we are moving to the reception upstairs. thank you. [inaudible conversations]

>> host: craig silliman's general counsel and executive vice president of the verizon corporation. mr. silliman what does that mean wax. >> guest: at responsiblity peter for all of the legal function and public policy function and security function. >> host: describe verizon has a business today. what are some of the entities that are under the verizon logo? >> guest: that's a great question because verizon has changed quite a bit. we have our network businesses and wireless business which is nationwide in the are fios business which is broadband on the northeast corridor in their enterprise network services around the world for government and enterprise customers. we have also expanded significantly into internet of things and internet video and businesses so we have acquired aol. of course we announced a plan to acquire yahoo!. over the course of the last couple of months we have

acquired to telematics companies we just bought a company in the smart cities at business. so you see is increased only building out to the internet of things and on line video. >> host: given the nature of your business how often does federal policy play a role in the decisions that you make? >> guest: policy really permeates a lot of things we do. what is happening is no longer just telecom policy. we have all rounds of policy going on in washington. in fact some part of our business. does everyone a company wake wake up every day thinking about policy? no. they think about serving customers and how to do that aspect the scope and scan of our business there or elements of policies that touch everything. >> host: with a the new incoming administration a new federal medications commission what is one of the issues you really looking at regulatory and legislative leg? legislatively.

>> guest: there'll be a couple of things going on in administration the administration. one is how things we are focused on is infrastructure and particularly fiber belts. when you think about the world that we are in today whether it's wireless, if you go back a couple of years a lot of big cell towers transmitting a couple of miles increasingly is this incredible demand for mobile services. we are intensifying our network. what that means is we are building the fiber deeper and deeper into the networks of the wireless travels a further distance. when we talk about her wireless networks 90% of that is fiber. i mentioned the internet of things and smart cities. you need a massive fiber infrastructure to do all of that. a lot of the issues we are looking at us where's all that fiber going to come from who is going to build it making sure it's accessible so we continued to build these services. >> host: you are not just dealing with the feds.

you are dealing with state government and local government. >> guest: one of the interesting trends we have seen is increasing municipalities in working working with mayors offices. a lot of innovative policymaking going on the cities and they are looking at how do they create an environment that's a great place to live that draws workers said. how do you build smart city solutions make them more efficient? ultimately it's build on fiber so a lot of interesting discussions going on within the cities. >> host: let's bring john mckinnon from "the wall street journal" into our discussion. why do you talk more about infrastructure. obviously congress has been think a lot about another of the structure built. the president-elect is thinking about it as well. how could that play into what you see as the future of infrastructure and fiber development? >> guest: obviously we talk about roads and bridges and whatnot only talk about infrastructure that's an incredibly important part of the lead today with their

knowledge-based economy the services that are being provided i do think we need to see fiber is one of the fundamental aspects for economic growth. certainly one of the aspects that has been discussed is the idea that is part of an infrastructure package you might see subsidization of fiber build across the country. >> guest: what kind of subsidy or were talking about? >> guest: obviously i can't speak for the incoming administration but i think what you want to look at obviously is anyplace that the market is thriving in investment. you don't need to subsidize their but there can be various ways you can do that, basically to look at areas where the marketing may not be there to build out fiber which is a heavy capital investments to encourage whichever players they want to play in that space to build more fiber in places that otherwise would not build. >> guest: what are the places we are talking about about here?

of a mostly rural or cities? >> guest: certainly the economics get harder and harder as you get to less dense population areas. so i think two things. one is that you are probably looking at rural areas where the economics may not make sense. the second thing i think you want to think about is the combination of fiber and wireless is pretty powerful and you may not need to build fiber where you build it all the way down to a premises but rather build up to nodes and let people with wireless capabilities on the end of those nodes so that maybe a more cost-effective way and more efficient way to get fiber out there but not have it built all the way out to the last mile. >> guest: what he thinks president-elect trump thinks about the telecommunications business? he is succeeding president obama who is obviously very tech-savvy.

he professes not to be as tech-savvy and i think a lot of people perceive that he doesn't really folk is on silicon valley certainly. what do you think he wants out of the telecommunications industry? >> guest: i can't speak for president-elect chuck and i can't say what he thinks the way i think we all should think about this, i think and this was mentioned before we live in a world where increasingly the services indicate the economy is growing. sais tremendous opportunity for the country to grow as we move into new sectors in new areas of innovation, research and development. all that spells out solomon made and communication. an ardor to be leading the rule in r&d and new innovations we need to make sure that we have those underlying communication networks as robust as possible and as ubiquitous as possible. what all policymakers should be

thinking about is how do we continue to encourage that investment in broadband networks and continued innovation of the platform so we reach as many people and you never reach a point where you are done. you need to continue your investment to keep upgrading to keep track with the demand. it should be a fundamental part of all the other economic growth of the new administration. >> host: craig silliman you mention that 90% of so-called wireless traffic is done on wired line. is there a disconnect between wireless policy and wired policy and should they be treated the same? >> guest: increasingly we do need to look at the networks coming together and we need to look at the overall communications policies. there are certain areas that are unique to the others. for example spectrum is unique to wireless but increasingly everyone is looking at mobility. people are with their devices, with their tablets but that may

be in your home, that may be out on the street and when you are doing that you are really connecting over wireless technology to quickly moving into wired infrastructure. so i think there are aspects of the network and aspects of the industries to build this network , it's not completely harmonized in the same policies don't apply completely. one example you still have four nationwide wireless carriers in the number of other players coming in for example cable players coming in. there is a lot of competition on the edge there. there are fewer people building the core fiber networks are the co-ask networks and i think there will always be the case. probably won't be economically viable to have four, five or six players overbilling those wireline fiber networks. doesn't make sense to do that. makes more sense to have the shared in some way wholesale etc. where she may have a lot of competition going on on the edge of the wireless networks with

all sorts of wireless technologies. i think women look at the markets and there are some differences they are but a lot of the issues you think about privacy and cyber security those issues that i think can be big issues for some years to come are common across the platform. >> host: couple of issues that might be revisited with incoming trump administers includes net neutrality. >> guest: it may be. it'll be interesting to see what the date around net neutrality is because when we talk about this and we talked about for a long time net neutrality is often waited in with title ii and certainly verizon has said for some time, many years we support the net neutrality principles. but the fight has been about for many years is about the jurisdictional. we actually came out sometime some time ago before the court decisions on title ii saying the

way to fix this is to codify the net neutrality into law and move away with the whole title ii debate behind us. unfortunately they didn't do that and i think senator. >> in nelson and their staffs did a lot of work to try to get their but ultimately what happened in this whole net neutrality debate was you had some advocates that either move the goalposts are openly reveal what they really wanted which was not dutrow the pet title ii and so they pushed hard to not have congress can find the net neutrality rules. frankly it's a bit disingenuous and in retrospect it was a bad political collation but now should look at the new postrace in a row question is, net neutrality principles are still important. what we do need to stand back and look and say is what is the statutory framework in which the sec is operating and they are really trying to put square pegs into round holes on somebody's

jurisdictional questions. think the new administration in looking at what you really need to protect it and what is the right setup of different agencies, what is their jurisdiction and from that how do you protect net neutrality principles? i think we can do it in a much smarter and much more efficient way if we stand back and look and say let's come up with a 21st century framework and not govern the whole industry under 1996 law. that doesn't address the question of what comes to net neutrality rules but it does get into the question of what is a statue in the framework and that's incredibly important for the new administration to take on. >> host: a communications guide greg waldman is coming into the energy and commerce committee. >> guest: he obviously knows the industry very well. he's been involved in these issues deeply for some years.

he is fantastically knowledgeable about this and also open-minded and fair-minded in the way he feels about these things. i think he will be at. leader. >> host: define the congress overall understands some of the tech issues you are dealing with? >> guest: like all issues it's going to be mx. congress deals with such a vast array of issues you can't expect every member to understand every issue but you do have members, greg waltman being one of them who actually do understand things very well and just as importantly they have staff members who have lived in this world for a long time. there are couple of key staffers on the hill that everyone knows who are very smart and thoughtful and very knowledgeable. >> guest: there is a narrative that how can congress take on such a complex issues such as re-relic -- rewriting the telecom act? there a few steppers the absolute have the capability to do this. they have the knowledge and the wherewithal to take on issues.

>> guest: you envision legislation that could refine the definition of title ii or make clear that your business doesn't fit under title ii by and large. do you foresee that this legislation would be limited to that or could there be a lot of other issues and if so what do you think the issues might the? >> guest: if it were me i would stand back and take a fresh look at the industry. think about how the telecom act of horse who has worked on for several years before 96 but it really reflects the world of the early 90s. what were some of the key issues they were trying to solve for long-distance and local competition coming into effect? that's been wildly successful but think about the debates around privacy. you have the privacy provision in the so-called privacy provision that originally was written is basically a market limitation. was written to say the local phone company sees your calling

patterns, your long distance calling patterns marketing a long distance plan vis-à-vis mci at the time. that was a very important issue in 1995 but completely irrelevant today. that provision wasn't in any way written as a broad privacy division -- provision so you think about a world that didn't have any of the major players that you have today the google, the facebook in the twitter. i wasn't part of the system. was really about local competition bringing the cable guys in telephony again hugely successful and what it was meant to accomplish but not representative of the way the industry works today. i think you want to stand back instead of tinkering with the act what are the things you're trying to achieve around competition and consumer protection that the rightist ride statute and set up an agency designed to operate in

achieve those things are in today's world? >> guest: so you see a fairly far-reaching scope for this legislation? >> guest: i do. i think if you think about the amount technological market change over 20 years that if you are going to change it start by saying what are my trying to achieve? don't tinker around the issues that are not good for this purpose in today's world. >> host: what point you java line in the sand and say with technology moving so quickly how do you draw that line? >> guest: that's a great question. you really can't expect congress to put something in statute that anticipates the future. we also have to anticipate the technologies of the future. we have a crystal ball that allows us to be great investors but we can expect congress to do that so we have to do is design a law that doesn't assume technologies. you have to basis on a couple of core principles. how do you drive competition and

how do you protect consumers but don't build the statutory framework as it is today where it's built around fios or telecom cable wireless. it begins to put strains on the fundamental statutory construction. what you want to do is say assume the evolution of continued technology assume and build it on guiding principles like competition and consumer protection and then the statutes and the rakes can reflect the moves as the technology grows. >> host: does that indicate as well that the sec is in the argument? >> guest: i think the sec should evolve with new technologies. the sec was built around certain silos of technologies wireline and wireless and whatnot. as those issues become more melted i think absolutely. it's not a criticism of the way something was set up in the past but the recognition that is the technology changes and as the markets change you need to

change the framework of the regulator to make sure that they are structured in a way to meet the needs of today's technology and market opportunities. >> guest: do you think you should keep regulation of what are called as providers, internet companies such as google or facebook and when it comes to privacy issues or other issues like that, do you think that regulations stay at the fec or should move to the sec or is there a way to slice back? >> back? >> first of all there's a question of what you should regulate. we should be careful not to fall into a certain class of companies or certain type of technology that should be regulated. yours want to look at where's the competition and where there is more competition and less regulation and when you see competition breaking down that's where you need more regulation and what are the consumer harms that could arise. as far as your larger question

it clearly is the case that the fcc and the sec are increasingly overlapping in terms of jurisdiction. you see that with verizon. thus earlier about the type of businesses that verizon is in. parts of the business are regulated by technology so you give a mobile device, consumer protection is driven in part by wearing the device is that the network or the operating system that doesn't really make sense. it's not good for consumers either sober time you can say what are the important consumer protection principles? what is the agency best suited to regulate that across an entire ecosystem in a coherent way? i certainly think that would be good policymaking going forward. >> guest: thinking a change in the markets, at&t trying to do a deal to acquire time warner.

how does that make you think about your business and what does that reflect about embarking on the changes? >> guest: i think first i can't speak to their deal. as far as how we look at it we have articulated strategy and we are very comfortable in that. to a large degree what you see is at&t is buying a -- with time warner that are some of the traditional winners in the content creation. our strategy is really looking at where we believe the content assumption and content distribution and content production is going to win. some of the highly curated but also highly personalized over-the-top type of shortfall videos for example, so a lot of fire business where there is aol

or yahoo! or whether it's our investments in complex media of those are all about really saying we think this is where the puck is going and we are going to skate to where we think the puck is going instead of the content creation model. >> guest: what is go 90? >> guest: go 90 is a map that serves up short form professionally produced content on an advertising-based model so you get the content for free. is supported by advertising and it's really designed for the way particularly millennials are consuming content on the go short form following different shows to the stories and things like that. i can help you put on your device peter. >> host: in the future as you say what happens to your fios home package? >> guest: i think it continues to be a great business and fios includes broadband which

underpins all of this in the fios broadband seems to be a great business one that we continue to invest in. we also see the traditional linear content model continuing to be attractive for some time to come. but consumers do want her flexibility in how they buy. we been pushing the so-called skinny bundles trying to give consumers a little more flexibility in what channels they get as part of their package if they don't want to buy the full 500 channels but rather walked 60. that's a struggle because of the way the contracts as of today and the way that content licensing works. we are trying to push that to give consumers a full span of options and how they can see content everything from the traditional 500 package linear models to something like go 90 that's very flexible on the go short form. >> guest: do you think going back to the at&t deal does is put more pressure on you to do a bigger deal? you certainly have acquired some big companies recently but are

you under more pressure now to acquire big media companies? >> guest: i don't think so. fundamental errors strategy will be driven by what we need to make consumer demand not just a reaction to what somebody else does. it's simply whether we do or don't won't be driven by at&t but rather how we lead. >> guest: 's to go a little further how do you see the landscape differently than at&t? >> guest: as i said i think there is a full spectrum of potential content assumptions and production distribution and assumption. there's probably going to be room for success in areas of those models. consumers are going to look for different things so maybe there will be different areas at the same time but we are certainly putting more of a bench right now on the forward-looking distribution and assumption models than at&t.

>> host: craig silliman fcc chair tom wheeler is not a fan of zero rating. what is verizon's prospective? >> guest: it's funny the amount of -- the business models been around for long a long time for the "wall street journal" has advertisements and it doesn't mean that my prescription -- subscription to wall street journal is in a less than it would be. back in the day when netflix was selling a lot of dvds they played -- pay for the mailing of that. so there's a fundamental business model that's been around for a long time that says companies will provide i think there is a transport for free in order to encourage consumers to concern for the content that they are providing. that's a pretty well-established business model and generally speaking i think when consumers get something for free they are pretty happy and it's a pretty

good day. i get a little amused as they see some of the advocates opposing zero rating. there's a classical quote by a jamaican where he defines -- as a hunting for that someone somewhere is happy and i sometimes think this thing about zero rating is some of these folks have this haunting fear that if someone somewhere is getting something for free i look at it and i say it feels a little pain -- patronizing if i say i know you love getting out the content streaming for free but it's bad for you, just take my word word for that think it's great for consumers and gives people more but they want. it's a well-established model. it's been around for a long time. i think policymakers ultimately will conclude that. >> guest: another thing that people like us to get their broadband and have it work and be able to get on web sites but i think increasingly people are worried that our networks are

not terribly secure all the time do you want to talk about cybersecurity and what do you think the industry can do differently to make it safer? >> guest: there a are couple of things was cybersecurity. first, obviously everyone not just our industry but all industries take it seriously. we spend an end toward an amount of time was cybersecurity. so i think we can do various things and there has been some helpful developments as industry members share information to see common threads and share the best information you have as it develops. i think that's good i also think there's a growing trend that's very important and we talk about in the policymaking world and that really is a gross threat

from nation-states. the u.s. government is of little bifurcated, a little schizophrenic on this issue. when you have a major attacks on fascia parts of the government that are there to help in parts of the government that are frankly punishing the victim. if you think about this -- >> guest: explained now. >> guest: at every time you have to preach by a nation-state and have agencies coming immediately saying we are going to find the company. if you have a cargo ship sailing to these coasts of the united states and gets torpedoed by the russians you don't suddenly have someone in government saying you should have hardened the ship against the missile or if i had a warehouse somewhere and a cruise missile comes and blows it up from a hostile foreign nation you don't have a regulatory agency coming in and saying he should else the warehouse to withstand an attack again i want to be careful. i'm not saying a company does

never responsibility to be responsible cybersecurity. as we do but when you're dealing with nation-states you are dealing with an adversary that has so much capability, so much power that frankly the u.s. government is struggling to defend itself i think it's unreasonable to simply say if you get hit by an attack of that level of specification we are going to find and punish you until you do better. i think we need to have more for dialogue to train the private sector and the government to say in this world we are very sophisticated, very high capability attacks are coming in. how do we work together to defend companies and everyone else just as we do in the physical world which again there are fundamental rules of government which is protect national security and as we get into these nation-state attacks increasingly beneath the government to help protect us. >> guest: do you think the government can do more in

specific league should we be retaliating more aggressively? >> guest: the answer to your first question should the government be doing more, yale. the whole question of retaliation sends a thorny issue that gets into very case-by-case situations in obviously you are dealing with government to government. certainly company should not be in the middle of that. the u.s. government has tremendous capabilities and i think we need to figure out how to leverage those. there are important privacy tissues that need to be taken into account. there are important separations by the government that should be taken into account that when you have the type of capabilities that the u.s. government has to help protect networks overall i think we could do more to work together to leverage that to protect important industries in important networks. >> host: finally craig

silliman what is the status of verizon's purchase of yahoo! and the fact that we are talking about -- >> guest: i will simply say that. we have said is publicly a couple of times and we continue to work on the deal. i don't have any new news to report today on the status of the breach. certainly when we have something new to report we will be saying it publicly. >> host: craig silliman's general counsel and executive vice president for public policy at verizon and john mckinnon covers technology for "the wall street journal."