>> the mississippi runoff is being described as a fight within the gop between establishment republicans and the tea party. quoting from the story: the race has the feel of an alamo moment while the establishment has poured money in and outside groups raised money for mcdaniel. we will bring you the result and the election night speeches as they come in. first, today's hearing on the merger between at&t and directv that would create a $48.5 billion merger. the chair of the house subcommittee on anti-trust law.

good morning. >> the hearing will come to morning. without objection the chairs authorized to declare recess of the committee at any time. now i recognize myself for my opening statement. we are hear today to examine the proposed merger between at&t and directv. as i reminded witnesses during the recent comcast-time warner hearing, today's procedure will m not determine if the merger is approved but this form will allow us to discuss the potential of the mother-in-leme allow us to ask questions and hear viewpoints. the records created by the hearing will assist the committee and the anti-trust

laws. the proposed merger comes at a time when the structure of the telecommunication industry is undergoing a rapid transformation in a relatively short period. the proposed merger has been announced and there has been reports of others. the business of telecommunication requires significant investment to construct and update central infrastructure and provide innovative products and services to consumers. merge companies maybe able to achieve economies of scale and have better access to large systems. however, consolidation raises

issues. these are issues that are appropriate for consideration in a hearing like this. for the most part the companies before us engage in different businesses. at&t is primarily a provider of voice and internet services while directv is almost exclusively a video provider. at&t has started offering u-verse which is a competitor to directv in concern sporonts -- certain participants parts of the country. today's hearing will look at how the impact of u-verse and its ability to provide video and internet sevrvices to the cons e

consume consumers. at&t and directv argue this will allow the combined company to offer a bundle and enhance competition by increasing compitation for bundles in the market. they contend the cost saving would allow additional resources to be explored in broadband networks. we have the ceo of at&t and directv with us. i look forward the testimony of the witnesses on these and other issues related to the merger. i now turn to mr. johnson for his opening statement.

>> thank you. today's hearing concerns the merger of at&t with approximately 11 million broadband subscribers and 5 million tv subscribers and directv serving 50 million customers. the core question at the heart of this merger is whether creating an integrated bundle of at&t's broadband services with directv's poplar video programming would serve the public interest without substantially lessening competition. according to a survey conducted by consumer reports, consumers are one-stop shoppers and prefer

to bundle phone, video and broadband internet into one package. not only does bundling multiple services save consumers money at time of increasing cable cost, but it also avoids the problems associated with multiple instillation visits, service calls, and phone calls to dissolve disputes. as a new entry in the video market place with only 5.6 million subscribers there is little to suggest that at&t offers serious direct competition with directv's video services. instead the bulk of the evidence demonstrates that each company primarily services different marks with different services. it represents a concerning trend toward industy consolidation

there is ample evidence showing this would create benefits. at&t argues the improved bundle and cost savings generated by the merger will quote fundamentally improve the economics of at&t's investment in broadband end quote. specifically at&t plans to deploy its fiber network to two million homes with speeds up to one giga byte per second and deploy it to 13 million homes in largery rural areas with speeds between 15 and 20 megabits per second. for many homes, this would be the fastest internet ever and providing access to millions and benefiting competitors by bringing those homes online.

as a strong advocate of digital inclusion, i commend this commitment to close the digital divide by bringing us closer to the universal adoption of high-speed internet. it is critical people of color remain competitive in the economic economy and that starts with a fast and affordable connection. this would benefit the public by expanding at&t standards for labor and corporate diversity to directv's employees and suppliers. given the television's reputation for opposing organized labor, this would have benefits for thousands of employees in this industry giving labor a strong foothold in the industry. i urge the federal communication commission and the department of

justice to view this merger in light of the public benefits and to strongly hold the merged company to these commitments. lastly, several dozen cities for deployment of its ultra fast fiber network, i call on at&t to deploy this service in atlanta, georgia that represents much of the district i represent. atlanta is becoming an innovation economy given to tinker, improve and design products. deploying an all-fiber network in atlanta would benefit local start ups and entrepreneurs and app developers and other innovators still emerging.

i stand ready to work with at&t and local government to make this happen. i thank the chair for holding his important oversight hearing and i look forward to today's testimony and with that i will yield back. >> thank you very much, mr. johnson. at this time i recognize the chairman of the full committee. the gentlemen from virginia. >> robert bork famously said 'the only legitimate goal of antitrust is the maximization of consumer welfare.' depending on the actions of the antitrust enforcement agencies and the federal communications commission, the telecommunications industry may experience significant change over the next year. as the committee and the relevant government agencies examine the potential issues associated with potential issues associated with the multiple proposed telecommunications mergers, we should be mindful that assuring the best interests of consumers is the ultimate goal. it has been demonstrated

repeatedly that a free and competitive marketplace yields lower prices, greater innovation, increased investment, and better services. we should strive to ensure that proposed transactions result in enhanced competitive marketplaces so that the attendant benefits continue to run to consumers. today's hearing allows a public forum to discuss the potential competitive impact of the proposed merger between at&t and directv. the leaders of both companies are before us today to explain how the proposed transaction will increase competition for the benefit of consumers. we also have witnesses who will raise potential concerns about the merger. through a fair and objective inquiry by the committee, a record will be produced that will provide an important measure of transparency and thoughtfulness to the review of this proposed merger. i look forward to hearing from today's witnesses regarding their views on the proposed merger of at&t and directv.

>> thank you. at this time i recognize the ranking member and former cha chairman of our committee the gentlemen from michigan. mr. conners. >> top of the morning my colleagues, witnesses and our visitors here covering this potential transaction. last month in may we had a hearing that covered time warner and comcast. and now this month we are looking at directv and at&t. and maybe even next month, depending on what happens in the

intervening time we maybe looking at sprint and t-mobile. question? where does this end? and i am looking at a transaction that highlights the concern that there maybe too much and too rapid consolidation in telecommunications especially when viewed in the light of a flurry of deals either announced or rheumorerumored. one rational is it would create a strong competitor to a large cable company and may in fact spur further consolidation in

the telecommunication industry as part of what might be view viewed as a race to the bottom. the merger may reduce competition for paid television services in many of our nation's largest markets. the sheer size of a combined at&t-directv entity could raise content prices for smaller video providers potentially jiving some maybe out of business. and finally, there is a need to focus on whether behavioral remedies with in practice affective. and so while neither we nor the competition enforcement agencies should prejudge this deal there

is several concerns that i want the witnesses to address as well as the feelings that i already expressed. that is the fact that we are concerned there maybe too much and too rapid consolidation in the telecommunication industry. and while i fully appreciate the goal of anti-trust laws to protect competition and not competitors, this ongoing wave of consolidation will without question result in fewer firm and may harm consumers by limiting choices and raising prices. afterall, it is the threat of

loosing business in the face of high prices or low quality services that drive competitive businesses practices. no one rational in favor of the merger is that it would create a stronger competitor to large cable companies. that may spur further consolidation in the telecommunication industry. i don't doubt that the merged entity that is under consideration could be large enough to compete against large cable companies but what is to stop competitors from using the same argument to justify further consolidation? so i will be looking and listening to make sure that we

are not moving in the wrong direction and i wanted to put my feelings out in front of you so that any of you can feel free to give me any consulation about the concerns and i will put the rest of my statement in the record and thank the chairman. >> thank you, mr. conyers. i would like to introduce the witnesses. we have an esteemed and qualified panel. mike white is president, chairman and ceo, that covers everything doesn't it, of

directv one of the leaders with 20 million in the united states and 15 million customers in latin america. i am not sure we realize there are that many customers in latin america. mr. white joined directv in january of 2010 and serves as the chairman of the board of directors. and mr. white serves on whirlpool corporation board of directors. before joining directv, mr. white was the ceo and vice chairman of pepsi-co. prior to that he was president and ceo of frito-lays and that was part of pepsi? or did they spin it out? he was ceo of the partnership

with general mills. mr. white was the ceo and vice president for avon products and worked as a management consultme consultment. our next witness -- we are glad to have you and mr. randal stephenson is care

>> each of the witnesses written statements will be entered in the record and we will ask each witness to summarize his testimony at this moment in five

minutes or less so with that now we proceed to hear from our witness witnesses. mr. white, you go first and we will go from lie my left to right. >> my name is mike white and i am ceo of directv. thank you for allowing me to testify. for any business to succeed in the long term it must satisfy its customer's need day in and day out and this will help directv and at&t do exactly that. we be able to offer new services to customers at a better value. we will help consumers watch the

video when they want it, where they want it and on the device of their choice and we will be in a position to compete long into the future. i would like to describe directv's perspective on the transaction. it is a remarkable suggest success story. we have more equipment and better customer service than cable. and congress has a lot to do with our success making sure in the early years we would acquire the programming our subscribers demands. broadband is changing everything. if we want to continue to compete in the internet driven economy, we too, must adapt. first we must provide a bundle of services because consumers are increasing better bundles

and broadband is now the more important element of the two for many. second, as we think about the future we must serve customers that want over the top video offerings. young subscribers want you tube, netflix and hulu. and third, as technology changes we must continue to optimize our own video service. cable's two-way infrastructure has remote dvr, video on demand stored in the cloud and soon cable with have cloud-based features like look back. we, too, will need to do all of that if we want to keep up and continue to compete successfus -

successfully. bundle competitors can handle the increase. directv has remained to be competitive boy offering synthetic bundles and the video and broadband are provided by separate companies but marketed together. customers have to talk to two sales representatives, wait for two installers to arrive on two different appointments and pay to separate bills and make two calls every time they have a problem. synthetic bundles tend to be more expensive because each company seeks a margin on its contribution. this transaction will help us meet those challenges head on. it combines directv premier video assets with at&t's unique

features. it will mean more bundles in areas and more and better broadband to 15 million locations predominantly in rural areas and more innovation combining video expertise and at&t's wireless capability. you get an action that let's us serve customers and a transaction in other words that opens up a new world of possibilities of directv subscribers. thank you for inviting me to speak. >> mr. stephenson, i welcome you. >> thank you chairman, ranking member johnson and members of the committee. i am the chairman and ceo of

at&t. and i am please today talk about what the consumer benefits of this transaction. it combines companies with producks that compliment each other. the rational coming together is simple. it is about meeting demand. customers are looking for bundles that combine broadband service. and directv has the premier may tv service but it doesn't have a broadband product. to compete against cable for broadband customers, at&t market's bundles of services most importantly broadband and tv and that is even though the video service isn't profitable.

less than 2% purchase tv service on a stand alone bases. we don't market stand alone television because we don't make it. 66 cent of every dollar goes to the programmers. we can offer it less than a quarter of u.s. households and don't cover all of the broadband fo footprint. so there is no significant cover overlap in the products that consuthat consumers are demanding. the benefits are significant. being able to offer directv nationwide in a game changer in terms of the economics for deploying broadband. it will allow us to expand and

enhance it to 15 locations across 48 different state and those are mostly in rural areas. this is in addition to plans we announced and it results from the synergy created by the transaction. this new broadband commitment includes 15 million location and 85% are outside of the traditional wireline footprint. we think this is big news for rural america. we estimate 20% have no access to broadband service and another 27% are hostage to only one provider. these 13 million consumers at&t service will be the fastest available and for some it will be their first chance for truly high-speed broadband. it allows us to expand our one gigabit service to two million locations and will be able to

sever 70 million customer locations with broadband. it will allow us to price competitively and provide a higher quality experience that results in cable companies pricing more competitively and that will include all of their products and services. consumers will receive greater convenience in terms of ordering, billing and customer care. we will be able to accelerate the deployment of the over the top services by at&t and amazon and hulu. we will be able to deliver them to any screen whether it is a tablet, mobile unit, car and even for airplanes. we operate in a competitive environment that is becoming more competitive. the cable companies dominate and google fiber and others are

transforming competition daily. it gaves at&t the capability of being an effective competitor and i want toentia sure -- to ensure we will meet the net neutrality standards. so thank you for the opportunities. i look forward to your questions as well. >> thank you. and mr. bergmayer? >> good morning chairman, ranking member johnson and members of the subcommittee. thank you for the opportunity to participate in today's hearing. today i will talk about how the merger could harm the public. it can proceed if it may reduce competition and the fcc can't allow it to proceed unless at&t can show it benefits the public. based on that, at&t hasn't met

their burden. as a result, at&t may leave rural americans behind by providing them with a service that is not the same quality. at&t much offer online service for video in a non-discrimination way. at&t and directv compete head-to-head in more than 60 local markets. tv viewers in these markets lose a competitive choice and the level of competition would exceed the guidelines and that means higher prices and worse service for these viewers. at&t's proposal to fix this doesn't do enough. it only promises to keep them on par for three years.

this doesn't meet the problems this could cause. at&t has a spotty record with regard to past merger commitments. for example, at&t now claims that there are residences within its wireline footprint that have no at&t broadband but it committed to serve 100 residences with broadband. it is good policy to allow them to make the promise this time? they have a history of using already planned build out. for example, they promised coverage but then after it was blocked it didn't change. when you strip away plans, this is less than it appears. at&t is stating it will upgrade portions of its network and that is not much. adding a new home wireless

service to an existing coverage area isn't as significant as an initial wireless build out. there are further public harms. laws state that consumers in nations including those in rural areas should have access to telecommunication that is reasonable in the urban areas. they have not shown this to be the case. policy makers should be concerned about the shift from universal service. finally, at&t will create a new online video service. it should be free to enter the market but it can't take the position to favor services at the expense of competition. at&t has agreeed to a bide by the 2010 open internet order. thank you.

i look forward to your questions. >> thank you, mr. bergmayer. >> mr. lieberman? >> thank you. this will transform the competitive market and consumer experience. this is cause for concern. congress and regulators therefore must review it impending deals and examine to address the market problems fueling them. focusing on at&t's deal it is important to recognize that directv is not only a nationwide provider of paid tv service it is also a programmer with interest in three sports program and national programment.

smaller cable operators are concerned this deal will lead directv's programmers to hold out for even higher rates. with 26 million subscribers, at&t and directv combined will command better programming deals than directv would alone. this means higher video profits for both directv and u-verse. regilators have accepted that as the per vehicle profits of a ve vertically provider so does the rival cost of programming. paid tv providers will feel the pinch win we negotiating for directv programming and the customers will pay. while directv remains subject to program access rules as an fcc condition from a prior deal it is no longer subject to an

arbitration condition. however, readopting this arbitration isn't enough. it had design flaws that left smaller cable operators under protected. to shield them, these defects must be eliminated. they must look at the bigger picture to ensure that industry wide problems are addressed. this will ensure consumers continue to benefit from a paid tv network that includes smaller operators. they are long raised alarms about broadcasters and programmers and increasing rates and demands and their discr discrimintory practice. the spread thought average

around 30% puts my members to a disadvantage to competitors like directv, dish network and comcast. even though at&t's subscriber base nearly exceeds that of all smaller cable operators combined, its motives point to facing similar market programs like aca's members, at&t understand its competitive standing is likely to worsen if the comcast-time warner cables and comcast charter deals are approved. at&t can lower cost and better compete, smaller operators can't because they lack at&t's financial resources. these video providers will struggle to remain viable.

some critics of the deal raise concerns about the number of paid tv providers decreasing from 4-3 in u-verse territorter. programming cost have caused some operators to close service and using consumers with only two providers. the slow but steady competition in rural areas hasn't generate much concern from washington, it should. it is harmful to rural america and often signals wider market problems. these trends are not irreversible. congress and regilators to cake action to prevent members and customers from being disadvanta disadvantaged compared to larger com ppetito competitors. three areas would help.

first, examine the processing against smaller providers. second, my modernization of rules and updating the buy-in group definition and updating the cat gories so all providers including directv and dish pay their fair share. thank you and i look forward to your question. >> thank you, mr. lieberman. at this time i recognize the chairman of the committee for purposes of questions. >> thank you for all your testimony. mr. stephenson, i noted you taking notes during mr. bergmayer's testimony and mr. lieberman. is there one or two points you want to make in response to the criticism of the merger.

>> he was sighting a blog where they wrote we didn't fulfill mer mergers with the south bell merge and that was false. it required we provide 100 broadband and 85% of fixed line and one has to remember -- >> i have limited mount of time so i get your response to that point. let me go on to my mine point -- >> we have all been bloged before. >> we understand that. let me go on to my main point in the opening statement and that is this is what happens in the consum consumer. in my hometown, roneoak

virginia, the bunled package is with verizon and directv. what happens to that package i have with verizon and directv under the merger? >> my expectation is nothing should change. >> does at&t offer those? >> mark referred to them as synthetic bundles. >> why is it necessary to acquire them to have the bundle? >> i would like for mike to answer this. >> that would be fine. >> so congressman, if we measure customer satisfaction on everything we do, and when we measure the satisfaction of a bundle experience versus someone just getting directv solo it is

poorer and it is two calls on two different days, two different instillations and two dills. >> how does verizon solve that? do they acquire dish? because i am not sure what i have available to me with at&t but i know what is available with verizon and that doesn't solve the complaint you just outlined there with regard to verizon. although, i am not familiar with the complaints. we like the service we get but i'm not sure why one of the two companies should own directv and the other should continue have to the bundle experience. >> the only way to get seemless integrated bundle and find a way with better value for customers when you have two separate companies chasing margin as opposed to one company that can spread the cost over one

install. we spend $850 signing up a new customer and we could reduce that by 20% with one car, one truck row, build the router into the box. >> does that saving get on to the consumer? >> we expect -- the bundles would be a better value for consumers. >> since my time is limited, let me ask you about another issue related to this. directv doesn't provide local harrisonberg, virginia, the northern part of my district, abc, doesn't provide that local channel in page county, virginia next to rockingham county despite being legally able to do so. rather they beam in content from washington, d.c. which is many hours away from my district. can you explain why directv has

opted to not provide this local content to my voters and can you commit to resolving this so they can receive local content rather than washington, d.c.? nothing against where we work but my folks at home live in a different world than here and they want to watch it on tv. >> we serve 99.4% of american households with their local channels. we have a few gaps and you pointed out. >> there are more because i have heard from other gaps in the country. >> there are. we are continuing to build out as we get satellite capacity. we have two more going out in the next 12 months. charlottesville, virginia is on the list. there are orphan counties and we would be happy to work with you provided we don't have to pay

retransmission fees twice. it comes back to the rules relative to the broadcasters. >> my time is expired. >> i recognize mr. johnson, ranking member of the subcommittee. >> thank you, mr. chairman. as i noted in my opening statement, this transaction gives opportunity for transforming labor standards in the telecommunication industry. the telecommunication workers of america noted at&t has the largest union force for any company in america and i know not everyone agrees to that being worthy but i think it is worthwhile. with that i would ask consent to make part of the record a letter from the communication workers of america in support of this

merger. >> without objection. >> now, mr. stephenson, many of your employees and workers in my district enjoy great benefits. how would at&t plan to extend this leading and respect the rights of employees to directv as result of the proposed merger? >> we have the largest full-time union in the united states and we have a long history of working with our union members and doing collective bargaining. we have also been open to card check neutrality and also allowed employees to make that choice as to whether they wanted to be represented in collective

bargaining or not. so with directv you should assume the employees will be offered the same option to collectively bargain or not. >> thank you. mr. white? >> i agree. we welcome the opportunity. there is fabulous talent at&t brings and directv has talent and the world-class benefit programs will be a good thing. >> all right. mr. stephenson and mr. white, i would like to ask you to talk about the company's commitment to diversity. the merged company's commitment to diversity and a number of different contexts. i know everyone will agree that having a diverse group of individuals as real partners, both inside and outside of the company, is important. at&t's public interest state

pledges that the diversity practices will be applied to directv. such action would be given at&t's history of supplier diversity and inclusion. mr. stephenson, please describe the best practices referenced in the public interest statement. >> i will start with employees. we have a strong belief that our employees ought to reflect the markets we serve. i don't believe you can bow successful in the market place if you don't have employees, executives and all the way up to the board that reflect the markets. we think we have a good track record in that regard. all the way from our board down to the front line line employees. we extend that to the supplier

community. with you look at the total spin, over 25% of our spin is with diverse suppliesuppliers. that is access of $15 billion. i would suggest that one of the things that mike and i realize is our cultures are compatible and we look at directv and see thing this will be seemless in that regard. >> anything to add? >> 40% of our workforce are people of color, 43% of new hires are people of color, 42% of summer interns are people of color. i believe you cannot understand customers if your employee and management base and your board, and our board does as well, reflects that diversity. we are proud of our diversity and inclusion at directv. i would say i look forward to

leveraging some of the supply chain that at&t has done and that is best in class and we will take advantage of that. >> that is great to hear. do these best practices for diversity apply to banking and finance? >> yes, for at&t, it is through all of the disciplines. i will not represent it is 25% across all disciplines but across all disciplines we impose diverse supplier requirements. >> all right. thank you. i yield back. >> my first question is something that is concerning members on both sides and that is how the proposed merger will affect american's jobs. let me go further than that and say the prices that voters pay for both video and internet.

in other words, how do customers benefit and will this create jobs? and i will start with mr. stephenson or mr. white, whichever you all. >> mike made this comment in his opening statement. this is about growth. i am very excited about this for a couple reasons. we both stated, first of all, these are accessets that complit each other. it will mitigate the overlapping responsibilities. to the extend of overlapping jobs that need to be taken care of, i think at at&t we have a good track record on elegantly working through those using attrition and placing people in other assignments so i will stand on our record in terms of what we have accomplished there.

third, this deal has a lot of investment tide to it. building out 15 million or enhancing 15 million with new broadband is a significant capital outlay. this is significant capital. these are hard hat jobs that will involve fiber to cell sights and new antennas on structures and instillations in the home. so there is a lot of capital investment tide to this and in our industry that is tide to jobs. >> do you have anything to add? >> i recognize the concerns about consolidation and i think this is more combination taking the best assets of two. and in a merger of this size there is significant job losses.

that is not the case. this is a different transaction and with the investments it will create job growth, better broadband access for rural america, and it is true win-win from both sides. >> i will say we are talking about two service calls on two different days and substituting that having one customers benefit and that is not the job consolidation we are concerned about. we obviously would like to have new services offered and capitals and new jobs created can what we are looking for. not duplication of the same job. this has been described as a merger between a broadband provider and a internet provider and i think that is somewhat true, i mean a video provider, and a broadband provider.

except that u-verse has a video offering at at&t. it is very proper in my area. i want to know whether that is going to go forward or slow that deployment or increase it and the effect it will have on u-verse. >> yes, sir. to answer the questions directly, yes. u-verse will continue and continue to expand the offering. one of the advantages of this transaction i referenced is that directv because of the content and program relationships we feel very good about what it will do to our overall content cost including on the u-verse platform. we are loosing money on the tv platform on u-verse. thill will allow us to take that from a money loosing prop --

proposition to a profitable organization. with the changed economics, we can expand u-verse and we have committed to expanding that by an additional two million homes with a full one gig broadband capability. >> thank you. my final question is this and it came up in the comcast-time warner hearing. many of the rural members were concerned and raised issues related to rural programming and the importance to customers and really both rural and urban areas to get that rural program because many of them have connections and farms and interest in their rural communities. i will ask you is rural america important to at&t? i know it is to directv. but what is your commitment to kerry programming that is important and directed at rural

america? >> rural america is important to us. we had opportunities in the past to sell off our rural assets. we have chosen not to. now when you have a profitable tv product it changes the economics for rural broadband develop. ...

about the comment about anything that was during the questioning period so far with our two distinguished witnesses. >> yes. thank you. i think when it comes time to the investment at&t is making i would urge them to put that in context. it's important to distinguish

upgrades from new buildout and i think a lot of the numbers consist of upgrades and adding a sixth wireless product to an existing coverage area. that might be an out of investment but it's less than a buildout and it's important to put it in context in a way and the existing plan at&t has a fairly ambitious buildout plan talks about a lot of the buildout and at&t plans. at&t has an initiative to the gigabit wire broadband and the scope of at&t existing plans. it's to compare any new commitments that they may be making today to those existing plans. and when it comes to broadband coverage i will just make the

point that broadband is an evolving standards we expect them to provide a certain level of service in 2006. broadband continues to be reworked by policymakers. it's to stay there but we expect to continue the level of investment. the commitments that we have made are very well-documented and laid out in public filings under the vip that we will build broadband to 57 million homes and we will expand our video footprint by 8 million homes passed and we will pass 1 million fiber and passed

300 million with our broadband local broadband ote service that are documented in the public record and in our financial filings. the commitments that we have made in the new or enhanced broadband are all on top of the commitment of the public domain so all that is incremental and in the capital requirement to do so it is a significant capital investment into the 13 million fixed wireless over the loops is a massive geography that we are talking about passing and wireless may be incremental to some of the investment that's already there for a company that's investing $21 billion a year as a significant amount we are taking out of that. we have any rebuttal? does that work out with you? >> i understand at&t has a

buildout plan but some of the numbers in question are supposedly in the public finding somewhere are redacted and confidential. it's difficult to see the numbers onumbers within the pity redacted. the number one plant is t pointt at&t's incremental promises in context of its existing plan and question how specific the promises are or whether they already have a buildout plan and they are restating them for the purpose of getting the merger produced. >> how would allowing the transaction to go forward result in putting downward pressure on cable products?

>> when you heard mike describes the process for which the services we do is a process to get to the market with a bundled broadband satellite tv service. you put the two together and you have a lot of customer efficiencies that comes as a result. you get a detailed model and before the merger cost synergies were incorporated this would not only have downward pricing on our prices but also the cable companies prices. >> let me get a response from mr. lieberman. >> the commitments that they are willing to make we haven't heard them talk about the conference -- concerns on the regional

sports networks owned by directv are not subject to any arbitrary conditions individual have an incentive to increase the program for the cable operators. if they are going to be making public interest benefits it would be nice to hear them talk about a commitment to that as well. >> i want to go back to something that is off a little bit of my other question. the laws be forced to unionize correct? while they be forced to join a union or required to vote for them to go to? >> the union has to see if they can hold them. >> as you may know i have expressed concerns that the

impact of the proposed time warner merger and the ability of the small businesses in the district to advertise on cable television. can you give me your view of the merger in any difference in the impact of the comcast time warner merger? >> aca is concerned they would be able to exclude their agents and advertisers from regional advertising interconnect while this wouldn't be the case with directv and interconnect. >> would you like to talk about that? >> i would make to comment on the advertising we are a different business model. most is national. less than 1%. i don't think it affects the market at all and it will open opportunities for small business to advertise.

we have three of them one in denver and seattle and pittsburgh. it doesn't have an impact and we are subject to the program access requirements. >> i believe the competition will get a good build a matter r where it may be in the competitive market in terms of the supply they demanded at&t and directv this would increase competition. the competition isn't the end however it should be a mechanism consumers realize actual benefits and i will open this to everyone. can you say with certainty or is it possible this will or will not directly result in more choice in the cost to consumers both the short-term and long-term and what extent. the reality is like change hearings and spotlights are off

if it doesn't happen. each of the best as you can and can't size as you can answer the question. >> randall can talk to the broadband benefits. but from a customer standpoint we believe in choice. we share an offering. it's good to be like vanilla chocolate and strawberry. we will have a bundled together with at&t particularly with the 15 million homes they are going to buildout. in terms of the overall value to consumers today those bundles are not very competitively priced. when you make one company as our modeling shows a better value to those customers. >> a quick question for folks like me that have direct tv and at&t for different services. well that's now become a bundled opportunity for us or are we stuck in the practice is? >> that will be your choice.

we believe in choice. the way we've built our business, it's up to the customer to decide that we are going to give the choice of a b. or c. or you can stay where you are. >> there is another facet to this when you ask about consumer benefits the over-the-top model is evolving very quickly. we have also 100 million wireless subscribers at at&t who are demanding access to the type of content ike has on the directv content. you begin to integrate the content seamlessly across the mobile devices that is one benefit and accelerating the model. the second is in terms of consumer benefits the 15 million additional broadband pass to the transaction. i won't go into the econo

backtracks model but it's not just with us but in the industry. >> that may be just what i would have experienced. i would assume the other to disagree with that and i would have to because of the time i do want to go back to this issue. the chairman brought up the issue for me. it is not just me. there are other members. i've had conversations with your folks. i'm going to continue to harp on this for the issue i'm not going to let go of. you know when i get on to something i don't believe it until i get an answer. at this point i would encourage that. my time has expired. we will go to the gentleman from new york. >> thank you mr. chair and witnesses for your testimony today. there has been some discussion about the workforce transition i just want to know over some of that ground again.

at&t has the largest unionized workforce in the country, correct? >> full-time union. >> and i commend you. you have been an incredibly successful company with that workforce composition. your employees are represented by the communications workers of america, correct? what is the percentage of the unionization in your current workforce at the directv? >> we have outsourced partners but as it relates in terms of their own employees at its terminus. it's mostly a nonunion workforce. some of our installers in the northeast and in our union. >> have there been efforts to unionize in the past? >> i think we have had a vote in one geography in california yes. >> what was the outcome of the result? >> it favored unionizing.

i think that we have had some questions from our standpoint they were in the commission of challenging that. but we are waiting for the ruling ideas. >> mr. stephenson in terms of the legacy i believe that you have indicated that they would have an opportunity to join twa is that correct? >> we have the open card check neutrality. >> so in that potential transition it would be through neutrality in terms of the card check. >> we have a track record in this regard. when we brought at&t wireless for example, we opened up the workforce to the card check. the union came in and held a vote and across many of the locations they voted to join or become a part of the collective bargaining process data that we leave it up to the employees to make that decision. >> you expect to the merger to create jobs ideally both

mr. white and mr. stevens and you testifie stephensonuses to , correct? >> we were enthusiastic about it. we are investing 15 million additional homes with broadband those are hard hat jobs to fill out these capabilities. >> so in terms of the ambitious d. program and as i gather as a result of the complementary nature it doesn't seem to be much disagreement about that. there's athere is an expectatiou would create jobs now. is there a reason for you to disagree with that assertion? >> i think it is usually the case that there are job redundancies. it's not the focus of my concern here. i'm focused more on the consumer side. >> okay. mr. stephenson, in terms of the potential creation of jobs, is there a specific regional distribution that you would anticipate that would receive

any job growth more so than other parts of the country? >> the places that come to mind are the 2 million that were passed with the gigabit technology high-speed broadband capability. that involves taking fiber all the way to home. that would be in the traditional franchises of the 22 states where we operate today. the rural broadband would hit all 40 states. there will be places to that comment where there are redundancies in jobs. but we do have a very good track record on how to address the situations we used very extensively attrition and feel

good about the track record in that regard. >> you don't currently offer the video subsidies in the new york city market; is that right? in the large corporate businesses we offer -- but not video, not today. >> directv does offer in the market is that right? >> we do. >> how do you expect the potential merged entity at&t, directv to impact the nature that would be offered by a combined company? >> i think in the urban markets like new york, there wouldn't be any change in general. they would continue to compete hard for the companies. they would have the opportunity to bundle and that is something different that we haven't done before.

>> so no current bundle? >> we might with verizon. but it's lower the speed. >> thank you. i yield back. >> at this time i recognize the gentleman from texas for five minutes. >> thank you mr. chairman. >> he is thhe's the vice chairme subcommittee. >> i would like to follow-up with you on a question that mr. collins asked about local broadcasters. satellite technology is adopted in homes. how does a local car dealer reach the market outside of the local broadcast stations that you carry car dealers or whomever can go to the cable company and by some of the vocal available channels and with satellite it doesn't. i would assume the viewers had

an ability to buy the local ad on cable as well. if you didn't, you should. >> you're absolutely right. because it is a local product they have local advertising. a directv, the nature of the satellites is kind of nationals of the advertising business grew up as a national business competing with the large media companies who are much larger than we are. they are enabling us to do some targeted advertising. we've done a joint venture with dish. this is a new technology leveraging the internet which is enabling us to target homes and we are hopeful to people to grow the local advertising. but historically it's $70 million of our 600 advertising that is local advertising. >> you may actually have a technology that is helping local broadcasters here rather than potentially hurting them. i want to talk little bit now

about your fiber buildout. common sense to me dictates that if you have a driving force behind broadband right now is a video and if you have a cheap way to deliver video by satellite rolling out the fiber network i have an article in the morning news about how you are still rolling it out becaus offu are competing with google fiber. how will we see the rollout affected. and to the midsized cities and then eventually to the smaller towns. >> one of the interesting things about the transaction, and i've referenced it a couple of times now. video service whether it be over

fiber or fiber to the node technology we lose video service because 60 cents of every dollar goes to the programmers. combined with strict tv and creating the opportunity to make our programming costs for quick directv programming costs makes our fiber-based tv product profitable. it fundamentally changes the economic of the fiber build. so when we announced a deal that we were going to expand our fiber to the home footprint is because of the economics of the more profitable video product and in your districinto your dit corpus christi, 16,000 homes would get fiber to the home as a result of this transaction. victoria county out and around that area is a fairly significant number that would get fixed wireless where they don't have any today. today. so that changes the economics of the broadband build and make the fiber deployment or compelling,

not less compelling. >> so you are willing to tell me this isn't going to slow down your fiber deployment. in the buying power that you get with this merger i see how that's a competitive advantage. what about making space available for the new coming new television networks were you see the huge growing market in the spanish language network and the growing market in sports and news for these sort of things. what's going to happen with respect if god forbid i don't get elected next year and decided to start? >> we have requests for new channels all the time. right now we are considering 50. i don't have the satellite

capacity for 50 but we do have two new satellites coming up over the years we have a process internally where a couple times a year i sit down and what are all of the requests? we already have 152 independent channels and we welcome that as an important part of our offerings so i would expect with our new satellite capacity and with things like doug gigabit you can do the video diversity of the independent channels. >> thank you very much. i see that my time is expired. >> thank you. at this time you are recognized. at&t failed to demonstrate this transaction and in large part he argues that the buildup that you are speaking about of the 15 million customers in fact

enhancements rather than the buildout and it may have been something that was part of your capital investment anyway and something that isn't reflected in the public filings and not specific to the merger. can you speak t to to the firstf all and tell of the 50 million how many are enhancements that have existing service and how many are buildup for the new customers. and is it something that you plan to do anyway that isn't specific to the merger not to say that it's not a good thing but in evaluating this put you respond to that? >> i went through earlier specifically what commitments we have made and they are in our public financial filings where we've committed fiber and broadband to 57 homes passed with fiber. the 15 million broadband user enhancements or editions are

incremental to that. the 15 million is split. 15 million is a technology that we are very enthusiastic about. it's called fixed wireless. interesting name for the technology. but what it is is taking advantage of areas where we have significant spectrum and it tends to be what role america. in fact it's where we have 20 megahertz of spectrum deploying this technology and using wireless to deliver 15 to 20 megabits of service to those homes. now to the point we are going to use the existing infrastructure to put up these capabilities but we have to go in and put antennas into homes and devoted installations. there are 2 million homes where it is called enhanced but what we are doing is deploying fiber to the home and going out and digging up streets and putting fiber in the home is a significant commitment to what we have already made. >> some of the witnesses spoke of the testimony into the

written testimony they've raised issues with net neutrality. and should part of the remedy to address the issues raised in the transaction include extension of net neutrality? should we do that as a part of this process or should it be done? >> we have been very constructive and that the data. the rules that went into 2001 we worked extensively to define those rules and picture were that it accomplished what they needed. and we think those rules landed at the right place. they were very cautious to tread into the wireless area because wireless networks are not like fixed line networks. we have a limited spectrum the congress is working aggressively to deal with when we have a limited spectrum and capacity doing things where it comes trains with you can do to deliver traffic can be very hazardous if you will too service quality in general. so we felt we had to walk very

cautiously and be very delicate and how we deal with the wireless situation. >> mr. white, can you talk to me a little bit about what directv is either committed to doing or what will be part of the term of the merger agreement to ensure that small or independent channels will get a fair rate to determine that directv is already the second-largest video distributor and will presumably have its market position and enhanced as a result of the merger was commitments have you made or what terms would be part of this that would protect that? >> i don't think we've put in anything specific to the merger agreement. clearly every distributor of the video right now is struggling with rising content costs which are 60% of our costs and they are growing at far in excess of the consumer incomes, high single digits from eight to 10% a year which puts a tremendous

pressure on the business end of the need to raise consumers prices. i would say certainly that colors how we look at all to go she asians big and small if we've taken on the big guys and we try to keep costs lower. it's a tough battle. but as it relates to independent channels, we have both our public interest obligations that we continue to live with. 4% of the channels would be p. i/o. we have 152 independent channels. and in today's world with over-the-top as an option as well with broadband, we can put things up as an application just like we've done with pandora and youtube so that we can expand beyond that and look to it if consumers want. >> may i ask the final witnesses if they would submit written answers. if there are things you suggest we could do that would relay some of the concerns that you

have raised in the outright opposition but actions we could take to the congress that would respond to the important issues if you could answer that i would be grateful. and i yield back mr. chairman. >> i recognize mr. isa. >> gentlemen, when you get as the chairman asked or i'm used to going first to all of the material is mine. when you get down this far most of the good questions have been asked and this is no exception. i want to run a concept by you because i am also a member of the energy and converse committee that often looks at the other side if your issue in the fcc. so, when i say for example comcast time warner nbc cut at&t, directv, verizon, fox committed to network, cbs, sprint, t-mobile, abc and google and everyone else.

are we looking at a future in which an order to be competitive companies have to find these partnerships and allies and mergers in order to be able to create real viable competitors in this case at&t interact tv to some of these other hypothetical and not so hypothetical means that i mentioned. >> for anyone disturbing the peace i would randall speak to the broadband aspect when 60% of the cost are in the content that you distribute in the seven companies control 75% of the content costs we are already in the world of dealing with big scale providers of content with the tough negotiations big and small and in our case we have had our battles with big ones on

behalf of our customers i think as a reality to do the kind of investment that we are talking about in broadband, and i think that he reverted to his earlier to be the exciting thing is not just the commitments that we are making today but the fact that at&t having a profitable business will continue to support them in increasing speeds in broadband which we know that's where our future is going for the long-term. >> i don't know where the future industry moves go and what consultation transpires. we view this as different. this isn't comcast time warner it's not sprint and t-mobile -- and you don't have a major content element we have some of the other names and hypothetical names and that's why i asked the question. >> you are right. we are putting the tv product with the wireless product and

creating a value proposition in the marketplace but there isn't a content play per se. >> i'm going to go back to the others. in your opening statement, you were very concerned but i would presume that you had been equally or more concerned when the major cable companies and content providers joined, right-click mr. lieberman had the same thing? >> there's definitely a concern. it's not only content providers merging with distributors. it's also just distributors getting larger. they get more influence over the programmers. they suffer and if we want to have a market that is dominated by larger players we have consumers in the rural areas that don't have options and that may be the market that we are going to look at. >> that's the reason i started this way. on this side of the office

building we deal in the antitrust question. but antitrust since the bond of antitrust and teddy roosevelt has been about recognizing that companies compete to the unfair advantage. do you agree? that is what antitrust is about is maintaining the opportunity for the real competition. it's not just for your merger but in my mind how the committee deals with the promoting of competition. in fact do we not have a problem that if we do not create certain large entities that can deliver the product and compete to my household to make sure that i have multiple choices in my household wherever i live that in fact we will not have competition either for the delivery of content or quite frankly we have a problem with

the delivery of content being at a good value; isn't that true? >> we think it is certainly true and this creates a greater opportunity for us to combine with the broadband capability. for us every satellite costs $400 million. on the wireless business, they spend ten or $15 billion a year in capital spending. it is expensive to rewire america and that is kind of what we are about collectively. and that's how we compete. >> thank you mr. chairman. this is in my congressional district. so the good news is those lunches tend to cause a similar amount. although it is reducing the cost of the launch. but the satellites are transmitting so many channels but i'm confident that in fact the competition from space becomes one of the competition hopefully the committecompetitil realize needs to be viable to

maintain the antitrust environment. >> with a gentle man yield? >> i will yield 15 seconds. >> i just want to make a statement about the government investment in infrastructure, the space program. the hundreds of millions of dollars that the federal government, through taxpayer money, spent two prepare to turn that industry over to the private sector of which mr. issa is proud of. >> to the gentleman from north carolina for five minutes. >> thank you mr. chairman. i represent back in north carolina wanted to know what it means to them in the merger. we had lots of good conversations and i would like you to succinctly boiled down

and ask this question. three years from now what are the top two things you think that my constituents customers will appreciate or dislike about this merger and i would ask mr. stephenson and mr. white and event mr. lieberman for their top two-point trade so starting with you, mr. white. two things that you think my constituents would appreciate in three years time. >> 15 million more will have internet service that don't have high-speed internet today. and i think up to 70 million homes in america out of 115 million will have a much better offer to compete with cable companies. >> as that plays itself out we will show that there will be downward pricing pressure in this industry as we become a viable competitor as the

programming costs begin to climb at a lower rate we think is beneficial to consumers and a pricing standpoint. we think also more broadband is very, very good for the over-the-top content distribution models so more broadband will help accelerate the over-the-top models and bring choices for customers on content. >> may be the top two things they will not appreciate in three years. i think the rising prices that they will see are the service te providers that have to pay for directv programming. and i think number two, the concern they would have distressed the increasing pressures, the decreasing competition in the smaller providers can provide as a result of the increasing consolidation that is happening in the marketplace not only due to at&t directv but also comcast time warner cable. >> if i was a rural resident i would be wondering whether i was

only having wireless choices or the fiber and high-speed broadband options are available to people in the more densely populated areas. and i would also be concerned. i agree the top video is a great benefit to consumers and what people benefit from is a choice and a variety of over-the-top providers so i would hope that in the future the customers are not driven towards using just one or another. if they update their own over-the-top video service that it doesn't discriminate in favor and discourage them from using the competing services like its own services from the data caps but not of the competitors. the gentleman from new jersey. >> thank you for holding this committee. my first question is for mr. white. the cable association states that reductions and programming

cost at&t and directv they receive as a result of the proposed merger which may lead to higher programming costs for their members. how do you respond to that? >> the reduction of the program costs are the production of the cost that currently at&t pays so we don't make any assumption that the cost would go down necessarily, but it's all related to the cost of content paid today. our belief is as we look at that, frankly all of us battle in these negotiations every day the cable operators do as we do as distributors there is a significant amount of leverage that it's hard for me to see in the world where there i there'sy $40 billion of affiliate fees in savings that would make that much difference over time to

what they would charge the small operators. >> so do you think that this would increase the cost of your competitors by any means? >> that's got nothing to do with our thinking. it'it's about getting the capabilities to serve the 75% of companies that leave directv because they can't get a bundle right now. i don't accept that and furthermore i think that some of our smaller operators you have to remember in the local market they are very powerful in terms of their coverage and they negotiate a very tougnegotiatedi don't expect them to want to see their prices increase any higher than they already are. i have a very rural congressional district and it is an underserved population. at&t and many other providers as well as cable operators have made significant investments to reach my constituents many of whom struggle to get the

dialogue. can you explain how this would result in increased broadband services for the communities like mine? >> looking at the list here the transaction will accommodate again if you have a profitable tv product we now pair with the broadband technology and its these economics look really attractive we are going to use a wireless technology that will give 15 to 20 megabits and build 13 million households in rural america in misery that is 340,000 households a pass with this technology and this is one of the areas we are enthusiastic about. we've been looking at this a long time trying to get the economics to work and it works once you put a profitable business product which directv brings to bear in this technology so that is what we should see. >> representing the

congressional district with your statement today i want to point out the only way that i can get internet service at my house in the office or satellite for larger sized competitors typically have an advantage relative to the small rifles as a result. a small sizesmall sized competin outperform their rivals on product quality. what other competitive advantages aside from the size with the combined entity of at&t and directv have? >> consumers benefit from having independent distributors in the market company.

they are often in areas where larger players do not want to invest and do not want to serve. with regards to your question, first and foremost i can't discount the importance of being a just large when you're negotiating the programming costs. that is the same for small operators as well. i think being large have other advantages of having just other financial resources whether or not it is marketing to the customers for instance. they are very present throughout my district. will they be able to compete with at&t and directv on the basis of the higher product

quality? >> they will compete and do what they can to overcome the significant disadvantage that they face in the programming fees that are significantly higher than directv, but that's competitive ability is getting more and more difficult over timtime into fewer customers eny having a competitive choice between the two satellite providers and their local cable operator we need to look at the rules are driving the consolidations to ensure that they can continue to benefit from that in the future. >> we are going to have a second round for the members that are here. i will go if you have any.

>> we mentioned that neutrality and that they were committed to the sec guidance. the general i'm not sure what the position on net neutrality is. it seems to me they are backing away from what was originally conceived of as net neutrality. >> they have committed to follow the 2010 over in order. the rules are partly vacated by the dc circuit. but certainly they might promise to abide by those rules even if they are no longer enforced for some of the industry. i think there is a question about the extent of the protection they offer to buy your list users. while they provide less than the wire line broadband they don't provide protection and one of the areas is for services the provider itself offers area there are some cases they cannot discriminate against the

services. if at&t does offer a new over-the-top video service, those provisions of the rules might take in where previously they did not offer such a video service and they might not. that is a sort of interesting point with the 2010 rules. >> i think most members of congress are very concerned. the internet has sort of been a gateway, not a gatekeeper for the broadband providers. and i know as a telephone company you are subject as a common carrier. we have seen reports of the fast lane and slow lane and if there's a reasothereis a reasons a concern. >> we are working and public knowledge is working now for

strong net neutrality rules that would apply to the entire industry, not just one company. i question whether it makes sense to apply the rules to one company and i preferred him to be industrywide. i would presume if we would succeed to get the rules even better than the 2010 rules in place if they go beyond the rules and the level of protection they would be subject to them but if they go not as far as the 2010 rules. it's something the committee ought to look at. the discriminatory process is a concern. we want to preserve the competition that we have. and you talked about a differential of 30% in your

testimony. you said the proposed transaction to the affiliate programmers and incentive to charge the higher prices for at&t, directv and then you say regulators should adopt the remedy to eliminate the ability of directv affiliated programmers to charge higher prices. nbc and others would just be directv, but would you -- i know there was arbitration that expired internet tv and have to submihad tosubmit to arbitratioi think that comcast still does and use it in your opening statement you didn't feel like that was sufficient. do you want to comment on that or on the discriminatory pricing? let me start with the issue that is most directly tied to the deal which is direct tv

incentive to charge the rivals high-priced is which will get greater as a result of the deal. there isn't enough protection to avoid that problem. they are subject. the program access rules already exist there should be heightened protections and it's argued. the fcc has asked for that same. so it is part of a 2008 merger and had arbitration conditions opposed to them and that was based on coming up with a rate that was based on fair market value for the program that has expired. and we the leaves that a similar condition should be adopted to address the harm. however the one that was

previously adopted had some flaws but remain expensive for the operators to use. so if you have a remedy that is too expensive for the cable operator to use, you pretty much have no remedies. so we need to look at this type of remedy and put some type of modifications to make sure that it works for all providers that need it. just to eliminate the ability. >> we should eliminate the incentive to create the price for the rival more than the price they would've charged them on rival. >> you all support dds and at&t. but because by saying with some of the members of congress and this is the most frequent. i don't think anyone has asked this. one of the principal proponents

of the at&t direct merger is directv continuing relationship in the nfl. what can you share with us regarding that relationship and your customers ability to get the package. hispanic thank you for the question congressman. as you can imagine the content all of our customers are very excited about this here when we kick off the new season we've had a 20 year relationship this here. the relationship is excellent. the current deal was a multitier deal that ends. so we are in active discussions about renewing our nfl sunday ticket product and we are hopeful and optimistic tha thatl happen and i'm confident on the discussions.

mr. johnson will close with this question. >> with the adoption among the low-income families comcast committed to offering certain low income families broadband internet access at affordable rates. and as a result of the program nearly 1.2 million americans have joined the program. 86% of whom use the internet daily. 21,000 which are in my home state of georgia with just over 17,000 in the city of atlanta allowed. we'll at&t connect to a similar program to advance the public interest and digital learning

literacy training. >> i'm not familiar with it. but we will look at it. it's not only in the communities that we serve like that probably our own self-interest we are doing a lot in terms of the nano degree is trying to help with low-cost education for people to get degrees that would equip them to do things in the digital world and we are very excited about it. we also have made a number of investments to ensure that we can address that end of the market and the customers at the end of the market are getting a robust broadband capabilities. our experience in terms of getting broadband in the lower income communities is not the access to broadband is the access to computers. what is happening at a very quick pace for these devices.

these are low-cost computers that are wirelessly connected into getting a really low cost for people in lower income communities to gain access to the digital economy so we are focused in this. but i would be glad to look at the areas that you address and evaluate it. >> as part of the rollout in the network in kansas city, google includes a service with basic internet service that consumers pay a one-time construction fee to connect their home to the network. doeit does at&t offer a similar service for its fiber networks? >> what we have done -- google has done some things and i take my hat off to them they modify their approach and tickets to boston. and wha what they receive in tes of building out the fiber in austin and the municipalities was very interestin interestinge fact as soon as they announced

that we told the community if you make decisions to make concessions to us we will build a fiber network as well. we launched our network up in november and google has yet to launch bears in austin but it's a good competition. the robustness of the employment of the communities and different business models emerging like the one you mentioned in kansas city and austin and north carolina as well. >> what other outreach programs does at&t offer to the low income neighborhoods and rural areas? >> what programs? >> i don't know off the top of my head that we can get back to you. >> they do have at&t that's a

valuable program that certainly keeps students from dropping out of school. >> they have the ability to use the multiple hundreds of millions of our commitment to the high school dropout crisis particularly on the african-american and native american dropout crisis was epidemic. so we have made a major commitment of money to address this and move the needle in a lot of areas that has continued. it is in terms of the outreach to enable families, loving, and also rural folks of what the opportunities are in terms of

what you offer and how it can benefit the people. so in terms of outreach not so much programming itself what do you do in order to make people aware of the benefits of internet connection and the other services that you provide. >> it's a good challenge and i can't give specifics of what we are doing. i will let you take it under consideration of what we can do better. >> it is an outreach program big-time. >> iowa to tell you in that regard one of your biggest issues as the company is -- >> it is a term in this program. [laughter]

>> you all agree. it is access to what i would call computer and digital literate employees. we need a significant number and we are doing creative things not the least of which funding for any of our employees can qualify the masters of computer science at georgia tech university of a purely online that's been certified by the governor and by the board of regents has a fully accredited degree and at&t is committing to pay anybody that can qualify and make it through the program. we are bringing it in house and bring the certifications to begin to build the skill sets for people for those in the

skill to learn about it and take advantage of it any programs that you may have. >> we have a number of digital literacy program and in fact be inspired program that was referenced we've actually done some things with the inspire program wherinspiredprogram whed in companies who do digital literacy training and do things in schools to develop the curriculum and so forth, so we have made some investments. the areas continue to be a focus and i would be glad to give you a full detailed listing of all of the efforts that we have going on in that area. >> i would look forward to you all thinking outside of the box and coming up with some new and attractive ways of making your

service is available to those who cannot afford it or simply do not know about it. and you've already covered the fact those without access to your going to take care of that but there is the other soft component of it also. >> i yield back. >> i think all of the witnesses for attending and answering the question and i thought you all give excellent testimony. without objection all members have five days to submit additional questions for the witnesses were additional materials for the record. the hearing is adjourned and now you can go over to the senate and answer their questions.