were trying to do, back to any of the things. you know, rather than what is one insight or the other, you have to move back to those principles and say are we moving, you know, are we talking about the right principles. and that's where i think the debate has gone, but i think that concept of private capital coming back in is critical and so i think, you know, looking for what are the solutions that look like that. >> if, phil, i mean, you were involved initially i know in some of the discussions around the corker-warner bill. if that idea has kind of reached its maximum level of support, you know, is it worthwhile to say, all right, let's look at how we can do this utilizing the gses, or are there reasons why you don't want to go down that roadsome. >> no, i think that is the natural next step. i'd say the next step is to let the firms build capital. jim and i have an op-ed in "the washington post" from a year and a half ago. i was making sure he didn't

leave. [laughter] >> [inaudible] >> exactly. we had an op-ed from december 2012 that said, look, the firms should build dabbal, and they're not able -- capital, and they're not able to do it now. all the other questions about the third amendment aside, the firms should be building capital. jim and i said the profit sweep doesn't make sense. look at -- how does the system evolve, right? so more, so hopefully more capital both internally and through the credit link notes, you know, going from 30 to 90 is triple, but 90 is very close to zero on a $5 trillion balance sheet. so that seemed like a modest step when the risk transfers are so successful so far. but more private capital. the two firms will continue to be regulated, and the retaped portfolios -- retained portfolios, the internal hedge funds will wind down. that's not as far aform as.john soften-crapo, but it's much better than the system before the financial crisis, that's for sure.

>> so do we need congress to do legislation, or could fhfa, how much could they advance unilaterally? administerrively any -- administer straitively? >> reporter: down shifting to first gear or maybe second gear or something. but the rest they could do. the worry i have still is the competition, right? that was the too big to to fail in competition, right? there's going to be two firms, they have market power. of course, in the old system they used their market power in the same way amazon is using its market power against publishers as we all read a couple days ago. that's the concern you know, can a regulator get at that? i don't know. >> but there's also, i mean, there have been great benefits to what the gses have done, market power and concentration of involvement and concentration of risk, honestly, to the taxpayer and to the government aside. the gses have created an

amazingly efficient and standardized market. you contrast the gse world of the two securities and du and lp and how a loan is done in the old dales versus the wild, wild west of capital labor markets -- >> no, no, fisher, we want to keep the good and address the bad. the good is exactly that, the bad is the 50 basis points skimmed off from five trillion for shareholders and management. that's the part we want to address. that's what i worry about if we go to the old system, we'll go back to the slush fund days and all that. look, we've got a good regulator, but that's the concern. >> so i want to ask the panel then, and anybody can jump in here. how do you deal with the ownership structure of whatever this, you know, new or reformed model looks like? and i want to read a quote from, this is from dan mudd, the former ceo of fannie mae before it was taken through conservatorship, and when he testified before the financial

crisis inquiry commission, he said that by 2006 fannie mae was engaged in a continual struggle to balance all the requirements, the public mission, and all the duties owed to shareholders. fannie was required to conserve capital, provide liquidity, meet housing goals for the underserved, perhaps we should have gone to the government and gotten a clear answer to the question do you want more capital, more lending? he said there are summits where i respect friday different with former secretary paulson, but i do agree with his belief that the cause of a the troubles lies with the business model, a structure asked to perform multiple tasks cannot withstand a national scale decline even without the accompanying global turmoil. so he went on to talk about the horrible choice that is the company faced in 2006. how do you, you know, to the extent -- hopefully, we're never in a situation, of course, like 2006 again. but if we are in that environment where there's been a lot of pro-cyclical lending and

you have an entity that's supposed to be countercyclical, is there a way to address the ownership structure to remove some of those pressures from, you know, somebody in that position? >> i'll jump in and say, yes, in a couple regards. first of all, it's sort of back to the future. i mean, freddie started as a mutual. you could send the structure back to that. that's what's used by the federal home loan banks where they're mutually owned by all the participating lenders. so you remove that conflict of maximizing shareholder return. and, quite frankly, i think it's important to realize how much reform has already been implemented. not just at the gses with more transparency, with a fully empowered regulator, but what really was the core of the problem, and that was the unsustainable mortgages that brought down the housing finance system. and they're the reforms of full

documentation, of determining ability to repay, of discouraging the riskiest features on loans. if you take just qm loans, for example, just the product features you would have reduced the default rate through the crisis. with the 2000, 2008 book of business to a little over 5% which the system would have readily handled. that's not even putting in the debt income limit. and so by making loans more predictable and safer, it is fundamentally a better system. we need -- there's still risks there that need to be addressed, but we securitize subprime car loans, we securitize, you know, credit cards. we had more transparency. the problem was we had lack of transparency in that market where investors did not what they were buying and did not get what they thought they were buying, and you have volatility that you could not match.

our markets are actually quite good at pricing and managing risk when it's transparent and when the volatility is predictable. >> i would actually tweak that comment a little bit. it's not necessarily they didn't know, although there was a limited amount of availability of information and transparency and transformative information, symmetric information is important and good, but i think there was also this grand and expectation, there was one clear expectation that house prices would always go up. so i didn't really care -- >> right. >> -- what i bought, right? and that was, ultimately, obviously, a big mistake. but it's the one thing that really explains all this behavior. give someone with poor credit a high ltv, low no-dot loan with all the funky features, we'll call them financial innovation to be nice here, right? and say that's okay because the value of the asset backing it today will be worth more tomorrow than it was today, and so i'm good. and we sort of learned -- we never expected. there's a famous lehman brothers

prospectus on a bond, and it goes through the details of their house price simulation, and it says there's this one possible path of houses going down 3-4% negative, and they showed if that happened, basically, most of the tranches of that bond would get wiped out because the it was a terrible pool of subprime loans. then they assigned a probability of less than 1% likely hood to that happening, so we're all good, right? you get back to the black swan conversation. we had what we now know -- once you have a black swan it sort of becomes white because it's known. so what's the next black swan? is the it a 60% -- >> interest rate shock? >> something like that. so, you know, we have to, you know, we sort of look at these things and say, you know, we sort of -- we should own collectively, you know, the mortgage industry, the consumer, everybody. we should own this problem ourselves because we all had a role to play. we made bad decisions around our expectations.

we won't make that mistake again. but as all of us sitting in this room definitely know, i'm sure we'll make another mistake again. >> and on that sober note -- [laughter] i want to see if the audience has any questions. if you do, please state your name and ask a question. yes, in the back. >> hi. phil -- [inaudible] from brookings. i'm just wondering, the private shareholders have gone entirely unmentioned up to this point, and obviously they're bringing cases in various courts trying to assert that the third amendments are illegal, and we don't know how congressional action might affect them. but i just wanted to throw that out there, see if any of the panelists want to comment on what's the likely state of those lawsuits of the private shareholders?

>> any lawyers up here? phil? >> i mean, look, i don't know. that's up to the courts. i mean, the government has effectively told the firms shareholders, you still own your car, but you never get to drive it again. we, the government, get to drive it forever in the future. i don't want see how that's legal -- i don't see how that's legal in at least english, instead of russian. [laughter] we saw in the auto bankruptcies it's tough for a federal judge to go against the government in this situation, so we'll have to see how that goes. you know, again, i think it's just bad policy. forget the legal part, it was just bad policy. the third amendment was not necessary, right? the ostensible reason to avoid the 100 billion caps didn't make sense at the time, it doesn't make sense today. it'd be better as a policy matter percent firms to -- for the firms to build capital. >> given that the taxpayers had all of the downside, i mean, people will cite that 188 billion number as if that was the maximum the u.s. had agreed

to inject when the truth was the u.s. was willing to put in 400, $500 billion. i mean, $180 billion isn't really where the clock stops. >> right. the -- yes. i have a paper that was written for a conference here at brookings in april 2009 that goes through in more detail. so you google the financial crisis, you'll get many things, but that's one of them. [laughter] so my fans are there too. [laughter] but, right. i mean, the structure of the pstas was put in place to avoid having the assets and the liabilities coming under the government balance sheet at that time, and i think no one envisioned that the administration would take so long to move forward on housing finance reform. you know, the support for the government, as nick said, was unlimited. there's a payment in kind provision as usual in the stock agreements, and so the government could have put in an unlimited amount at a 12% rate rather than a 10% rate. you know, again, for many

reasons the third amendment is baffling. but, again, i start with this core policy. >> any other questions from the audience? yes, rob. >> thank you. rob zimmer, community mortgage members of america. the co-op idea is interesting to me -- [inaudible] don't deposit insurance, didn't get t.a.r.p. money, they had their warehouse lines, so help me think this through. how would that work? could the mortgage bankers, would they be required to inject equity into the new entity? they're not members of the -- [inaudible] probably for the same reason. how can we make sure that the future system still serves mortgage bankers appropriately? [inaudible] >> i'll ask you, mike. >> sure. i think those bankers are a critical part of the system, so they need to be served in any successful reform here. and i think there are a couple ways. one, of course, is the cash

window. one of the things that the current gses provide that it's very popular with small lenders in general. there are also correspondent arrangements that mortgage bankers could do that would feed into the mutual structure. but both of those, i think, are ways to address it. but in any event, i would agree with you totally. it's critical that they be addressed. and one concern we have about some of the possible reforms is the mortgage market has concentrated more postcrisis, and we think that is an unfortunate trend and that we want more competition among mortgage originators. you know, i think it's good to step back everyone in the room here is deep in all the intricacies, but all this is pretty much a black box for the average home buyer, home seller. they want to be able to get a mortgage at a good rate. they want credit to be there through the cycle.

and i think we really need to think about how that interface works. we need to make sure the back room, if you will of it, is stable, sound and responsible. but ultimately, it needs to serve the can customers on the street. >> and with that utility or, i guess, the kind of co-op model, would you envision there being just one? would you have multiple, you know, secondary market guarantors, or do you need, do you really only need just one? >> there'd be various options there. there are different functions of the90oug+uz aggregating of the , bringing them together for the pulling and then theç guarante. i think there is a consensus on a lot of things about gse reform, that we want more private capital. so i think any system will have more private capital in front of it. there'll be deeper insurance, more capital required by the garon guarantor -- guarantors. people differ about exactly where to set that, but at far, far higher levels. people are talking about near

multiples of ten times as much capital as what was there before. and you could do that various ways. you could combine the ago regater and the guarantor in the co-op model, or you could have multiple guarantors. i think all these systems envision a continue continuation of the mieft mortgage insurance companies with, as director watt referred to, greater scrutiny as to their capitalization and operate to make sure that they are there, in fact, in a crisis. >> phil? >> right. i would just, you know, say -- i mean, i'm going to disagree here, but, you know, it's -- different people disagree on this stuff. i mean, i look at the model and say it has a number of problems. i mean, it doesn't get at the too big to fail problem. if anything, it enshrines it. so i think a synonym for co-op is wells fargo/jpmorgan joint venture, right?

i think those are synonymous terms. and i just don't -- you know, i don't think it's what we need for the system. i would say failures could be catastrophic, right? if there's another failure of the system, the officers should be fired, the shareholders should go to zero or nearly to zero and so on. and you can't have that, right? it has to stay in there for a co-op. so my criticism is from the left which i know is ironic m if someone says we should have a co-op, i would say, no, no, don't stop there. run it by the government, call it what it is and don't have a co-op. anyway, that's my disagreement. >> we'll have time for one more question. yes, straight in the back here. >> [inaudible] >> there's a mic. >> yes, thank you. chk gabriel, capital alpha. just a question maybe for mike with regard to the fanny/freddie -- fannie and freddie language that was released yesterday. a lot of us didn't have a chance to peruse that very closely.

there had been a lot of ideas out there, for instance, in moving to a narrower sunset window on loans going forward. this didn't seem to go there. i was just wondering, you know, how the notion of allowing up to two delinquent payments in a 36-month period and the other change that is the director mentioned, you know, how far that goes towards satisfying the issue or, mike, do you think they might actually consider additional changes going forward? >> right. well, and that's what i was getting at with my first comment which is these are a very important first step, very positive. and if you, when you do study them, there's also in addition to the payment issue, there's some, you know, requirements around if a qc review is done, then there's not a subsequent repurchase demand. also, the rescission of mortgage insurance doesn't result in an automatic repurchase, and those are significant steps. but what i believe is equally

important, perhaps even more important than those positive steps is the fact that the director said they are committed to working on these things. and, you know, we haven't yet seen the strategic plan, but i have the impression that some of those items he mentioned from the podium today will be in the strategic plan to keep working on those items. and so i think like many things it's an iterative process, but the director making it such a point in his speech and talking about the commitment to keep working on it, i think, is as important as what words are on the page in the announcements yesterday. >> and if i could add, i think that the two key components that are ultimately going to be materiality, the requirement that you show that some defect had some causation with the mortgage actually defaulting which today there is astonishingly no requirement of that. and then to add to that you have the gses currently,

unilaterally essentially get to decide do you have to buy back. i mean, people with fight it concern can fight it, but they're the ultimate decide canners on that. and some dispute resolution system for that. but right now it's got a long ways to go to be in a good place, i would certainly agree with that part of your comment. >> there's also not, this is not something just that the secondary market, the gses or even the private level market whatever there is in terms of repurchase has to do with is that the mortgage industry itself, i think, bears some responsibility in doing a better job of manufacturing the loans in the first place, right? you know the lemon laws more cars. well, if you think in the mortgage industry in many instances we roll lots of cars missing lug nuts and wheels and sometimes the whole steering wheel, you know? and that's not acceptable from the car-making perspective, and it shouldn't be acceptable from the mortgage i have's perspective, and we're going and doing a lot, even the gses are

doing a lot to try and insure that the information that is important and material to a credit risk on a loan is put in the loan files and originated through the process x. that's sort of, that will in many ways help with the repurchase issue along the way with the concept of materiality. we know the information up front. if it's bad going in, the loan won't get originated. that information will get fixed and provided appropriately, talking about credit scores, dtis, the important attributes such that the risk of repurchase will be much lower because of the improvement in the manufacturing process itself. >> great. i think we're going to leave it at that. thank you all very much for attending, and we'll see you the next one. [applause] [inaudible conversations] >> a couple of live events to

tell you about this morning. veterans affairs secretary eric shinseki will testify on veterans health care and reports of lengthy delays in patient care at a hospital in arizona. the situation has prompted a congressional subpoena, and some veterans groups are calling for secretary shinseki to resign. that's on c-span at 10 a.m. eastern. also at 10 on c-span3, the senate foreign relations subcommittee on africa will are view -- will review u.s. policy regarding the nigerian government's response to the kidnapping of more than 200 schoolgirls. >> now, a look at how the cable tv industry is being affected by technology. from the annual show hosted by the national cable and telecommunications association, this is 20 minutes. >> great to be with the three of you. and i wanted to kind of take up off of some of the conversation

that you just heard with the other panel. and i thought, you know, i thought so mckinney, to you, one of the interesting things we heard from the programmers is how the technology is not somehow for the cable companies technology hasn't really caught up with what consumers want, right? and it hasn't made it smooth enough, this whole idea of tv everywhere. so what's coming out of cable labs? what's coming out of your company that's going to allow the consumer experience to be better and better? >> well, cable labs' perspective one area that we're working closely with all the members is really the improvement of high-speed data. you know, we've got docsys3.1 which allows them to consume more of that content, be able to carry it around. the second area is the improvement of wireless, wi-fi in the home, wi-fi in the community, those kinds of things. the comments about the ease of

authentication, there's a lot of conversation going on around how do we do a better job of identity management and authentication. so it just automatically happens. the user doesn't have to think about or as was mentioned before log-in, you know, credentials are in order in a lot of different areas, and everything in the industry is rallying around how do we make that insanely simple. >> i'm just curious on authentication because that seems to become a topic we became focused on. why, i guess why did the industry figure that out that that was going to be a problem for customers before rolling that out? >> well, you know, i think part of it is the complexity of the variety of devices that people are willing to consume on, the radical changes that are happening in the technology state. when you look at things coming out of silicon valley, and there's something new every other day that people get excited about. the other is making sure you

have the rights and you're approved to distribute that content. so part of it is a little bit of catching up on the technology side, but also getting the, negotiating the right so that you can deliver those content on those devices. just because you have the rights on tv does not mean as a cable operator you have the right to deliver that content everywhere. so it's one of the reasons why if you pick up your device, you may not have your entire channel lineup from your cable operator today. it's not because of the cable operator, it's part of the industry of catching up from the standpoint of getting the distribution rights to allow you to do it across all those device platforms. >> michael, when you look at your company five years from now, do you believe -- because i've heard this from many ceos -- that technology and innovation is going to completely transform your company and it'll look completely different in five, ten years? >> it already has. i would have answered the question about netflix differently, so if you want to ask me -- [laughter] but if you look at online video

and consumption of online video, it has impacted every aspect of our his. we're investing far more in our broadband infrastructure. it has changed how we interact with content providers, the rights that we secure online, out of home, off footprint, in multiple windows. it has impacted our relationship with regulators. the entire net neutrality debate is about video. don't be confused for a second, it's all about video. it's half the consumption on the network today. in europe it's less, but it's growing. and, you know, whether it's a fast lane or volume-based billing, it's all about video, and so it's changed very much our relationship with regulators. it's impacted the competitive environment that we operate in. so the innovations you're describing, netflix as an example, has already impacted us. and i'd say one more thing, it did expose a failure of ours. it exposed that we have a massive functionality gap. we have great content. we have great networks. we have massive, you know, speeds and terrific

relationships. but we had a function -- and great programming delivery. but we had a functionality gap. simple as that. it was easier, cooler, or simpler to access content through a netflix environment, easier to navigate, search, be recommended to. and we're bridging that functionality gap. we've launched horizon in europe, comcast's x1 and x2, and i see it in my household. my kids spend far more time on x2 than other environments because it's giving people what they want; a better user experience, a slicker environment. if you bridge that functionality gap, which we didn't do, i think -- >> so what happened? this is open to all three of you, but what happened there? what happened with to the not seeing that functionality gap as you call it? >> i'll tell you something, did we invent the dvr? no. but every cable operator provides a dvr today. you don't have to be first necessarily to find that your own weaknesses and react to them.

so i'm not concerned in the long run, and i don't think most operators are. but we have to work together because it requires scale to deliver a new experience. so we're cooperating with comcast and time warner on the rdk platform which is a software environment that works for, you know, advanced settops and cloud-based interface, and so if we work together as an industry, we can get -- achieve anything, quite frankly. but i don't stress the past, just worry about the future. >> phil, tell me a little bit about what's going on with your investments in mobile in the canadian market. >> well, we are a mobile company, so, i mean, we're a cable company, but we're a mobile company too. so we don't, we don't experience some of the same problems that are existing down here. we don't -- we offer wi-fi, but we don't offer it as a competitor to ourselves. we just offer it.

so there's a big, big difference in how we approach mobility. but it all, it all amounts to the same thing in the end. small screens, people want small screens, want to watch it anywhere, everywhere, anytime, and they want to get to it as easily as they possibly can. that's all it is. it's very simple. >> what is the future of screens? in five years what is the screen going to look like for the consumer? what is it? >> well, there's the everybody gets all excited about 4k, you know, ultrahigh def resolution, but, you know, today when you look at what people are doing on the small devices they carry in their pockets, i still think we're going to see a wide tersety of devices -- diversity of devices, and people are going to pick the appropriate content. long form content for the bigger

screens. screen sizes will continue to grow in 4k. you know, you're going to look at screen sizes, they're going to start at 60, 65 inches and go bigger in 4k. you need that size to really detect -- >> i'd say a couple things. big screens are alive and well. 150 hours in the u.s., it's been flat forever. >> aren't you surprised that people can watch movies on a small screen? >> well, let me finish. the point is, it's alive and well today. 85% of viewing is still on the big screen. it's more like 95/5 in?yrjo),a. but that 15% is coming from other activities, because the amount of tv time is relatively flat. as a cable industry, it's good news, i think, because number one, when you walk into the household, if you have children and you don't immediately instruct them to get on the wi-fi network, your at&t bill, your verizon bill is through the roof. so in that regard, 70% of tablet, you know, activity is in the household. so we're that connective, we're that connective tissue, if you

will, or to the internet for any device. secondly, we're in the mobile business in europe. we have four million mobile subs, it's 1.2 billion in revenue, growing very fast, so for us, we will be in mobility. and lastly, our services, as we started the conversation, are available on all devices. so tv everywhere, call it what you want. in europe, if you're a customer of ours with a verizon platform, you can watch your television on any device, so we're somewhat indifferent to that. i'm not concerned about it. ..

come is a third of our growth in the next five years. we are very much in the mobile business as you are. we are doing it through reseller arrangements. we are not building networks. mobile is a big part of a business. the macro environment, 80% of our revenue comes from five countries. it's highly fragmented. we were talking about that. the european telecom environment is fragmented. issued consolidation. we've done 50 billion in acquisitions in the last five years to consolidate the european market much as the u.s. is consolidated and that's inevitable. consolidation is an important thing for us. >> consumers in europe or just overseas, are they consuming their content, looking at online platforms, consuming them in a different way than in the u.s.? >> on average, our average

consumer is downloading 1.7 gigabytes a day which is a fold in the last, tenfold in the last eight years, growing 30 or 40% a year same as u.s. are broadband speeds are faster. average download, average consumer is getting 50 megs. vast majority of our new ads are 100. we had to push the speed accelerator because it's a slight more competitive market in broadband which is why 3.1 is usually important to us. >> tell us about docsis 3.1. how transracial isn't going to be? >> from the standpoint of what consumers today, the european members are moving very aggressively into the higher speeds, 3.1 really allows the cable operators on a worldwide basis because we've now been able to negotiate a consistent standard globally with all of our members.

be able to give you multi-gigabit speed, maximum with the design criteria is for 3.1. so now if it's over the existing plan, so from the standpoint there's no digging new digits, nothing have to do to the home. that's very important. so, therefore, you can take what everybody has been investing in this industry over the decade to be able to take that into a multi-speak. rather than we get into arguments over fiber and stuff, look, if you look at a global fiber miles, we are the largest employer of fiber today. from the standpoint how are you going to serve all of the homes that we serve today? you have to have a technology that works on our existing plan. three doubt one will have first prototype hardware this year, certification begins in 15. you'll see early deployment the second half of 15 and broad

deployment on a global basis in 16. >> how widely adapted do you think it will become? >> if you talk to any of the ceos of any of the cable operators globally, we now cover all of north america, europe, asia, within china, japan, taiwan. >> as with 3.1, we rolled it out immediately. because we have fiber competition and media cell competition. speed is a very important factor. it's a great innovation. it only happens because we work together as an industry and the needs to be more of that. scale is everything in this business. everybody in the audience knows that. without a scale we don't thrive. we are competing with hyper giants who can launch businesses overnight. they don't have to build networks or do anything. and as an industry strength is really -- >> how close are you watching charlie, for instance?

and what he's going -- >> he is building my office. >> easy going to be rolling out internet tv, you know, his version of internet tv this summer? how closely are you watching and what do you think? >> i think he's a very, very smart successful entrepreneur. i think you'd be well advised to watch everything and anything he does. but he does also have that old pioneering spirit were not everything he does is going to work. he's okay with it. you watch what he does but you also realize that a certain amount of things he does is not going to work in the school. you measure success to fully than the rest of us in some cases. in terms of what he is launching, he is working for quite some time so we should all pay some attention. >> the key there is you have to watch everything. if you're going to play in the innovation game, you can't assume the only source of ideas is yourself. you have to be able to be willing and open to really reach

out and see what other people are doing and leverage the vast. >> you've been quiet for a little while. tell me your thoughts on that. >> i'm listening and i'm agreeing. particularly on the netflix question earlier on. i think this is, netflix continues to play an important role in our future. the deal with comcast, for example, that's really a breakthrough in terms of how the internet is going to be treated. >> rerolled the netflix app out on our kelo flat form in the uk which required media and it's doing fine. so in that instance we partner with netflix. you are -- you can search for content. it will search everything including netflix. if you want to watch netflix find that you don't have to leave our environment necessary. you can stay within the cable

environment. >> wasn't popular or has to become popular? >> it's working fine. in other markets we might launch our own services or we will require or enhance our programming. we will do it differently in each market. i think it's important for all of us to be willing to embrace that form of experience and to steal the best of it. do it just as well. that's really the key. >> we spoke a couple of things that consumers want. authentication is one of them come but also higher, faster speeds and want to have a seamless interface. from your experience being in touch with consumers and what the market wants, ultimately what is the big holy grail? what's the holy grail that's going to get, that's going to really make a different? >> i can tell you what it is and. we still have not come up with

the proper formula for customer care, consumer care. i mean, it is plaguing us. because we are spending more money. we are developing more systems. but our customer expectations are rising, too. we might have satisfied them five years ago, but now they are expecting more and we are still not there in terms of what they expect us to be delivering. and it's a major problem for us. >> why do you think that hasn't been addressed fast enough? >> we spend hours, i'm thousands of people spend all their full-time on this thing. it's just a tough nut to crack. >> we've done a couple of things differently as well, not differently but without success in europe on the. 90% of our advanced setups are

self install, plug-and-play. when you can plug something in and it works, avoid the phone call, that's magic. consumers appreciate that. we've also embedded net promoter scores. queried our customers, are we any good? you drive incentive plans, compensation plans along that line. people, angel employers react. >> are they hire in europe than here in the u.s.? >> i don't have the exact number but we struggle with the same issues as to telecom operators. it's a high touch business. nobody ever calls google. it's a high touch business and we have to be, as unto, says, much better than that. >> is there any technological innovation a something in the pipeline where it addresses this very issue that bill lynn is talking about? >> a couple things. we been working closely with the operators on doing critical tools. part of the problem that verizon called in the customer satisfaction issues some form of an outage.

we've done some predicted those that can predict issues in the network before the consumer ever sees the problem. those kinds of things. the key there is if you can solve the problem so they never -- for them its expectation. nothing is ever 100%. the question is can we really address the issue before the consumer ever sees it? then you head them off and, therefore, you do continue to raise that bar. this isn't something where the industry is sticking their heads in the sand. every major ms-dos thousands of people are constantly working, how do i do this, how to take this problem, how do i make this faster, how i reduced this customer frustration issue? as mike said this is a high-tech industry. >> this has been counted out. you are very young, you probably don't remember. a dozen times and i would not bet against it. it's reinvented itself many times in the last 50 years, and

i think we have got tremendous opportunity going forward. >> on that note i know i've got to wrap up this panel. thank you so much for all of you, michael, phil lind and bill mckinney, thank you so much. and thank you again for allowing me to host this panel. had a great show. [applause] >> ladies and gentlemen, that concludes today's from the annual cable show, over the next 20 minutes another view about technology is affecting the way consumers use tv and other vid video. >> well, good morning. >> good morning. >> let's talk about cable. to start it off let's talk about the merger of media of it, lots of speculation about what the potential comcast time warner high up could mean for cox cable. should just come out more strongly against this thing looks maybe could've gone a half

a million subscribers out of the? >> i'm a believer that the more the industry works in a cooperative fashion, the more we work on creating standardized platforms, the more we looked for universal solutions, all boats rise and we're in a better place. and the comcast time warner comcast charter agreement i think actually helps us move along that continuum, with industry working together to its sympathize some things. the more we create standardized industry platforms, the better off our customers will be and the better business opportunities i have. >> do the others get bigger? to drive down the cost of content for everybody or can they afford to pay more and then driving up the cost of content the? >> i don't think it's a content discussion but it's a platform discussion. we will talk let it about what's going on, turns going on in our state and you will see the need to create standardized industry platforms. when we do that innovation shows

up right on top of it. we have example after example. if we can do that in a few more parts of our business, very fast growing, continue to grow for a long time. >> let's talk about that. cisco has been vocal. lots of different types of objects that we are not used to seeing connected to the internet. lightbulbs, thermostats consider them even outside the home. when are we going to see that vision really start took silver given more? we are seeing home automation stuff. businesses are getting a bit involved but what's it going to take to really make this largest? >> we are starting to see it now. we done a lot of work in understanding where we're going to see the market move more quickly. the 99% of the things we haven't yet connected like televisions and phones and mobile phones get connected. there's a huge opportunity here. so the one that we think is

going to move quite quickly is cities. we're seeing barcelona, we've seen cities like homburg. we have seen citizens in united states start to consider what they provide is a platform infrastructure is going to differentiate them from -- attracting companies to head off and located the most important creating innovation for small companies to start up. >> surveillance cameras. >> and that. here's the point it is a look at the experience we've seen in barcelona most of what's happened so far, someone has kind of going after one service and said let's create a wireless mesh for this application. doesn't work actually. the financials don't work. if you take the platform for a smart city, broadband, it's wireless and it's a new methodology delivering innovation and application which we would call cloud. you can build those out and get them out of citizens or out the people attending ugliness. is what we are seeing.

we are seeing the connectedness of things that haven't been connected on a broadband platform with a lot of wi-fi is creating real benefits, job creation in barcelona. they have created hundreds of thousands of new opportunities, a thousand and a half new jobs. they saved money. in a european city if you're looking for a parking spot, you drive for ever. smart meters. just imagine that what, what fedex would look like if they drove to every business everyday and not on the door and said, do you have a package? imagine what could happen international in large cities when, in fact, you only went when the bin was full and you completed transform have a process existed so that they. in the united states what we see is a huge opportunity for cable operators to focus on

have more nationwide hotspots today than anybody else, 250,000 of them. our customers today can roam from a cox market the comcast market for time warner market today and have metro wi-fi service is available. those are the ones i look out and i conceal exciting this is a. not only as you roam but in your neighborhood come in your home,

in your business, giving you the ability with the devices you have in your life immediately be authenticated and connected. >> it's going to take a lot more than the place we are right now for that experience to compete with the wide area of the cellular networks, moving to ltd and beyond. are we pushing that for? >> i would challenge of the next time you're with verizon or at&t wireless folks, ask them what percent of the data streamed on their devices is going over their network versus their wi-fi connection. i'll let them answer that question. it's ey eye-opening. >> when i travel and i'm on my phone and am looking for reliability, like an on going to be able to get some e-mail. i know i will be able to trust the network that i'm on. i tend to go to cellular, not to whatever random wi-fi hotspot i can do. if i making calls by making him over cellular. i'm not making them over wi-fi.

at what point are the cable there's going to be able to really compete full-spectrum with what cellular offers? >> never full spectrum because there's parts of the business model that would not be attractive to us and that is the role the wireless carriers have a very advantageous position. but i am telling you for the majority of the usage that you do on a daily basis, you would be surprised at the availability of wi-fi that's probably very close to you or your actual standing in it and you don't even know it. 250,000 only will continue to. >> i think the point is we are thinking of wi-fi today as a beta build in a shop or a store, restaurant or in our home. as we start to see the platform get deployed to old tops and every other part of that network, it becomes very pervasive. in cities what we already see every single day in our lives

when you get into a high density then you like staples center in los angeles, it's wi-fi. if you're going to be there with 18,000 people attending a lakers game, or an l.a. game now that mike sharks have lost, you are given going to see why these five as a platform that enables the capability. the video consumption that is happening there is going to require that. >> there's some real technology challenges to making that a good experience. i want to be able to connect my phone to that network and feel that it's secure, not an essentially have to type in a password every time i look at my phone and see i'm on a safe network i know that what i'm doing on this isn't being monitored by that guy in the t-shirt. >> i want you to be able to access it once and exploit it several times in your life. i don't want you to think about that. the kind of things that rob and cisco are working on are things that are seamless our customers lives, very simple but in a way elegant. the things we're talking about,

with companies like cisco is how do we take a world that's very single threaded today, wi-fi devices in your home, for example, are really engineered to work by themselves independently. and think about the very differently, a platform in that house use the cloud to do the power fundamental devices in home and get their platforms standardized the people can start looking into those platforms. i was laughing last night thinking about today's panel, and i gave my brother-in-law i just as a joke a wi-fi connected alarm clock. it was called chumby. they went out of business. the reason why they went out of business was fashioned all the world were as single threaded devised. when my alarm went off it also started my water heater or set the temperature in a certain room or in the wintertime turned

onto heating coils in the floor, or got my coffee maker going. it's scary what that could have become. but the problem is we were very single-minded and we have to think about a much more complicated rule. >> let's talk about over the top. how do you look at amazon fire tv, apple tv, others that are moving in under the tv set. another option for people to access content? is that more opportunity, more threat? how do you decide how friendly defeat to the stream that these content about what to send through those boxes instead of -- >> it's both competition and a friend, and it is the most interesting discussion to have. i haven't looked in the last 90 days but at the end of the year 40% of our broadband customers streamed at least once netflix movie a month. netflix is important to them. we think about that, we want

that to be a good experience. clearly if my broadband connection has a lot of services, you name amazon, apple, i want that to be a positive experience spent what percentage of your customers use on didn't? >> video customers it's a very high percent, 70 or 80% use on demand. i haven't done that calculation based on broadband households. >> makes sense but in any case netflix stacks of free will even against what's happening with on-demand? >> netflix stacks up well against other over the top providers but also video service and netflix keeps me on my toes but it makes me think about a world where my customers want on demand content on any device anywhere they go. and how do i get those devices for them? we launched a product called contour in august of last year, and contour responded to fighting the customers told us. they wanted more vod content

available. they wanted more to us in the home for the dvr. they wanted more storage. they wanted access to all this content on second screens in their lives. and last but not least they wanted a really powerful recommendation engine that kind of knew them and recommended other shows to them. during the month of february, 600,000 households in cox have contour know. 140 million learning activities were gathered by the recommendation engine and almost 1 million times our customers consumed that recommendation to the average household was watching 22 channels on month, which we found odd, to 29 channels on month. customers will respond if you innovate. >> if you take a step back from the conversation about over the top, here's a we are seeing. we are seeing a whole industry moving to the construct of embracing the crowd in the cable industry as a new manufacturing platform, a new way to achieve

scale, speed and application innovation. that's what the whole show floor is about a lot of cloud apps. what does that mean? it means we are going to have to move to a new model, a new kind of thinking. that movement is underway right now. it is underway right now amongst the people that are here. the movement is a model. develop, operate in one mode. you don't have an operations team and you don't separate those. you bring those together, drop code every week or drop code every day. to a market trial, doesn't work, will back. those are different thoughts but they speed up the innovation process. >> i'm confused about what cloud means in this context. >> it means applications. applications that can be managed and delivered in a central environment that tied to the network that action leverage the network and its capabilities, that still connect to the valley of the set box on at the end of the connection. >> from the consumer's perspective, does this mean the set-top box i have an expense i

have on my tv is going to get upgraded and improved more seamlessly like and use to getting updates from my phone? >> a time, exactly. >> the customer service experience that i'm able to access to the tv instead of having to call, is that what you're talking about? >> it means the china guy doesn't change with a hardware upgrade. you got to change with a new drop of code and by the way, before the top happens somebody tested it with a few homes and they didn't know they had a test and the feedback came back positive or negative. that's what's happening all day long on your phone today. somebody is dropping a piece of code or an image as a new feature, people use it. it completely changes the innovation speed that cable is going to bring to that consumer. >> but some platforms infoworld are better at it than others. take a look at android. some phones, you can't upgrade them to the latest version. ios is a little easier budget trade-offs.

what's going to happen in cable? is it going to be comcast time warner and the others who end up becoming the android or ios that make sure that the platform gets driven forward? if cisco going to make more of a bloody? >> we are. so underline the delivered assessment, it's a manufacturing plant, a delivery vehicle. we actually announced that we're going to build a collaboration with providers of the world's largest connected cloud because you may not have a data center in texas and you may not need one. you may not have a data center in germany and the customer may insist on one. we announced a strategy called into cloud which will be a connection of those clouds because the network matters more than anything in high intensity and important workload. video is a great example of an application that the networks really matter. ask everyone here, the network really matters when you deliver that experience. we are in here. >> what about the platform

software that's on the set-top box is? do have a dog in that fight as far as how standardized that needs to be? >> the platform will change and sometimes the customer want to bring their own and other times we will deliver an experience i will be differentiated when the application is being delivered centrally, and integrating in real time as every other app we expect from the cloud does. the set-top box will have capabilities and rendering the application on the television or on my ipad or on my phone and i will be experiencing that decided which i have with my content. that's actually where this whole room is going right now. we will be part of that along with many of the players who were here. >> i will give you a transformative example of part of our business that we don't spend enough time talking about and that's business services. the clout has arrived in the business space. the set-top box with the video business, there was something

called pbx, boxes that had to sit inside the shops. this box when your phone system. it's not going. webex replaces a lot of those. we go to small businesses now. units of any technology in a shot. itself up in a cloud. your phone system, you go on a location that you type in on the web and to put your account in and you control your home phone system. now every time we go through improvement it happens virtually. you don't have anybody come up to your office and reconnect wires and put in chips and download software. it's going to arrive in the residential space just as quickly. >> we talked about this the other day that he coupled we bought for $1.2 billion, it's cloud networking. you can put a wireless controller or put a switch in your location. it's a box but the role of that and a measure of that is all in the cloud. that business is voting for us.

that with broadband offer, i think the commercial market is ripe with opportunity to deliver cloud services from the cable industry that bundles cloud applications together with broadband and voice and creates the sixth plate instead of a triple play for small business. it's happening right now. it's exploding in that market. >> five years from now who has gotten the margin out of all these changes? i mean, you know what i'm saying? there so many areas that may be the operators, may be a big equipment provided, used to have pretty much a lock on, that are now more up for grabs. >> what does it look like? ..

if i run the math for the industry, the numbers fall between 75 billion and 90 billion. we've been at it for a long time. we're getting a big chunk of that almost in our market over $1.7 billion to us this year i think the industry captures 30% over the next five years. business services in the cloud, things you hear us talking about

will be very important to us going forward. i didn't even get into new business development. >> we have to wrap up. last question i want to pose, net neutrality, fast lane, how do you convince people you can have it both ways? that you can have a fast lane and the main lane actually improves at the same time? >> we just all need to focus on innovation. consumers just want to see service innovation. they want to see things solving their problems. they want new experiences and you know, i would leave it alone, let's just focus on those that own the network actually have a chance right now as these trend emerge to make the network matter and deliver new services and service innovation i think is what our consumers are looking for. we have that whole platform in front of us now. >> consumers don't want -- they want to pay less for faster speeds, right? >> i think mistake people making we do commercial arrangements in all the industries every day somehow i'm taking something

from you if i have a special arrangement. this is not about taking anything away from everybody. the broadband customers i have today i aim taking care of them. i increased broadband speeds this year and for several years in a row. >> could you have made it faster and done it for less if you weren't so focused giving -- >> not about giving a good deal. it's a business arrangement. >> if netflix is paying for, paying for a faster lane and startup x wishes they had the master lane as well, consumer wonders because netflix -- >> i don't think that is the world i live in. i don't think netflix getting a faster lane that i'm hurting anybody. our customers will have access to all of the product out there on the internet. that is our promise. that is what we're doing. we're not blocking anything. it is the worst thing i could possibly ever do. >> all right. lots of people worried.

>> shouldn't be. >> but it is a fast moving area. you guys are operating in it. exciting times. >> thank you for coming today. >> thank you for the conversation. [applause] >> we're sitting here today in a city designed by a french much man. lafonte, the french engineer and architect. the great symbolic work of sculpture at the gateway to the country in new york, the statute few of liberty, gift from france by a french sculptor, bartoli. countless rivers and towns and universities all every the country with french names. we don't pronounce them the way they do but, influence of france

on this country is far greater than most americans appreciate. >> read the interview with david mccull law with other noted storytellers with 25 years of book notes and c-span conversations sunday at 8:00. published by public affairs books and now at your favorite book seller. >> president obama yesterday called on congress to restore the highway trust fund and outlined his plan to expedite infrastructure projects. he spoke in tarrytown new york, near the tappan zee bridge and was introduced by new york governor andrew cuomo. [applause] >> thank you very much. >> thank you. >> good afternoon, westchester! first to chris horton, it is an honor to be confused with mario

cuomo. let me tell you that, chris. give a big thanks to chris horton and all of his colleagues are doing a fantastic job for us. [applause] i have been out there during the winter months when they have been working on this bridge and i can tell you those are really rough and tough conditions and they're doing a great job. they're on time, they're on budget. so let's give them another round of applause. [applause] good afternoon, to all of you, welcome mr. president, to the great state of new york and let's give the president a great new york welcome. [cheers and applause] behind me is the tappan zee bridge which was built in 1952. intended to be a temporary

bridge at the time. today over 140,000 vehicles go over the tappan zee bridge which is more than twice the capacity and design of the bridge. it has been outdate, it was been unsafe, been in need of repair for many, many years. the state has said on many occasions that the bridge had to be replaced. in fact we spent $80,348 and 10 years talking about replacing the bridge but we just couldn't get it done. it was seemingly too complex it, was too big. we couldn't even get it started. to me, it was a metaphor what had happened to our state. political gridlock, government paralysis, fear and indecision had taken control. but that, my friend, is not the new york way. we are the state of the bold, we

are the state of the daring, we are the state of performance, we are the state of skyscrapers, of intricate transit systems. we are the state of public works that challenged the imagination. just 120 miles north of here, straight up the hutson river, you'll find the eerie canal. the erie canal was one of the most ambitious public works in the nation at the time. people said it couldn't be done. the governor was whit clinton who set out to build the erie canal. thomas jefferson said the governor was mad, literally, to think that he could build the canal 350 miles through the wilderness. well, we built the erie canal. we built it on time, we built it on budget and the rest is history. it opened up state new york and opened up the west to the nation. that was new york ingenuity and that was new york hard work.

in that spirit, october 2011, we moved forward with our new bridge. we said we were done talking and we were done procrastinating. we forged new partnerships. we challenged ourselves to do it faster and better than ever before. we're using a new development method that combines the design and construction faces in -- phases in one step, saving time and money, over one billion dollars saved from the original estimate by this new construction method. [applause] the federal government agreed to fast track the project and dod and dot exceeded all expectations making government perform. i was saying to secretary fox on the way up, it is incredible how quickly this federal government moved and moved this complex project and let's give secretary

fox a round of applause. [applause] the united states department of transportation provided unprecedented financial support. the largest loan ever awarded under the transportation infrastructure and innovation act, $1.6 billion. thank you very much. [applause] and we owe a special debt of gratitude to our champion in securing that loan, our congresswoman, nita lowey. let's give her a round of applause. [applause] i want to thank the new york state legislature and many of my colleagues are here today. both houses and both sides of the aisle, democrats and republicans. i want to thank them for breaking the political gridlock that long paralyzed this state.

we just passed our fourth on-time budget in a row, not done for 40 years. [applause] and we approved this project in record time. this bridge will create tens of thousands of jobs. it will speed commutation, it will increase safety, it will open the region to new growth. like never before. but, mr. president, we want you to know that to new york we are not just building a bridge from rockland to westchester. this is a bridge that symbolizes what was and what can be. this is a bridge from gridlock to bipartisanship. this is a bridge from paralysis to progress and this is a bridge from yesterday to tomorrow. [applause]

and mr. president, we owe you a debt of gratitude because without your leadership and without the assistance of the federal government, we would not be building this bridge today period. ladies and gentlemen, please join me in giving a big welcome to the president of the united states, barack obama. ♪. >> hello, new york! hey. hello, new york! [applause] it turned out to be a beautiful day. well, it is wonderful to be here with all of you. take a seat. take a seat. relax. first of all, i want to thank governor cuomo for that great introduction and the great job

he is doing. i want to thank mayor fixel for having me in taro town. where is the mayor? where did he go? there he is right there. [applause] this is a gorgeous part of the world and i am lucky to be here and i'm going to be coming back soon. in two weeks i have the honor of delivering the commencement at west point, just a little bit further up, but today i'm here along with our secretary of transportation anthony fox. [applause] to talk about one of the best ways to create new jobs and spur our economy. that is to rebuild america's infrastructure. it has been about five 1/2 years since the financial crisis rocked wall street and then ultimately spread to main street. thanks to the grit, the determination of the american people, we've been steadily fighting our way back. just four years our businesses

have now created 9.2 million new jobs. auto industry that was flat line something now booming. a manufacturing sector that had lost a third of its jobs back in the '90s is adding jobs for the first time. troops that were fighting two wars, they're either home or coming home. rather than creating jobs in other countries, more and more companies are recognizing it makes good business sense to locate right here in the united states of america with outstanding american workers. [applause] so we made progress but, here's the thing. we could be doing a lot more. we could make the decision easier for businesses to locate here in the united states, here in new york state if we do a better job rebuilding our roads,

rebuilding our bridges, upgrading our ports, unclogging commute times. the alternative is to do nothing and watch businesses go to places that have outstanding infrastructure. behind me is the old tappan zee bridge, longest bridge in new york and one of the busiest bridges around. as any commuter will tell you, it is crowded. it carries a lot more traffic than when it was built back in 1955. at times you can see the river through the cracks in the pavement. i'm not an engineer but i figure that's not good. but right now thanks to the efforts of governor cuomo, thanks to your outstanding congressional delegation led by nina low which and including eliot engel and sean patrick maloney and jerry nadler, all of

whom are here today -- stand up congressional delegation. we're proud of you. [applause] thanks to their outstanding efforts, workers are building a replacement, the first new bridge in new york in 50 years. it is called the new new york bridge which is fine as a name. but for your next bridge you should come up with something a little more fresh. [laughter]. now, here's the thing, now, this never happens. you are building this bridge ahead of schedule. three years ago after republicans in congress refused to pass multiple bills that would have put construction workers back to work i took action on my own to fast track permitting process for major projects like this one. normally it would have taken three to five years to permit

this bridge. we did it in a year-and-a-half. in a year-and-a-half. [applause] that meant question were creating thousands of jobs faster, while doing right by workers and tending to the environment. and the vice president is in cleveland today at another project we fast-tracked, the rapid transit station, that will make life easier for a lot of residents there. so today we're releasing a new plan to apply the same strag did you to other major projects all across america. we're announcing 11 more projects to accelerate, to get moving faster, from boston south station, to pensacola bay bridge, to new light rail projects, north and south of seattle. we're cutting bureaucratic red tape that stalls good projects from breaking ground. we're launching a new national permitting center to implement

these reforms. we are aiming to put every major infrastructure project on a public dashboard so everybody can go on line, track our progress, hold us accountable, make sure things are coming in on time, on budget. make sure your taxpayer money is being used well but also make sure we're putting folks back to work rebuilding america. that's our goal. [applause] now all these steps we can do without congress and all these steps mean more good jobs because nobody was hurt worse than construction workers by the financial crisis. the housing market plummeted. and a lot of guys in hard hats and a lot of gals in hard hats, suddenly they were off the job. that's why the recovery act, back in 2009, 2010, included the most important public works jobs program since the new deal,

jump-starting more than 15,000 construction projects around the country. over the past five years american workers have repaired or replaced more than 20,000 bridges, improved more than 350,000 miles of american roads. four years ago, when we were just starting to clear away the damage from the financial crisis the unemployment rate for construction workers stood at 20%, in fact it was more than 20% but today we have cut it by more than half. but we can do better. we can build better and we have to. we have ports not ready for the next generation of cargo ships. we have more than 100,000 bridges old enough to qualify for medicare. we have leaky pipes that lose billions of gallons of drinking water every single day, even as we have a severe drought in much of the west. nearly half our people don't have access to transit at you will. i don't have to tell you what some of our airports look like.

building a world class transportation system is one of the reasons america became an economic superpower in the first place. but over the past 50 years as a share of our economy, our investment in transportation has shrunk by 50%. think about that. our investment in transportation has been cut by half. you know what other countries are doing? european countries now invest twice as much as we do. china invests four times as much as we do in transportation. one study recently found that over time we have fallen to 19th place when it comes to the quality of our infrastructure. 19th place. i don't know about you but i don't like america being 19th. i don't like america being second. i want us to be first when it comes to infrastructure around the world because businesses are going to come where there is good infrastructure to move.

businesses move people, move services. [applause] we shouldn't watch the top-rated airports and seaports and fastest rail lines or fastest internet, networks get built somewhere else. they need to be built right here in new york, right here in the united states. first class infrastructure attracts first class jobs. business owners don't want a crumbling road or a bridge because then they can't move out their stuff and their workers aren't as productive because it is harder for them to get to work. they want to set up shop where there is high-speed rail and high speed broadband, high-tech schools. self-healing power grids. new ports, tunnels. that allows them whether they make goods here in america to move those goods out and sell them all around the world. now unfortunately helping states and cities funt infrastructure is one of congress's chief responsibilities and you have

some outstanding members here. let me talk a little bit about congress right now. if they don't act by the end of the summer, federal funding for transportation projects will run out. will run out. there will be no money. the cupboard will be bare. all told nearly 700,000 jobs would be at risk over the next year. that's like the population of tampa and st. louis combined. right now there are more than 100,000 active projects, paving roads and rebuilding bridges, modernizing our transit systems, states might have to choose which ones to put the brake on. some states are thwarting to slow down work because they are worried congress won't untangle gridlock on time. that ising you should remember every time you see a story about construction project stopped, machines idled or workers laid off their jobs. that's why earlier this year in addition to fast tracking

projects, working with secretary fox i put forward a plan to rebuild our transportation infrastructure in more responsible way. it would support millions of jobs across america. it would give cities, states and private investors the certainty they need to plan ahead and invest. and it wouldn't add to our deficits because we pay for it in part by closing wasteful tax loopholes for companies shipping jobs overseas that are in the tax code right now and we could clean out and help pay to put folks back to work rebuilding america. [applause] now so far at least republicans who run this congress seem to v a different priority. not only have they prevented so far efforts to make sure funding is still in place for what we've already got but their proposal would actually cut job-creating grant programs that funded high priority projects in all 50

states. they cut them by 80%. they can't say to save money because at the same time they voted for trillions of dollars tax cuts weighted towards folks at very top. think about that for a second. instead of putting more workers back on the job, they put those workers jobs at risk. instead of breaking ground on new projects that improve quality of life for millions of people, they voted to give a massive tax cut to households making more than a million dollars a year. instead of making investments that grow our economy by growing the mid did i class, they still convinced prosperity trickles down from the very top. if you want to tell them what you think about that, don't worry, because usually they show up at ribbon cuttings for projects that they refused to fund. and here's the sad part. rebuilding america, that shouldn't be a partisan issue.

my favorite president happens to have been a republican. guy named abraham lincoln. in my home state of illinois. and it was lincoln who committed to a railroad connecting east to west, even while he was struggling mightily to hole together north and south. it was a republican, dwight eisenhower to built the interstate highway system. it was ronald reagan who said that rebuilding our infrastructure is an investment in tomorrow that we must make today. since when are the republicans in congress against ronald reagan? but that is part of the problem. we've gotten so partisan everything has become political. they're more interested in saying no because they're worry ied that maybe, you know, they be at a bill signing with me than they are actually doing the job that they know would be good for america. it is time for folks to stop

running around saying what is wrong with america. roll up your sleeves and let's get to work and help america rebuild. [applause] that's what we should be doing. we don't need a can't-do spirit. we need a can-do spirit. that's what governor cuomo has. sound like the state legislature will work with him on this. we need congress to work with us on these issues. doesn't mean they will agree with us on everything. i guaranty you they will have more than enough to disagree with me about but let's not fight on something we all know makes sense. after awe, we're the people who in the depths of the depression, lifted a great bridge in california, laid a great dam down in the southwest and lifted up rural america. we shrank a sprawling continent when we pounded in that final railroad spike, connected up

this amazing country of ours. stretch a network of highways all across america from coast to coast. we connected the world with our imaginations and the internet. a great nation does these things. a great nation doesn't say, no, we can't. it says, yes, we can. [applause] so the bottom line tarrytown, america doesn't stand still. there's work to be done. there are workers ready to do it. some of them are here and they're already on the job doing the work. we're proud of them. [applause] there are people all across this country that are ready, and eager, to move this country forward. so i'm going to keep on fighting alongside all of you to make sure that we're doing everything we can to rebuild america, not just rebuild one bridge but i want us to rebuild every bridge. i don't want us to rebuild one

school. i want us to rebuild every school that needs help. [applause] i want to us, most of all, most importantly, rebuild an economy where hard work is valued and responsibility is respected and rewarded. and where opportunity is available, not just to some, but to every single, hard-working american. that's what i'm fighting for. i know that is what you care about. thank you very much, everybody. good job workers. look forward to seeing this bridge. thank you very much. god bless you. god bless america. [applause] thank you. ♪.

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♪. >> today's senate session starts in a few moments with general speeches until 1115 when there will be votes on judicial and

executive branch nomination. following those five votes the senate will recess until 1:45 p.m. another round of votes follows when they return including one to limit debate on the substitute to a bill extending expired tax breaks. a number of amendments are already attached to the bill and they could be debated and voted on later as well. over on c-span, veterans affairs secretary eric shinseki will be testifying about veterans health care that starts at 10:00 a.m. the chaplain: let us pray. heavenly father, thank you for a land where we believe that our rights and freedoms come from you. we're grateful for the gifts of life, liberty and dreams,

and for those who make daily sacrifices to protect our liberties. empower our lawmakers to protect and guard the foundations of our freedoms so that america may bless our world. when our senators are weary, replenish their spirits, permitting their light of patriotism, vision, service and hope to continue to burn. forgive them when they fail to live up to their high heritage, as your grace transforms them into instruments of your purposes.

we pray in your miraculous name. amen. the presiding officer: please join me in reciting the pledge of allegiance to the flag. i pledge allegiance to the flag of the united states of america, and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the presiding officer: the clerk will read a communication to the senate. the clerk: washington d.c., may 15, 2014. to the senate: under the provisions of rule 1, paragraph 3, of the standing rules of the senate, i hereby appoint the honorable john walsh, a senator from the state of montana, to perform the duties of the chair. signed: patrick j. leahy, president pro tempore.

mr. reid: mr. president? the presiding officer: the majority leader. mr. reid: i now move to proceed to calendar number 92, s. 162, the franken mentally ill offender treatment and crime reduction act. the presiding officer: the clerk will report the motion. the clerk: motion to proceed to calendar number 92, s. 162, a bill to reauthorize and improve the mentally ill offender treatment and crime reduction act of '04. mr. reid: mr. president, following my remarks and those of the republican leader, the time until 11:15 will be equally divided and controlled between the two leaders or their designees. at 11:15, there will be a series of roll call votes in relation to several nominees. following those votes, the senate will recess until 1:45 to allow for caucus meetings that we're having today. at 1:45, there will be another series of roll call votes on the nomination as well as cloture vote on the wyden substitute

amendment for the tax extenders legislation. the filing deadline for second-degree amendments to the substitute is 3:00 p.m. today. mr. president, a memo from the koch-funded organization americans for prosperity found its way into the national press last week. the memo details americans for prosperity's plan to spend at least $125 million, and more if necessary, ensuring the koch brothers' hand-picked candidates win elections this november. this memo was sent to a select group, the ultrarich, megarich, that's who got it. the memo was entitled -- quote -- "confidential investor update." close quote. how fitting, mr. president. the koch brothers' hostile takeover of the american electoral system to call

something investor update. investor update. you see, these billionaires are dumping unseemly amounts of money into a shadowy political organization. their donation is an investment in an america rigged to benefit themselves at the expense of the middle class. the kochs' portfolio expenditures are investments, investments, like any other that's listed in their financial portfolio, and they absolutely expect monetary returns on their investments in buying america. that's what this is all about, mr. president. the kochs' bid for a hostile takeover of american democracy is calculated to make themselves even richer, yet the kochs and the republicans followers here in congress continue to assert that these hundreds of millions of dollars are free speech. for evidence, -- i'm sorry.

for evidence of that, look no further than the republican leader who has flat out said -- quote -- "in our society, spending is speech." close quote. let me pose a question to everyone, including my friend, the republican leader. if this unprecedented spending is free speech, where does that leave our middle-class constituents? the poor? it leaves them out in the cold. how could everyday working american families afford to make their voices heard if money equals free speech? should voters mortgage their homes if they are worried about climate change? if they are concerned about their children's education, should they max out all their credit cards making political contributions? is our involvement in government completely dependent on financial resources? the answer, mr. president, should be a resounding no. but the shadowy koch brothers and all their different

organizations in attempting to buy america, if they succeed, the answer to that question is yes. involvement in government according to them would be on how much money they spent. there should be no million-dollar entry fee for participation in our democracy. as retired supreme court justice john call stevens noted very recently -- he did this before a senate panel just a couple of weeks ago -- quote -- "money is not speech." close quote. he went on to say -- "speech is only one of the activities that are financed by campaign contributions and expenditures. those financial activities should not receive the same constitutional protection as speech itself. after all, campaign funds were used to finance the watergate burglars, actions that were clearly not protected by the first amendment." at its core of the constitution

of our great country is the great equalizer. the constitution gives all americans, regardless of race, background, financial status the same freedoms and rights. the u.s. constitution levels the playing field but not so calculated by the koch brothers. according to them, lots of money is their name and it's their game. the playing field of campaign finance is skewed in favor of interest groups and corporations. the more money there is, the more skewed it becomes. justice stevens rightly labeled these massive campaign contributors as -- quote -- nonvoters. elections in the united states should be decided by voters, americans who have the constitutional and fundamental right to elect their representatives. yet, more and more we see koch industries, americans for pass parity, one -- prosperity, one of their shadowy front groups,

dictating the results of primaries and elections across the country. behind these nonvoting organizations are massively wealthy men hoping for a big monetary return on their political donations. when the candidates they bankroll get into office, the winner is -- the winners inevitably begin to legislate their sponsor's business plans. less regulations, less overnight for corporations. remember, mr. president, the koch brothers' dad was one of the inventors of many other strange organizations. it's hard to believe that one of these men ran for president in 1980 -- vice president, as a libertarian. and the views that he pronounced at that time were so radical, doing away with social security,

no taxes whatsoever, no power to enforce the laws, doing away with all environmental regulations. mr. president, they have now become part of the mainstream of the republican party. that should frighten everyone. their dad was one of the beginners of the john burke society. think about that. so, mr. president, let me be very plain for all to hear. no one should be able to pump unlimited funds into political campaigns, whether they are democrat, republican or independent. as one political observer noted, we currently have a campaign finance system in place which compels each party to pick which billionaires they like best. what a shame. that's exactly why the system needs to change. there is absolutely no question the koch brothers are in a category of their own, in both degree and kind.

no one else pumping money into the shadowy campaign organizations and campaigns like they are. there isn't even a close second, mr. president. they are doing this to promote issues that make themselves even richer. $100 billion is not enough for the koch brothers. no other individual has recreated the role of the national political party. that is what they are doing. they are re-creating the republican party. i say, mr. president, why not level the playing field for everyone. let's get this money out of our political system. let's undo the damage done by the citizens united decision. let's do it now. the supreme court has equated money with speech, so the more money, more speech you get, the more influence on democracy. what kind of a system is that? it's wrong. every american should have the same ability to include our

political system. one american, one vote. that's what the constitution guarantees. the constitution does not give corporations a vote, and the constitution does not give dollar bills a vote. i have heard recently my republican colleagues seem to have a different view. republicans seem to think billionaires, corporations and special interests should be allowed to drown out the voices of all americans. that's wrong and it should end. i oppose the notion that a big bank account should give billionaires, corporations or special interest groups a greater place in government than american voters. that's why i support the constitutional amendment proposed by two democratic senators, senators tom udall of new mexico, and michael bennet of colorado. their amendment curbs unlimited campaign spending. this amendment grants congress the authority to regulate a limit for raising and spending of money for federal political campaigns. it's not a bad idea.

senators udall and bennet's amendment reins in the massive spending of super pac's which have grown so much since the sits united decision. it also provides states with authority to institute campaign spending limits at state levels. i know the state of montana, that was in effect for decades after decades after decades. the courts knocked that out because of the citizens united case. such a shame. the proposed amendment makes our nation's campaigns fair, allows candidates to help their voting constituents instead of big spending special interest groups. here is something else that justice stevens said. unlimited campaign expenditures are purely the process of democratic self-government. they create a risk that successful candidates will create more attention to the interest of nonvoters, provided them with money in the interest of voters who elected them.

that risk is unacceptable, justice stevens said. so, mr. president, it's unacceptable that the recent supreme court decisions have taken power away from the american voter, instead giving it to a select few of megabillionaires. soon, chairman leahy and the senate judiciary committee will hold a hearing on senator udall and bennet's constitutional amendment. the senate will vote on that legislation. i urge my colleagues to support this constitutional amendment, rally behind our democracy. i understand that we senate democrats are proposing something that's no small thing. many in our constitution are not something any of us should take lightly, but the flood of special interest money in our american democracy is one of the glaring threats our system of government has ever faced. let's keep our elections from becoming speculative ventures for the wealthy, put a stop to the hostile takeover of our

democratic system by a couple of billionaire oil barons. it's time we revive our constituents' faith in our electoral system and let them know their voices are being heard because the american people clearly, mr. president, deserve a fair shot. mr. mcconnell: mr. president? the presiding officer: the republican leader. mr. mcconnell: our all-volunteer military depends on americans who are qualified

to wear the uniform. our recruits expect to be well-led, well-trained, adequately compensated, effectively challenged, and fairly treated. critically, they also expect to receive the health care promised to them while they were on active duty or as veterans. later this morning secretary shinseki will testify on stories that emerged several weeks ago about administrators at the v.a. hospital in phoenix falsifying medical records to conceal delays in providing care to veterans. similar stories from wyoming, north carolina, missouri, and texas have come to light about employees using similar tactics to conceal backlogs in medical care. the questions awaiting the secretary will be tough, but this is his job, and the

american people are demanding and deserve answers to these questions. now, to his credit, secretary shinseki has ordered an inspector general review of the phoenix v.a. health care system. it would not surprise me if additional inspector general reviews end up being required at ear v.a. hospitals -- at other vv.a. hospitals. one thing i will be listening for is whether the secretary states that the v.a. is in fact facing a systemic crisis. because just this morning "the wall street journal" reported that his department has made -- quote -- "minimal progress, at best, on a host of problems identified in 2012 by the nonpartisan government accountability office." minimal progress at best. that's how a nonpartisan g.a.o. official described it. now, many letters have come into my office on this issue.

kentuckians are really concerned. let me read you just what one kentuckyikentuckian had to saiva veteran, i have read the recent revelation us of events in phoenix with horror. these americans sacrificed for their country. in return, we owe them competent care and treatment as a person and not an oka obstacle to a god evaluation. in order to regain the trust of our veterans, it is vital that we hold those responsible accountable. this kentucky veteran couldn't be more right. last year i called the obama administration's veterans backlog a national disgrace. i've also made several appeals to the secretary, and i know of course i wasn't the only one. and yet the initial reports of the shocking situation in phoenix indicate that things have gotten only worse. with similar stories now filtering in from other parts of

the country, it's getting harder to believe that this isn't more of a sort of systemic administration-wide crisis. the veterans administration needs to get to the bottom of how widespread the problem has become. my concern is that the obama administration will treat this scandal like this does all the others: like a political crisis to get past rather than a serious problem to be solved. and we know we appointed a member of his staff yesterday to look into it, and that's a start. but if the president is truly serious, he needs to treat these stories at least as seriously as he did the obamacare web site fiasco when he pledged his complete ateption and the full force of -- attention and the full force of his administration to do whatever needed to be done. when he let it be known that his people would not rest until a

solution could be worked owvmen- worked out. incredibly, so far the president has made no such treatment when it comes to our veterans. our veterans deserve at least as much ateption as a web site -- attention as a web site. in fact, they deserve a heck of a lot more. that is really big deal, mr. president. it is our job as senators to get to the bottom of it. we need to ask the tough questions. we need to uncover the truth. any misconduct found at v.a. hospitals should be met with swift -- swift -- punishment. and administration officials need to be held accountable. because america's ill and wounded veterans have already paid a price. they've already paid a price. they have a right to expect that our country will be there when they need help, and if we break faith with them, we're breaking faith with the recruiterrers who made commitments to -- the recruiters who made commitments to the next generation of american military leaders.

all of these people have made commitments -- the recruiters, the military leaders, have all made commitments. as one of my colleagues put it, american veterans ought to be first in line -- first in line -- for the best care, not pushed to the back of the line for what they're getting. so our joint mission, whether we're democrats or republicans, should be to get to the bottom of the obama administration's veterans crisis swiftly and fix it. it means holding officials accountable, and it means getting serious about solutions: things like senator rubio's bill that would make it easier to remove high-level v.a. officials for performance failures. i'm proud to cosponsor that legislation, and i know some of my colleagues will have other good ideas in the coming days and weeks, too. the point is, that's where our focus needs to be. we owe it to every veteran who has served.

now, mr. president, on a different matter, i want to pay tribute to the spirit of kentucky, literally. this month marks the 50th anniversary since the united states congress passed senate concurrent resolution 19 which recognized bourbon whiskey as a distinctive product of the united states and unlike any other type of disspilled spirit, whether foreign or domestic. on may 4, 1964, congress declared that bourbon whiskey had achieved recognition and acceptance throughout the world as a distinctive product of the united states and expressed the sense of congress that the united states should prohibit the importation of any other whiskey purporting to call itself bourbon. this resolution helped to promote the thriving bourbon distillery industry that we can

be thankful is located in the united states today. kentucky is, of course, the birthplace of bourbon. the dwing itself is named for bourbon county, kentucky. bourbon county, kentucky, is in the heart of the bluegrass state where the product first emerged. kentucky produces 95% of the world's bourbon supply, and kentucky's iconic bourbon brands ship more than 30 million gallons of the spirit to 126 countries making bourbon the largest export category among all united states distilled spirits. not only is kentucky the overwhelming producer of the world's bourbon, bourbon gives much back to kentucky. it is a vital part of our state's tourism and economy. the industry generates close to 9,000 jobs and contributed almost $2 billion to kentucky's

economy in 2010. production of bourbon in kentucky has increased by more than 120% since 1999, and not to go unnoticed, the bourbon industry has taken an active role in promoting the moderate use of its product bien. senate concurrent resolution 19 was originally introduced 50 years ago by queen ke kentucky r martin and a companion measure was introduced in the house by representative watts. they recognize that kentucky bourbon whiskey is a distinguished product of america, all with official government recognition. bourbon deserves a distinction

that comes with official recognition as well. however, the international federation of manufacturing industries and wholesale trades and wines, spirits an and liquos could only enforce the bourbon abolition if congress passed a resolution declaring such. therefore, on may 4, 1964, congress adopted the original bourbon resolution. 50 years later i rise to introduce along with senator paul a new senate resolution to recognize the 50th anniversary of this original declaration of independence for bourbon. kentucky is celebrating this 50th anniversary in an appropriate fashion through various exhibits, events, and tastings. perhaps the most exciting of these events is the display of the original bourbon resolution which has been released from the national archives and records administration in washington. for the first time since its

adoption, it's to be exhibited in louisville at the frasier history museum. i was proud to work with an subsidy barr in assisting to bring the original resolution to kentucky and i want to thank the kentucky distillers museum for their efort efforts to honor the anniversary of the i'm also proud today to follow in the footprints o and honoring the original bourbon resolution with this 50th anniversary resolution. bourbon production in kentucky has grown strong and thrived over the last half-century and i am sure it will continue to do the same for the next 50 years. i want to thank all the hardworking kentuckians who have contributed to building our state's vibrant bourbon industry. i urge my senate colleagues to support this resolution and i look forward to its swift adoption. therefore, mr. president, i ask

unanimous consent that the senate proceed to consideration of s. res. 446 submitted earlier today. the presiding officer: the clerk will report. the clerk: senate resolution 446, recognizing the 50th anniversary of the congressional declaration of bourbon whiskey as a distinctive product of the united states. mr. mcconnell: i ask unanimous consent -- the presiding officer: is there objection to proceeding to the measure? mr. mcconnell: i i ask unanimous consent that the resolution being agreed to the the preamble be agreed to, the motion to reconsider be laid on the table, with no intervening action or debate. the presiding officer: without objection. under the previous order, leadership time is reserved. under the previous order, the time until 11:15 a.m. will be equally divided between the two leaders or their designees. mr. grassley: mr. president?

the presiding officer: the senator from iowa. mr. grassley: i'm glad that the senate is finally getting serious about passing tax extenders this year. congress has put off the extension of expired tax provisions until the last minute all too frequently. in the 2012, provisions remained expired for an entire year before finally being extended in january of 2013. similarly, the previous extension of expired provisions did not occur until the middle of december. such late action by congress results in complications coming filing season for taxpayers and particularly for people that hire tax preparers. tax forms are not ready, and refunds, as a result, are delayed. so we owe it to our constituents to see to it that these added

complications are not a factor this year. tax season is unpleasant enough without our adding to it by failing to do our job in a timely fashion. already we're five months late. it has created a lot of headaches and uncertainty for individuals and businesses. the current expiration causes headaches for teachers purchasing school supplies, college students paying for higher education, and seniors making charitable deductions from their ira's. and those are only three of some 53 provisions that we're considering extending that should have been extended four months ago. furthermore, it creates uncertainty for businesses, which harms investment and

business growth p. the enhangsed expensing rules under section 179 are particularly importance to small businesses and farmers. i regularly hear from my constituents who are putting off purchasing a new truck or tractor for their business operation because they do not know the fate of that provision. now, this is bad for economic growth, and it obviously has something to do with we have a high unemployment rate, jobs not being created. the lapse of renewable energy incentives has also created a lot of uncertainty and slow growth in the renewable industry. this serves only to hamper the stride made towards a viable, self-sustainable renewable energy and fuel sector. i'm aware that some of my colleagues have