also the political system and how this work withs. thank you, mr. chairman. >> senator schumer. >> well, thank you, mr. chairman. and, first, i want to say there are times that when we're asked to consider nominees that are leading thinkers in their field. other times when a nominee has a wealth of experience. it's rare you get the two together, and i think you are just that person. you are one of the most brilliant people in terms of how a central bank should run, your experience in israel shows it, and you've also within somebody who -- been somebody who has very broad experience. diversity is good between people, but it's also good within someone. and also somebody who has very broad experience. diversity is good between people, but it's also good within someone. you spent three years in the

private sector and decades in the public sector at the the imf, at the world bank and the head bank of israel. my view would be as three years in the private sector made you a better central banker because you understood how the private sector would act. all too often the private sector runs rings around them. so experience itself should -- three years at citibank should be an asset, rather than a liability, if you use that to understand how to regulate institutions that you're asked to regulate, and i think you will, knowing you. so i think -- i think you would be great at this. you've been a great voice on monetary policy. you've been one of the most respected economists of your generation. you served as a leader on the national and international stage. you've had broad experience in the public sector, private sector, and academia, a great

intellect and a strong moral compass, and not to mention, mr. chairman, he is a new yorker. maybe the greatest qualification of them all. so here is my question, first question, and this was the greatest challenge that our central bankers faced in the last decade, which was the collapse in 2008. i was there. and i think the steady hand of ben bernanke was amazing. and that will be the number one thing that goes down about chairman bernanke in history. that is what he was able to do and convince the political side to do, to save our country from a massive depression. i was one of the 10 or 12 legislators sitting at the table and i can tell you that. so i experience is this. my question is this. the in 2008 and twain, the israeli economy was able to mainly avoid the global financial crisis. this was in large part of a result of your decisions as governor of the central bank, to do things quickly. like cutting interest rates.

reducing the value of sheckel. as you look at the u.s. economy today, what advice would you offer to chair yellen as how the fed can better foster economic growth in the country. that's the number one problem. it's the lack of middle class income growth. it's the lack of good paying jobs. it's the basic stagnation of the economy, which may tarnish for the first time or have a better word, glow much less brightly the american dream. that lady in the harbor that i represent basically says if you work hard, nothing fancy. what advice can you give us, will you give chair yellen about how we're going to get better economic growth, and what monetary policy decisions can help make that happen? i understand we're the main people who ought to do that hon the fiscal side, but we're a bit

paralyzed. >> thank you. thank you very much indeed, senator. i am very proud to be a new yorker. but i have to work on my accent. i understand. >> you sound to me like you're from brooklyn. >> i think the fed with -- in terms of what it has under its control, which is fundamentally monetary policy and now supervisory policy to a greater extent is -- what it has going for it that many central banks don't have is a deal mandate. and the fed is charged with trying to achieve maximum unemployment as well as maintain price stability, which is defined as 2% inflation. i think the mixture we're seeing coming out of the fed now is approximately preept. there will be questions about the speed of the tapering and so

forth. but in terms of the instruments it controls, keeping an eye on the financial system and making sure that it does not get into a crisis of this sort again, and maintaining incentives to growth, which is what low interest rates do are appropriate at this time. it then becomes harder when interest rates eventually will start rising as they have to, and one will start talking about trade between inflation and unemployment. we're not there yet. we can focus on unemployment. that's what we, the united states, needs to do. >> and one final question with the indulgence of the chair. just to elaborate. because i asked you about this. you said to me that your experience at city bank for the three years you were there in your long career helped you be a much better central banker.

and you're one of the fe . .. the world dealing with crisis. just tell me and elaborate for the committee how it was an asset both in terms of the economy but also in terms of regulating banks. >> senator, i answered this a little bit in answering senator warren's question, questions. the basic issue is what are you seeing out there? do you understand when the markets are behaving one way or the other? and particularly what happened in the israeli case. i happened to be getting the "new york times" as well as the israeli newspapers. they were more worried about lehman. the headlines were blacker and

more difficult in the israeli press than in the united states. and panic descended. system shape was. no relationship to what actually happened. the fact that you could have a confidence based on what you saw and go out and speak to people and avoid the sort of trick that is journalists play governor, can yo u guaranty us there will never be a bank failure? that sort of thing. you have to, you have to give people, without exaggerating. >> right. >> i never would -- >> one final question you had mentioned to me that in one instance you had to as head of the israel bank, bank of israel, go after one of the major financial families in israel for wrongdoing and one of them ended up spending time in jail. could you tell people a little aboutna that. i know you don't, you may want

to talk about that. you're grimacing here. >> that incident happened. it was not pleasant and it happened in the middle after global crisis which made it very delicate. it involved the chairman of one ofap the very big banks and we reached the conclusion based on evidence we had that he should not continue as chairman of the bank. itnk was very difficult to get m out but we did eventually. and i, this was one person. it was tough, that but we dealt with it appropriately and the, he was later convicted of a variety of crimes. >> i just bring it up because i think it shows that you will go after people who violate the law, do the wrong thing, et cetera. thank you, mr. chairman. >> what opportunities and challenges do you see for credit unions in the current

environment? >> i think the greatest opportunity for credit unions is to continue what they're doing now. 96 million americans in credit unions, they're growing, their loan base is growing and the like. whatdo opportunity is particulay for low income credit unions into expand their mandate to those americans who are underbanked and unbanked. there's opportunity there. those folks need financial services, they need financial services at a reasonable rate and i think there's an opportunityun there. challenges, i think the principle challenge is to look to the future and then anticipate the next systemic shock or the next shock to the financial system. this applies to credit unions and also to banks. if you roll the clock back six years, seven years, the talk

about overconcentration of the mortgage-backed securities on the books of a financial institution, the too big to fail, the large corporate credit unionsnd was virtually nonexistent. if you look at the transcripts from the fed tapes in 2008 there was very little, if any discussion about this. it was there. it was hiding in plain sight. loans were y clearly inappropriately underwritten. there was an overconcentration of mortgage-backed securities. it led to a huge financial crisis that we're still suffering through. that's the greatest challenge is to look into the future but you have to be careful with that. if you're always crying wolf you will be considered a flake. so you need to exercise judgement, carefully and judiciously. other challenges to the credit unions, i think is regulation of small credit unions. perhaps the overregulation of small credit unions. ncua has -- you.

>> can see the last several minutes of this hearing on our website at c-span.org. as we're leaving it now to take you to a telecom policy conference hosted by the free state foundation. we'll hear from an fcc commissioner and panels on communications law. live coverage on c-span2. >> i'm especially pleased to welcome our c-span audience today. i'm a fellow c-span junkie, big-time. i even watch booktv on the weekends although i catch a lot of flak from my wife how much booktv i watch on the weekend. that's on c-span. so i appreciate c-span being with us today and i also understand bloomberg tv is with us as well and i appreciate that as well. so, if you were here last year you heard me say something very much like what i'm going to say right now. and i may have to keep saying it

every year until global warming finally kicks in. last november when i picked this day for the conference, you can understand that i had in mind a nice, warm, day in the 60s. maybe the cherry blossoms already in bloom or so and i didn't think that once again in mid-march, and this was the case last year, that i would be worrying about snow in the forecast. so maybe next year we'll do this in may. i'm just kidding. we're going to be back again for number seven sometime in march but maybe it could be a few days later. and hoping for some local warming if not global warming next year. anyway, the other thing that say at the beginning of each conference is that it's hard for

me to believe that this is our sixth one or whichever one it happens to be. and now that the free state foundation is about to begin its 8th year i'm already beginning to think about a really nice 10th anniversary gala celebration. of so stay tuned for that. now i want to take just atom minutes before we get started in ernest with commissioner clyburn's opening keynote address to briefly tell you what to expect today. the conference theme is, a new fcc and a new communications act aligning communications policy with marketplace realities. a new fcc refersing to the fact that the agency has a new chairman and a new commissioner. indeed you will hear from michael o'rielly, the new commissioner at lunchtime when i engage him in the traditional

lunchtime conversation. in fact chairman, former acting chairman clyburn and now commissioner clyburn did that with me one year as well. now when ever the agency is reconstituted and especially with a new chairman there's an opportunity for a fresh start for changing course. a new communications act refers to the house commerce committee's recently niche sated -- initiated project, which i very much welcome to review and update the communications act. in aligning communications policy with marketplace realities refers to, well, you know, that refers to all the changes that have taken place in the communications marketplace which we're going to be discussing today and by the way, which continue to occur at a

rapid pace and what these changes may mean for communications policy. and as importantly to me what they ought to mean for communications policy. so i've already mentioned two of our keynote speakers, commissioners clyburn and o'reilly. the third is ftc commissioner maureen ohausen who will deliver the closing address. her perspective considering the respective jurisdiction of the f-ec -- fcc and ftc in regulating or not regulating broadband internet providers in a post-verizon d.c. circuit world will be very interesting. in addition to the keynote sessions we have two panelings in the morning with senior officials and experts with a wide variety of perspectives. they will share the most

important communications policy topics of the day. we'll cover a lot of ground and we should get started. before i forget, and there are pieces of paper on your table, the twitter conference, twitter handle for the conference is #fsfconf. some of you know, we've had longer ones in the past which i bungled but this is nice and simple so tweet away. now, without further adieu i'm going to introduce debra taylor tate, a distinguished former fcc commissioner herself and by the way now a distinguished senior adjunct fellow at the free state foundation who's going to

introduce commissioner clyburn. i just want to say one word about debbie. she is, as many of you know she is a very busy woman. she travels internationally a lot. has contribute ad lot to helping other countries understand communications policy and some of the good things we do here in the u.s. and i appreciate her contributions to the free state foundation. finally and i will not steal commissioner tate's thunder in introducing commissioner clyburn but i do want to say that we're pleased to have you here today. i enjoyed having you previously. i look forward to your remarks and hope you will come back many times in the future. of the with that debbie tate. [applause]

is. >> thanks, randy. as you all can imagine as i was detouring through detroit yesterday it is truly march madness. i'm glad i finally got here. i want to thank randy his insight and as well as a state commissioner in tennessee and at the fcc and, how much i value free state and now my new role here as an adjunct solar i think that is what we've decided. and now more than ever i think we need these type of dialogues in a sometime vitriolic time that we have as we continue to, to see the exciting transformation that's going on but also challenging times for our industry and for the sector and for the entire internet ecosystem that i'm sure we're going to get into later as we talk about not only the role of the united states but also the global economy.

so, i'm so very pleased to introduce my friend, chairman, mr. wyly says, once a chairman, always a chairman. so i will always introduce her as that, and, also, commissioner mig none clyburn. what i think was about minute none'sdmignon's role as chairman. she will not be ever called a caretaker chairman. she was the most active chairman the fcc has ever seen. as you all know she was also a history-making chairman and in every speech i give literally i talk about mignon. not only was she the first woman, the first female african-american woman to serve as chair. the first owner of a small business and the first true southerner. so all of those things i want to

tell every audience. she did not only change history but she also took on really substantive actions and saw them through. she was also courageous. you all remember that she actually brought up the inmate phone issues and discussed them and dealt with them at the fcc level even though many of us had done that at the state level it had just never been quite on the agenda until someone as courageous as chairman clyburn took them on. you all know she oversaw both as the head of the joint board and then as chairman the kind of final work that had to do with usf reform, something near and dear to my heart as well and something that we shared at the state and federal level. she also understands the economic impact of many of these decisions but at the same time she always, always, keeps consumers and citizens of america at the forefront of each

one of her decisions and how what the fcc does impacts citizens every single day. and i can't say enough about what a champion she was been for women. she speaks all the time to women's groups. we hosted a historic, an historic women in the fcc event and it is wonderful to see what a role model she is for young girls and women across america. because if you can't see it, you can't be it. most recently and i'm very excited about this, the chairman has asked her to head the newest health care initiative, the task force that is being called, connect to health, which i'm really, really glad to say that commissioner clyburn start adlong time ago. she actually came to nashville and did a whole field trip seeing the very first electronic medical record that vanderbilt developed actually back during

the bush administration. so she has been for a long time such a champion of all of these issues and certainly as it relates to rural health care, something that i worked on while i was at the fcc as well she also understands how technology is going do reach those who are most at risk. of being left behind. left across the digital divide. so i'm so excited and, thank you, randy, for having the foresight to invite her back again and with that, just please, please, welcome a very effective chairman, mignon clyburn. [applause] >> good morning, everyone. thank you, commissioner tate, my friend, once a friend, always a friend for such a gracious introduction and for mr. may for

such an efficient start. i'm impressed. need to learn a little bit from that. it is a pleasure for me to join the free state foundation during the sixth, i think you determined it was the sixth, right? couldn't tell from some of the exchange but sixth telecom policy conference. subsequent panels will discuss whether congress should pass a new communications act and if so, what that should include but from my perspective, marketplace realities dictate that today's fcc can ill-afford to be in standby mode. in order to provide the degree of certainty needed for both the industry and consumers to function when it comes to the rules of the road, decisions must be made around they must be made now. no one really disputes that the communications act accurately reflects current realities. the act provides the industry into silos, traditional silos of

common carriers, cables and wireless that no longer exist. those distinctions have been blurred for some time now and pose challenges for us now statutes. values, relevant today, competition, consumer protection, universal service and public safety. and i am pleased the commission made clear in the recent technology transition order, that our commitment to preserve these values is unwaiverring. what an incredible time to be involved in this space as technology continues to open doors, we previously thought unreachable. traditional energy co-ops providing broadband. the cable companies offering voice and even natural gas options and legacy telephone companies supplying video. in a few areas, new entrants such as google faber are

providing competitive alternatives and in other areas, localities have responded to demand by constructing their own network, providing consumers with broadband for the very first time. increasingly opportunityies already, they exist. but not for everyone. so i am hopeful for a day when wireless provider offer speeds, capacity and pricing that are truly competitive alternatives to wireline broadband. i am hopeful for a place when innovators and advancements create sustainable solutions for our most difficult to serve areas, bringing universal broadband within reach and finally closing the digital divide. and i am hopeful for a time ubiquitous next generation 911, not only has features such as video chat that will save lives but will be more robust and resilient than our current

current public safety networks. to get there we must be willing to be bold. the industry needs to take more risks try new things. push new technologies beyond the current boundaries in order to produce positive dividend particularly for our most vulnerable and hardest to serve populations and i know taking risks also means accepting degrees of failure but that's all right. if we're willing to learn and keep on trying. and we are not exempt for i believe that the fcc should be willing to take some risks to be creative and to look for ways to promote our core values. policies that are no longer necessary or inhibit innovation or competitive entry should be should be mod guide or eliminated of the we should be open to embracing new policies. most importantly we must be willing to make decisions as

quickly as possible and not allow ourselves to be paralyzed by the fear of being wrong if the goal is to promote those core values as maintained. the technology transition orders, the fcc adopted in january is prime example of an agency looking for solutions to provide robust broadband in unserved or underserved areas. i applaud chairman wheeler for tackling this issue so quickly and soliciting expressions of interests on proposals to deploy robust broadband in rural communities. these experiments have the potential to promote universal service in a way that the commission has yet to by inviting all interested entities, including localities, electric co-ops, research, development and development networks, wireless providers, cable providers as well as incumbent telcos to submit proposals and express interest. for as well-intentioned as we

may be at the federal level too often we craft policies from a singular matrix and attempt to fit an urban peg in a rural hole. all too often, when we do so in this manner, we fall incredibly short because the challenges and the solutions for these communities are not congruent. so i hope you join in my excitement about these experiments because these trials could unleash opportunities for solutions from rural areas for rural areas. to date, nearly 1000 proposals from mostly local, community-based entities have been filed at the fcc showing a significant demand for robust broadband. they include innovative ideas and proposals from electric co-ops leveraging their existing networks to provide fiber to to the home, to community based initiatives wishing to construct

broadband sometimes in partnership with other entities. to cable providers, research around development networks, wisp, wireless providers and we even got proposals involving tv wide spaces. while the fcc is still evaluating these and their relative merits in order to develop an order and budget these experiments could enable rural communities to be incubators of innovation. and this is the not first time rule areas have taken the lead in technology and innovation. as jonathan chambers, chief of office of strategic planning noted in his blog last week, cable television was deployed first in rural areas because homes are unable to pick up a broadband signal. not so much time passed before these first generation cable companies showed the rest of the country that this service was not just for rural areas and the rest as they say, is history.

but let me note that cable's entry would not have occurred but for regulation. cable providers needed the access to utility poles to deploy networks. the pole attachment act of 1978 made this possible and was technological advancements. today cable, today's cable providers offer robust broadband throughout their footprints as well as video and voice. while i understand the instinct for many is to push for a deregulatory framework, there are potential dangers and consequences in a regulatory free zone. for regulation has enabled tremendous growth and the commission's policies are directly responsible for many of the things we take for granted. one such example is the commission's decision to permit greater use of unlicensed spectrum. this has spurred one of our nation's greatest innovation

engines. it has given us technology such as baby monitors, cordless phones, bluetooth, radio frequency identification or rfid and wi-fi. some of these technologies led to the development of billion dollar industries and while precise estimates vary, it is clear that as a result at the end of 2013 billions of bluetooth-enabled devices have been sold worldwide. but none of this would have been possible if the agency yielded to those who wanted us to stifle innovation in this area. remember, when unlicensed wi-fi technology began to gain momentum self years ago, a number of commercial wireless providers complained that wi-fi networks could cause interference. they argued that the fcc should allocate more spectrum as primary exclusive use licenses

but today many of the largest commercial wireless service providers manage their customers demand for internet broadband data services by shifting that traffic from licensed networks to unlicensed wi-fi networks. last month an economist reported that about 60% of smartphone data traffic is being transmitted over wi-fi connections. services using unlicensed spectrum cans also help bridge the digital divide. despite the amount of spectrum the fcc auctioned over the years there are a number of areas in this country, rural areas and low-income urban communities, that have no broadband providers or do not have many choices. as a result of the 2010 final rules which the comitial adopted for unlicensed use of the tv white spaces, we have created another opportunity for

innovation to connect unserved and underserved communities. since the commission initiated its tv wide space proceeding about 10 years ago, every fcc commissioner has supported the development of unlicensed services in tv white spaces. we have already seen in virginia and north carolina that v white space devices often lower costs over unlicensed spectrum, over lower cost, over lower-cost unlicensed spectrum can successfully bring affordable wireless broadband services to both rural areas and low income urban communities. this past summer west virginia university started deploying tv white spaces through the metro system that serves the campus and neighboring communities. the main reason that the university opted for white spaces is because the mountains and other geographic characteristics present huge

challenges to wireless companies. there are niche i was such as airu a partnership of gigu, new american foundation, united negro college fund and microsoft and google and others helping universities take advantage of these services. some of these services are located in rural areas and struggle to find affordable broadband solutions. airu offers low cost means to provide increased coverage and capacity which helps stimulate aggregate demand in the adjacent community and spur investment in tv white space technology. in a similar vain, vane i long advoid indicated against laws that prohibit localities enter market when the existing providers have not responded to need for or demands for advanced services in underserved areas. i'm encourages that the chairman announced his intention to evaluate the impact of these

so-called muni broadband laws and look forward to working with him and my colleagues to promote more come figures in this space. and as i close i wish to encourage this audience and other stakeholders to continue to share their thoughts on how the fcc can modernize its rules in line with our shared core values. let's get beyond the rhetoric and talking points of deregulation versus status quo. neither option quite frankly is realistic. sound, specific proposals, that advance the bar are the best means for prompt decision-making and a healthy marketplace. i thank you very much. i look forward to any questions you may have. [applause] >> well, commissioner clyburn, thank you very much.

i appreciate you getting us off to such a good start and you cover ad lot of territory and we're going to be discussing a lot of it throughout the day. and as you know you and i, i think you know this and we've talked about it, we don't agree on everything that the fcc does. you've noticed. but, but, frankly that's why i appreciate your being here because i do agree that the discussion and the dialogue is important and, and in your address this morning certainly contributes to that and i appreciate it. now i'm going to, the other thing i want to say, we're both from the carolinas, right. i'm you're from south carolina from north carolina. i'm a yankee compared to south carolina. one thing i noticed is you speak a lot more quickly than i do. i've been trying to, adapt for, for decades but you've done a better job so.

. . >> so here's my first question. the staff acting on delegated authority has been in the news quite a bit recently. there have been a couple of instances where i think really from both sides of the aisle, so to speak, commissioners have raised questions about the particular exercises of the staff acting on delegated

authority, and for those in our c-span audience, that means the commissioners themselves don't vote on the particular action but the staff just takes that action on behalf of of the commission. and i know commissioners have publicly, they have expressed some concerns about the recent use of staff actions on delegated authority. so as a commission, and as one who uniquely also has served as chairman, what are your views on the proper exercise of delegated authority? >> i thank you very much. that is an issue as you said that i seem i guess from both sides. and when we talked about delegated authority, i want to emphasize one thing, but we did not, we do not interact in debt.

this is not a non-interactive place, meaning the fcc. so no matter how things are delegated, where things live in terms of final decision-making, again, exchanges happen, interactions happen, and so i want to be very clear that, again, this is a very communicative interactive place. the ability for the chair to make certain decisions, the ability for it to be delegated in that manner, it's clearly laid out. these are not black or white issue. i think from a regulatory standpoint, as a chair and commissions deserves some flexibility, some dexterity. and let's keep in mind, many of you in the audience have recommended to us on a number of occasions that we need to move things quickly, that you want

expedited decisions. this type of decision making is more expedited. it would be coming gives the certainty and quickness that a lot of you, you know, have asked for. so these are things that you have to wait. and so i am not overly concerned. i would be if there were not interactions, but there is interaction. there's healthy interactions, and so again it's the dexterity that i think is needed both from a managerial standpoint and expedited decision standpoint. >> okay, well, thank you for that perspective. and again, you have been in both places. so my next question is this, and this is an area that i think you and i do agree on, or share a lot of common perspective as opposed to maybe some others. and that regards the

commission's lifeline service. i've been, for a long, long time actually, i've been an advocate of maintaining healthy lifeline program for low income portions to support their ability to get on the network. and i continue to do that, but, frankly, as you are aware and a lot of people in this room are aware, there have been, particularly in the last couple of years there have been reports about, i think, increasing instances of abuse of the program, quality in the program. and to the extent that's true, ma or that it is increasing of it seems to me that that might jeopardize support for the program among those who do support it. and i know that includes you. it also includes, by the way, former commissioner take.

so my question is, do you agree that there's a problem, everything to some extent you took some actions to try and address them, problem, but the greedy there's a problem and do you agree that the commission needs to do more to address fraud and abuse of the lifeline program? >> well, thank you for the opportunity for me to speak about a program that i don't think people here or talk about enough about what is designed to do. it is designed to economically fill a communications need. it is a design to help those who are in most vulnerable, often low income, often when you look at some of the studies, a single grandmother who are attempting to stay connected to schools, the medical services, to again,

to emergency services. these are the most mobile individuals who are increasingly cutting the cord. so this program has been around for a long time. it hasn't supported a wired line. is supported a wired line infrastructure for a long period of time. and under the reagan and bush administrations, it moved to a wireless platform, rightfully so. because if you look at the statistics, those who are low-income, 56%, an estimated 56% of them have cut the cord entirely, meaning that their primary communications engagement is wireless. so given that, the program was rightfully embraced and included and expanded to include a mobile ecosystem. so yes, there were issues in this, in the regulatory compliance i should say engagement. and we take regulatory action to address that in 2012. we made some comprehensive

reforms that by the end of this year wilmette about $2 billion in savings to the program. -- will net. we have been working with the state, creating a national database which will sync up those eligible providers, like one state, oklahoma, let's look at the provider experience and making sure that the providers are compliant. we have joined also in terms of compliance by issuing some notices of parent liabilities to the tune of almost $100 million. that since the proper signal to those who are noncompliant that we are serious about, we are serious about enforcing our laws. so we are continually, continuing to take a proactive stand, stanzas to target on the problems that exist without

harming a very worthwhile program. >> thank you. now i'm going to take a couple of questions from the audience. and by the way, we are going to do this throughout the day. it's not just subjecting commissioner clyburn to do it. i hope you'll stick around and find out. so if you have questions, raised your hand. we have a mic, and the rule is that you have to identify yourself, please, and ask a question. and no statements and not many subparts or any subparts to the question. we will try to get in a couple. does anyone have a question? over there in the back. wait for the mic. >> good morning commissioner.

brooks harlow. i appreciate your comments about white sprays a specific my question is, do you envision td white spaces playing a role in universal service whether it's row high-cost rural health care for schools and libraries for siebel future? >> thank you. >> it, to me, we've been talking, my office has been concentrating on that particular engagement for some time now. because we believe that it has the potential to provide affordable alternatives in the key areas in which he mentioned. so yes, i am hopeful in looking forward to reviewing that particular submission, as well as what the future will hold for him a robust, you know, footprint as relates to that. again i think it holds part of the key to affordable provision services. so i'm excited.

>> grade. this gentleman here. identify yourself, please. >> you should use that term loosely. >> he is, trust me. i know you. [inaudible] just the mention of the fcc doing something with the joint services agreement for broadcasters, tossed stocks all over yesterday. why should i not view the fcc is designed for tv broadcasters out of business? >> you should do the fcc as doing its job as balancing what they need of the communities, our goals that we hold dear that are in them rated in 257, diversity, and competition and localism, as well as our duty to uphold our statute. there are abuses that need to be addressed, but there are these opportunities that we want to nurture and support.

and so what you see and what you will see on the march 31 agenda is a pathway toward a balanced process that will take into account, you know, both the goals. they are not mutually exclusive goals, meaning enforcing the statute, as well as, again, looking at 257 on options, and so that is our goal and objective. and i'm confident that when the market comes to terms with that, that we will have a recalibration that's reflective, again, the great value of those properties. >> i'll take maybe one more question from either a gentlewoman or a gentleman, this time. [laughter] we will go to anna maria.

>> i'm with the georgetown center for business and public policy. you are spearheading the effort on telemedicine. can you talk a little bit about what you see a sort of the keys to making that a successful effort, and perhaps what some folks industry might be able to do to help with that? >> expanded partnerships. i had a chance to go home recently advocate with the medical university of south carolina has done with an infusion of capital from us, increase investment from the state and leveraging in that community. what they're doing is closing so many health care divides. they are looking at neonatal challenges where, because of distance medicines, that mother does not have to travel long distance. they are providing critical minutes engagement in terms of strokes.

the critical 60 minutes you need to address the needs of a stroke victim, that time was being lost, especially in world communities, rural medical systems. they are closing devise and having incredible outcomes as it relates to the. the encouraging this approach which is hoping even nonmember, meaning non-fcc grantees leverage, the possibility for conductivity by giving them the capacity to come at lower cost, what that means is more services in critical areas. so what we hope to do with this initiative is to put that on steroids, so to speak. i mean that in a positive sense when i say steroids. in this instance, we would bridge on that working with entities like the va, working with more the rural hospitals, working with others who may not have gotten the type of funding.

and really saying how can we partner, how can we best deliver these, have better outcomes. because what we're doing and what we're seeing is money is being spent, but the outcomes in which we expect on not being realized. how can we shift the paradigm? we think technology can be a positive conduit for that, and some going to spend all of 2014, spending a lot of my oxygen concentrating on that because i think it's so critical for this community. and quite frankly i think would be a wonderful legacy for all of us to join. >> i've got the hook, so thank you so very much. [applause] >> okay. well, that was terrific, and i want to thank you again. as a token of appreciation for

coming here today, you are going to the first one to receive the official free state foundation -- this is a polite, fold up a blanket. when i ordered it i thought, it's one you unfold and it's good for taking to the ballgame and putting it on the bleachers. today coming might be good for wrapping yourself in it, when you go outside. you know, i checked. the cost of this was $14. [laughter] i can't keep up with what regulations are over there, but it's only $14, so i hope you can enjoy. thanks very much. >> thank you very much. [applause] >> okay. now, what we're going to do as commissioner clyburn exits come were going to ask, i'm asking the second, the first panel to come up and take their seats

now, ever going to get started in just a minute or two once they are in their seats. [inaudible conversations] >> for those of you are standing, there's some seats up front that you can take. no one needs to stand.

when commissioner clyburn commended us for our efficiency this morning at the beginning, you know, i wasn't sure if she was talking about us. but actually everyone is very efficient here on time. so i'm going to accept that complement and we're going to get started here in just a moment. going to make sure everyone is mike up properly. -- mic'd up properly.

okay. well, welcome to the first panel of today. again, if there are any of our c-span audience that's just joined us, i want to welcome you as well out there. i said earlier, and i won't convince any more about this, but i am an admitted c-span junkie of the first order. particularly glad to have c-span with us today. so this is the panel that i call the senior executives panel, for good reason. because we've got everyone sitting before you is a very senior executive. and we are going to do this in a conversational format today. they know that. and i'm going to do my best, anything can do this to prevent

long filibusters and to make sure we cover a lot of ground, and i'm serious about that. you will all find out about that. and because there's a lot of ground really to cover. so what i'm going to do is just, you have the brochures with you. each of the members of this panel has a very distinguished bio, and, but i'm not going to take the time to go through the. i'm going to give you their titles. you can being or google them and find out a lot more, but when i tell you what they'r they are dn their current positions, that will give you a sense of the expertise that they bring to the table. so just in alphabetical order, first we have rebecca arbogast,

and rebecca is vice president, global public policy at comcast. sitting next to rebecca is james assey. james is executive vice president of the national cable and telecommunications association. i should say james is filling in a bit for michael who a few days ago informed me that unexpectedly had to be out of town. cyprus she james filling in. he hasn't had too much that the others have had to prepare, but nevertheless, i don't have any fear that cable association is in good hands. next is jim cicconi. jim is a senior executive vice president external and legislative affairs for at&t. and then sitting next to jim is

steve largent. now, i'm going to break my own rule here for just a moment, really with regard to steve. as many of you know in this room, steve has led ctia, the wireless association for over 10 years. i think that's correct, over 10 years. and he announced a few months ago that he is stepping down to resume his football career. [laughter] which he did they want to spend more time with his family, but no, he's not going to resume his football career. and i'm not sure what is going to do, and i'm anxious to find out when that happens. by no that whatever he does decide to do, that steve will do in the same way that he set records in the nfl, which gotten into the nfl hall of fame. and in the same way that he led

ctia. i think the record of success for the last decade with the wireless industry, sort of speaks for itself and i don't want to step on any of his answers that he might give. so i'm going to leave it at that, steve, but we are glad you're here, and affect your stepping down doesn't mean you're not going to have to come back in the future as well. now, you know, i should say for those of you, last year when tom was on this very same panel and he was stepping down, i took the liberty because i've known tom for a long time, just as i've known steve, commending tom talkies for his work. if any of you guys announce your stepping down next year, i might do the same thing. but i can't make any promises.

[inaudible] >> i'm going to have to do some googling of that as well. i'm going to have to check into that. but that brings us indeed to craig silliman, and greatest senior vice president for public policy and government affairs at verizon. and with that, welcome, distinguished panelists. now again, i'm going to be throwing questions at the panelists. they're not going to necessarily have to answer all the questions, but if you want to say something, you can let me know and for me of them i will certainly welcome comment from all of them. the first question tha i'm goino ask, and this is going, this will test i think and demonstrate my resolve to remain

in control of the panel. because i know the natural tendency. i've been there myself but here's the question. on the perspective of your company or association, what should be the single most important priority for the commission with the emphasis on single most? and i'm going to start with rebecca, and just go right down the row on this and just, you know, take just a minute or two. just a minute or two, rebecca. >> thank you, randy, thanks for inviting all of us are to have this conversation because i think conversation or import. i'm going to answer that the story quickly with a very short historical story which was triggered by an event a couple months ago with a digital pioneer, the folks were at the fcc when i started there 100 years ago were being honored for their fourth, therefore such at

the time they were developing policies when the internet was starting. and michael powell and bill kennard, both of whom i worked for did this great -- a bipartisan approach that sort of very deliberately to stand back, let this new thing breathe and grow. and bill talked about the way he put it was the high-tech hippocratic oath, first do no harm. then michael talked about how the two of them were in the wing for some of the advocate that this term vigilant restraint. and that they took very close to heart they need to keep an eye on things, but to step back and let this thing grow and evolve. and concluded that that work. i think that approach is much too now as it was back when bill pointed in 1999, which is you don't know where things are going to go. you want to keep an eye on it but you want to let it go together think that that approach which is in contrast to what happened with a lot of european countries, has served

this country well in terms of investment and innovation. and so the single most important thing i think the fcc needs to do is continue that trajectory and remain faithful to the historic art because it's important for jobs and economic development. >> okay, james, the single most priority from your perspective speak with i'm just glad to have someone who proceeding. i don't think i was a much better than what rebecca did. my two words were going to be regulatory humility and based upon that same notion. we've had this tremendous economic engine over the past two decades. because we have recognized the constantly changing, evolving nature of the internet and internet technologies. when not talking about something where we pour concrete and it hardens and that's what it is. it just isn't going to be that for. it's constantly change and we wanted to constantly change

because that's what drives the innovation that leads to all the consumer benefits that provide all the new services that consumers enjoy. so i think when you look back at the past two decades and where we were and where we are today, our biggest challenge, or the biggest challenge for regulators i think is to continue to have that economic engine go forward. and as rebecca said, do no harm. >> jim. >> well, i think it's the ip transition. it's not just because the fcc is the challenge with navigating the technological change successfully. i think it really tees up a much larger question for the agency, which is, which is this, the ip transition will challenge the agency to modernize its entire approach to regulation. i think we are all pretty aware of how dramatically the industry

has changed just in the past decade am a let alone the last several. the fcc really hasn't. and i think we are very encouraged that chairman wheeler and the commissioners have decided to tackle this pretty immediately after he assumed his job infected and i think, i think tom wheeler is the kind of guy that i think understands the challenges and the difficulty of altering the approach to an agency but also i think that's the biggest challenge they have is to really bring it into the 21st century and updating its entire approach to match the realities of the marketplace. >> thank you, jim, considering its 2014, it's probably not too much to ask that they get up to speed in the 21st century. steve? >> , randy, i just after that introduction my stock goes down you with every word that i speak

some better off just passing to the next, to craig. but i do want to say that when my wife and i go out to dinner and become as to what i want to beat my first response is always spectrum, spectrum but everything i say is a spectrum. [laughter] spectrum is our highest priority that we have, and they will continue to be. we begin the debate about spectrum that's coming to auction now back in 2008. it's actually the fastest spectrum has ever come to market in terms of, you know, moving this debate along the so from 2008-2014, they held the h. block. it was a successful auction. they will come up with other later this year in the third quarter ended of course we have the broadcasters spectrum auction. that is to be held by mid-2015. and i applaud the chairman for getting the spectrum out to the