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 marketplace. it's something less than

300 megahertz. the presidents five megahertz that he called for a couple years ago, and we certainly applaud him for that effort. and we want to continue to push and get the spectrum as quickly as possible. because companies like the two gentlemen represent on either side of me are using the spectrum for new and varied uses, and the people who stand to gain the most are our consumers that are now over 310 million in this country. and so we want to see that continue. >> okay, thank you, steve. craig. >> a lot of good comments made and agree with all this but i think from a single highest priority i'm going to agree with steve on this. it's spectrum. to elaborate, spectrum, spectrum, spectrum. by the way, let me tell you why. i agree strongly with the untreated, for example, he regulatory -- a lot of these

areas where the innovation and investment in the industry and the technological progress are going to bring tremendous consumer benefits and really what we are looking for its policymakers to stand back and let that innovation investment take place. spectrum is a unique area where we need policymakers to take affirmative actions. spectrum is the lifeblood for inefficient has taken place in this industry. and this is an area where the spectrum needs to get into the marketplace, or it's going to choke off that investment and that innovation. this is not just a role for the fcc. the fcc is doing a good job and now getting some spectrum. we've got three spectrum auctions for teed up here over about an 18-24 month period after going five years without any. ntia is working to make more spectrum available, but there's a strong role for congress here, too. this is an area where there is no central coordinated, coherent

strategy for managing spectrum in this country. it's controlled by lots and lots of different agency, lots and lots of different entities. that makes it very difficult to get the spectrum, identify it, clear it, move it out. so the our fcc rules for the commerce department and roles for congress in getting spectrum into the hands of the industry where you can be best used? >> inky. the second question is going to be a bit of a softball and then you may notice that they're going to get increasingly difficult, but here's the second question. this comes from today's "washington post" crossword puzzle. it's number, you'll be at a disadvantage if you haven't seen it, but it's number 63 down. you can check it out. i've got it here, and the clue is, government regulator of radio and television.

and it's three letters. who can answer that first? [laughter] my wife is an avid crossword puzzler, and she got it right away, fcc. and i was just grateful it didn't say government regulator of the internet. you know, i think that was good. okay, now, the next question is this, just taking a little bit with the institutional side of things. what do you find most encouraging about what tom wheeler has done so far at the commission? and what do you find most troubling about what he's done at the commission? and keep in mind that our theme today, as you know for the conference, is a new sec. and we talked earlier about of

course chairman off the bat. so i want to throw that out. and to some extent it may coincide with what you said about your priority or not, but just let's start with craig and go down the line and see whether you can, what you might want to say in response to that. >> in terms of what's most encouraging, from the very outset, chairman wheeler has been talking about the role of competition. i think he's been very encouraging that is recognize that the technologies have changed, the markets have changed, that the fundamental policy system has changed from the times when a lot of these laws and regulations were put in place. and that ultimately regulation is meant to be circuit, competition doesn't exist so we will look first at competition. i think that's encouraging. we want to see that acted out in practice, but as far as philosophy he has laid out as a cornerstone of his regulatory approach, i think that's been

tremendously encouraging. now, randy said we can't just say the good without the disappoint -- as was once did to the point, i would say what's most disappointing is that something that chairman wheeler has done but rather something has not been done yet. to me that is updating the spectrum screen. because the spectrum screen in the area is a great tool but it is something objective. you lay out the total amount of spectrum of india she. you lay out a clear and objective standard -- spectrum of industry. where the limit is o up which ia safe harbor or anyone covering to own spectrum in the market. that should provide clarity for investment, for secondary market transactions, et cetera it's was potentially a very good tool. the problem is that it hasn't been updated. there's huge swath of spectrum, particularly held by sprint that holds more spectrum than anyone

else in industry by a longshot. the problem is, first within the spectrum screen itself you take a tool that should be clear and objective and allow companies to make investment decisions with clarity, and you've thrown an element of uncertainty. the reason i find it particularly disappointing, it's more than this particular issue. for me an area that is so potentially objective and clear, there's no real, there shouldn't be any real questions around interpretation. this isn't a big macro over policy question. this is a question of you set a rule and you apply it. and yet the fact that it is so clearly results oriented, becomes a question of institutional integrity. if this tool that is so potentially objective and clear is being used in a clearly results oriented way, it then undermines credibility for the commission on hold out of other

issues that don't lend themselves to clarity of sight in terms of what the real up to do this. so i think chairman wheeler should make this priority because it sends the right signal not just about your managing the spectrum assets in this country but it sends a signal that says when we say this is what the policy is, this really is how we implement it. >> thanks for that. into illustrate how we are going to jump around today and make this completely interactive and conversational i want to follow up on that and then we'll come back to the general question. i know in the last day or so the spectrum screen has been is because it was employed, i think it recently with the at&t leap, transaction. so i want to take issue with you a bit in this sense that it seems to me with my administrative law have on, the screen by definition as opposed to a rule, a regulation that

adopted and put in cfr, i think kind of the inherent intent is really that the commission use it as a trigger, but then that a quote looks at other factors. and so it's a tool that i think possibly build into it as opposed to a rule. so let's just get right to it. my question is, i mean, that's the way i do it anyway. would it be better to adopt a regulation that would be more binding in the sense that a quote screen really probably is not intended to be, at least in the commission's mind as opposed to yours from the beginning? >> well, i think i'm going to ask, because i think as i said, at&t was i believe just recently, the issue came up with

them, and jim cicconi may not agree at all what i just said but i won't ask you about that and they will come back to you, craig. >> we think a rule is warranted. a we've argued for that for a couple of years now. i think, you know, there's merit in having a screen, and i think it's supposed to work, as you describe, randy, that it provides companies some certainty. you know you're under it. if you're over it in any particular market then obviously there's added layers of scrutiny that you know the commission is going to subject it to you. what is a little disturbing to us is there seems to be a tendency now, and we commented on this chart on friday, seems to be a tendency to not, in

fact, not use screen as a safe harbor, but even raise questions if you're under the screen. and i think that's really a notion that think calls into question the entire reason for having the screen. i think if there's no certainty that any company has in terms of their spectrum holdings, then it's going to jam up the ability, at least in the secondary market, to operate effectively. if you're under the screen, yet you're still not somehow safe, then i think it really raises a question as to whether the commission isn't just kind of making it up as it goes along. i think that companies need certainty in these areas. i think the screen is operated fine, and i think it allows companies to invest in the

secondary market, when you know you're under the screen. and so we wanted to least raise the question on friday, because if you think it should be a safe harbor. i think if you put it in april and i think that ought to be one of the aspects of the rule. >> steve, this involves a spectrum. do you have a view on this question of screen versus rule, or have the commission administers the screen? i should say as most of you know, steve is communism at least in my view, in the head of a trade association, you know, probably it's more difficult than getting into the nfl hall of fame, right, with all the different interests holding in different ways. but do you have a view on the screen is your? >> very, very briefly. my view is that instead of focusing on scarcity when he did focus on abundance. we need to have more spectrum

that's available for the industry and not be worried about how much spectrum you have, but just keep rolling out more spectrum through auctions and other ways. that would be my only overall view of this. >> james or rebecca, do either of you have anything you want to say on the spectrum screen specifically? >> no. the only thing i would add is picking up on the point that commissioner clyburn said about the importance of giving unlicensed spectrum out there, too, and i think the commission has paid a lot of attention to that and we're hopeful that that will get out there to provide what we all need for wi-fi. >> okay. and actually i have a whole set of questions that we may get to. we will get to some of them on spectrum as well down the line, if this was just a little diversion. so we'll come back to that and i will call on you first for that. some just going to go down the line and ask whether anyone

else, and i would appreciate comments if you have any, this could be a good, you know, a good sound bite. what do you find most encouraging about what chairman wheeler has done so far at the commission? and what do you find most troubling? >> in just a few words i would say i applaud his effort to continue to push to get spectrum auction. and the only other, the caution i would say is that my hope is that tom, particularly tom coming from the position that i am in now just 10 years ago would exercise regulatory humility at the fcc. and that's yet to be sayin seent that will happen. >> okay. thanks for that, and you can see that some of these panelists may substitute caution for troubling or whatever, and that's fine, too. they are welcome to do that.

because tom may be watching right now on c-span, we hope. >> honestly i think the most encouraging thing is that tom has brought the commission i think a very refreshing attitude and approach. he's brought a really stellar team in there with them. at me, people but we all know and respect, you know, that worked in industry for a long time really understand issues. he's got a really high quality and he's brought in there. they reach out, they listen, and they ask. within a week of getting into the job, the chairman took up the ip transition petitioned that we have filed, you know, over a year earlier, and just been sitting there and vowed to

act on it and did the first subsequent meeting they had. i think that's really encouraging to see at the agency but it's really a refreshing approach. i'm sure by the end of the i will find some things that will trouble me, but so far at least in the month has been the i haven't seen anything. >> all right. james, you want to comment? >> i would just echo what jim said. personnel i think is one of the things that you notice he really has adopted, some of the best talent that i know of to try and work through a lot of these issues. and he's brought i think a sense of boldness and decisiveness. i think he very clearly knows what he wants to accomplish and then set about accomplishing it. i also think it's been very refreshing, you know, tom has used obviously blogs i've been to relay some of come and we've

seen this in a lot of his speeches of regulatory philosophy. he's talked a lot about the seesaw and the ability of industry to work together to solve what we see as societal issues or problems that are separate and apart from regulatory responses. and you know, on any particular issue, you know, we may have issues and believe that the teacher has pottered but i think that type of mindset we don't reflect, when we hear about a problem we feel the need to regulate it is refreshing. i'm hopeful that as tom wants to look at all of these issues based upon the facts and circumstances brought before the agency that they will continue to do that. okay, rebecca, is a any issue you think that peter has pottered -- teeter has tottered?

that's a new one for me but if you have a comment why don't you offer it and then we'll go to another question? >> just to demonstrate that what i so didn't coordinate our answers, i identified exactly the same things that the to james had done. i think picking is brought in, it says a lot about a person when you look at what people they surround themselves with to guide and advise them. and i can't think of a better am honestly a better group of people is brought in. i hope at some point through the whole process of his tenure there is the bandwidth to focus on, the last half of the chapters of the national broad plan plan. the verticals of the cardboard with health care and education, public safety. and so i hope that there is the ability to see some movement in that direction. >> goodie, thank you. i should say as all of you know up here, and most of you in the audience, from my own

perspective i found many encouraging things as well, but also things that i'm troubled by. so not going to say anything about those now but read the free state foundation blogs, papers, and all about. and then you can find out what we think that the free state foundation. now let's talk about one of the really important issues that i think pervades a lot of what is happening at the commission, or may happen in the future. and that's net neutrality. i know sometimes someone called open internet. sometimes people don't want to talk about it at all but in my view, it's important that we do wrestle with some of the questions raised by that. because, you know, for just so

everyone is on the same page, i mean, what this question involves, particularly after the d.c. circuit's decision in january is the extent of the fcc's authority to regulate broadband. so to start us off with this question and for your comments, i just want to quote craig aaron who is ceo of free press and tell you what he said after the d.c. circuit's ruling. quote, this ruling means the internet users will be pitted against the biggest phone and table companies and in the absence of any oversight these companies can now block and discriminate against their customers communications at will. we are disappointed that the court came to this conclusion,

closed quote. now, to my mind, at least, it seems clear to me absent a further appeal that under the d.c. circuit's opinion, the fcc lacks authority to impose the very same regulations that it put in place before the court said, amounted to common carriage. again, i'm just assuming absent, further appeal or change in the law. yet, the court also said in its opinion that pursuant to the now famous section 706 in the communications act, and in conjunction with what verizon in its appeal and the descent as well by the way, referred to as the triple cushion shot theory of promoting broadband

deployment, it seems clear that the fcc possesses some authority to regulate internet providers, and possibly fairly broad authority. so my question is this. short of adopting the very same net neutrality rules that the court has struck down, let's assume that that's not going to happen, and just assume, i know all of you i think are opposed to reclassifying internet broadband providers under title ii. if anyone is not, raise your hand now. but that being the case, really the question is this. how do you envision that the commission can or ought to try

to prevent quote discrimination against edge providers and content providers, which seem to be its principal objective in adopting the rules in the first place. so comment on that pic i think this time we will go probably keep alternating. may go to the middle one time but i'm going to start with rebecca. >> i think rather than get into the nitty-gritty of the various legal ways that the commission may get from a to z., which the court in the verizon case gave them, have some guidance on how to do that, were resting on seven '06, the high level points i think keep in mind our the way the court interpreted 706 was really quite generous. and so if you take the triple

cushion shot theory come and ensure we have all played parlor games internally on the range of things that might be done under that, one of our favorites is ordering silicon valley executives not to retire and take the earnings at age 35 make them keep on working so that they can contribute to at developing. you get into 13th a minute issues, but you can go a long way with that. i don't think that this chairman will do that because he has a lot of other priorities, the ip transition and will want to chart a path. i think that is probably closer to the core concept that michael powell identified, the restraints, and my instinct tells me that what comes out of this rulemaking, this whatever, the proceeding is going to become to be something that will be very close to those original,

original principles that were articulated years ago that we have all basically followed throughout all these years with the ups and downs of the legal status. what i was struck with in the court's opinion was the dissent about all these transactions that have happened over the years, you can count on one hand literally for that people cite and i think that's a remarkable grounding for us to all take. >> good, thank you. i think to mix it up do am going to go to craig and it is going to keep mixing it up now. remember, those of you in the audience, the twitter handle, hashtag fsf cons. we will save some time for questions later in the session. craig, why don't you comment next. we're going to generally,

remover we're going to try and limit these so we can have a series of questions but i want you to answer to the question of why this -- why did verizon decide not to appeal the d.c. circuit's decision? >> i me i know you want in part but just explain what you're thinking was. >> certainly the fcc won every significant part. to answer the question of why we chose not to appeal, the reason we brought the appeal in the first place, and that has to do with the desire for clarity around the fcc's jurisdiction to impose regulations on the internet. just as a quick aside to i noticed when you're asking the question you read a quote, and it talks about users. your question talks about the edge providers. i think we should be clear on something, which is that there's sometimes a misconception that

these rules have always been with us since the dawn of time to like the opening scene of 2001 a space odyssey. there's been this classic -- cataclysmic change in its history. what has protecting users, consumers for two decades now is the fact that our incentive is to provide users conductivity, how they want, where they want, when they won a. that competition providing what they want is what continues to provide that protection for consumers. nothing changed in terms of how that was working with the rules were passed with nothing changed when the rules were struck down. let me be clear on that that are two different issues to win his the open internet rules. the other is the jurisdictional underpinning that the fcc looked to him from getting these rules. the reason we brought these here if we were concerned about this

broad jurisdictional claim by the fcc that would allow it to regulate, friendly, broad swath of internet ecosystem. as this case has gone through, frankly, this is become like pashtun lots and lots of ideology has been poured, much of which if not most is unrelated to what the case is actually about. so by the time the cases, i agree with what rebecca said it i think it's clear the fcc has a broad jurisdiction to record many parts of the internet ecosystem under the court order but our view at this point is, this is not our top priority to our top priority is things like spectrum, other areas. this is become a distraction. and, frankly, i think we've reached the point where we really need to look to congress. regardless of what you think the fcc's role should be in regulating the internet, was easy pashtun when you think it should be minimal or an expansive role. you should be somewhat troubled that the way we are, the way we

are in the system today is people sort of saying, well, if i read this into this court's decision and the number of this argument and what congress is intent may have been here, 7068 versus become after that we will -- that's a very muddy way to get to the conclusion. it's time to stand back and have policymakers look at this holistically, look at what the right record toward regime is to protect consumers on the internet. and further appeals of this particular decisions are separate a distraction for greater priorities. >> okay. i'm going to ask the other panelists for some comments, but let me throw this into the mix, just add a comment. because you used that word internet ecosystem i think maybe a couple of times, and even holistic only. so here's the question. facebook just purchased whatsapp

for $19 billion. that's billion dollars. and for many of us the question might be what is whatsapp? that was my first first question. but whatever it is, and i do know something about what it is, now i've read that it's taking away business, potentially significant amount of business from --

>> i think in a lot of respects many of us who believe that the verizon case was going to be about the, you know, the

ancillary authority and how far that extended were thrown a bit of a curveball by 706. i think it's fair to say a lot of folks didn't believe that 706 conveyed the extent of direct authority that the court, at least a divided court, found. but it is the law of theland at least here in the d.c. circuit. and we know that 706 is currently interpreted, does something more than nothing and something short of common carriage. and it will be up to, you know, future decisions and future sec rule makings to determine, i think, what the contours of that legal authority is. but aside from the legal questions, i think you have to go back to the underlying policy question of how are we going to regulate given all of this robust competition that exists not just among network providers, but also at varying levels of the internet kind of ecosystem stack.

i i think -- and maybe this goes to where craig was aiming towards a new statute. you know, when we look at the statutes that we have, so much, so much of what we have is based upon the premise of a monopoly provider, you know? in 1992 cable was 98% of the multichannel internet universe. at&t used to be the only game in town. and we live in a very different world now. so, you know, to the companies represented up here and in the audience, a lot of the innovation that has occurred has really occurred kind of around the obstacles the statute has provided. but at some point if we want to rationalize the statutory thinking with the world we live in today, we need to kind of rethink the bases for these rules. >> jim, -- jim.

>> let me start with the rule and kind of address your what's app question. i mean, first, you know, at&t doesn't block any legal content, we don't discriminate for or against any particular content. that's the pain reason we didn't really have a problem with the original rule, and i trust that whatever the fcc does in this proceeding will be narrower than that. and so, hopefully, we won't have an issue with that either. i think the larger question that i think the what's app example tees up is this, i think, how do you insure a level playing field in the zone when you do regulate under 706? and i think the fcc has confronted this or is confronting it to some extent right now in the text messaging area, for example. you know, there are 911 requirements. well, if you're going to, if

you're going to impose a 911 requirement on at&t or verizon or sprint or somebody, you really have to do the same thing with the text messaging service offered by apple. forfor examples, on the iphones. because a consumer when they go in and send a text, presses that button isn't necessarily thinking about who's behind the curtain on it. they expect to be able to get 911. so the fcc, i think s trying to figure this out and how to address it there. i think that the key is that if you're providing one of these services which increasingly will be delivered over ip, they're gonna be very difficult to distinguish one from another based on who provides it. the you're going to have a regulation in -- if you're going to have a regulation in that area, it's going to have to apply equally to make any sense. if you're going to put regulations on an ip voice

provider -- which we all will be -- then you're going to have to deal with an issue like skype or something like that. because at the end of the day if a regulation is justified in a particular area, it would have to be applied to all. so i think that's the challenge the fcc's really going to have. but i also think it's probably a good reason for them to be very cautious, because the whole point of it is is when you you've all these competing services, in theory the market ought to be able to address many aspects of these things without the need for rules. now, 911 would be an exception to that. but hopefully, i think, it would bring about the type of regulatory humility that james mentioned earlier. >> thanks. and by the way, towards the latter part of the conversation i probably want to end by asking you about your thoughts briefly about a new communications act, and, you know, in that context

we can think about whether, how much the fcc can do itself now or how much might be done in a new act. i want to just ask steve whether he has any comment on this net neutrality question. but, actually, i'm going to throw in one more wrinkle, and then you can, if you want to, you can deal with it or just the original question and then maybe the others can help me out on this as well. before the d.c. circuit decision, i think it was assumed by many, at least i was one of these, that a predicate for the commission exercising my authority, affirmative authority at all under section 706 was a prior finding by the agency that broadband was not being deployed on a reasonable and timely basis. i mean, that's, that was a reading that i think was widely

accepted and, in fact, as most of you know in just only in recent years very, very recently did the fcc do a bit of a switch and make a determination that broadband was not being deployed on a timely basis, and then so many of us thought -- myself included -- that that might have been done possibly to bolster the legal case concerning what 706 meant if it were challenged in court by people like craig sullivan over here. so i want to throw that out because as i read the decision at least, it seems like there's been a complete decoupling of the finding requirement from the determination about the

commission's authority that is a little bit puzzling to me. so, steve, why don't you go first and then the if anyone -- and then if anyone wants to comment that might resolve this question in my mind, i'd welcome that as well. >> let me say, first of all be, that 90% of consumers in this country today have access to three or more wireless carriers for wireless broadband. 98% of all consumers in the united states have access to at least two wireless providers for wireless broadband. so the fact is that healthy competition is taking place, and consumers have a lot of choices when it comes to broadband. but what i wanted to say about the whole net neutrality debate that really came up six, maybe seven years ago is that i was in congress for eight years. i've been at ctia for over ten years, and i have never seen a debate this congress or -- in congress or anywhere else, the

fcc or just in the public in general, that's been carried forward that long over what becky said four cases of network -- that were alleged network neutrality violations. i've never seen that. i mean, nobody's life's at stake. but this has just been an issue that will not go away, and yet i'm not seeing any harm. and so there's a lot of issues that we need to work on at the fcc and within the wireless industry and within congress and everything else, but i just don't see network neutrality rising up to that level of urgent need. we've got to fix this because this is a problem. because it's not a problem. we've got companies up here half said they're not -- that have said they're not, they have a free and open internet, and they've always said that. so i just don't see what the debate is about. we have a number of things that

we need to have a healthy debate about. network neutrality is not one of 'em, in my opinion. >> okay. jim was raising his hand, and so if you have a quick comment on this decoupling of the finding, i would welcome that. >> yeah. no, i, i think a lot of people in the industry recognize that the fcc's about face on the finding of broadband being deployed on a reasonably and timely basis was probably a finding of convenience. it's certainly at odds with the fcc's own data and, frankly, becomes even more out of pace with the available data. i do think at some point the courts are probably going to step in. i think i read recently a smart person wrote something to the effect that it's really hard to

look at the phrasing congress chose which is "reasonably and timely" and interpret it as immediately and today. that's not what reasonably and timely meaning. and certainly not what congress intended. and i have to believe that if the fcc continues to press this, at some point that issue's going to be litigated, and i'd have a hard time seeing a court interpret it as you need to be everywhere at once, otherwise it's not reasonably and timely. i just, i have a hard time seeing that. and, frankly, i think the congress would as well. >> okay. well, i'm going to -- we've got about who more -- i'm going to ask maybe two more questions sort of in this area, and then we're going to move on to another area, and i'm going to ask the panelists, again, to keep the responses reasonably short. that's by my definition, not the fcc's or something like that. so here's something that is

always a question, i think, that arises over and over. there are some people that claim, i could cite our friends over at free press again, that because investment in broadband facilities has been robust over the past several years or decades, and i think you all, you know, would say and have actually touted robustness on the investment of your companies, that this proves that the adoption of net neutrality regular -- regulations or even the overhang of potentially title ii regulation or any other regulation, that that does not chill investment as you claim that it chills investment. how do you respond to this? i'm going to call on craig and maybe we'll get another response or two and move on. craig? >> [inaudible]

i'm reminded since you started by evoking steve's nfl career, you know, those weights that they put behind running backs when they're training, and you say, hey, the running back just made it all the way down the field dragging a hundred pounds behind him, so it must not have impeded him. i think you can't conclude the first from the second. so i think two points. one is i think it cannot be coincidental that you look at the investment flows, and there tends to be a correlation between the level of regulation in the areas in which investment's going. so clearly, wireless has benefited tremendously from a lighter touch regulatory environment than have some of the wireline environments. and if you begin looking at technology, begin looking at markets, i don't believe that investment -- that the regulatory environment has no impact. in fact, i know from sitting in a company day in and day out, seeing business decisions that are made, the level of regulation absolutely is a factor that's taken into account.

the second thing is we tend to be deterministic on these, and we say the technology we have today is the technology that there would have been, and we can't imagine an alternative future. and we don't also think about the levels of innovation. so, you know, sometimes point to the postal industry, and had you -- a number of years ago had you said we should have postal neutrality, that would have sounded very rational, very logical, because neutrality has to be a good thing. and 20 years later we wouldn't have had next-day mail, bulk mail, you would have just dropped things off at the post office, and everything would have been treated equally, and you wouldn't have known i could pay a little more to have next-day mail. so you wouldn't have known what you would have foregone. who knows the areas of health and education and energy management that may have been developedded and innovated in with areas of lighter touch regulation. you can't point to the counterfactual of what doesn't exist, and i think it's a false premise to say that because some

investment took place and some innovation took place, no other was impeded because of this regulation. >> okay. i want to transition really to another -- >> can i make one brief comment on that? because if you don't think regulation impedes investment, then why isn't google fiber offering voice service? >> okay. well, that was dutifully brief. rebecca, do you have a brief comment? >> and i think, i'm thinking back on the ten years i spent on wall street. i think that investors aren't particularly worried about net neutrality, that they see we have all been living with it. i think title ii is something completely different, and i think many of us still remember the day that julius announced he was going to do title ii light and saw the stock market react to that. and the other thing i think people should keep in mind and watch because it's interesting, it's hard to shift entire industries back and forth between regulatory regimes, it's inefficient. and once you go on a particular course, it's very difficult to

unwind it sometimes. but i think we've got a natural experiment that's been going on for about a decade now between the u.s., which did not apply these rules to internet systems, and the e.u. which did. they took the pretty aggressive regulatory regime that everybody was applying to the telephone network and extended that over to the internet networks. and what you see very clearly happening over that period of time is the investment shifted out. so the investment and jobs growth happened in the u.s., and investment and jobs growth declined very seriously in the e.u. and then australia, i think, is a third sort of model of investment which is -- or model of approach to this which they did the same kind of resale competition approach that the e.u. did, found they weren't able to get the investment they needed, so a few years ago decided to decommission the private plant and do a

government-owned network. and so it'll be interesting to. watch that play out, right? it's too early to know for sure, but they've had a rocky start, and i think watching those three different models and where the money flows. because anybody knows that money can go wherever it's going to make profit, and the investors are watching that very closely. >> well, those are valuable insights from a former investment analyst. and thanks for that. hey, you know, when i started this panel and i referred to today's washington post, that cross word puzzle, number 63-down where the answer was fcc? you know, i just looked up at our conference logo up there which, by god, you know, it looks like a crossword puzzle or something, and fcc is up there. i think those people at the post must have gotten that idea from us. okay. now, here's the next question. tom wheeler, in reacting to the

net neutrality decision, came out just a couple of weeks ago with a statement listing a bunch of actions that the fcc might take. and i just want to focus on only one of those. under the heading of "enhancing we constitution," there was a suggestion made. it wasn't necessarily explicit, but it at least was read this way by many that one of the things the commission might do to enhance competition in the broadband space is act to preempt state bans which restrict or otherwise prohibit municipalities from offering communication services, broadband services. you know, this my own perspective -- in my own perspective it's not necessarily the way i think about competition, but i want to get your reaction to that particular

suggestion from the chairman. anyone? steve? >> well, i would just say, i mean, do you want the government in the gasoline business? do you want the government in the grocery business? do you want the government in the wireless business? i don't think so. i don't think we want the entity that also regulates wireless to also be competing in the wireless. so i don't, i think it's a non seq. bier the, and i don't think that's going to happen. >> i think it's a proposition of dubious constitutionality to think that the fcc somehow would have the authority to preempt a state law prescribing what a municipality -- which it created finish can and cannot do. i just, i would hope they would be very cautious. it's not just unwise, as steve

mentioned, but i think it's probably not constitutional for him to do this. and i think it would create an uproar across the country, and i think, i think you'd have, you know, at least 20-plus state ags, i would expect, that would go to court to defend their state laws. >> rebecca, do you want -- >> i would just quickly commend people to a paper that was issued last week or the week before. diana karew did a study that looked at where there is need for public funding, and along with ed rendell and i think arnold schwarzenegger was involved with this group, i can't remember the act proanymore. the acronym is building for america, i think, or america's future. but they're showing how we have a massive, massive underfunded core infrastructure need in this country, and when you hear ed rendell talk about it, it -- he talks about the panama canal as apparently being completely dredged so these huge tankers

can come through. and in our country on the eastern seaboard, there are only two ports that are deep enough to accommodate these big tankers. so all of that commerce is going up to canada. love canada, but i'd like to see some of those jobs stay here. and the amount of delayed investment in roads and ports and water in this country is, it is really scary. and so what her paper looked at was the fact that there's plenty of private capital going in to broadband, more than, you know, plenty, ample, and that we have this incredible shortfall of state, local and federal funding in the core infrastructure that the country needs. so take a look at diana's paper. >> okay. remember when i asked you initially what troubled you most potentially, possibly about the new chairman, maybe that would -- we could put that into the troubled category. now, let's switch gears and talk about spectrum, spectrum,

spectrum. which we did talk about a little bit earlier. but i want to talk specifically now about the incentive auction and the process the fcc is going through to develop plans for that auction. and -- because i think you all agree, i suspect, that in order to provide wireless service as spectrum, obviously, is a key input. but as you know, t-mobile and sprint suggest that somehow the rules be fashioned in a way -- and i don't want to put words in their mouth because there are different ways you could say this, but somehow that they, quote, win enough spectrum to make sure that they remain competitive.

and, again, i want to turn to my friends over at free press and give you this quote as well and then have you respond to questions about specifically structuring the bidding in a way that limits the amount of spectrum that a company can gain. so tree press z said, quote -- free press said, quote: while no qualified entity should be barred from participating in the upcoming auction, clear, transparent and fair limitations on how much low frequency spectrum any one carrier can acquire do not bar participation. they said that rules can be structured, quote: to allow all interested bidders a he jet mate -- legitimate chance of winning the spectrum. they need to deliver wireless

services. close quote. so how do you sunday to that suggestion -- how do you respond to that suggestion for the fcc to develop rules at the auction? jim, student to go first? -- do you want to go first? >> yeah. i was trying to kick it to james here. [laughter] >> james, do you want to go first? >> he hay want to rebut me, i don't i don't know. look, t-mobile wants to stack the deck in the auction, and i don't fault them for that, but i would be very surprised if the fcc actually went in that direction. the congress directed the fcc to conduct an auction, not an allocation. and what t-mobile's really arguing for is an allocation. moreover, i think it'd raise serious policy questions if the fcc were to go into this auction with the intention of rewarding companies for not bidding in previous auctions and penalizing those who did. you know, we've been very clear

that, you know, it's entirely appropriate for there to be reasonable limits in the auction on what any one company can purchase. that's been true of past auctions. but those limits ought to apply equally to everyone. and i think that was also what congress intended when it passed the law. it was very clear in the provisions it had there that it wanted the auction open to everyone. and so i think if the fcc went down the path that t-mobile is arguing for, not only would it be unfair and, i think, would call into question whether they were following congressional intent, but with i think they'd be setting the auction up to fail. i think that somehow christie's and cost by's and everybody -- sotheby's and everybody is dissing the point of auctions -- is missing the point of auctions if you're supposed to go into it

with inhibitions and restrictions on certain participants. so i'm hopeful that people will see their view for what it is, which is simply a self-serving proposal and designed to help them and penalize everybody else. >> okay. james, i'm going to turn to you -- [laughter] i may let steve resolve this definitively and have the last word, and then we're going to move on to another question. james? do you want to say anything or -- you don't have to. >> i look forward to bidding. yeah, right. >> you look forward to bidding? okay. i knew you were a man with deep pockets. [laughter] >> well, i would just say, you know, our members have diverse opinions on spectrum and auctions and all the proceedings that are going to take place. and the solution to all of this is let's allocate the 500 megahertz of spectrum that the president called for so that everybody gets some spectrum. and we're not having to, you know, have these fights over the

little l bit of spectrum that's coming out. as i said, the auction that's teed up right now that's been auctioned or going to be auctioned in the next year is something less than 300 megahertz, and the president's called for 500. so let's get 500 out there, and let's start investigating where that other 200 megahertz or 220 megahertz of spectrum is and get going on that. because it shouldn't take somewhere between 9 and 12 years to get spectrum to auction. this industry just doesn't operate that way. and so if we can accelerate the process somewhat to get more spectrum to auction, then a lot of these orr debates go away -- other debates go away. >> okay. i know earlier someone mentioned the question which is also in these auctions concerning allocation of license versus unlicensed spectrum, so i'm

going to -- i know i said i was going to come back to it. i want to do it quickly. rebecca, i think -- or maybe you said your piece earlier, but if you want to, if anyone wants to say anything about how the commission should go about this process or licensed or unlicensed auction, you can do so now. it's kind of a technical issue. let's don't dwell on it too long. >> james maybe. >> james. >> well, i think, look, it's -- i think the important thing for us to all recognize not only has licensed spectrum just been a tremendous american success story, but so has unlicensed spectrum. this is not an either/or proposition. we feed to insure that we have the -- we need to insure that we have the inputs necessary to allow both a licensed economy as well as the unlicensed economy to grow, and we've seen tremendous consumer been fits as -- benefits as a result of that. i think we're very encouraged by the action teed up later this month in the five gigahertz

proceeding that the fcc has shown some real leadership in. that has not been an easy process, and it involves opening up a band, the uniny 1 band and five gigahertz to allow us to coexist with licensed users and develop rules that will permit that. but the fact of the matter is we all know we have more internet adopters, we have more wireless devices out there, we have more intensity of use as people migrate from just looking at web pages to wanting to watch videos as well. and we don't see any signs of that hockey stick stopping. so we're foolish if we don't figure out a strategy that will allow both licensed and unlicensed to grow. we're very encouraged by this first step that the commission is going to take, but it is a first step, and we're going to need to continue to try and keep this engine running. >> and i would adjust, e applaud what james just said, and i

would add to that as long as there's not interference. interference is the only issue that is a concern for the wireless industry. >> okay. so now we're going to switch gears a bit and talk about the video area and what's happening in that space. and in case some of you may not have heard, there's a merger proposed between comcast and time warner cable. and i guess i think three or four weeks ago maybe. and, you know, that will provide a context in which we can talk about the video marketplace and maybe the broader broadband marketplace too. so i'm going to -- and i'm going to ask rebecca this question because she happens to be from comcast, so she'll get first stab, and then maybe another

panel member will have a reaction. and i'm going to invoke my friends again in the public interest community and ask you to respond to what they claim to be their concerns. because they've said, well, i'm just going to tell you what i've read in the press. and then i'm going to ask you to respond. they say that this merger ought to be stopped or perhaps conditioned pause the combined -- because the combined company would exercise too much dominance in the video marketplace and also the broadband marketplace. and they claim that this merged company will have the power to stifle diversity in muse and information services -- news and information services, stifle the development of over-the-top online services, raise prices for multichannel video services, maybe even other things.

do you agree? [laughter] >> so i, i mean, we've all watched this cycle before, and i think in the very early days of a transaction being announced there's a lot of noise and high-level rhetoric around it. i think that everybody looks forward to getting deeper into a lot of the issues and a lot of the analysis. i i -- from my point of view, i think that the transaction itself is -- people need to remember it's not a horizontal concentration, it's not vertical acquisition, it's an expansion of a footprint which really presents very limited sets of issues. in this particular case, there will be a lot of benefits that would accrue to the consumers

that are in the time warner territory which is where the footprint is expanded to. so comcast, i think everybody would recognize, has been a leader in our industry in terms of innovation and investment, and we'll be able to bring those speeds, those services that we provide to broadband customers to the time warner cable customers over time. and on the video side of things, we have a lot of new really quite good products in terms of user interface. the x1 platform is incredible, i can tell you that firsthand. and we have a deep bench of video that's available and a lot of other video innovation and services that we can also then extend to the time warner cable footprint. the simple fact is that times have changed, and so the regional model of cable foot prints just isn't tenable any longer given that the companies that we're competing against

have national footprints. and it's important to be able to have that scale not just to do things like expand the speed of broadband and get the deep video libraries, but also to do things that are kind of hidden behind the scenes. ipb6 we were a leader on in transitioning over to, cybersecurity we lead on, and you really need to be able to have a base over which to spread that research is and development. we're able to do a lot of, i think a lot of the focus is on residential. i think it's important to look, too, at what happens with the business services which don't get as much advocacy from the group's attention, but i think it's incredibly important for economic growth and development and jobs to bring services and provide more competition to verizon and at&t to the services that they provide businesses across those new footprints which is important as well. and you get all this benefit without decreasing competition.

so there will be in fewer services or competitors that will be available. in fact, it probably will increase competition. those folks who have said there's no incentive to keep on upgrading and investing among our companies, i think, are being proven wrong. >> okay. you know, i will say this, not taking a position on the merger, but i've quoted, of course, and maybe to the discomfort of my friends up here my other friends over at free press throughout the morning. but i, you know, i will say this and many of you in the audience know it as well, at the time of the proposed aol/time warner merger because i was actively writing and trying to think back then as well, some of the same statements that are now used in dominance, you know, if that merger were allowed to go forward in terms of really

taking over the internet, taking over the video marketplace were almost in the same language were used then. and i've -- for those of you that are interested, i quota language quite a bit -- i quote that language quite a bit this system of our blogs. so some you may remember what happened to the aol and time warner, so i just throw that out. now, i want to just ask whether jim or craig have any quick comments on this merger, any concerns that you might have, and then we're going to turn to a final question and then try and get in a question or two from the audience. anything you want to say? is. >> our chairman spoke to this at the investor conference last week, and one of the things i've learned is i usually don't need to expand upon the things he says. [laughter] >> what did he say, for those of us who don't know? [laughter] you don't have to expand be it. >> i think it's a matter of public record. [laughter] >> all right. anyone else want to say

anything? okay. then here's what we're going to do, i'm going to ask this final question. i said earlier i wanted to get reactions concerning a new communications act. that's the second line in our conference theme. we're going to do this really pretty quickly, because that could be the subject of a whole other conference. and, actually, you know, i'll make the this promise that we'll do a whole other conference on a new act at an appropriate time. but i'm just going to go down the line, and give me just, you know, almost really in bullet form two or three points that you would like to suggest in terms -- just assuming that there may be one if you think that's appropriate -- what a new act should focus on. i'll just start with craig, and we'll go down the line quickly. >> quickly?

markets, technologies have changed radically since the laws were first run in 1936, even 1996, so start with a clean slate. rely as much as possible on competition, not on economic regulation. build your platform be around consumers, not around technologies. technologies will change, protection of the consumer should be your first principle. and avoid technology silos and focus on consumer protection and competition. >> okay. steve. >> service, focus on service, not platform. focus on enforcement, not regulation. focus on predictability and have a bias for markets, not regulation. and in those areas that with respect to disabled or things like e-911 or other emergency services, they should be competitively neutral. >> jim. >> i think too often in past years the fcc has felt its mission is to regulate, and

that's not true. its mission is to anticipate and address problems, and regulation is the tool they use to do that. i think they've gotten away from that. i think in any new law that the congress ought to be very specific about what problems it wants the fcc to address and ought to, i think, circumscribe them getting this broader authority to act in the public interest. i think that might have been necessary in the days of the monopoly, i don't think that broad a grant of authority which is, in essence, allowing them to do just about anything that they want or feel they could justify publicly, and so i think they ought to be very clear, very specific and define the mission clearly. >> james. >> i think a recognition of technological convergence, an

embrace of service competition and a result that comes out in the form of a more simpler structure focused on consumer protection. >> rebecca next. >> of course i agree with everything. i think i'll quote two other people. one is i think that the key thing they need to do is recognize that the world changes so fast. and so all the dynamic competition that we talk about means that you can't predict where things are going. there was an event last week that jerry falmaybeer and larry downes who i see in the audience were talking about, and their point was when things are changing that fast, the last thing in the world you need are prof lactic rules. so i would guard against that. and be i will channel howard che land sky who spoke at this event a couple years ago who made the caution of beware the not-so-sweet nothings. so the general what sound like

benign sort of edicts out there get played. and so we need to, i think, follow howard's good advice of be ware of the not-so-sweet nothings. >> thank you. we definitely need to have another seminar or event, and we'll drill down a little more deeply on what a new act should look like. and in just sort of a preview of coming attractions, i should mention that on the next panel we're going to have with us david -- [inaudible] and sean chang. they're the two lead staff persons that are working on this process to develop a new communications act, what they call carefully an update and not a rewrite. so we're pleased that you guys are going to be with us then. god, we could do so much more. this has been so much, so much

fun. and so i probably have just got time maybe for two quick questions if i have any questions. raise your hand. we're going to bring a mic. it's the same rule, you have to, you have to identify yourself and just ask a question without making a statement. scott. and then i'm going to come, just so you'll know, to the gentleman that professed not to be a gentleman, but i know is a gentleman. scott. >> [inaudible] for net competition. a very quick question. the pro-competitive development of lte and the outgrowth of wi-fi really is changing the dynamic in the sense that now we have wireless capacity, and the u.s. is leading in lte deployment of being able to deliver video. so over the top especially now with the court appearing to be

blessing two-sided markets, could people give a comment about how, you know, how competition is greatsing a lot of the video -- is addressing a lot of the video and broadband issues? because more competition is on the way. >> who would like to comment quickly? >> i mean, i'd only degree with you, scott, to the extent that i think the consumer has more choices available to them now than ever before, and they increasingly, i think, have the power to select the video choices that meet their needs, and i would say the communications choices that they want to use whether it's at&t, verizon or what's app. so, you know, that is one of the greatest benefits of convergence that we've seen, and i don't expect that to slow down anytime soon. >> i'd add that, i mean, we -- i think you find most of the industry, but particularly at&t and our u-verse product, i mean,

we really embrace over the top. and i think that's a real good example of how, of how competition in the market really addresses concerns that in the past have motivated regulation. in fact, when the net neutrality debate started, one of the arguments is that companies like ours would never embrace over the top. and, in fact, the opposite is the case. and not only have we embraced it, but, frankly, we make good money at it. >> craig, were you -- >> agree with all of what was just said. i wanted to remind people that when verizon first announced that we were embracing lte, it was a very controversial decision. a lot of people thought the devices wouldn't be there, we were way too early to the market. we look back now and say this was a successful platform, but that only came about because we had this competitive environment where we were trying to differentiate ourselves. that could have failed. it turned out succeeding. you have to have that environment where everyone's

experimenting, and you end up with these types of platforms. >> okay. one last question right up here. >> brooks -- [inaudible] politico. why does comcast get it boast ways -- both ways? they argue that it's only local markets, that we don't, you know, we don't -- we replace a competitor, we don't eliminate a competitor, yet then comcast will say it's a national market. so why shouldn't we look at it as a national market instead of a local market which you just said is failure? >> when you say we say it's a national market, in what respect? i'm just not sure i follow the question. i'm sure you're right, i just didn't follow the question. >> you just said that comcast -- i'm sorry, come last says that the merger should be looked at in a regional basis, a market-by-market basis. in l.a. comcast doesn't replace time warner. it replaces time warner, but it doesn't replace a competitor. and then you say we need this

scale to compete nationally. so why shouldn't the reviewers look at it as a national marketplace inthe stead of a local marketplace? it looks like comcast is talking out of both sides of its mark. >> i think from an antitrust perspective just two entirely different conversations. >> so? >> i mean, i think the answer is also the regulators are going to look at both, right? doj and the fcc look at all the different markets, any emerging party is going to, you know, affect. so, you know, i think what your point, i think, brings out is fact that, you know, there are facts that are going to be put before the agencies, and the agencies will consider the effect on the relevant markets. >> and maybe this is more responsive. so you talk about when you're doing antitrust analysis, you rook at what the efficiencies are, what are the benefits that come from the transaction, and you balance those against harms to competition. so the benefit of the

transaction by doing a footprint expansion goes to the scale. and then you balance that against the reduction of competition where here there isn't one. so that's just kind of a high-level way antitrust would look at a transaction like this. so there, the two points are just located at different points of the analysis. >> okay. well, thank you for that, rebecca. i want you to join with me in thanking the this panel. they were extraordinary. we could go on. police departments. [applause] now, i want all the panelists as well as commissioner clyburn already has hers, but i want you to get your free state foundation blanket over here, if you would. and let me tell you, i'm going to ask the next panel to come up now, and while they're coming up, i just want to tell you what's going to happen.

right after the next panel -- i think i'll wait until they come up and then tell you. knock to knox. [inaudible conversations] [inaudible conversations]

♪ ♪ or. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> okay. i'm going to ask everyone to take their seat, please.

come on back when you get your coffee or whatever and take a seat. now, before we get started, i just want to tell you what's going to happen next, especially for those of you that weren't here when we started this morning. deborah tate is going to pod rate this panel -- moderate this panel, and right after the panel is completed, we're going to immediately serve a hot buffet lunch right behind that wall. just as i promised, it's a hot lunch with three entrees including filet mignon and other things. so we're going to go right to

lunch, and then once everyone has their lunch, gets started on it, we're going to have the conversation with commissioner o'rielly beginning probably just about 12:50. and i'm very much looking forward to that and, hopefully, you are as well. so with that, i'm going to turn it over to debbie tate, distinguished adjunct senior fellow at the free state foundation. and former distinguished fcc member. >> thank you all so much, and i hope you all will gather after you have gotten some refreshments and have a seat. randy keeps referring to this as panel two, and so i really enjoyed the first panel with all the ceos, but this is the real, really important panel because these are the people who think,

write, publish and get things passed. and in addition to that, the first panel did not have an ambassador, and i have an ambassador on my panel. so we're going to stop referring to this as panel two. and i do want to introduce the ambassador first for those of you all who haven't had the chance and the understand the to get to know ambassador phil revere. i actually have spent more time with him in other parts of the world than i have in washington, so it's fun to be able to be with him here, and we appreciate you very much being here. i didn't think anybody could keep up with the ambassador gross' schedule, but i bet that your frequent flyer miles show that you have. so we certainly welcome you. to my right, as many of you all know, professor christopher yu. we have a long history because he was part of my kitchen cabinet which existed of two

people, chris and me. [laughter] when i was the chairman of the state commission. and in addition to that, obviously, he also serves on the board of academic advisers for the free state foundation and is the john chestnut professor of law and also runs the technology, innovation and competition center at penn. i'm very sad that we lost him from vanderbilt but very happy that he has his own institute. dr. nicole turner lee, i hardly know where to begin, you all. she has, i think, a whole page of her bio because she's been very many places, but we are very excited. i also seven on the board of mmtc here in washington. i'm very excited that she's now the vice president and chief research and policy officer. and we will be talking a lot about the new task force, about the possibility of a new act with her because mmtc has

certainly been a leader in that. david, thank you so much for being here. i knowst hard to get off the -- i know it's hard to get off the hill. i know at any moment you could get a phone call and be out of here, so i'll try to get on with you. you all know he is the majority chief counsel subcommittee on communications and technology for energy and commerce. and prior to that, of course, worked at ctia, so i'm sure that you can talk with both of those hats on. daniel, i have just now met him, but i want you all to know that we've changed his bio. he is now the recently-tenured professor. so let's all give him a round of applause. [applause] for any of us in academia, we really know what that takes, so, obviously, he specializes in all the topics that we're going to be talking about today, and appreciate youring being here so much. gus, you all will love this

story. i only know two guss in my life, the other one is a two-star general, and i was trying to hitch a flight on a military plane, but gus got that e-mail the other day. so i think i might have missed my flight. he is the assistant professor of law at the university of nebraska college of law and another one of my colleagues here at the free state foundation. and then certainly last but not least, sean chang who's the chief democratic counsel for the communications and technology policy, energy and commerce committee. formerly, you all may remember, that he also worked with chairman waxman and then was also the deputy policy director of free press. so you may want to jump this at any moment -- in at any moment or shoot randy after this. [laughter] but anyway, i wanted to follow up, obviously, with many of the same questions that we started with the earlier panel, because i think that you all can really

help us delve into those a little bit more. and so i'll start just with a very quick question, and we'll just run down the whole thing, and that is, what is the single most important priority for the fcc right now, this year, in the next few months? and if we'll just run down the panel, that would be great. chris. >> i would say the enormous sucking sound you hear at the portals is the incentive auction pulling every single member of the staff into its ambit. it's, essentially, consuming almost every bureau and every part of their organization. i actually think thinking through the transition whether it's a regulatory one or a statutory one is probably more important in what wheeler, chairman wheeler stakes his legacy to. and i just hope that the large political exigency of the incentive auction doesn't stop the commission from achieving its other goals. >> ambassador?

>> well, i certainly agree with professor yu that it is in terms of input, in terms of contributions from all over the agency that the incentive auction is a very, very important activity at the commission these days. >> [inaudible] >> yeah, this is tough. i think last year when we were tough, adoption, so it's kind of hard for me, debbie, to put one single340es important thing, but i will say increasing minority ownership and trying to find ways. and if i could piggyback on what was said about the auctions, we can't go into the auction without minority ownership and increasing the opportunities for minorities to be more engaged in the auctions as well as in every part of fkcc -- fcc decision making. there should be an undergird of how it's going to impact consumers and owners of color. >> we'll come back and talk about that when we talk about auctions. david? >> i would agree with what

ambassador and professor yoo said. the incentive auction is definitely priority one, two and three and should be priority one, two and three at the commission. we've said before we hope that they can take care of the broadcast issues. wireless industry is used to dealing with the auction process at the fcc, the broadcast industry is not. so the sooner the fcc can answer the questions, you know, solve the question marks in the equation for the broadcasters, i think the sooner we'll be back on track to get this thing done in a timely manner. ..

trying to balance the needs of the serious social services that communication platforms enable with the challenge of the economic provision of those services. those are two divergent anyway goals, and the fcc needs to figure out how to converge them. and the incentive auction, universal service, these all go to basic challenge. >> i agree with david, incentive auctions. but i will disagree with gus that it is not a part for the fcc. in fact, i think while integrating the fcc's interpretation and the use, the sections and authority as it applies to the broadband

providers. >> which leads into absolutely my next question, and that is post-verizon. what do each one of you all see, this is an issue i know professor yoo and i've talked about. it so interesting because i think that we thought was going to be over. with the original comcast decision. obviously, many years later we're still talking about it. on these panels were still talking about it. shawn, you've got your view that it is very important. professor yoo, again if he would start us off with just kind of how far does it go. randy mentioned that discrimination against the edge providers. so maybe you can teach us a little. >> there is i was it illegal and in terms of what's left, what's open for the commission to do and the political and. there's a lot of hidden restrictions and landmines that the fcc has to negotiate around to craft an order. common carriage is permissible so, therefore, anything that was

visible in the common carriage i think is permissible under whatever the story is going to be. you can do different price under traditional common carrier to interpret 706 to permit them. partnerships, individualized negotiations, differential pricing, and there's a whole, the ancillary authority puts limits on what they can do at the attempting to tiptoe around. they will likely punt that downstream but adapting something that strongly resembles the rules that were previously upheld and let the major details worked out later. i have an observation, not based on any knowledge. i believe, i was told michael was once told, he told chairman genachowski he could be the broadband plan chairman of the network neutrality chairman andy try to do both. i believe he is facing a choice of being the i think -- ip

transition chairman or the network neutrality chairman. my sense is he is trying to something for political needs but he's trying to get enough to get, to be responsive because the responsibility lay elsewhere in the incentive auction. >> can we skip to the other professors and get your thoughts and then maybe go to legal counsel? >> there is a huge number of landmines the fcc is going to have to negotiate around to get done what it needs to get done. that having been said, i think one of the things most interesting about this is the chairman's own comments about the importance of competition. i think that's a big change in rhetoric from the previous administration. it spills over to the net neutrality proceeding, and i hope it does, what we may see as less of a focus on prohibitions and much more on a broad

standard that we then learned on a case-by-case basis. a number of models that exist under the mutations act, something like carriage rules that apply to cable, where broad nondiscrimination act and what that means an individual circumstances occurs a case-by-case recent. the latest entry was recent fight between comcast, what the legal vote is. it allows more flexibly to evolve over time. >> why would we need anything other than the original principles? when i was there i just assumed we would be looking at these on a case-by-case basis and we have the principals for that, and that we would apply those just as you said. so i'm not sure how we've gotten where we are? >> part of the issue is the original politics was that, a nonbinding statement of policy and there was no legal force behind.

that was the big thing that got called out for. you can make something binding unless you explain before in its binding right away. >> microsoft or dissent, thank you. >> a very wise dissent. i will start by going 100% with christopher. network neutrality is anyways an albatross. chairman wheeler i don't think wants to have it waiting down. the ip transition much more meaty substance of area to focus on, and i think that the approach we think is being involved is rulemaking to provide some basic rules for the road that would then be filled in on a case-by-case basis. that's exactly what needs to be done. to flesh out a little bit of what daniels had some initial comcast challenge, the fcc had previously said such and such didn't apply. so the fcc had previously tied its hands. what the rulemaking needs to do

is provide some notice of what the legal framework or analysis is going to be, what the legal basis for the fcc case will be, what the rules for the rolled will be. said the agency can then avoid fair notice by all challenges and, to network neutrality questions. the broader question of what is the ultimate scope of 706, under current administrative law chevron doctrine, city of arlington, incredibly broad. the fcc has difference in determining the restriction, and the biggest bump ahead could very well be between the fcc and sec in dd security and privacy. >> i would agree with that. shawn, but you and david talk from your perspective what's going on on the hill regarding the discussion about net neutrality? >> well, certainly my boss,

mr. waxman and ranking member have introduced their legislation to temporarily bring no blocking and non-discrimination rules in as the fcc adopt its new home rules. i think going back to what gus just said, i find it interesting what the fcc tried to do act in 2010 chairman genachowski was exactly a very broad set of guiding principles or guiding roles that will be applied on a case-by-case basis. i don't see how that was different and the vision that everyone has agreed upon, and of course we had the support of the community, major providers. the only one that challenged it based on authority reasons, not just the rules, was verizon and look where we are today. and so i think certainly i think the fcc should move beyond just

net neutrality to look at sections as a whole. it is a very broad authority. they will likely give the fcc plenty of difference. >> it will come as a surprise to nobody that shawn and i disagree on this. my bosses have been very clear that the few net neutrality and have since its inception of the open-ended principle as a solution in search of a problem. the d.c. circuit remanded the rules in january and the internet continues to march on to bring us the things we want to as it turns out just because those rules are no not in place doesn't mean the internet suddenly goes away. what's interesting from a legal perspective, as we've all made our citations can we talked

about verizon city of arlington and what do all these things have? the one thing we should all be aware of is no one knows what it means. that level of uncertainty being brought back into the internet debate i don't think it's helpful from it business perspective, or from a social perspective. as we start to look going forward, my bosses like to see the fcc spend the majority of its time on issues that are solving actual problems or are advancing technology in a way that brings real benefit to consumers. and we just don't see net neutrality as doing that spirit and i want to echo what david is saying as well. my boss, we have not that in mtv taken a stand where regulation has created an environment imposition which we see the internet floors. if we try to put in additional rules, there's a choke hold on the type of extreme edition and innovation that drastically benefited people of color.

i agree with david. taking the oxygen out of the air to not address how we enhanced consumer engagement, how would protect consumer interests that help make the internet go so vibrant, oftentimes it efforts detention which is the ultimate goal of or want to see the internet coal which is great economic development and a more vibrant ecosystem that we are seeing a. i think that something that we should consider. it's one of the many themes that are in the bucket. when you asked us what one thing, there are a lot of things that are in the bucket right now, going to bother you not knowing what you want to read but this is deadly when we should not pick because you be sitting there trying to figure what part of the meat you want to consume versus the other issues that are there. >> so steve largent talked about the fact that there are now 98% of americans have a choice of two different providers and that for years the fcc found that deployment was going along reasonably well.

and according to the statutory language, and that somehow the fcc is kind of turned that around and concluded that is has not been deployed on a reasonable basis. i guess, professor yoo, any thoughts? we will just do this very quickly. >> we are blessed having wonderful david to study this mapping project, the fcc's semiannual orders instantly put, we have a vibrant world in which as a benchmark level the fcc established summer well over 90% have a choice of three providers. the maps as 80% of american households have a choice of two. does not encounter which is now peaking at 60 anywhere where you need eight-megabyte speed to get hdtv. what we see as a very dynamic world, i'm doing a steady right

now compared to other policymakers. in europe where they've taken a different approach, our penetration of 30 megabits and 25 megabits is about 86% to europe's is 54%. there's huge difference is that i think we are in a really wonderful world that, in fact, when you go to europe they were following -- falling than the u.s. when we include wireless there's a pilot this has the number of to take wireless as a real possibility, the number of uncertainty also as a year ago dropped a 5.5 million. so beginning i look at it, really wasting a tremendous amount of dynamism in the market that is benefit to american consumers. >> not including the investment. i don't know if you want to talk about, since we brought that kind of our global competitors. >> well, first of all, our european friends confront challenges that we don't. talk about europe, we talk about

unified, completely unitary activity and its illusory. illusory. were talking to 29 countries. each of them with national laws, national regulations. and in some instances countries that are too small to reach minimum efficient scale with respect a lot of these activities. so the european parliament, european commission are trying to find ways to overcome that. but it's not to claim that the united states is doing better than europe while unitary entity is a kind of statement that there's an awful lot of foot note materials. >> kind of like rural america. >> on the point, i think to chris's point we're doing better as the country. a couple years ago when the plan was introduced, we did a study where place did not instance of where you lived. and access to high-speed broadband a particular or

competition or competitors was equally important to the think we all have to fear of to go through this conversation is digital redlining and the impact that will have if there are still places because the utility of broadband in terms of social benefits that people do not grasp that. i think that's where the promise, the of the things we talked about so far will allow us to create more ubiquity without leaving people behind. i think that's a real concern. even though we can put on our head and say we've made progress, we still have to fear that there'll be some communities where they don't have access to basic resources. that will place them behind for -- that's something we're concerned about as we see more projects that are maybe public resource or pet project of companies that do not tend to look at the social benefits and ubiquitous benefit of broadband. >> quickly, 706. >> this is something we're concerned about on the committee

of the having seen the report come out and have the fcc failed to find, make a finding. it was one of the things that led to h.r. 2044, the consolidated reporting act which would combine a bunch of those silent industry-specific reports into one market report. it passed unanimously. i would b be a bad staffer if i did upload if the senate did not take action on that. >> comment on the curious timing of the fcc's reversal in question of whether broadband is being deployed in a competitive fashion. one thing that hasn't come up with his satellites, which has made a number of slides in recent years. is becoming competitive alternative. satellite was how we solve the root problem with regard to cable provision. it was directv and dish that were getting the single of the people where it was uneconomical

to run the wires. >> randy, you need somebody from satellite up here. >> we have merged together a bunch of issues in this topic. i want to see something but 76 and 76 question for our hill staffer friends, and also on the international comparisons and investment question. one of the important metrics to understand, and i owe this to one of my colleagues at the american enterprise institute, americans constitute 4% of the population of the world and get 25% of the total network and investment in recent years. if you look historic weight and rebecca on the last panel, i guess we're no longer calling this panel number two so let's call that panel zero. panel zero, she noted how the capital is going to follow what's going to be able to have the greatest returns in europe, investment over the last soviets

has fallen off precipitously. so that's a very important point to understand. on the 706 question and the question of the 706 be report, i'm not entirely sure that, so the d.c. circuit noted that awkward timing or peculiar timing of the fcc's finding, i'm not sure if under current difference doctrine that would dissuade the d.c. circuits outcome even had the fcc not had that finding. the agency will get very broad deference. so for those who might be involved with drafting legislation, really greater specificity for what the requirements for the agency are i think is going to be an essential characteristic of any legislation. it is an opportunity for deference, the agency relied will be able to make use of it. >> shawn, you started off the 7a six discussion them to do you want to close it out? >> i think it's a complicated issue that requires a lot of unpacking and i don't think the

court, the court looking at 7068 found the fcc's authority there as well. so whether or not there's a finding of the fact, deployment, i don't think it's relevant today. >> so we looked at and heard from most of you all and the previous panel that it is spectrum, spectrum, spectrum, right? let's have a couple of discussions about that. our $30 billion auction while i was there translate into the u.s. having half of all the 4g users in the world. that's pretty incredible sense were only a fourth of the world's population. that's pretty staggering to think about what that one auction did, and now many years later we are at the point of having another very large auction. so let's talk a little bit, or if you all would share your notion about some kind of

adoption of spectrum caps. there was discussion in the earlier panel about spectrum screens. commissioner pai has said the rule should be simple, transparent and market-driven. and it looks like this is not going to be part of the may agenda meeting. so if you all could impose the fcc and suggest what should be in that order in the main meeting, we would all really love to do that. i know that commissioner you, you and i have talked about over the years caps and screens. so i would love to hear your thoughts. >> is interesting to doctor number of people in other countries. they're all watching these with tremendous interest because it's a big experiment we've never done before. there's a bunch of questions but as a learned when i conversation with both david and shawn when we were on the hill, a big part of it is revenue generation. there's certain things that need

to get funded. it's a two-sided auction. you're getting a property from one side and flipping it to another, and if you take too much money out in the middle there will be enough way to convince the people who have the property to sell it to the people who want the proper. there's enormous tension here based on the needs, the real needs we have in this country for tax revenue and general revenue. but if we do that wrong what's going to end up happening is it's going to go. want to start is bunch of different -- if we keep bidders ago to participate in a market that will put down pressure and even worsen the problem. we have two other auctions have caught on the h. block that are going towards fulfilling the financial obligations that are there. there's some real hopes that will only some of pressure in incented auction. the most important thing to me is it happen quickly. one of the recent we are among the world's leaders in lte is we flipped much, much faster than the other countries. effective if not used isn't a wasted as a.

ththat benefits in our consumers benefit from getting spectrum as in play as quickly as possible. more than anything else want my observations around the world is those who do it slowly end up with worse service. there's nothing magic about it. i think we are on the fast track on this but i hope we don't slow down anyway, don't take any settle steps to keep it from being deployed properly. >> it's certainly the case that is a very complicated proposition in unprecedented. a lot of people at the sec working on it, and from a lot of different angles. i will say this, as the professor just said, we had one action. we're going to have another that is going to help and meet the statutory requirements with respect to contributions. we are going to be very close or perhaps even have met them by the time the incented auction takes place. so that is a very important consideration. we need to keep sight of.

and that is we really care a lot about the competitive environment which the environment occurs. we don't want to do something in this auction for any auction that threatens fat. there's one other kind of nearly extreme this point but i think it's worth making. the professor makes it a good point about not delaying things, but it is certainly true, if you look at the international environment, an awful of countries benefit from the examples that we set, the efforts that we have met. they can go to school on those things, and very, very often it enables them, even if their second or third in line, too overly certain things and actually do better. so the lessons that are available will be very importa important. >> i'm kind of in between psychic you can come after these guys and you guys go back to this conversation. i'm sort of going to say what i

always say. so yes, we're moving very quickly and i think the incented auctions are moving as plan. if you're in revenue generated by the same token i come at this growing spectrum concept. we at trenton haven't dealt with that deep into spectrum caps do we leave that to these guys to actually look at those issues. but what we've been most concerned about is because it's moving so fast what the ecosystem will look like for my noted ownership. if you look at the designation ownership rules that were mandated under section 309 to what we found since 2006 even with the successful h. block and the other successful auctions, the minority entrepreneur's have gotten less than .005% of the revenue. as we spoken so far, the competition angle is very inclusive of everybody, all the stakeholders. when you have that type of competition it also lends itself to the economic development the we want is in the country. i have to put this out there,

i'm sure you'll go back to that comment, paying attention to minority spectrum ownership at this time is even more critical. we've gone before the sec and talked about looking at reforming the designated entity program. for those of you who don't know, that includes collectively small businesses, minority and women-owned businesses. there are rules right now in place that stifle their participation based on some of the pitfalls in 2006 rules that was pretty much compromised by the sec. we would like to see the process reinstated, particularly getting rid of that awful material relation will allowing secondary market transactions to actually occur, and increasing the bidding credits. i would love to say that back before when we saw more participation, the credits were high. it's about the revelatory certainty for minorities to participate. i put that out there as a conversation. when we talk about incentive auction.

we have told the sec this is not about compromise or create a consumer welfare program for people of color, or rural telcos, small businesses to sort of stifle the development of revenue that we're all seeking in this country. this is about having a conversation to promote meaningful dvd participation and ensuring when the next auction comes a. h. block, there were no that participate in h. block. with a single bidder. very happy to see that fund first met th by the same token e didn't see a qualified minority, and until minority entity that actually compete in that auction. so as a look at the aws, as a look at the incentive auction this is important that we figure out ways to bring people into the process so when we talk about competition we are talking about in a 4 cents a not just as one area. that's my plug but i know these guys -- i had to put that in there. >> that's why you're here. we are glad you are.

>> spectrum caps and screens i think chairman upton and walton have both spoken on this at length in our hearings and other venues. and so it should come as no surprise that we are opposed to the idea of spectrum caps and that includes screen as a de facto cap. one of the greatest pro-innovation, pro-job moves the sec made was recognizing and having the humans recognize spectrum caps were not working and remove the spectrum caps in the early 2000s. they start to invest, wireless industry turkey take off and is one of the reasons why with such a vibrant marketplace now. i hope the current fcc will learn the mistakes of the fcc's past as a look at this issue not put any caps and a de facto ones in place. >> general you adopt an option -- auction mechanism. anytime you attach conditions to that, that limits the ability of players to participate him on yr distorting the ability of price to do that.

we saw with the c. block auction a number of studies have shown the open access condition that was placed on the rise and spectrum meant that the auction price wanted being much less than it otherwise is gone for investment begin directly out of the treasury. otherwise would've gone to we spend to have it open access condition. if you're going to put additions you need to make sure it's for good reason to i'm not convinced i bet poorly or have not been using my current spectrum. it is a good enough reason. we heard a lot of rhetoric during the at&t-t-mobile merger discussion about the importance of robust competition among four or five national wireless providers but that's true with regard to your concerns is also true with regard to competition for spectrum. the more you limit the competition, the less optimal the result will be. >> so for spectrum caps and screens, my answer is simple,

antitrust, antitrust, antitrust. screens are a traditional approach in antitrust analysis to creating safe harbors. we can say we're not concerned about activity below this threshold. so the screen is being used to create a safe harbor, that's a sound approach. beyond the screen we don't want to see if you're above the screen is going to be a problem. we want to see ordinary antitrust, ordinary competition ordinary economic pencils apply. we then we'll look at how much spectrum individual actors control and ask does this raise competition concerns. on the incentive auction, i'm somewhat surprised a that of optimism and hearing about incentive auction. the auctions historic rotunda been proceeding at a great speed, a great clip --

[inaudible] >> the greatest goal i think we should have for spectrum ownership is a liquid market. a vibrant secondary market where we don't have the one off, one shot opportunity to sell you spectrum. that gives everyone an opportunity to pollute or come together and say this is her one chance. we don't want to participate or we are only going to participate with something from agreement if we get this amount of money out of the process. we should be thinking about how to transition to a more liquid secondary market for spectrum. i'm going to also add another component to the spectrum discussion that they don't think is on many folks in our areas radar screen yet, which is millimeter wave spectrum. this is even higher frequency spectrum which is being used to also to from the great stuff at that engine and research and develop space right now. it may not be veryw