about the power of the president versus the powers delineated in our constitution for congress and the judicial branch. so let me close once again with president obama's own words because he got it right back in september of 2013. he said, congress has said here is the law when it comes to those who are undocumented. what we can do is to carve out the d.r.e.a.m. act and that is what he did with his 2012th executive order. saying young people are people

that grew up here and americans we should welcome that if we start broadening that which is exactly what he did in his 2014 executive order that essentially i would be ignoring the law in a way that i think would be very difficult to defend legally, so that's not an option. and that is why the courts struck down or stayed implementation of the 2014 executive order. thank you mr. president. i yield the floor.

next a discussion on governance and leadership in the world from the united states to europe to asia. it's part of a conference hosted by the rand corporation called set politics aside. speakers include author francis fukuyama and former banking regulators sheila bair. this is an hour.

>> hello and welcome back. i am michael rich president and ceo of the rand corporation. the focus of the last session of course was the middle east foreign policy more generally bear also the middle east of courses or region several hundred million people. hardly any democracies in that region. in fact, authoritarian states teetering states, banishing states increasing amount of ungoverned territories. in this hour we are going to shift our focus to places that on the surface seems stable, secure and even prosperous but the question is are they and will they be up to the challenges in this century?

it's an appropriate time of course to take up questions like this. it's the 25th anniversary this month or this week of the opening of the berlin wall. this year the 25th anniversary of the protest in tiananmen square. in fact 1989 there was a wave of democratic transitions beginning in eastern europe obviously latin america asia and even africa. liberal democracy and free-market capitalism seem to have prevailed in that great battle of ideologies for various forms of totalitarians and it leaves one of our panelists have written about it and in fact i that was frank fukuyama to my left. he wrote an essay here at rand. he sat right across the hall from me. it's entitled have we reached the end of history a paper he then developed into a widely cited article ultimately a very famous book. the original rand paper which still has a question mark at the

end it was end of history and i noticed over time as it went from paper to article to book the question mark dropped and i may ask him about that. but i read that frank recently said that the year 2014 feels different than 1989. how true that is. russia of course now has been electoral authoritarian regime. it seeks to take back territory that lost when the soviet union results. the soviet union has an economy that rivals ours but remains authoritarian. the transition to democracy or the transition of the path to democracy in many countries has proven now anything but smooth or straight. in the united states we of course have experienced a prolonged recession, a gridlock with no end in sight to that. the climbing conference of public officials and their republican cetaceans and in

europe we see an incomplete union in which nicolas has written about secession movements and echo mike stagnation. so hence the need for fresh approaches to governance and leadership and that is the theme for this session. i think we have got almost a perfect panel to address this. let me introduce frank fukuyama three or four time alumnus. i can't remember the research staff there. he's the author of many rand reports and best-selling books including the 2-volume set on political order that we are going to get into today. the second volume of the set has just been published. sheila bair is two francs left also a rand -- sheila shares the systemic risk council and the federal deposit insurance corporation in 2006 through 2011, critical time. she is the author of bull by the horns, fighting to save main street from wall street and wall

street from itself. she has another book coming out. it will come out this next spring that will explain the financial crisis and its implications for young adults. and it's title is the bullies of wall street. this is how greedy adults messed up our economy. [laughter] i told sheila she has made it easy for reviewers with that title. nicolas berggruen is next to sheila's left. investor, philanthropist impressive founder and president of the berggruen institute on governance and he has launched several government reform projects including history the 21st century council which is focused on global governance options, g. 20s type structures. the council for the future of europe and importantly for residents of california. he has co-authored a book with nathan bardolph, intelligence governance for the 21st

century a middle way between west indies. and then simon sinek is to my far left. simon is an anthropologist and advises leaders in business government of the nonprofit sector on issues related to leadership and i think it's a very close tie into the subject we are going to discuss. he does work with rand as well as one of our adjunct researchers. he is contributing to research several best sellers and frequent speaker here at rand. frank has done a lot probably more research and analysis on the causes of political decay. more thinking about the problems plaguing modern liberal democracies than about anybody i know. nicolas's book contains some of the most intriguing ideas for fixing the breaks in democracies taking ideas as the title suggests from east to west in putting some of them to the test here in california. few people have thought more

about the shortcomings of restitution for governing modern economies and their financial institutions than sheila and in the end it all boils down to the competence and leadership qualities of individuals of the institutions that we have a nobody better than simon on the quality of leadership. let me start with frank. frank you have gone a long way back in history, collective experiences from around the globe. what does an effective modern state a liberal democracy need to endure and can you list the ingredients and what is causing the decay in those institutions that we are seeing? >> thank you michael. this is a really important issue because the difference between 25 years ago when i wrote the original article and now it's back then i think most people around the world has looked to the united states as the model of an effective democracy.

i think very few people would say many democracies are not saying we want to replicate everything is going on in washington with the shutdown and refusing to pay back previous deaths in the sort of thing. so it's an important thing for global politics. modern political order has to have three things. it has to have a state which is about power and ability to use power to enforce laws and provide services and protect the community but it is also got to constrain power. it has got to have a rule of law which basically sets rules for the powerful. it doesn't set the rules for the president and the prime minister it's not the rule of law. finally there has to be democratic accountability which make sure the government acts in the interest of the whole community and not just the ruling elite. and i think americans have a problem in perceiving the world because in a sense the american

system is built around the instruments of constraint around law and democracy. that is what we think of when we think about our political system. we don't think about the state part very much but as my mentor samuel huntington said before you put -- can restrain power you have to have an effective administration. that is i think where we have a big problem. my diagnosis of our situation is it's a collision of several things. >> just for a second i want to ask nicolas whether his definition of intelligence in governance as close to those three ingredients that frank just listed. >> frank one of the greatest thinkers today in terms of understanding governance and government so whatever he says he is right.

[laughter] to address one of the key issues here government why the government? is frank says its power but government is really there at the end of the day to serve the public. it really has a function and the function is one that maybe control, direction but also service and the issue that at least we see at the institute is that the service in democracies and very much in the u.s. has become too politicized. so you have to be able to separate the political side with where do we want to go morally and ideologically but also the government service bureaucracies. it it needs to be there really to make things function and make sure that people have

opportunities, that they are safe and there is a future for everyone of these visuals and that has to be depoliticized. i think the issue we have in the u.s. there are a lot of other places and that is why reform is so typical in democracies. and why it's become so criticized. >> with that basis let me return to frank and let you complete your diagnosis because maybe you now agree with nicolas. >> that's a different way of saying what i was saying. you actually have to have a competent executive administration. i think the problem right now is so everybody is aware of polarization. right now the most liberal republican is more conservative than the most conservative democrat. that is something that has been measured very clearly by political scientist that has happened since the late 1980s. that is just a fact of life. there is also a huge group of growth in interest

well-organized and well-funded. the supreme court has said money is a form of free speech so money and politics makes him -- makes much more difference in these two. these by themselves would not be a problem but for the institutional structure. the founding fathers were interested in a strong centralized power so they created a very complex system of checks and balances in which different parts of the government checked other parts of the government but unfortunately when you bring this together with polarization and powerful interest groups it leads to what i would label a plutocracy meaning of rule by veto where it is extremely easy for well-organized small minorities to block things there in a broader public interest. that is why we have got this absurd connection thousands of pages that is basically a collection of special privileges. that is what congress has not been able to pass a budget since 2008 and i would say that is a

prima facie case for decay. >> it's a good lead-in to a question i want to ask sheila because one of the changes that has occurred is that the economic and financial institutions that government is also responsible for regulating and overseeing are now much larger much more complex, much more international. sheila how when your experience does that set of trends complicate the government's challenge for modern democracies? >> it complicates it a lot. i think a lot of the cynicism that we are seeing now the lack of trust i think a lot of it stems from the breakdown of the financial regulatory system leading up to the crisis in the bailouts that ensued. obviously it helps people who are responsible for the mess to begin with. i think it did create a lot of

cynicism in government but i think we can get that back. we are not doing a very good job right now. again getting back to remarks earlier today which i was quite taken with and because i think to be a good public servant and an effective public servant and we do serve the public. agencies like the nsa over the fdic or whatever should not be about political purpose. they should provide a service. he had a clear understanding of what his agency did. it was to protect the u.s. public against threats and gather intelligence. i'm happy for him to look at my telephone records. i know that a person like that in people who work for person might that know exactly what to do and what not to do with that information. but we don't have that kind of strong sense of public purpose i think with a lot of the leaders of the government agencies we have now or if they do they don't publicly articulated. they need to talk to the public

and explain to them what they are doing and why they are doing it. especially in the financial sector. we are getting a lot of reforms. some of these bank regulations that are coming out now and i think again it's because the regulators are ronica we are becoming less effective than less confidence because they know they don't have the public trust. they don't get the political support they need and there are too many of them so they counter each other and there's relentless lobbying against it. the financial crisis has a lot to do with the cynicism we are having and unfortunately the government response has weakened the competence even further. >> so frank and nicolas have outlined in different ways but i think are quite common ground the ingredients for an effective set of institutions. simon what are the ingredients

for effective leader of an institution of the sort they have been talking about? >> first and foremost leadership has nothing to do with rants. authority comes with friends and their many people is that at the highest levels of an organization who have authority that they are not leaders. they tell us because they have authority over us but we would follow them and we all know people who said that low levels of organizations that have no authority but they let the person of the left of them look over the person to the right of them. as you gain more authority have the opportunity to look after more people. and this is where we trust in our leaders. we have social animals are spotting to the empowerment ticket people and put them in a bad environment and they do bad things. so the trust in our leaders is the belief, the human intuition of social animals that are leaders which is why we would

devote blood sweat and tears willingly and probably help with their vision. when we have the sense the belief that they have their own interests in mind or rather they would sacrifice our lives to protect their edges which is even worse than we keep our walls up and keep a safe distance. it's the reason we don't trust politicians. though we may agree with the words that come out of their mouths we know they don't believe all the words that come out of their mouths. so we keep a safe distance. it's a very primal reaction which is can i fall asleep at night and trust this person and can i trust -- turn my back and trust this person wants that me? if there's any doubt then any doubt then trust the case and self-interest prevails. >> nicolas you have thought a lot about what we might do to change our system here in the united states. can you tell us a bit about the path we should at least consider

going down to fix some of these problems? >> it's a complex problem and there isn't a simple recipe but i go back to what i said before and i apologize for that the sort of part of what the government has to do is service. at the same time citizens have to approve of the government so they should have the last word. there should be some separation or some difference between serving citizens and giving power and responsibility to people who may be the be like anderlecht. so there has to be some difference there and to your point of leadership the question then is somebody may look good and be a good leader and be

popular but may not be the best administrator. we have to be able to make that difference and government has to on one side be able to attract people who are willing to lead and inspire but on the other hand there has to be an organization that is capable and has to be able to attract people for that. i would say what is interesting is and i would love to get the view on this is government in the u.s. and in a lot of western countries able to attract the best people? is a prestigious, rewarding, exciting to be in government and is government attract the best people? i was listening before to -- countries that are less rich than this one saying governments have to pay more to get better people. i think in this country maybe that is also true that there has

to be prestige. there has to be recognition that comes with serving government and i think that is being lost. so if you don't get the best people you are not going to get the best service. >> that is very true. it feeds on itself because people are more cynical about government and they get relentless. pretty soon you want to go into that war as it becomes more dysfunctional. good people want to get things done. or even worse getting the good people in and people who want to use government for their own purposes at a few tax dodges and get this good -- though that's not what you want. i think it's a real problem and again you want to attract people who are committed to serving the public interest by congress and elected officials which are agency does in protecting and

sure depositors whether it's national security whether it's the collection of the tax code. you need to identify the public purpose and for that reason and not other reasons. again i think it's important, your comment about public servants especially political heads being good administrators. that is a real issue as well. we need better management and business skills frankly and government leadership. i think there has been a slow recognition of that but again you can't have people who know how to defend their agencies execute and operationalize their agency in way that's professional and you need to get out and explain to people what you are doing and why you were doing it. that helps attract people. we had, it was incredible the people at the fdic. folks did identify with the service we were providing and wanted to be a part of that.

again stature is the only thing you can compete with especially in financial services. you will never be able to compete on a compensation basis. frankly i don't want people looking for multi-million dollar salaries working at the fda. that's fine go make money feud with the right way but that's not what you want to drive the person you have working for a government agency. you want them paid fairly but hopefully a higher purpose and why they are joining in and they will do a good job. >> please nicolas. >> i was listening to the comment and frank may agree with me but 25 years ago when the walls fell in berlin and after the end of history and other important papers and books 25 years ago it would you have predicted that today you would have more countries that have

done -- become plutocracy's innocence? i mean in terms of the large countries becoming like russia, turkey india. >> it was a military dictatorship back then. >> in terms of governments they have become you could say little less democratic versus not. >> i.d.s disagree. there are about 35 electoral democracies in 1970 and depending on how you define it its 110 to 114 right now so there has been a huge increase. >> maybe i am wrong in terms of 25 years. maybe it's 10 years great. >> for the last eight years there has been a regression. >> i'm sorry let's say eight

years. >> in fairness he did say you might disagree with him. >> sorry, the point i was trying to make the reason why i think some of these are getting more traction is that maybe they are perceived by the citizen's right or wrong to be more effective and the citizens of some of these countries have seen the government in some ways perform. the issue that we have a democracies is our government seem to be less able to perform and to change. that is really my point. not so much about a system. i'm not saying that system is better or not. i'm saying there is a perception by a government that is more effective. citizens in the end will be better served and that makes

democracies harder. >> i'm looking for a point of entry to start changing this situation so what i have heard so far is that do we have a set of public institutions that are not professional competent, service-oriented and one problem is that the human capital in these institutions isn't as strong and appropriately motivated as it should be at all levels as simon pointed out. one reason for that is the polarization of congress which has led to gridlock over complexity of relations and so on. and yet congress is elected by the very citizens that should be the consumers of the services. i was in scotland this summer just before the referendum. there was very little publicity about campaign publicity. no billboards and hardly any bumper stickers or signs. the turnout in that election

84.5%. in 2012 when president obama's was reelected the turnout was 58% of the electorate. we had a race for mayor of los angeles the second biggest city. 60% of the registered voters turned out. how do we fix that problem? >> is that australia? is a lot you don't -- you get fined if you don't. what that does is it sets a specific duty. there is something to be said that might get a kick out of our politicians to say they are getting mandates when they get a percentage of the percentage. isn't a mandate to people who get the bode? [laughter] i think the thing that fascinates me is why the polarization. yes we are polarized and i had a conversation with a member and i

congratulated her for the 9% approval rating and asked her what he think the reason is? she said that the system. i said you do realize you are the system? one of the things that fascinates me is why the polarization and if you think about what makes functional organizations functional and it goes back to trust come its relationships. good old-fashioned human relationships and some damage was done when newt gingrich implemented some of the policies and one of the things he said was lead washington and go back to districts. there was a time that when you want a seat in national and federal office and lived your whole family to washington and though you may have fought on the floor during the day you set on the bleachers with your opposition at night and watch your kids play ball. tip o'neill would bash reagan and talk on the phone and be

friends at night. politicians spend so little time in washington. they don't buy apartments and they don't move their families there. they don't really know each other. it's just that simple. >> but there's a prior reason why that is happening. >> absolutely. and there's a cost for the money you make. a breakdown in relationships how can you work with somebody that you just don't know? as you know it's much worse than the polarization of democrat and republican. democrats aren't dissident democrats and republicans are interested in republicans. lacking good old-fashioned relationships self-interest prevails and we hunker down and everything becomes short term and interest rather than long-term what we can do together. not until we can fix the quality of the relationships within the parties will you see a change in polarization. >> of course when there was less polarization some people weren't happy with that either. used to hear there is not a

timer difference between the two parties create how do you fix the eroding social relationships among people who are supposed to work together and compromise while still having some creative tension and competition of ideas? >> it was functional. they would debate 80% behind closed doors and debate publicly the last 20%. now they debate 100% on the floor for theater. there is a great irony and congressman criticizing bankers are being short-term interested when their only interest was their own short-term gains as well. i for one do not believe that congress is the root of all the problems in america. i believe congress is a reflection of america and i think we are the ones who are polarized and we are the ones

who are mistrusting and we are the ones who have no sense of direction. we are the ones who are quicker to disagree. >> frank. >> that is actually some -- under the debate. data shows america's less polarized in the political class in congress. that suggests there's an institution. >> are media viewers would not agree with that. >> there is a lot of data other than just to watch his fox but in any event it's a debate. you are right there probably is more polarization but i think if you are going to fix fix it you have to give institutional rules and there are a lot of institutional rules. prop -- popular primaries, we are supposed to increase competition. the only people that show up are

activists and that is how someone like richard lugar who is a great senator can be defeated by a tea party candidate who then goes on to lose the main race. i think actually c-span in the chamber is the chamber has had it just stuck because that is what has killed deliberation. senators and congressmen do not talk to each other. they talked to add to this audience is out there in tv land land. >> i would agree with that. i don't know what is causing this effect. they are not talking to you to each other and they are meeting each other. they don't care, they don't have to deliver. there is not a broader populace there that's holding them accountable. so you are absolutely right the personal relationships worked a lot better then. they are not there. i think one feeds on the other. i think gerrymandering is a problem in the house.

the senate i used to work for the senate so maybe i am biased. the primaries are the worst of the worst in terms of activist to decide who the party candidate is. i like runoffs. i like the top two and having them go to the vote in the general elections is that it is tightly controlled primary which leads to that phenomena where you can get an electorate over the small percentage of voters. when a better personal relationships but also the gerrymandering has got to go. the districts need to be drawn less impartially. >> i will call on nicolas but let me throw something out or maybe he can address this. we started the day with the discussion for innovation at the city level and we have been

focused in this discussion at the federal level in the united states at least implicitly so i guess the question i would have is whether or not the local level is the place to start. nicolas you have written about devolution is having some advantages for performing certain functions. you have a view about that whether or not we will expect to see pushback against polarization and maybe come from the bottom up rather than at the presidential politics level. >> i was going to make a point on the prior discussion but it's effectively the same point which is big issues that are issues that everyone which they debate in public in front of c-span, you are not trying to find a compromise.

you are trying to win votes and that is damaging. we created a committee, task force 14 republicans and democrats very prominent and it was a strong experience but also ideological views of people who were not in office at the time. we had a series of meetings, i think 12 meetings over a year to come up with proposals on deep issues like tax reform. republicans and democrats who ideologically have very different views were able to after difficult discussions but constructive conversations they were able to come up with thoughtful bipartisan proposals. that was done frankly in a place like this like grand environment behind closed doors. not to hide anything but to be

able to deliver it openly. so people -- important issues by people respect him both sides and to get that space to political classes on both sides is what is lacking. to go to your question about cities being able to potentially be more effective than states or countries i agree. simply providing clean streets or water shouldn't be political. it's just again a service. that makes mayors and local officials potentially more effective. >> let me turn to the audience for questions for any one of the

poor -- four panels. i know the microphones are coming around and they will signal that they have a question. >> starting on the panels left. >> this question is for nicolas berggruen. last night we talked about interstellar and the opportunities for governance on a new frontier. this morning we heard from admiral rogers regarding cyberspace and some of the challenges associated with governance of cyberspace here on our planet. but internationally. i'm curious if you have given any thought to live frontier of governance which might be something like the interstellar governments were governance of cyberspace on a grand international scale and how that might take shape or form

contrasted to your comments about the state of california that there is no easy recipe. >> i'm not sure they are easy recipes for cyberspace. in truth what has happened, i think it's a good thing that the consequences are enormous. cyberspace has become incredibly relevant, the same way as 50 years ago nuclear weapons, let's say nuclear power became incredibly important for good or for bad. it creates energy that you can also create weapons. the same thing with cyber. cyberspace is a fantastic opportunity to share and communicate information. at the same time we are going to be in a position where we need to understand between nations what we are allowing ourselves to do or not to do between

civilized countries. our country is going to do the economic espionage up to a level. what should countries permit or not and to cooperate there and to establish limits i think is going to be important. we are just starting this kind of global negotiation but i think that it's going to make friends and enemies and i could really create and exacerbate tensions if we don't deal with it especially china and the u.s.. >> hi. i just had a question. in full disclosure i work with nicolas berggruen. i just had a question.

the role of globalization. seems like a lot of our focus is on national governments and their incompetence but they are often in different context than the ones which they were created. national governments were in control of their destiny in a way that today they are now. how much that we are seeing is not about improving relationships but more about the fact that we are operating in a context where they cannot solve the problems they face because they truly are global problems. they will continue to look incompetent that they said that. >> she would you want to take a first crack at that? >> i think it's a fair point but i do think there are things that should be getting done that just aren't getting done. i think there needs to be accountability. this idea we heard it's a 100 year year flood in nobody could've seen it coming. that just wasn't true and you are right that the challenges are great because of globalization.

there are still things that can and should happen. we should have the simplified tax code. our tax code is lunacy. it's horribly unfair. we shouldn't be allowing banks to borrow $25 for every 1 dollar income inequity that they fund with their balance sheet. that's crazy. they are obvious things that need to get done and that aren't getting done so i guess i hate to sound hard-nosed i'd don't want to let people off by saying it's just hard. it is hard, i know that we need leadership. that is why they are elected and appointed. so i think there needs to be -- make their jobs to do and they're clearly things that are not getting done and people need to take responsibility for that. >> frank this is something you talked about as well. >> if you look at the deepest causes of financial crisis and the global forces that was the accumulation of large surpluses

of -- in a lot of different countries and in a certain sense the fed ran to lists of the monetary policy. the fed could not control the ultimate flow of funds into the u.s. housing market because they were so much liquidity in the world. that is one of those areas where the g20 admitted this was was a big problem they haven't done anything really to deal with that kind of issue. i am not at all confident that that's going to happen. >> it is worse if anything and if they were going to open up the spigot there were additional approaches but we were letting banks take on more leverage is that of trying to -- it could've turned both the crisis difficult spot versus a near catastrophe. there are global dynamics no doubt that makes it harder but there are also things that a

candidate done that should've done other than proper hands and say it's too hard. >> she wasn't the reason we couldn't do something simple like raise capital requirements on banks perisolo the fact of the banking lobby is too competent? >> well it is. people talk about too big to fail but there's a problem of being too big too. there has been row progress in crafting resolution regimes without exposing taxpayers. it's a lot more work but a lot of the work needs to get them because they are so politically powerful. a lot of the end users and consumers and financial services are fearful of speaking out. even if we solve too big to fail there still this problem of too big and how it skews decision-making. >> hassan with the grand middle east board. i have two questions one for frank and one for simon.

frank the last time we met in your office he said something so eloquently that i remember something to the effect that instability in weak states starting from north africa to middle east and asia will be a threat to nation-states. my question for you is the stagnation in our political system and other countries like us which are generally seen as stable and the beacon of democracy, what will that do to the whole concept of nation-states and quickly simon i had a teacher at usc and he said something that leaders were like beauty. you know when you see it. my question for you is in your research do you believe it is something that people are born with, it be adopted, it be taught?

>> in answer to your question i would echo something that nicolas said earlier which is that i think one of the big problems in the world right now is someone like xi jinping or putin gets up and they say look at us we are on the move and making decisions and so forth and they point to washington or brussels and they say and look at these democracies that are really gridlocked. now i think in the long run i do not believe this is the right argument because i think russia and china's will have a lot of problems with sustainability with the china model and so forth. i think there are resources that democracies that particular the united states has had in the past that have come into play slowly but over time. there is no question that in the

short-run this has been very damaging in terms of perceptions of the relative strength of the authoritarian systems versus democratic systems. what happens in our country does make a big difference for global politics. >> i can meld the two questions together. there's a difference between rallying people and time is the thing that distinguishes them. we see what we call leaders and you can throw putin and then you can throw hitler in there if you want. being able to offer people something where they can come together that seems to be leadership but it doesn't last. leadership has an infinite quality. one of the things that distinguishes our democracy and

have lent dictatorship is a fantastic form of government. the problem is the session and forever people want to complain about whatever is empowers a remarkable transformation of power. time will tell who is rallying in who is leading. the second question leadership is a skill like any other. some because of the experiences they have when they are kids. there's a natural capacity for that. some kids are great at basketball and some work hard to become good leaders. it's a skill like any other that requires tremendous amounts of practice. the problem is we don't do this effectively. when you are junior job we teach you how to do your job and you get lots of training how to do your job and if you are good at doing your job we will promote you into the position where you are now responsible for other people to do a job used to do. what we don't teach you how to do that and because you are good

at doing a job we assume you're good at leading others and this is why we get managers. you are doing the better job than them. we can't help but want to meddle. for good leaders the transition they make and we don't teach and what i'm saying our mbas need to teach the transition where you are no longer responsible for the job and the results. you are now responsible for the people who are responsible for the results in the transition of becoming a parent is hard. it takes a lot of practice and is learned over the course of time which is why we want people to have experience that can practice leadership. >> nicolas. >> i was just going to say on the issue of confidence in democracies people here say how could the u.s. -- don't all that.

look at europe. the european union was constructed with the idea where we could have free trade area and peaceful after two terrible wars. when you look at europe but was not able to progress at all. it was not able to come together in terms of the big issues like economic development, economic ordination foreign policy. they were having huge difficulties and at the end of the day even though they are all democratic environments is really going to undermine more and more the confidence in the democratic system. that's really a shame. in some ways democracy are the worst enemies and not being able to come together and make europe function properly.

you have in some cases and you see it now nationalistic parties in europe that really did exist in a big way a number of years ago. it's really a symptom but it makes it even harder for europe to come together. and that is a danger. >> we have two questions here, to your right. >> out with lockheed. i think history can be a great teachers of this might be a question primarily for frank and sheila but the last time i believe we have had this kind of partisan gridlock they have been the days of reconstruction after the civil war get at the same time the biggest economic growth we have seen with the rise of braille in steel and oil. what lessons might we extract from those experiences in the latter part of the 19th century that might help us politically and economically? somehow we got out of it. >> that's a fascinating question.

it you are right if you look in terms of partisanship if peaked in the 1880s and 1890s. basically the country couldn't decide whether one to remain it kind of agrarian jeffersonian country or modern industrial urban party. that is why i guess you have to temper your pessimism about this country at the moment because i think in the 1890s no one saw a solution to this and all of a sudden you have this realigning election in 1896 that brought mckinley to power and had great leadership in the form of theodore roosevelt and the whole progressive era. the country made up its mind. we are a modern industrial country and built the rightist fusions and fix a lot of things. i would say i guess the only thing to keep in mind is that history does not always repeat itself. so in theory democracies should be self-correcting in this

fashion but you need three things. you need a grassroots mobilization where people are angry and upset and they want things to change. you need good leadership and then you need an idea. you actually have to have a concept and it can be a really bad idea. hitler had one so you don't want the wrong kind of idea. you want something more like let's say roosevelt rather than hitler. those three things have to come together to really fix the problem. >> it's a really important to highlight this idea of a sense of vision in the sense of the future that we can build on this is what i think is one of the great things about the american experiment which is the declaration of independence. we declared why we wanted a country and this is a division that was proposed to us when we were at her best that was what we are trying to offer. you compare that to the arab spring and what happened in egypt, everybody knew what they were against which is mubarak al

but nobody said what they were for. so okay mubarak is out and now what? i think that was one of the distinguishing factors between america and the egyptians. we didn't just say england out. started with a vision of where we were to go and if you look at the declaration of independence than the rest of it is here is why it's preventing all of this from happening. there is a lot to be said for that idea is really lacking in a lot of democracies. >> i would agree with that. i think he can make a difference. maybe we need to hit rock bottom. people getting fed up and are willing to give support. i would love to have a teddy roosevelt. he was all those things were talking about. yet a strong sense of purpose a strong sense of public purpose and he was willing to bring up

unsavory business classes that help the country and economy the economy. i think having that leadership today would be good and that's not to say it's not going to be difficult and challenging but people if you have a strong leader that has a vision in a way forward and that makes tough tough decisions and that short-term people can see where we are going and why we are going there is important. >> all of our great leaders always hearken back. the gettysburg address for roosevelt's four freedoms speech is. they basically are reinforcement of the founding fathers. they always go back to the founding vision to take us forward. >> perhaps a good follow-up to that. and thinking about our dysfunctional political landscape in thinking about how we teach the next generation to be good citizens what would you say if you want to cricket him

committee that would be the right messaging for classes k-12? [laughter] >> mandatory service. >> frank. >> i would say you should first just teaches civics class. the content is not that complicated but somehow we have lost the sense that citizenship is something that actually has to be cultivated and doesn't come to people naturally but it's a duty that all of us have. we have gone through a couple of generations where we think we have lots of bright and i don't think you can invoke a sense of duty unless you actively teach it. so i would really start there. >> the question on the panels left. >> brad brian in this questions for for simon. maybe this violates, hope it

doesn't violate the tenets setting politics aside to establish teddy roosevelt was a leader. simon did you think of our presidents are prominent politicians in the last 50 to 60 years would qualify as a leader under the tests you've articulated? >> of your going to talk current history i've got nothing. [laughter] i've got nothing. >> would you agree or disagree with her politics they are a level above their own position. they seemed to stand for something and if you want to compare the first and not a girl of reagan and kennedy's and i's and my girl they both use the term peace on earth. they are both crazy idealist. regardless of the methodologies and that's the difference between democrats and republicans, it's how we get to the american ideal. just go back a few years whether it's margaret thatcher let walensa or ronald reagan they were leaders. they stood for something and they existed on the level above

their own position. i've got nothing of a politician now who seem to exist on a level above their own position and stand for something and more importantly would risk their own career for that thing. the election is everything and i love elections. they lose their election but then they don't do that. did you ever believed in the first place? a good leader we can look to now come i have two good examples. i think pope francis is great. he stands for something and stand for something on a level above his job as pope. and he is really attracted to non-catholics too. and i think lady gaga is really good. [laughter] she is consistent, her message is positive about inclusion and sheet helps people boost their self-confidence. >> i have a feeling that wasn't the answer that brad expected.

but good nevertheless. any others? >> you know it's interesting that the panel actually ended up in a different place than i expected it to. [laughter] and i don't just mean i don't just mean lady gaga, because frank's book to some extent nicolas' book and in some sense she was last book focus on institutions and processes that those institutions are responsible for but in the end i think we all came down to the qualities of the individuals that both select the people in those institutions and to work in those institutions so pretty interesting circuit that we have traveled. ..

>> the federal communications commission voted on knew open internet rules to regulate internet service as a public utility. the new york times calls it a milestone. the new rules were approved in a partyline vote of three to two and would prohibit internet service providers from blocking or discriminating against

content and was top providers from having so-called pay to play fast lanes or preferential treatment. the rules also regulate mobile data service for smartphones smart phones and tablets? protect consumer privacy and ensure internet service address services available for people with disabilities before the vote the commissioners held an open meeting to debate the rules. we we will show you that now followed by post vote briefings from tom wheeler and the republican commissioners. this is about two hours and 40 minutes. >> we are now pleased to present for your consideration clear sustainable, enforceable rules to preserve and protect the open internet is a place for innovation. built on the views of some 4 million americans who commented in response to the

notice of proposed rulemaking last may. before we present the item we have two special guests. we also have a brief video from the inventor of the world wide web and founder of the world wide web consortium. they we will provide us with brief remarks. i would 1st like to turn it over to mr. dickerson. >> thank you, chairman wheeler, for the opportunity to speak today. i am here to thank you and your colleagues for taking decisive action to protect the internet as a platform for entrepreneurship and

innovation. at sea is an online marketplace. we have democratized access to entrepreneurship for over 1.2 million sellers 88 percent of whom are women who collectively sold $1.35 billion worth of merchandise. most are sole proprietors who work from home, live in all 50 states. we rely on a free and open internet that allowed our company to grow from a tiny startup to a global company with over 600 employees allowing the micro- micro businesses to reach buyers around the world and compete with much bigger, more established brands. in 1993 it allowed me an

english major with it data entry job to jumpstart my career and technology by teaching myself how to code. [laughter] without strong rules to prevent discrimination online the innovation economy would suffer. take etsy as an example. we charge $0.20 to list an item and take only three and a half percent from each item. there is a direct and long-term impact on revenue. absent the rules before us today we would be forced to raise our fees or leave our sellers in the slow lane. the etsy community knows what is at stake. on september 1030000 of them joined millions of others urging congress and the fcc to protect the open

internet. many made handcrafted objects calling for net neutrality and sent thank you cards for me to bring today. i have a handwritten note from nancy from california. she wrote, dear chairman wheeler my note is a heartfelt and personal thank you to you for protecting the free internet for all. i worked in the medical field for 30 years, but a couple of years ago a girl texting on the freeway took my career away from me. my injuries forced me to find income from something i could do from the chair. my dream is alive and viable because of free internet neutrality and etsy. thank you from the bottom of my heart. to you. thank you.

today i applaud the fcc for establishing clear rules that ban discrimination online. over the last year over 4 million people weighed in on this proceeding. today's vote demonstrates that they have been heard. thank you for voting to protect the internet as an engine for economic opportunity. thank you. >> thank you for your leadership and please say thank you to nancy. >> good morning. thank you for the opportunity to speak. i am a television producer and writer and member of the writers guild of america. the killing originally aired on amc but the network canceled it. netflix offered to share financing and we were resurrected.

when amc canceled us yet again netflix took over the show in its entirety all because the internet has opened up competition. we told some of our best stories, toughest, most heartbreaking ones in those last two seasons stories that never would have been on the air if it not -- if it were not for the open internet. with the open internet means for creativity, innovation and diversity is by no means limited to my experience. other series by giving voice to world and people and experiences never before seen on the small screen. while little more than 20 percent of comedies and dramas on traditional television have a woman at the helm almost 40 percent of the series airing on this knew online platform this

season will be run by women. this is the result of knew competition let loose on an industry that is highly consolidated the result of pent-up demand by an american public tired of hearing the same old same old innovation on the platform that does not require permission and has expanded how where and by whom stories can be told. we are seeing the free market work with increasing competition which rewards consumers and creators. however, this we will not continue without strong rules that ensure markets work properly. -- we have arrived at the moment where you decide the future. the right decision, the one that will benefit creators innovators, the economy, and the american people is to reclassify broadband

internet service as a telecommunications service which will allow the commission to institute rules that will ban blocking and paid prioritization and all the ways in which the companies that control distribution tip the scales in their favor. what you do today can secure the future of the open internet and make sure all of our voices are heard, each and every one of us. thank you. >> thank you. now i would like to ask the a/v team to play the video. >> thank you. thank you for the opportunity to address you at a critical moment. more than anything else the action you take today will preserve the those of innovation. toy five years ago for all

those years ago i could sit down write a program give copies to people and let them run. [inaudible] from this the world wide web enhanced free speech and democracy. i did not have to get permission from anybody. pay special fees from convince anybody. i did not have to worry

about competing. i don't need permission from anybody. another platform. so the openness of the internet insurers also the next innovation improvements we will have the opportunity to try in a free market just as i did. today fcc action is about consumer rights, free-speech democracy. it is also important for business.

the openness of the internet , the fact that the internet is neutral is very important. so i applaud the decision. enable the commission to write the kind of simple clear rules. the oppressive regimes abuse the legal system and can deter us from internet openness and free-speech while setting the example of how free-speech. [inaudible] many countries are facing the question of what to do about net neutrality command

i am proud of the fcc is leading the way. we are a society of laws. property is protected, fraud [inaudible] a world in which the flow of information on the internet is a social lifeblood we have to add net neutrality. thank you, again mr. chairman, members of the commission for the important steps you are taking today. >> we heard from our guests and reflect the widespread consensus on the record of the importance of protecting

and promoting an open internet. an item of this complexity and scope requires quite a team. economists, engineers, and attorneys across the commission all played roles in preparing the items before you. on behalf of the competition bureau i would like to thank our colleagues in the office of general counsel wireless telecommunications bureau, consumer and government affairs bureau and enforcement bureau as well as our chief technologist, scott gordon. with me at the table are john and stephanie from the office of general counsel members of the wireless telecommunications bureau and members of the wireline competition bureau. melissa we will present the items. >> good morning mr. chairman and commissioners. at the outset the order before you sets forth three bright line rules to ban

conduct that we no threatens the open internet. first, broadband providers may not block access to legal content applications, services, or non- harmful devices. they may not impair or degrade waffle internet lawful internet traffic on the basis of content application, services or any class zero. third, they may not favor some internet traffic over other internet traffic. in other words, know fast lane. as in the 2010 open internet order, today's order adopted standard for judging concerns with future practices on a case-by-case basis which will prohibit broadband providers from unreasonably interfering with or disadvantaging the ability of consumers and edge providers to reach one another. all of these rules are

subject to a common sense exception for reasonable network management. the order makes clear that the commission we will not tolerate abuse of this exception. the order also enhances the transparency rule adopted in 2010 which is still in effect providing smaller broadband providers with a temporary exemption and sets in motion a process to consider whether to make that or another exemption permanent. the order also notes that some data services, like facility -based voice, are not broadband access services and not subject to the constant rule. the order does ensure these services do not undermine the effectiveness of the open internet rule. also, the order allows the commission to address any problems that arise in the exchange of traffic.

the order recognizes ultimately consumers bear the harm. the order grounds these knew protections in multiple sources of authority. first classifying broadband internet access has a telecommunications service. the order recognizes that in offering this service the broadband provider makes a promise to the end-user to transmit traffic to and from all lawful internet endpoints and the end-user. this is no less true in mobile than it is in fixed. the order finds that mobile broadband internet access service is a commercial mobile service under section 332 of the communications act, and all of the internet communication access that apply to fixed broadband apply to mobile broadband. with respect to interconnection the order explains this promise encompasses the duty to make

the necessary traffic exchange arrangements that allows consumers to use the internet as they wish. these findings provide the best legal certainty for rules guaranteeing an open internet and reflect the reality of how broadband providers offer their services to the public today. to ensure the service classification results and continued light touch framework for broadband the order exercise of the forbearance authority granted to the commission by congress some 27 provisions of title ii and over 700 regulations. the order retains core authority to prevent unjust and unreasonable practices, protect consumers, and perfect -- protect universal service. broadband providers we will not be subject to utility style regulation. this means no unbundling, tariffs, or other forms of rate regulation and the

order does not require broadband providers to contribute to the universal service fund, nor is a propose, suggest, or authorize any knew taxes or fees. the order before you respond to the unprecedented record in this proceeding by a dropping strong open internet protections and resting them on solid legal ground. the bureau recommends adoption of this item and requests editorial privileges. thank you. >> thank you for your substantial efforts. commissioner mignon clyburn. >> thank you, mr. chairman. following years of vigorous debate they adopted the framework recognizing that basic freedom as enshrined in the 1st ten amendments to the constitution is fundamental to a free and democratic society. james madison gave life to the first amendment, and a scant 45 words which are fundamental to the spirit of this great nation.

almost two centuries later justice william brennan would write the historic 1964 new york times versus sullivan decision that holds debate on public issues should be uninhabited, robust, and wide-open. i believe president madison and justice brennan would be particularly proud of the rigorous robust, and unfettered debate that has led us to this historic moment, and what a moment it is. i believe the framers would be pleased to see these principles embodied on a platform that has become such an important part of our lives. i also believe they never envisioned a government that would include the input and leadership of women, people of color and immigrants, or that their would be an open process where nearly 4 million citizens have had a direct conversation with the government.

they would be extremely amazed, i venture to say them up because we are extremely amazed. here we are at a pivotal fork in the road, poised to preserve those same virtues of a democratic society free speech, freedom of religion, free press, freedom of assembly, and a functioning free market. as we look around the world we see foreign governments blocking access to websites, including social media and some curtailing free speech. they're are countries where it is routine for government to determine who has access and what kind of content can be accessed. i am proud to say that we are not among them. absent the rules we adopt today, however, any internet service provider has the liberty to do just that.

they would be free to blog, throttle, favor, or discriminate against traffic from any user for any reason or for know reason at all. if this is more than a theoretical exercise. providers have blocked applications on mobile devices which not only hampers free expression but restricts competition and innovation by allowing companies, not the consumers, to pick winners and losers. as many of you no, this is not my 1st open internet rodeo. while i did go to a -- i did vote to approve the 2010 rules, it was no secret i preferred a different path. title ii with forbearance mobile parity, a ban on paper organization and preventing the specialized services exemption from becoming a loophole.

i am sincerely grateful to you for your willingness to work with my office to better ensure this order strikes the right balance and is positioned to provide us with strong, legally sustainable rules. this is our 3rd bite at the apple, and we must get it right. today we are here to answer a few simple questions. who determines how you use the internet? who decides what content you can view? should they're be a single internet or fast lanes and slow lanes? should internet service providers be left free to slow down or throttle certain applications were content as they see fit? should access to the internet on your mobile device have the same protections as your fixed device at home? these questions get to the essence of the open internet debate. how do we continue to ensure

consumers have the tools they need to decide based upon their own user experience the consumer, not me not the government not the industry, but the consumer keeping in touch with your loved one overseas, interacting with your healthcare provider even if you are miles away from the closest medical facility enrolling online for classes to improve your educational, professional, or entrepreneurial potential without worrying whether the university can pay for a fast lane so that lecture can be watched not buffering for hours. not wondering if business is affiliated with your internet service provider is getting preferential treatment over the startup you worked so hard to establish. we are here some teachers don't have to give a 2nd thought about assigning homework that has to be

researched online because they are sure there peoples are free to access any lawful website and such websites won't load at dial-up speed answering the calls of nearly 4 million commenters who raise there voices and made a difference through civic get sometimes not always so civil discourse. we are here to ensure every american has the ability to communicate by preferred means over the chosen platforms. as one of our greatest civil rights pioneers representative john lewis said so eloquently if we had the internet we could have done more, much more to bring people together from all over the country to organize and work together to build the beloved community.

that is why it is so important to protect the internet. we cannot let the interest of profit silence the voices of those pursuing dignity. the richer ensure they're to ensure they're is only one internet. an equal chance of being seen and seen and heard. we want to enable those with deep pockets as well as those with empty pockets. they're are many aspects of this item that i am particularly pleased to support. users of mobile devices should not be relegated to a second-class internet. we no many low-income americans rely heavily on their mobile device there

only accesses the internet. they need a robust experience. i thank you for ensuring equality and erasing the mobile versus fixed distinction. containing strong and clear rules to ensure all content applications are treated equally. these are all essential to the free market, and this is pro- competition. we must ensure companies are not able to take actions that circumvent or undermine the open internet rules whether through exemptions in the definition or at a.of interconnection. and despite the flurry of press reports earlier this week very interesting for me, i would never advocate

for any policy that undermines oversight or enforcement of any open internet protections including interconnection. i am pleased this order commenced to monitor internet traffic and enables the commission to intervene if appropriate. i have also been vocal about my call to modernize the lifeline program. which has been stuck in a time warp since 1985. this order enables the fcc to support broadband as a separate service which would help low income communities breakout of the digital darkness. [laughter] in the seemingly endless meetings with stakeholders my office has heard concerns for many signs. to sum it does not go far enough. others want a ban on access

and they're are only -- there are those who advocate a band for zero rating and others you feel that it goes too far. we work closely with the chairman's office chairman's office to strike an appropriate balance and yes, it is true that significant changes were made at my office's request, including the elimination of that classification. i firmly believe that these edits have strengthened this item. reports reports that this weakens is inaccurate. with any item in excess of 300 pages, they're may be a few issues i would have decided differently. first, i would have preferred to re- adopt the unreasonable discrimination rule and reasonable network management rules from 2010. second, i think we should

tread lightly with the state's ability to adopt and implement there own universal service fund. not doing so could put a strain on the tremendous partnerships i have worked so hard to create in the state universal service fund , completely distinct from any federal program. finally, i have been struck by how much rhetoric in this proceeding is completely divorced from reality. as a rule, i generally refrain from responding in these cases but i must address concerns about rate regulation. many of you know that reforming the inmate calling services regime has been a priority. despite clear legal authority, the fcc drag its feet for over a decade of

families, friends, lawyers and clergy, paid egregiously high and unlawful fees to make a simple phone call. i bring this up today because the inmates calling proceeding represents a prime example of how the fcc resisted rate regulation for years even when consumers were subjected to blatantly unreasonable charges by providers with a clear monopoly at a severe cost to society and where they're was a clear case of market failure. for those in a panic about rate regulation they're are millions who can testify to how i the bar is when it comes to the fcc intervening when it comes to rates and charges. i repeat this challenge to anyone willing to accept it. highlight examples where the federal communications commission has ruled that a

rate is unreasonable in the context other than inmate calling aura terror investigation over the last decade. to date no one has come forth with any examples and that in another and of itself is telling. lest we forget that over 700 small broadband providers and rural america offer broadband internet access pursuant to the full panoply of title ii regulations contribute to universal service, and amazingly this guy has not fallen. things are okay. we have not regulated rates and i am unaware of any stream of class-action lawsuits. even so, the item does assert primary jurisdiction to reduce such concerns. mr. chairman, today i support this item because i believe it provides the strong protections we need and balances the concerns raised by stakeholders for a lot -- stakeholders, both

large and small. this is not a product however, of some artificial life force. a dedicated team of wireline competition and wireless telecommunication bureaus in the office of general counsel worked extremely hard on this item. they're are too many people to thank, but i would be remiss if i did not mention jonathan, stephanie, matt, claude marcus, marcus, roger, jim joe and michael but i also must thank think two people in my office especially. louis for always being that eagle eye attorney and rebecca who worked days on end to see that night was right. i thank you very much. last but not least i would like to thank you, the

american people. more than 4 million of you wait in. thank you for your amazing role in framing this historic order today because of your efforts we are better able to allow millions of americans to tell there stories, to reach their potential and to realize the american ideal. thank you very much. >> thank you, commissioner. [applause] thank you for your leadership on this recognizing that, as mr. lewis said, every voice matters. commissioner jessica rosenworcel. >> there has been a little noise on the way to this decision today. i we will do something radical i we will be brief. our internet economy is the envy of the world.

we invented it. the applications began right here on our shores. the broadband below us and the airwaves all around us deliver its collective might into our homes and businesses all across the country. what produced as dynamic engine is dynamic engine of entrepreneurship and experimentation is a foundation of openness. sustaining what has made us innovative, fierce, and creative should not be a choice. it should be an obligation. we also have a duty a duty to protect what is made the internet the most dynamic platform for free speech ever invented. it is our printing press our town square our

individual soapbox and our shared platform for opportunity. that is why open internet policies matter why i support network neutrality. we cannot have a two-tiered internet with fast lanes that speed the traffic of the privileged and leave the rest of us lagging behind. we cannot have gatekeepers who tell us what we can and cannot do and where we can and cannot go online and we do not need blocking, throttling, or paid prioritization schemes that undermine the internet as we know it. for these reasons i support chairman wheelers efforts and rules today. they use our existing statutory tools, including title ii authority to put back in place basic, open internet policies that we all rely on the last year our of courts took away.

the result honors the creative, collaborative, and open internet envisioned by those were there at the start including the legendary tim berners-lee. this is a big deal. what is also a big deal is 4 million voices. 4 million americans wrote this agency to make known there ideas, thoughts, and deeply held opinions about internet openness. they lit up our phone lines client our e-mail inboxes and jammed our online comment system that might be messy but whatever our disagreements are our network neutrality i hope we can agree that is democracy in action and something we should all support. >> commissioner. [applause]

thank you. what you edited out was your leadership throughout this process, your championing of open voices. we we will hear a lot up here today but the most important is one simple, short word. thank you. commissioner. >> thank you. americans love the free and open internet. we relish of freedom to speak, post, rally, learn listen, watch and connect online. the internet has become a powerful force for freedom hear and around the. it is said to witness sad to witness the fcc's unprecedented attempts to replace that freedom with

government control. it should not be that way. for 20 years there has been a bipartisan consensus in favor of a free and open internet a democratic president and republic congress enshrined in the telecommunications act of 1996 the principle that the internet should be a vibrant and competitive free-market unfettered by federal and state regulations. dating back to the clinton administration every administration every fcc chairman, republican and democrat, has let the internet grow free from regulation. the results speak for themselves. today the fcc abandons his policies, reclassifies broadband internet access service as a title ii telecommunications service seizing unilateral authority to regulate internet conduct to direct where isp make investments and determine what service plans we will be available to the american public.

this is not only a radical departure from the bipartisan market-oriented policies that have served so well over the past two decades but it is an about-face from the proposals the fcc itself may just last night. why is the fcc turning its back on internet freedom? is it because we now have evidence the internet is broken? no. we are flip-flopping for one reason and one reason only president obama told us to do so. i am asking the fcc to reclassify internet service under title ii of all law known as the telecommunications act. on november 10 president obama asked the fcc to implement his plan for regulating the internet that favors government regulation of the marketplace competition. as has been widely reported in the press the fcc has been scrambling ever sense to figure out a way to do

just that. the courts we will ultimately decide the order's fate. litigants are already lawyering up to seek a judicial review and given the many glaring legal flaws they will have plenty of fodder. if this order manages to survive judicial review these we will be the consequences higher broadband prices, slower speed, less deployment, less innovation and fewer options for american consumers. put simply, president obama's plant to regulate the internet is not the solution to a problem. his plan is the problem. this order imposes intrusive government regulations that we will work to solve a problem that doesn't exist using legal authority the fcc does not have. accordingly, i dissent.

to start the commission's decision to adopt president obama's plan marks a monumental shift toward government control of the internet giving the fcc the power to micromanage virtually every aspect of how the internet works. it is an overreach that we will let the washington bureaucracy and not the american people for some of the future of the online world. one facet is rate regulation for the 1st time the fcc we will regulate the rates that isps may charge and set a price of zero for certain commercial arrangements. the order goes out of its way to reject calls to forbear from section 201 authorization of rate regulation and expressly invites parties to file such complaints with the commission. a government agency deciding whether a rate is lawful is the very definition of rate regulation. although the order plainly regulates rates the plan takes pains to say it is not

imposing x anti- rate regulation. even the agency's suggestion that it cannot envision x anti- regulations in this context says nothing to what the future commission could envision. just as pernicious as the new conduct standard, a vague standard that gives the fcc a roving mandate to review business models and upend pricing plans that benefit consumers. usage -based pricing plans are the current. if a company does not want to offer an inexpensive unlimited data plan, it could find itself in the fcc's crosshairs. our standard should be simple. if you like your current service plan, you should be able to keep your current service plan. the fcc should not take away

banning never service plans we will hurt consumers especially the middle class and low income americans who are the biggest beneficiaries. the fcc we will have almost unfettered discretion to decide what business practices clear the bureaucratic bar. these won't be the last plans targeted by the agency as the electronic frontier foundation wrote two days ago, this open-ended rule will be anything but clear and suggests the fcc believes it has broad authority to pursue any number of practices. in a multi factor test gives the fcc a lot of discretion potentially giving an unfair interest the parties interested parties with an insider influence. then there's the temporary forbearance. a light touch regulatory framework but it is not

white and all coming with the caveat that the public is come to expect from washington dc. in addition to rate regulation, tariffs, bundling, burden some filing accounting standards and entry and exit regulation the plan. he states it is only forbearing at this time. for other rules the fcc will refrain for now. at this time for now. to be sure with respect to some rules the agency said it cannot envision going further, but as the history of this proceeding makes clear, assurances like these don't last long. in other words, expect forbearance to fade and regulation to ratchet up as time goes on. moreover consumers we will be worse off under president obama's plan to regulate the

internet and should expect bills to go up and the broadband we will be slower going forward. this is not what anyone was promised. first, broadband taxes. one avenue is the taxes and fees that will be applied and here's the background. if you look at your phone bill you would see a line item this is universal service fee. these fees are paid by americans on a telephone service. they funnel about $9 billion to the fcc. consumers have not had to pay taxes on there broadband bill because it has never before been a title ii service, but now it is. the order explicitly opens the door to billions of dollars in new taxes. it repeatedly states it is only deferring the decision on broadband tax, not prohibiting.

this is fatally forbearance. the fcc is already referred the question of assessing federal and state taxes on broadband to the joint board on universal service and has requested a decision by april 7 2015 right before tax day. it's no surprise many view this as a question of how, not whether to tax broadband states have already begun discussions on how to spend the extra money. the fcc's own preferences clear. the order argues taxing broadband potentially could spread the base of contributions and could add to the stability of the universal service fund. for those not familiar, let me translate. taxing broadband would make it easier to spend more money with minimal public oversight. we have seen this gameplay before during reform of the eu rate program in july of

2014 the fcc to lobbyists it would raise the taxes after the election to pay for promises being made, and sure enough in december of 2014 the agency did just that. public reports indicated the federal government is eager to tap this knew revenue stream to spend more of consumers hard earned dollars. when it comes to broadband read my lips, more knew taxes are coming. it is just a matter of when. second, affect on consumers slower broadband. internet regulations will work as serious harm on consumers. the record is replete with records that it will slow innovation. let's remember that

broadband networks don't have to be built capitol does not have to be invested risks don't have to be taken the more difficult the fcc makes the business case for less likely it is broadband providers we will connect americans with digital opportunities. the old world offered a cautionary tale compare the broadband marketplace in the united states to that of europe where it is generally treated as a public utility. today 80 percent of americans have access to 25 megabits per 2nd broadband speed. in europe that figure is only 54 percent. moreover average mobile broadband speeds of 30 percent faster than western europe. it is no wonder many europeans are perplexed by what is taking place at the fcc. just this week the secretary-general of the european people's party, the largest party in the european parliament

observed that the fcc at the best of president obama was about to impose the type of regulation which has led europe to fall behind the us in terms of levels of investment. making all of this worse is the fact that the fcc now welcome to litigation from individual claims about the justice and reasonableness of isp pricing to sprawling class actions for violations of the knew internet conduct rule as an appropriate means of regulating the internet economy. judging from what we have seen in the patent world, this we will be a boon for trial lawyers. what have mentioned so far are just the intended consequences of reclassification. they're are unintended consequences. the fee the broadband providers small-town cable companies to google must now pay to the.broadband using things like utility poles we will go up by an estimated 150 million to 200 million per year. reclassification we will expose many knew companies dire state and local taxes.

here in washington dc companies we will face an instant 11 percent increase in taxes under gross receipts. that is a big bite that will leave a well-planned consumers wants. all of these new fees and costs add up. one independent estimate puts the total at $11 billion. every dollar spent on fees and new costs like lawyers and accountants has to come from somewhere either from the pockets of the american consumer or project to deploy faster broadband. so these higher costs we will lead to lower speeds and higher prices. in short, less value. that is certainly not what i heard consumers wanted when i hosted the taxes for them on internet regulation in college station. the fcc's only field hearing for net neutrality where audience members were allowed to speak. internet innovators, students everyday people

told me they wanted something else something that i thought had a familiar ring, competition. yet literally nothing in this order would promote competition. to the contrary reclassifying broadband would drive competitors out of business. monopoly rules designed for the monopoly era were inevitably move us in the direction of the monopoly. president obama's plan to regulate the internet is nothing more than a kingsbury commitment for the digital age. if you like the ma bell monopoly, you will love broadband in the 21st. this is not just my view. the president's own small business administration apparently acting independently admonished the fcc that its proposed rules would unduly burden small businesses.

following the president's lead the fcc ignores this admonition by applying heavy-handed title ii regulation to each and every small broadband provider, as if it were an industrial giant. not surprisingly small internet providers are worried. one of the panelists runs alamo broadband wireless isp that serves 700 people across 500 square miles south of san antonio. he thinks it's pretty much a terrible idea. his staff is busy dealing with the loads they already carry. more staff means less fun to run the network and provide the very service the customers depend on. others feel the same way. last week 142 more joined the chorus. they deploy wireless broadband to customers who

often have no alternative. they often run on a shoestring budget with just a few people to run the business, install equipment, and handle service calls. they have no ability to take on commercial giants like netflix. they say the knew regulatory intrusion into businesses will likely force them to raise prices, delay deployment expansion or both. consider the views of 24 of the country's smallest isps, each with fewer than 1,000 residential broadband customers who said that title ii will badly strained limited resources because they're is no in-house attorney or budget line items for outside counsel. how about the 43 municipal broadband providers that flatly told the fcc that title ii will trigger consequences beyond commission's control and risked serious harm to the

ability to fund a deploy broadband without bringing concrete benefit for consumers or edge providers. there is a special irony given that right before this vote the fcc voted to preempt state law regarding city-owned broadband projects. this is an incentive president obama himself announced last month. the fcc dutifully is implement it. cedar falls utility, the very municipal broadband provider the president promoted tells us that title ii is a tremendous mistake. so what does the order tell americans whose isp isn't comcast or at&t? what does it tell those who service will be more expensive as a direct result of reclassification? what does it tell those who may lose there internet service? what does it tell those who worked for years to serve there community the community and build the

business that is finally in the black? there is no explanation. there is not even an acknowledgment. there is a smug and implicit assurance that it will be that bad and you probably had it coming anyway. so the fcc is abandoning a 20 year bipartisan framework for keeping the internet free and open in favor of great depression era legislation designed to regulate ma bell but at least we're getting something in return. the internet is not broken. there is no problem to solve that the internet works should be apparent to anyone with an apple iphone or microsoft service samsung smart tv. we live in a time where you can buy a movie from itunes, watch a music video on youtube, listen to a personalized playlist on pandora, watch your favorite

novel come to life help someone make a potato salad check out the latest comic see what seinfeld has been up to, navigate bad traffic, watch and eventful fcc meeting online, and do literally hundreds of things with an online connection. at the start of this millennium we had none of this end no the federal government did not build that. somebody else made that happen. for all intents and purposes the internet as we know it did not exist until the private sector developed it in the 90s. the commercial internet has led to the creativity innovation, frankly the engineering genius we see today. nevertheless the order ominously claims that

threats to internet openness remain and argues that broadband providers all the tools necessary to defeat consumers, the great content, or disfavor content they don't like. the fcc continues to hear concerns about broadband providers regarding blocking or degrading. the evidence of these threats there is not. it is all anecdote, hypothesis, and hysteria. if you are allowed to see this plan you would see that for yourself. a small isp in north carolina allegedly blocked voice calls a decade ago. comcast kept bit torrent traffic. apple introduced facetime over wi-fi 1st. scattered examples are not enough to tell a coherent story about net neutrality. ..

>> the plan was not forged within the building. instead "the wall street journal" reports that it was developed with a unusual effort inside the white house. indeed, white house officials according to the journal unction as a