video. from the so the innocuous, family and personal to the josy kony video which has profound video and stunning over 80 million plus hits in a short period of time. now the smart phone and the tablet folks make it possible for people to capture video not just on your television on your computer, but anytime. anywhere. so it's a brave new world. it's a whole new deal. and most of these services are riding on either the wired or the wireless investments of a group of companies, the satellite, cable, telephone folks. and now they're using their broad band capabilities to put content out in new ways such as the comcast, x box, microsoft x box set up. so a lot of us are sitting here trying to figure out what are

the principals that ought to guide us going forward. mr. chairman, i think it's critical that whatever we do, we help to grow and empower and enable this innovation. that means on the wireless side that we have to do a better job of managing and releasing the spectrum because video takes up a heck of a lot more band width. on the wired side, we need to be pushing out broad band networks to underserved regions still a problem here. the committee has had hearings before on it. we've had policies put in place. and president bush way back in 2003 or so said we're going to have policy that had everybody in america wired and as we all know we're just light years behind that. in fact, dropping behind other countries, which we really ought to take note of. if you want to talk about american competition and preeminence in the marketplace

it's going to be dictated largely by some of this and we're not doing what we need to do by any sense of the imagination. finally i just say this part of the opening comments i wanted to make earlier, mr. chairman, we have to protect net neutrality. i think that's critical as we approach this. we fought back against one effort here in the senate to do that. so i remain very committed as the chair of the subcommittee working with my full chair to make sure that we enhance this marketplace as we go forward and frankly, make a little sense out of it. because i think consumers are bouncing off the walls right now in some ways. in other ways they're benefitting just enormously through the increased access and different appliances. and we have to be careful not to nip that because of its power in the marketplace. so let me ask you a couple of

questions if i can. one, i might ask mr. diller what, given your success in the marketplace in a number of different venues and the knowledge you have of this, what would prevent you from say going out and creating now your own sort of fox network or some network any other name to attribute to it -- >> i think i would pick a new name. >> well, pick a new name. your own network. your own individual sort of network outside of the broadcast or the cable world and just distribute it purely on the internet. >> absolutely nothing. >> doable? >> yes. the wonderful thing about the miracle of the internet is you literally get to make up whatever you want. press a send button and publish to the world without anybody between your effort and the

consumer. so it gives you an absolutely open possibility to create anything. now we're at a very early stage. we've only had video for a few years, the ability to transmit rich pictures over the internet. and there's no question in my mind that as time goes on, and systems for consumers get used to the same degree that they're used to the one click on amazon, so that if you have something you can offer it to someone in a payment system that they'll understand and easily be able to access and so this will happen over time. it is the -- it is the promise of a la carte programming that i think is the -- probably the greatest opportunity that there is. >> and in that context, and i don't want to ask, i mean, we

don't have a --

>> the greatest value and greatest convenience possible. as we look at the telecommunications laws as they exist today, try to put ourselves in the shoes of the citizen consumer and see what they would want rather than what the industries do. >> i want to ask this of both mr. diller and mr. miser, how critical is net neutrality to this ability to with able to let the net -- to distribute and to develop in this sort of way that you've described? >> i would say -- >> please. >> i would say it's a parity with the need for national broad band policy that gets us to be if not number one, i wouldn't settle for less than number two. we are now number 18, i think. >> something like 16, 18. >> net neutrality is -- is

mandatory because there is no question that without it you will see the absolute crushing of any competitive force. it's just not going to be possible in you say that distributors can -- can put tin cans and anchors around anyone that wants to deliver programming that they don't owe those distributors. since we have a universe today where there are very few distributors, that's not a good thing. >> do you agree with that? >> i'm confident that i could not have said it better. >> okay. final question, if i may, as we all know hundreds of thousands of movies are illegally downloaded every day. one could block that by preventing people from getting

to sites that stream the video, but i don't think anybody obviously wants to impede the freedom to go where you want to go. so then the question is asked or begged, is there in the current copyright and proposed copyright law both civil and criminal too little protection for traditional video creation and too much constraint on innovation or is the balance right and should we simply enforce the protection in this new era? where do we come out on that? >> we're in the business of selling legitimate product. we fundamentally abhor piracy. so we're concerned, of course, about the prevalence of piracy in some places around the world. so if there are ways to get at those kinds of copyright

protection issues, more effectively, we certainly would support that, senator. >> well this is something we obviously need to follow up on. there are a whole lot of side bar issues to each of the questions i asked. we look forward to working with you all coastly as we work through this. and hopefully can make sense out of it. thank you. >> thank you, senator kerry. >> senator, pryor. >> thank you, mr. chairman, thank you for having this hearing. it's been great. mr. diller if i can start with you. i know that senator kerry asked you about what's there to

prevent you to start your own thing on the internet, there's absolutely nothing. you're obviously excited about that. it is exciting. i also have a question about regulation. and what regulatory environment do you think there should be out there? for example, we recently passed i guess it was last year the 21st century communication video accessiblity act. which makes sure that certain devices that aren't covered by previous law, the handicap could have access to those. one of those examples that we gave was one folks were watching a movie like the wizard of oz online it doesn't have to be closed captioned. but obviously on television it is. those are not real -- those are regulations that doesn't necessarily infringe much, but they do make this access

available to everybody. how much regulation should will be and how equal should their playing fields be? >> i think the regulation should be relatively light touch. given this very powerful mass communications the engines of such, there's got to be first of all, the levelist playing field that can be legislated.

at the same time, there are all sorts of legacy obligations that broadcasters took on, that cable companies took on and satellite companies took on. i don't think it's that hard to do. the last time around the 96 act took a lot of plot and preparation and endless noises heard from. not that that's not going to happen again. but i think this time around it's easier and the reason it's easier is because the internet and its ubiquity and its adoption has changed so many things naturally that amending the act for the future i don't think is going to be, that includes the internet, the reality of the internet i don't think is going to be that problematic.

>> do the other panelists have any comments on that? any response? >> senator, you mentioned x box, i'll respond on that. >> the amount of meta data with the closed captioning is no small task. but that is our goal and one that we treat seriously. >> let me ask the question about something that senator kerry eluded to a moment ago and that's intellectual property.

>> senator, we provide the customers the legitimate the product. >> i know you look at all this data all the time. you see what people are doing and see how they're behaving out there. what about, do you think that -- one of the things that this committee's been working on is

trying to get high quality broad band to every american that wants it. you know, it's particularly challenging in rural areas. you think that as more and more content is available online that that will actually incentivize people to get broad band especially many the rural areas? >> i think it just seems like a logical conclusion. it's so much of what you can talk about and experience every day, the applications that are useful, the way you can communicate and learn and get your entertainment being available particularly on a phone as i say, said before, i think will lead to more people asking for broad band and requiring that access, so that usually leads to a commercial discussion about making it available. >> that's going to lead to the issue of affordability for broad band and trying to get it deployed. i just -- one of the concerns i think this committee has expressed over and over is we don't want two americans.

we don't want urban to have the latest and greatest and rural just left behind. thank you very much. >> senator, i would add that the offering of all this additional video which is really -- requires that broad band capability, which i mentioned before as far as the four meg threshold that the sec has siplated. my impression in dealing with these various isp internet service providers is they are looking for new ways to be able to offer more broad band to more households and sell it. it is a good margin business. as people see more and more of this content the ghand goes up. when demand rises the businesses typically see that void and try to fill it. i think that this increase in video content may well be a catalyst for many to build more. we hope so. >> thank you, mr. chairman.

>> thank you senator pryor. >> thank you, mr. chairman. of course, senator pryor you've been such a champion for rural america. as you know, the fruits of your labors in getting broad band the fruits of the chairman's labors in getting broad band out in the rural areas have helped my state enormously as well as a lot of people don't think of florida as being rural, but there are vast portions of florida that are rural. i might say having done a number of town hall meetings in rural parts of the state, now that as a result of the stimulus bill having put money into expanding broad band into the rural areas, which is now just occurring, that is being greeted with

exceptional excitement and approval among the rural areas. so that basically as you said that we don't have two americans that the children in rural america have the same access to the information that children in urban do. i wanted to ask a question of miss whiting because i'm just absolutely -- i was fascinated the other day when a senior member of our staff said to me that she does not watch television anymore. that she gets all of her information basically from either her computer or from her ipad. so how in the world is nielsen, which is now refined the technique so well in determining how many eyeballs are watching a tv set with your boxes, your

electronic boxes now that measure it exactly, how in the world is nielsen adapting to determine how many eyeballs are watching content on the internet? >> thank you for the questions, senator nelson. we've obviously had to adapt. because as we just talked about, if we want the follow the audience of a program across any screen, the tv, the pc, the phone, the ipad soon, any web sierts, we have to measure that. and we do that for boast the programmers and advertisers. so we use technology to do that. we recruit samples of consumers who let us measure that. there are a growing number of people who do not own -- there's contradictions going on, there's a young, general group of people who do not own a tv set. they tend to have a smart phone, not a land line.

and they're getting their content and their information that way. you balance that with households that now have four tv sets and their pcs and every other device and our task because the programmers and advertisers really require it is to measure the programming across that. so technology's our friend here without giving a long explanation we use technology to help us measure with permission the behavior of all those screens in samples of people. so it's possible. and we're doing it and i expect we'll have to continue to innovate because they'll just be more screens. >> well, technology refined your technique with regard to television screens because you could put a box on a representative sample and then determine who was watching what program. how do you do that with a hand

held computer device? >> so very specifically it's usually a software application that we basically recruit someone to participate. we down load even a software application or we're measuring a commercial or a program and there's a code in the commercial and program and we pick it up if you're -- basically it's code recognition. it's technology that's residing on whatever the equipment is, a phone or a pc or soon your ipad. we use software. so it's not a separate box that's connected. it's a way of understanding behavior your permission. >> how do advertisers understand that they are being charged appropriately on the internet as compared to the satisfaction and confidence that they have in the

number of eyeballs that are watching a tv program because of you? how are they being satisfied that they're being accurately charged a fee for their advertising on the internet or any way that's distributed through an internet type program. >> so the really simple measures advertisers are looking for are how many people and what exposure did my ad have. they have estimates for television. there are a number of different ways they can get those estimates for online display ads, search advertising, they get feed back. and we provide it other companies do. the number one question we're getting now from major advertisers is to understand across the screens how an ad campaign can be effective. how do balance the money they put in. so that's again done recruiting

panels using technology to measure, same kind of way we do in television in exposure to an ad and the effectiveness. but there are many ways because you have website information, you have other technology that people can do that. so we have similar methods to television. similar answers for advertisers and big question that's happening is trying to understand how they compliment each other and ad on tv and ad on the internet. >> if i use myself as an example, a tv program goes dark and an ad comes up. now maybe my mind is watching it or not, but that's what's filling the space. not so with an internet screen. i may be looking at content on the screen on an ipad and that's an adjacent ad. but i'm not paying any attention to that. how do you go about measuring

the effectiveness of that compared to a tv program. >> so we actually use a method that involves both understanding that a panel we've recruited has that ad up and on the screen and then recall after the fact and certain measures we create for recall and impact for that advertising for major advertisers. so it's a combination of things along with demographic information we have so we can say this ad was viewed by an estimate of men 18 to 49 and then we additionally would look at the impact of the ad in the recall. we do that for a number of major advertisers. many of them, in fact. >> do you find that the recall for internet ads is much lower than the recall for tv ads? >> it depends on the creative. it depends on the placement. in other words, the actual ad,

the placement. what we do find is ads that are shown on both television and the internet have much higher recall and much higher effectiveness when they're combined. so that's something that many advertisers are studying with interest. they compliment each other. >> senator, i would add also that to the point i made in my remarks about innovative business models and new offerings that various content companies which obviously use advertising as a part of a way to fund the programming are experimenting with ways of lighter ad load, for example, shorter ads so again, to my comment out with the old in some respect, the new way that online video is being delivered is not just the means by which the content's being delivered, but the way in which it's offered up for the price point for the access to the content. now the ads are developed up.

there are a number of things being done putting aside the actual measurement. it's not my expert tease that's being utilized and some are finding it from what we hear extremely effective. >> thank you, senator nelson. i'm going to ask the final question there being nobody left. you really hesitated when you talked about the effect of technology leading to rural coverage. you didn't -- you had an answer. but it was -- it was a while in coming. i thought it was honest and i have to agree with that. the business of -- of when rural state senators talk about rural people or poor people in far off places and people say they're

just pandering to their constituency is really not at all the case. this is a basic american precept and mr. diller has said that a number of times it has to go -- everything has to go to everybody. it's such a fundamentally american concept and it's also a concept which is so probable can be probable with this proliferation of platforms and delivery areas. however, i think this committee has done a very good job in three areas of all of this. that is we started the e-rate. houston went wireless the second day and was completely -- every classroom was done on the third day. others didn't do that. so it was a much longer process. now the e-rate has worked. that's the starting point for connectivity is always a starting point. i think we've pushed really hard

on as senator nelson said broad band. and through the stimulus package which some people say i never want to see the likes of that again, and that -- therein lies a problem because what we've done in broad band as a matter of public policy may have reached it's point of no return. then we think we've done also a very good job in wireless. put a lot of money into wireless. on the other hand, we haven't done that by ourselves. obviously others have done it. but with all of these things going on, all i can think of when i hear about rural america, i'm going to think about the rural part of florida, not the rural part of west virginia just for the moment so i appear to be more honest in my questioning. that is that for the most part it's been -- it's been the business of the telecommunications companies up

until now. there's always a wonderful thing because there's lots of merger and conditions. the conditions include that you've got to go everywhere and cover everybody. a lot of the telephone companies that have ruled over west virginia over the years they've all promised it and none of them have done anything about it. yes, they've moved things further. but if you talk about mine disasters, if you talk about driving down any interstate in west virginia you have to memorize the places where the interstate rises high enough so you have cell service which is hue himuating and embarrassing in a modern world. that's our world. that's our world. so i am on fire in the business if we are going to have an explosion of technologies which i welcome i totally