pbn. they are reformed. i'm not sure which model. but -- >> government corporation. >> government corporation. that tension between the regulator and the operator, their version of the ato is there is intense tension to the -- depending who you talk to, tt to, they are ready to revoke the certificate. if the funding is stable, are we deploying the technology on a system-wide basis at the right pace? what i will tell you is if you look at the highest density hub, my understanding is they are shy or not as agreagressive as theye at the spokes. there are things we can do better and faster. we have to be careful to not rush too far forward. my point is that both stable funding and a reformed relationship between the nsp and

regulator doesn't guarantee success when you transition to high technology. >> i want to follow up a little bit, if it's okay? >> go ahead. you go and i have a question for marla after that. >> all right. sometimes it's easy to blame congress on funding issues. but i also think when we started the process of next didn't gen there was a lot we didn't know. there's been a sense we are ready to do nextgen. it's a matter of funding. as we have gone through the panels at an industry level, we recognize, boy, we need to really be careful here. we don't necessarily know. and so in some cases i think what i have heard from congress is, we would like next didngen. what do you need to make it a reality? i'm not sure the faa or even the faa and industry together have

always consistently arctticulat that. i don't think we have always said, if you give us an extra billion dollars, here is what we would buy, here is when we would deploy it, here is the benefits we would receive. that was particularly acute to me when we went through following the great recession there was a stimulus prackage. what do you want to see in the package? whi while we were able to put some things forward, i don't think anyone thought we were at crisp as we would like to be about saying we want to do this at this price, look for it to be certified, implemented and paying these benefits on these dates certain. so i think while there's a lot of frustration with our evolution to nextgen, there's also a lot of learning that has been going on. >> i agree. >> one of the things that we're doing -- this is well traveled ground for us and probably a lot of folks out there is when we look at these potential models

for moving nextgen forward is we leave the faa as is or a variant where we say take the function and have it live under dot. that's kind of basically the first option. the second option is the one that marla hinted on. the government corporation, something like amtrak. as soon as you say amtrak -- >> tva. but it changes some of the architecture of the decision making process. but it doesn't resolve the funding issue. it's still buried in the appropriations, the federal authorization and everything else. >> to an extent. >> to an extent. that tends to kind of drive us towards the third model, which is the ansp, the fully privatized model because of the way you can go out and seek capital elsewhere rather than have to go through uncle sam to

do that. the question i have -- i'm going to start with marla. is there another option that's kind of a hybrid where we can have the architecture, the decision making and still create a line of funding that is not subject to as much handling on the part of the government? >> i don't think any funding model like that has ever been demonstrated to work in this country thus far. we have had a number of the trust funds. it was not created to pay for the entire system. so it is working as it should, partially general funds. but looking at every other trust fund within our country, they don't work. they haven't been sustainable. so sitting up here listening to this, i have been thinking is there another way to fund this within the federal government? and one option potentially could be -- there is a precedent for having appropriations a couple years in advance. i believe it's the national

public broadcasting company, they have appropriations two years in advance. but that might not solve the problems either. we could appropriate money two, three, five years in advance but are we going to have enough to modernize our system? we still would not have bonding capabilities at that point. >> i think a key thing is having a revenue stream that permits and facilitates bonding for large-scale capital programs, which is it what every airport in the country -- every large airport, that you fly to, has as a matter of routine. so does every other utility, including tva, which is government. but i think that is a fundamental thing. doing large-scale capital programs out of annual cash flow, when it has to come from appropriations in a very uncertain -- going forward -- budget climate is a recipe for continuing problems. a bondable revenue stream -- these are investment-grade bond

ratings. air traffic control, there's no competitors. it's a monopoly. so the investment community says where do we sign? if you have anything credible, they would love to fund it and give you the money and have a reasonable assurance of annual debt service payments. why not take advantage of a structure like that when it's readibly available and works in other countries, works in other industries in the united states that are also vital, essential infrastructure, including airports. there's an awful lot of precedent. this is not like stepping off a

one would be to ask the government for an explicit subsidy. those things don't pay for themselves. the other wouldubsidize it. cover things that don't pay for themselves. they decided on the ladder deliberately and very specifically because if they asked the government for partial funding, then all the controls that we're talking about that are a problem for faa of reporting to at least six congressional committees, having the budget have to be approved and you can't ask for what -- only ask for what will be approved, having the gao over your shoulder, the inspector

general -- as opposed to the stake holders saying yes and no about policies, as soon as you have taxpayer money you have all the oversight things. when i talk to senior faa officials and retired ones who can speak more freely, they say again and again how much top management time is taken up by responding to all these overseers and costly -- they're required not only go and testify occasionally but every time an inspector general gives a report, they must respond to all the recommendations and so forth. that takes a lot of time. we talk to them candidly off the record. they will tell you that. that's not how you should run a business. it really isn't. >> i'm sure a lot of people will grab david after those comments. just a reminder, we have half an hour left for panel here. i want to make sure that you realize, you have the opportunity if you have a question that you would like to bring up. i'm going to keep the conversation rolling. i'm sure ed has something to

say. >> i think it's probably clear to everyone. but i want to make sure it doesn't get lost. when we talk about bonding authority, we're talking about borrowing, we're talking about borrowing a sum of money today and paying it back over a period of years. when you go to borrow money, you want to have a very idea what it is you are buying. >> absolutely. >> that's why i think it's important as we talk about nextgen that we understand where is it that we are and what exactly do we want to do. if we're going to go borrow a billion dollars or $10 billion, what are we going to buy, what's it going to give us on what date certain? because the users are being asked to pay for t. if you look at what we have today, let's say the faa has roughly $16 billion, 13 of it comes through the user taxes, about 3 of it comes

through general fund appropriations. assuming that the system is $16 billion going forward next year, that means if we privatize the system, then the $3 billion goes away and we've got to find a way collectively to pay for that $3 billion that used to be the government. then we have to look for the additional money. we need to be pretty sure i think before we as an industry take on $3 billion to break even and additional money to move forward, we understand what is it we're trying to buy, when are we going to have the benefits, what are the other costs associated with it. it doesn't mean it's the wrong way. but the idea that we will borrow our way out of it and pay for it later is something we need to be cautious about. >> there's two really -- there's two things that i feel i need to say. and then you talk about the deeper nuances on the borrowing

and what are you buying. maybe we can get back to that. i would say the simple answer to your question, sean, is there another model, there has to be another model. there has to be. really, i believe that firmly that there has to be another option at least to discuss. there's two words that convince me. once is liability and the other is responsibility. on the liability sides you look at the mitigation, the cost to mitigate a lot of the legacy insfi inf infrastructure that's out there. you rapidly approach a funding liability to mitigate that. there's a reason that we have had a super fund to go out and do cleanup stuff. so that's the environmental responsibility or liability. there's insurance liability. they're saying to look at the cost to insure the operations, there's not any one insurer in the world -- maybe not a

conglomerate of all the insurers in the world that are willing to take on the risk of insuring our operations. third is pension liability. pension liability is no stranger to anybody in this room. if you look at the pension liability associated with air traffic controllers it's significant. all that has to be factored in. there's three liabilities. responsibility. going back to the ga site, one of my alma maters, a dirt strip in southern california, in the middle of a cow field. there's learning that's going on there. the responsibility, the relationship between air traffic controllers and student pilots is -- we covet that relationship and the responsibilities that are inherent on both sides. look at stuff that happens as a result of the nev canada model. there's a co-located air strike with a lake. it doesn't cost anything to land on the lake. they are sucking the wheels up and choosing to land on the lake

to save a user's fee. if there's weather in the northern part of the u.s. and say can we divert flight snz what's it going to cost? they decide not to divert. those are negative pressures on that responsibility side of an air traffic system and pilots working together to operate as safe as possible. sean, i will turn it back to you. we have to think deeply about all of those nuances. >> i have about three more questions that came up from that discussion. we can do this panel for another couple hours. >> thank you for the opportunity. we cover satellite navigation is absolutely essential to nextgen. one element is the civil funding out of faa for gps monitoring has been cut repeatedly. this session, that we haven't gotten into the conference committee's -- the house is eroded out. the senate cut it by more than a

third. it's going to delay monitoring, as i understand it, from what i have been today. my question to you is twofold. one, what have your organizations done if anything to follow up or monitor this, because without the monitoring, you don't have the signals in the long-run after gps modernization? and so for the current structure, are your organizations looking at this issue? have you weighed in on this issue? and for the future structures that you are talking about, how would this kind of funding be integrated into what you are talking about? it's coming through faa. but it's not happening from congress and in some cases it's been actually delayed by faa because they have a lot of pressures. >> i have a tidbit. it's not more than that. i certainly pitch it back to the panel. what i would say essentially by what i hear you talking about is

alternative position navigation. if we were to say we're going gps-based system, you have significant liabilities that are associated with that when we start to look at the fragility of the satellite system whether it's from solar flares or missile attacks or denied environments. so there's some puts and takes occurring within the legacy inf infrastructure versus satellite-based that's assessing that because we still have a robust legacy ground-based in a infrastructu infrastructure, that dependence on the satellite system isn't as significant as it would be if we have shut down 90% of the ground-based stuff. so my question is that those funding decisions that balance -- that say we need to fund that, we need to be better -- sure that we're going

to get what we need out of the satelli satellite-based systems, those things are more easily delayed, those difficult decisions, because this legacy of infrastructure that we can fall back on. it's a tidbit. it may not get at the heart of what you are asking, but that's what i believe at least partially why you would see deferred funding. >> let me give you a different perspective on it. i think one of the things that really puts us in the focus is rpas. there's a congressional mandate for rpa -- an integration standard by the faa by september of 2015. and when you think about it, the only way we're going to have integration, especially more broadly, is that if we have very stable signals, satellite-based signals, command and control signals and the only way that's

going to advance is if we make sure we protect the signals and they are robust. rpas have wireless pilots. there's nobody inside the aircraft do something if there's a system failure. looking at more systemically, tagging on to what mel said, one of the things that we have also been participating in in addition to the nextgen stuff is making sure as we go to a more space based system, away from a ground-based system, we have some of the legacy pieces of hardware still in service for when we have the solar flare activity, for when we have some kind of thing that kind of takes down the signal or disrupts it. and that's why we're never going to be fully only space-based. we're just looking to strike the right balance. as far as funding, we're always playing a game of triage trying to push priorities forward and advocate for things we think are nearest and dearest at this point in time. otherwise, if we say we need money here and here and here, we're trying to borrow the ocean.

we will lose our effectiveness. one of the questions i have -- was there a following question? >> well, the monitoring is part of the new ground system. the ground system is essential to the new gps-3 satellites. got to have it. you can have the ground system without the monitoring. but the monitoring is essential for the aviation component for ne nextgen. it's going to be happening over a period of time. it's not like it's tomorrow. if you change the structure as you are discussing, the financing structure, are you going to incorporate this kind of funding for this? because it is essential to make nextgen work. >> i think if you look at the investment priorities of the reform, they're generally -- the pacing items because where are the air framers, what's the infrastructure and what's the deployment structure.

a logical answer is they would reconcile that. they would reconcile that. >> thank you. >> thanks. one of the questions i have -- we have been talking about money. right? one of the questions i have that i'm going to throw to the panel is here is when we had the sequestration hit and you had a 5% cut that got put over a smaller chunk of time which turned into 10% cut. four divisions in the faa, research and development, airport improvement, facility and engineers, the problem became is that you had a consistent 10% uniform cut right across all the different lines of business. anybody who has had experience managing any kind of business or their own household budget, if you said you got to cut 10% out of your finances, you wouldn't take 10 out of your mortgage, 10

out of your car payment. you might skip landscaping or something like that. in one respect we talk about the overall amount of money. but in the second we talk about the use of the money and the management of the money. can you comment about lessons learned from that experience? >> i would say i would be curious to hear ed's perspective outside looking in. i would say watching the faa executives wrestle with the difficult decisions that they were forced to make was not pleasant. but i would say to the current administrator is very accurate in pointing out the faa is a wonderful operational organization. we do ops. ops is our business. business is good. we're not a real great planning organization. i think it -- you would

naturally default if you were in his shoes to say, i have to -- i'm graded every minute of every day on ops. i would noaturally strike the 1% from modernization, which would be the entire budget. so you would just totally abandon anything towards modernization. >> that's what a lot of us feared would happen. >> i'm not sure it gets to the heart of it. i'm sure it wasn't more pleasant for anyone else to watch than for me. any thoughts? >> i think flexibility is important. i had an opportunity last week to be in oshkosh and hear michael talking about the faa and the upcoming faa reauthorization. i think he laid out three key priorities for the faa as they move forward. that is, stability, funding and flexibility. i think that gets to the heart of what you are bringing up there, sean. and that is, you want the

ability to prioritize when you can't do everything. and so i think everybody understands that. i think the feeling would be, let's make sure when we are doing the prioritization, we are putting the money where it can best serve the community but flexibility will be a key part of the faa reauthorization debate. i think that's appropriate. >> another problem that hardly ever gets mentioned is that there's a looming deferred maintenance problem with faa. it's several billion dollars and growing, because that's one of the things that -- one of the things that's easiest to put off when budgets -- when funding is tight. you have operations you have to maintain. you're trying to do as much modernization as you can. the deferred maintenance, let's leave that to another year. that's how it builds up over

time. eventually, that has to be coped with. there's no plan that anybody that i know is aware of for doing anything about that, except hoping things will be better in the the future. that's not a plan. >> i think that these are the real reasons that everyone came to the table for our working group is after experiencing 2013, they had to find a better solution to be able to fund our system. >> absolutely. that was the one thing that the group could clearly -- i was joking about mason dixon line. we have to do something. we cannot relive that nightmare again. we can't have a situation where we are relying on 23 crs to keep stable fundi inlevels. we can't lay off controllers and lowering the capacity of the airspa airspace. >> and potentially shutting down small towers. >> i believe you were first. >> thanks, sean.

i think my question might be directed more appropriately to mel. this has to do with an equipment question as far as nextgen. it's my understanding now that faa has put out a mandate for aircraft owners that by 2020 now we have to have our airplanes equipped with adsb out, which then places a pretty good size burden on the airborne side of it, meaning we have to -- from a financial standpoint, equipment manufacturing standpoint and of course for the shops to gear up for installation. my question is from the ground end of it, will you guys -- based on all i'm hearing about funding issues and -- i hear the word languishing. will the ground end of it be in sync with the requirement to have that by 2020 along with the

airborne part of it? will you be ready for that? >> that's a great question. it really -- the mandate has been a driver, a strong driver of the atc modernization side. we look at -- there's currently -- it's embarrassing to admit that we have 98 facilities that still currently use monochromatic radar screens. so we send our young -- our best and brightest individuals through universities and these incredible labs that have 360-degree -- the equivalent to a high category simulator. and then we deploy them to a facility that says here is your black and white tv. so it is a monumental lift to force in one second updates that it will provide into the atc

automation systems. it's way harder than we thought it would be. we are on pace to not only meet that but be well ahead of it. and the result of that will bare fruit in many different areas. example would be the constant tension between radar surveillance and root structure. can we put roots closer together? you think about a million pound airplane flying at 500 knots. you don't want to get too close. you could be. one second updates and what we call fusion now where you start to look at areas of terrain and you see better what's going on down near the ground or eliminate gaps in radar coverage. some very exciting stuff going on. there's people working real hard on the atc side to meet the mandates. >> thank you very much. >> hi. speaking of deferred maintenance, is there more talk about combining air traffic control facilities?

i know there's political roadblocks to that. >> the base realignment -- what was it? yeah. in the technology really is driving some wonderful opportunities. there's a reason why facilities were located very close to the radar that doesn't exist anymore. so the geo independence of the technology allows you to have a -- an honest discussion about what's the right density and deployment road map look like? politically what we have said as a union, as an organization representing employees is now is the time to have that discussion. maybe five years ago is the time to have that discussion. we have been participating in it for that long, because we are literally resetting a generation of the work force. if one of your political roadblocks is i have two kids

and they are in school and my wife says we're not moving, now is the time to -- there's a lot of guys that have gray hair like myself and there's a lot of incredible young individuals that are just starting families. there's no better time mrit beingly to have that discussion. there's no better time technologically to have that discussion. the discussions are ongoing. then what you come back to -- bob will be a softball for you. is the constituent situation and the political representation. that's my tower. i'm going to leave it for bob. we're all in on this one. >> that is a real political constraint. members of congress really hate to give up -- even a facility that has two people in their district. it's jobs in the sdribldistrict. they live and breathe to protect those. the technology makes it possible, particularly since so many of these facilities have so much deferred maintenance. they should be replaced. if you replace all of them where they are today, we will waste a

fortune. we can't afford do that. coming up with a plan that puts new -- all new facilities or in many cases new facilities to replace several old facilities really makes sense. as mel says, now is the perfect opportunity, the time to plan that and to hire people with the idea that they are going to need to be flexible in where they will work five years from now and so forth. >> the last thought i have -- maybe ed has something to add to it from a business perspective. i was the facility rep at the southern california trade con which is no small facility when the wildfires burned up to the building and the joanitor turne on the irrigation outside. we deployed to nearby locations and maintained -- we limped along 80% for three or four days. that type -- we have to maintain that type of resiliency.

because there's too many things that can happen. regardless of whether i'm thinking public or private, i'm looking to ed from an investment perspective, it is not easy to justify buying new stuff. they invested money inside faa to evaluate that. what's your return on investment? those are heavy, heavy lifts which you are talking 20, 25 years before you see a return. >> i think the interesting thing is even congress has agreed, we need to move forward with consolidation. we need a consolidation plan. if you look at the last faa reauthorization bill, there was a section 804 that called on the faa to come forward with a consolidation plan. i think everybody in industry supported it. i think even -- we recognize exactly this conversation that's going on here. that we need to build for the future and that may mean taking steps away from the past. it means consolidation.

i think the part that is missing on this is exactly what does that word mean? how do we get there from here? what's the plan? what's the cost? what's the timing? and i think all of us have urged the faa to move forward smartly with a plan, share it with the community and let us become advocates for it. so we're hopeful that will happen soon. >> i think -- i had the good fortune to visit one of the first facilities up in salt lake. it was phenomenal. they are going from what they call the host system, the legacy system, the scopes -- monochromatic scope and paper going back and everything else and to a fully digitized system where if you were to have a crisis like that, a fire, some kind of natural disaster, you can basically switch the full control function from one facility to the other one, which is an absolutely phenomenal thing. i think that that's another

great example of some of the redundancies and resiliencies that are being built in through the use of this technology. >> that core infrastructure going in is critical. fortunately, flexible enough that we will be able to leverage it later. that becomes that point where what is your definition of nextgen? i think i would say if you think about the 20-year cycle and the $20 billion taxpayer dollar investment, we're about ten years in and 5 or $6 billion. we have a lot to show for it. got a lot of great core infrastructure, a lot of great opportunities. it's the -- what next and when and how type of thing is probably the biggest argument. based on perspective. >> i wonder if a safety case can be made for happier and safer controllers at a facility that's not dark all the time and if you have ever seen some of the scandinavian air traffic

controllers, it's hardwood floors and a fireplace. >> there's a level of culture there that was developed out of a requirement, because of that real low light situation. but you are right. once you are exposed to options, generally you see some incremental benefits. then they start to pick up. there's a lot of facilities that look that way. once we deploy those nice bright scopes, my guess -- i bright monitors, not scopes anymore, we will see the changes. >> thank you. >> you hit on incremental changes. one of the big frustrations that sometimes we all share is the fact that we keep on talking about nextgen with this mythological connotation like it's futuristic. maybe we don't spend enough time focusing on the incremental changes and improvements we're making right now.

i guess kind of getting back to the opening conversation that we had when we started off the panel, we're talking about funding, we're talking about discussion making, governance and everything else. are we making enough change right now through the deployment of the technologies, the changes in the policies and procedures? metro plex operations, taking airports and harmonizing flow in and out of the airport. they are realizing benefits. mel mentioned recap. we can talk about equipment lateral spagscing. maintain safety. are we doing enough that we should really just keep on riding the wave, or do we have to go back and look for more transformative approach? >> ed? i have a lot to say. i'm very enthusiastic. i'm by no means an infomercial.

i will tell you -- i'm sorry. what i say is one of the kind of fatal flaw -- not fatal. one of the potholes was what was your perspective going into it? what is the attention span of the average person in the u.s. right now? it's about a minute and a half. squirrel. it's really tough to maintain enthusiasm in relation to or in -- to maintain perspective where you are in history. i would say there are incredible efficiencies that are literally at our fingertips and could be populated -- could be disperses and done immediately. do you do that now and abandon some of the more advanced c conse consents? it's really tough. >> i think change is happening. change is happening all the

time. whether it's reducing vertical separation, one day we flipped a switch and we doubled the capacity of our air transportation system. flight level 290 and 410. change does happen. it is happening. we don't always talk about it. we don't always highlight it. but frankly, the american dna is never do to be satisfied with where we are. right? so i don't think anybody is satisfied with where we are today or with the pace at which we got here. we want to do more. we want to do better. i think all of us here are committed to doing that. what we're talking about are structures that may give us the best opportunity to move forward. in doing that, my point has been let's not lose sight of the fact how far we have gotten and where we are today. >> good point. >> we have in our dna we want to

go farther, we want to go faster, we want to go safer, we want to go more efficiently. we want to be the world's best. hopefully, dialogues like the ones we're having today will keep us there. >> i wanted to take a look -- a slightly different spin on that. there's r kihe of change that i think has been very important and very positive in terms of nextgen. that is the nextgen advisory committee. this has brought great diversity of aviation stake holders to work together and reach some kind of workable consensus on a whole array of issues. and i see that process as something we really never had that before. in all the history of previous air traffic reform, we have had different parts of of the aviation community in disagreement on various aspects. and i think -- i see this has the first time in my memory at least that the whole aviation

community has figured out how to work together in the greater good. it doesn't necessarily get everybody's first choice of everything. but you reach workable compromises that move the ball forward and everybody can live with. i see that as kind of a prototype for what a stake holder board of directors can be, it's not going to have as many people but a smaller number of them representing everybody to do the same kind of process but as a policy -- not an advisory but a policy making body for a reformed air traffic system and air navigation service provider. i think there's a lot of learning that's gone on in the process that shows this is really -- it's not inconceivable. which it might have looked like ten or 15 years ago. but it is conceivable because we have seen it work on this kind of a scale. >> any comments?

>> i would echo what they had to say. we have made strides, but in the american dna, we can do better. we have seen other countries do better than us. i don't think we're ever satisfied with that. >> my experience from working around this lines up with what you just said, bob. my sense is that when i first got there, we had a bunch of different stake holders looking at 35 different core programs in technologies associated with next didn nextgen. it's like asking 40 people what pizza they want and you get 40 answer answers. that was the frustration i bore and these folks did too. it wasn't technical. it was not a technological question. it was a leadership and prioritization question. i think looking in the context of what was happening is important as well. we had an interim administrator.

we had some folks coming in and out of the line of business. now we have a full-time administrator, we have a deputy administrator who is one of the core focuses is nextgen. we have the assistant administrator in charge much next didn ne nextgen and we have leadership and decision making happening to the point where we are funneled in towards four core priorities. surface operations, data com, runway operations and pbn. i can see a palpable difference between the first day i walked in and starting getting immersed in this to present. sometimes at the end of the day, money is always going to be important, but sometimes it's more important to discuss how you use the money. technology is really important. but sometimes we're dealing with non-technical barriers to move this process forward. at the end of the day, it comes

to leader p shileadership, visi having folks that have the dna that get an attitude that makes sure we continue to be the safest, most high performance air traffic system in the world. we were talking a lot about n norwegian and maintaining our advantage. it's important that we do so with regard to how we manage our airspace. i have exactly one minute left. we will have an on-time arrival so i don't get in trouble with anybody. i'm looking forward to our next speaker and the closing ceremony. please join me in giving a hand to this panel. i hope you enjoyed it t. [ applause ] join us tuesday for programs focusing on healthcare issues. we will show you remarks from cvs pharmacy's president and a

house hearing on medicare fraud. starting tuesday at 8:00 p.m. eastern. more live campaign 2014 debate coverage coming up tuesday. starting at 8:00 p.m. eastern, an arkansas senate debate between mark pryor and tom cotton. recent polling has this race as a tossup. right after that, south carolina governor nikki haley faces off. that debate is 9:00 p.m. eastern. then the incumbent oregon governor will debate.

former nasa astronaut garrett reisman was a keynote speaker. today he is the commercial crew program manager for space x. he talks about the future of human space flight and technology. this is about half an hour. thanks. it's really an honor to be here. thanks, captain moak for that great intro. and thanks to lori for inviting

me to come here initially. it's great to be back amongst friends. lori and i go back to our days at nasa. i know she's doing great work for you and we -- but we miss her at nasa. she was a great champion for a lot of the work we are doing. and the path i'm about to talk about, commercial space, it was her efforts that led us to where we are today. hopefully, we have a bright future, which i'm about to tell you about. it's great to be here. it's great to be back amongst pilots. in addition to the other things i have done, i own a grummond tiger. you have one, too? it's a great airplane. the next time you are final approach in lax and you see a tiger struggling to maintain glide slope, that might be me. it's really fantastic. if i can go to the slides.

let's see if we can -- here we go. okay. so i started out at nasa as an astronaut. i flew a couple missions. the first one was sts-123. it was on "endeavor." i stayed at the space station for 95 days. i got to tell you, it was a bummer. if you stay for 100 days, you get a patch. it's true. i'm not making this up. you get a patch. so 95 days, the space shuttle said it's time to go home. how about you hop on board and we will head home? i said, just five more days. can you go around a few more times? nobody will notice. no, mission control says we have to come home. okay. i got home and i didn't get my patch. then nasa said, we got another mission for you.

sts-132, 14 days. 95, 14. i can get my patch. sign me up. i will go. we went back up into space. i went back to the international space station. came home and i'm excited. ready to get my patch. it's got to be in a row. i still don't have my patch. it's not like i'm bitter about it or anything. you know? i will get over it some day. it would go on my flight jacket, it would go right here, above my heart. i have a big empty spot above my heart. it's okay. i had a great career at nasa. i got to do space walks. i got to do awesome things. i flew with great crews. i was very lucky to be part of that. near the end of my -- right after the second mission, i came

back and i was flying in a t-38 to go to edwards air force base to train for a shuttle landing simulations that we were doing out there, and we landed that day. it was a day that this happened. this sh back in 2010. space x launched this rocket, the falcon 9. at the top you see the dragon spacecraft. it went up and went around earth two times, landed in the pacific ocean. space x was the first private company to send something to space and bring it back. at that time, that was something only about six or seven nations had accomplished. that was a big deal. we landed. the air force lineman came up to service the jet and he saw the nasa logo and he said, congratulations on that awesome flight of the dragon. that was so cool. and he was so excited. my first reaction was, well,

that was space x that did that, not nasa. but then i thought, wall street a minu -- wait a minute. nasa was very much involved and it never would have happened without nasa. once i made that realization, i took all the credit. thank you very much. glad you liked that. i designed it myself. i saw something there. i saw excitement that i hadn't seen in a while. that was really interesting. so i started looking around at what was happening and what this new initiative nasa was taking to involve the private sector more and give more freedom to the private sector to innovate. i saw all this innovation happening. i saw companies doing really great work. and i knew that this was a promise for a bright future in space. this is where progress was going to happen. i wanted to be a part of it. i did something that was very difficult, which is i stopped

being an astronaut. that was a great gig. but i voluntarily stepped away from that and said, i want to sign up with space x. i have been there for 3 1/2 years working on turning this spacecraft that we used to take c cargo into a human carrying vehicle. this is what it looks like. if you compare that to the previous slide, you see there are significant differences in the spacecraft. this is the one that will take people. we have had now four times successfully brought cargo up to the space station and brought cargo home with the previous version. but this guy has a bunch of advancements that make it suitable for carrying people. it will carry up to seven people. you see a shot of the -- there will be -- the interior looks awesome in that picture. we will put a lot of cargo and stuff in there. it won't be quite that spa

shous. we have a life support system that you need that cargo doesn't need. we have an escape system. that's the key thing to improve safety, which is having the ability, which we did not have on the having a bad day on the falcon nine, falcon nine launch vehicles having a bad day, light up the engines and have an ejection seat that will take the capsule to safety like we had previously in apollo gemini and mercury. it will be quite a ride if this happens on the pad. you will have about five to six g's of initial acceleration. that lasts about five seconds. there will be a nice coast phase. that's what the fins are for you saw in the other picture. we don't throw them away. we can use them for landings.

we have parachutes for backup but we want to land this thing so you could fill it up with gas and fight again. one thing about -- and i will talk about it in a moment. we are trying to get more and more like you guys. we are trying to bring space more and more into commercial aviation. one of the examples of that is, you know, you never see a 737 land with parachutes. we have to pack them or get new ones. he wants to be reuseable. get to the point where as much of the rocket and the spacecraft comes back you taxi to the gate, fill it up with gas and go again. that's what we do every day. that's one example of that. we have landing legs that will help us land on oh harder surfaces. and on land obviously instead of right now our cargo ship comes

back to the ocean. that's not a good way to bring people back. we are trying to take astronauts to and from the international space station. we have a heat shield there that's capable of three times the heat flux of a nominal entry from low earth orbit. that means we can do missions to the moon. so we are looking beyond. so we want to be more like you guys. we are trying to be as good as you. one of the ways i can describe how far we have to go is on this chart. first thing i want to point out is this is not to scale in a sense that -- well, it's a logarithmic scale. i got the statistics on how risky are different endeavors, different events. you see the one on the far left

with the lowest chance of fat fatali fatality. better than one in five and a half million. that's you guys. that's commercial air flight domestically in the u.s. all the numbers are dead on, balls accurate because i got them all from wikipedia. so if you have questions about where i got the numbers, it's a simple answer. anyway, you know you are in the one and a half million plus level of a chance of fatality on a domestic flight. if next one you see is driving from l.a. to san francisco. that's one in 174,000, flying on a military aircraft is one in 100,000. flying general aviation, one in 27,000. we are getting worse and worse. maybe next year i can talk about why general aviation is nowhere near as good as you guys. in combat, military aircraft,

one in 7,500. i'm still talking aviation. i haven't gotten to anything in space yet. next is the requirement of where nasa wants us to be. this is what they want us to attain with the next generation of spacecraft. that's one in 270. that's our aspirational goal. you guys are at one in five and a half million. where have we been one in 68. we lost two of our 135 p space missions. so one in 68. if you climb mount everest that's riskier. one in 67. but about the same danger as flying in the space shuttle. so

soyuz is 1 in 58. d the modern ejection seat, that's -- the number there is misleading because that's when the guys pull the handle, that's the success rate after they pulled it. many of them pulled it way too late. so if you were straight and level inside the heart of the envelope the number would be better. >> look how bad we are in space. one in 68. we have a long way to go. why are we so much worse? some of it is basic physics. the kinetic energy of the dragon is roughly 100 times, two orders of magnitude what it would be of a boeing 757. i was flying over here and not that i procrastinate but i was putting my presentation together on the plane ride here yesterday. i was in the back of a 757 from

lax to dulles. i asked the flight attendant, do me a favor. i'm trying to put a presentation together for airline -- this keynote address i'm giving. can you ask the captain what's our gross take off weight and cruise speed at knots. she looked at me like, what? what kind of request. all i wanted to ask was do you want something to drink. but she did and i got these numbers from the captain. 242,000 pounds compared to our vehicle. the crew dragon is 10,000 pounds less than that at just over 20,000 pounds. look at the speed. when it converted 480 knots to miles per hour i got 552. orbital velocity in low earth orbit is 17,500. since energy goes to the square root of velocity, there is a huge difference. we go 30 times as fast as the

757. but we have with a hundred times the energy. if you got hit, run over by a dragon, it would feel like you got run over by a hundred 757s. actually the end result will be the same. there is a lot more energy involved. as far as loads, we have to design our vehicle to survive up to 30 g's. that only happens during emergency cases. that's what we designeded for. we have a thermal environment that's unforgiving. plus or minus degrees in the shade or space. our engines shake more. make more noise than airline engines do. we have a more difficult radiation environment to deal with. our avionics have to struggle with that. it is the laws of physics.

they also explain why we haven't closed the gap faster. if we think about it, we have been flying in space now with humans for over 50 years. it's about the same time we have been flying jet passenger planes, right? in that same period of time, look at the improvements you guys made in safety. we can't say airplanes are safer because we have been doing them longer. well, you have been doing them twice as long if you count the right flyer. look at jet aviation and where it was at the same time we flew the first person in space. look at the leaps and strides you made and we have got to 1 in 68. the flight rate has been less. we threw an average of four and a half sorties per year. that's how many take off from

dulles in ten minutes or so. right? the rate of new vehicle development is different. we are about to do the first test flights in dragon. we are only a couple years away from that. when we do it will be the first human test flights in the united states for over 30 years. the very first space shuttle flight was 1981. it takes 30 years to get to the next generation of vehicle. i don't know how many boeing and air bus and mcdonald douglas airplanes came and went in the same 30-year period. the other thing -- those things are difficult to do something about because of the demand and economics are such. we fund it is difficult to incorporate new technologies

which sounds weird. you are thinking about space and nasa as the cutting edge, all about the latest and greatest in technology. nasa cares a lot about safety. and in a weird way we care too much. our risk aversion has led to kind of a situation where it's hard to innovate, incorporate new technologies. as a contractor, building a new vehicle the path of least resistance is to do the same thing and use the same technologies, the same processes that we have always used. if i do that, i will sail through certification. no questions asked. not a lot of meetings. won't have to come up with regimes reams of data. if i try something new, 3-d

printing which we are using to build rocket engines. if i want to use modern electronics instead of space qualified class s, class b parts the way they have been done. if i want to do software engineering in an agile way instead of software standards written for mainframe commute computing i have a mountain to climb. a tough uphill battle to get certified. because there is a tremendous burden on doing things a different way. the fear is if you don't closely examine new technologies you can get burned and something unexpected can happen. but by being so concerned about doing something new because you will do something risky, you lock in safety at one in 68. you will never get better. if uh you don't do something new.

so we have a risk aversion leading us to paralysis to some extent. the other thing is once you build the thing it's hard to improve it. one thing that's important is improvement. look really carefully at your vehicles. every time you are flying around you are sending reams of data down to central locations where you analyze engines, performance, environment, all that stuff. we collect a lot of data, too. it's important when you see a problem in the data that you are able to fix it. the problem we have is that we have this high cost structure in the industry. and that makes it very expensive to change things. we have solved the problem with spacex to a large degree. we are vertically integrated. we make 80% of the dragon of the falcon ix in our facility.

if we want to change something. we do it all. we say, let's fix that. so we don't have all the cost barriers to make the change. we have the certification barrier. the way we do certification now in space, it discourages the baseline configuration. if you change anything it's expensive because of the paperwork burden involved with changes. i give you my favorite example. after we flew in atlantis we thought at the time it might be the last flight of atlantis. it turned out thanks to laurie zephyrs it was a great thing for the shuttle program.

we thought it might be. we called ourself the first final flight of atlantis. while we are up the day before we did the deorbit burn to come home we went up to the flight deck. we took the sticker and put it on the flight deck in a region that was pretty easy to access. in zero g. but difficult to get to in one-g. we put it up there and we all signed our names next to the patch. we put words at the top. i'm paraphrasing. the first final flight of atlantis she was a great ship. let me put it up there. well, guess what. while they were doing the maintenance, the turn around to fly one more time, somebody found it. they said, guys we have to scrape it off. why? well, if we let it stay there we have to do all the paperwork to

prove we don't have to have certification. we have to redo the drawing, the engineering drawing for the panel has to be redone. it could cost a couple million dollars. i'm not making this up. it really happened. we're like, wow, that's pathetic. we're like, okay, scrape it off. that's how hard it is to change anything. even something as simple. the upshot was when they rolled atlantis to the visitor center at kennedy somebody looked and knew the story. it was still there. the technician charged with scraping it off just didn't do it. they flew another mission and she didn't fall out of the sky. that's how hard it is to change something. this is really bad. this is really, really bad.

if you look at the two catastrophes we had in the shuttle program. if you look at channeler, and columbia. what happened was not we killed people because we were changing things willy-nilly and not being careful. we killed people because there was a problem we knew about that we didn't fix. in both cases. if we were continuously improving we would have solved the problems and saved the lives. i assert that the problem we have is not that we changed too many things. we are not changing enough things. there are other things that we did move heaven and earth to fix. we had cracks in the feed lines and the space shuttle engines. we bit the bullet and fixed them. that was probably the right thing to do. a vehicle as complicated as a

spacecraft, you really can't know what will kill you next. it's very, very difficult. we fixed the feed liner cracks but we never fixed the hot gases. we killed two crews. i'm pretty well on time. what i would like to do is i might need help to start the movie. i would like to show you a little bit of the -- that was -- i don't want to end on that note. that was really cool stuff we are doing at spacex today. we are all about that continued improvement. constantly searching for ways to make the product and processes better. we are not going to take the path of least resistance, do things the way they were done. even if it takes extra effort

we'll make it better. that's the only way we'll get to a place where we are really doing amazing things in space. here is a preview of what's to come. ♪

>> up in a human rated dragon is not going to be an issue. >> yeah. so i can tell you, look, i know you had the speaker the other day who was kind of a little bit negative about where we are right now in terms of space. but i can tell you this is a painful period. for about three years now since atlantis did fly her last flight the united states of america no longer has the capability to send men and women into space. we have to rely on our good friends, the russians, to take

our astronauts up and down to the space station. now this is not a good place for this country to be. we led the way in space for so long. it's not what any of us are working in the space industry are comfortable with. but what we are doing is retooling, right? what i tell people all the time is it's never sexy when you retool the factory. you never bring in tours and trams to watch the factory retooled. it's when the bright toys start flying around that people get excited. nasa has not stepped down one bit from committing to human space flight and leadership of human space flight. in fact, popular -- contrary to popular myth, the budgets at nasa have stayed flat or gone up over the past six years. we are not backing down.

we lad to stop flying the shuttle because it was $3 billionish a year and there was no way congress would give us another $3 billion to do something new. it's important we do something new that we do better. we have to do better than 1 in 68. we have to have a program that's sustainable as well as we make it better. that's exactly what nasa has been focused on. soon the whole world will see that. now we are in a painful period where we don't have the capability to send humans into space. stick with us. in a couple more years we'll be sending humans into space, doing human test flights in a couple of years. we'll be launching americans on american rockets launching from american soil. we'll come roaring back. it will be awesome. so stay tuned. [ applause ]

>> absolutely. sir, be happy to. >> a lot of similarities and differences. we can identify with a lot of what you said. the doctor agreed to take questions if we have any out there. >> i loved it. >> are there any technological advances that we can use in this vice versa. what have we done that would be useful for what you do. >> absolutely. it might be of most benefit that we are doing in manufacturing. we are finding that the freedom you have as a designer to do

things you could never do before because you are constrain bid the machining process. that gets lifted when you can print your parts. we are making rocket engines out of these things. once we all get comfortable with the performance and strength of materials issues that holds great promise for aircraft as well. in addition, there is a lot we can learn from you. in fact, that's where we started when we started looking at how to make our avionics better. we looked at, hey, what are the -- what's the flight computer? how many flight computers are in a 777? we started looking at those architectures to learn how you do dissimilar redundancy. manual piloting in the event of a failure with the systems. we are learning a lot from you. there is a lot more we can learn. >> brian smith, nasa ames. >> hi. >> i'm a nasa guy and a pilot.

can you speak to the human factors of the dragon flight deck to give the pilots insight as to what it might look and feel like? >> sure. the dragon has seven people. there is just a flight crew of two. commander and pilot. we have called ate commander and a pilot because it's really pilot and copilot. but the guys have thousands of hours and big test pilots and stuff. they didn't want to be called copilot. it's pilot and commander but the commander flies. it's weird. >> good crm. >> yeah. we call it sfrm. space flight resource management, but whatever. it's the same thing. in dragon we'll have a commander and a pilot. where do you draw the line.

at's a debate that's been going on in both of our areas of expertise for a long time. it's a debate that's alive and well. where we are with dragon is the primary mode of operation will be automatic. it has to be because we'll use exactly the same vehicle to take car go up with nobody sitting inside. it has to work with nobody at the krols. maybe just a little bit of help from the ground. that will be the primary mode. we are going to put in manual backup mode. there will be a stick and you can manually fly this thing in the event the automated system fails you. you can do a manual docking. manual attitude adjustment and probably deorbit burn. >> thanks. >> time for one more question. >> wonderful presentation. thanks for coming. >> i work in quality assurance.

we look at flights and analyze how they did, how the crew did. if we have questions we'll call and ask them. it's a preemptive way at looking at safety. do you have a similar program for your company? >> we certainly do look at the data. so every test we do on the ground. every flight we have of the rocket we look at the data. one of the things that hampers us is the low flight rate. when we launch a satellite we use exactly the same rocket that will be carrying people. the flight rate will be instead of four and a half a year, it will be one a month is where we are at right now. we are going to get to three times that rate soon.

we do look at the data from a mission assurance standpoint. when we put humans in the loop we start looking at that as well. we always did it at nasa and had extensive debriefs. the first thing you do is come home -- well, first they have a ceremony. after that then you go home and spend two weeks doing nothing but debriefing every day on every system and group that was involved with the flight. we'll do the same. >> thanks for coming. >> that's great. let's give him a round of applause. >> thank you. [ applause ] join us tuesday here on c-span 3 for programs focused on health care issues. we'll show you remarks from cbs pharmacy's president, a senate hearing on health care systems around the world. and a house hearing on medicare fraud, all starting tuesday at 8:00 p.m. eastern.

with live coverage of the u.s. house on c-span and the senate on c-span 2, here on c-span 3 we complement the coverage by showing you the relevant congressional hearings and public affairs events. on weekends c-span3 is home to american history tv with programs that tell our nation story including six unique stories. the 150th anniversary visiting battlefields. american artifacts touring historic sites. history bookshelf. the best known american history writers. the presidency looking at the policies and legacies of the commander in chief. lectures in history. top college professors delve into america's past and the new series real america featuring government and educational films from the '30s through the '70s. c-span3 created by the cable tv industry funded by your local cable or satellite provider.

like us on facebook. follow us on twitter. >> next, remarks by homeland security under secretary susan spaulding at the conference on homeland security issues from the american bar association. topics include cyber security operations and efforts to form stronger relationships with the private sector. this is about 55 minutes. [ applause ] >> thank you very much, joe, thank you for once again taking the laboring war and putting together this very -- thank you to all of you, who are here

today who have taken the time to be here, but who also, i know on a daily basis care about and in many cases work to achieve our shared objective of ensuring safe, secure, resilient communities where our -- this is like a class reunion. and in many ways it is, a lot of former dhs folks here, a lot of current dhs folks here, but also a lot of you in private practice and in academia and elsewhere, all of whom contribute to the solving, addressing, understanding the challenges that we face. so thank you all of you for what

you do. i bring greetings from secretary jay johnson, secretary of homeland security who would love to have been here today. like me, he is a recovering attorney. and we are very, both of us, well aware and deeply appreciate the importance of the rule of law and the role of lawyers.

as a vital part of our team as we go forward to accomplish this mission on behalf of the american people. i am aided, as i said by my very able county schedule, i believe you're hearing from later in the program. so we're really quite fortunate in our legal counsel. at the department. i want to talk about three key elements of how we accomplish and view our mission at the department of homeland security, but particularly with regard to the national programs director for which i have the honor of being the undersecretary. joe described a built about what we do, which is good because the name tells you very little about what we do. but our overarch -- critical infrastructure. and we do that in the context of an all hazards approach. so we look at the threats, the vulnerabilities, the consequences and mitigation

across both physical, human and cyber. and that gives us a tremendous strength. we are working very hard, each and every day to make sure that we are not stove piping our approach to that mission of the security and resilience of critical infrastructure. that folks who are our cyberninjas, who are really smart on the cyber front, and the folks who have gotten really good over the years of -- and the folks who are looking at human security from a biometrics perspective, for example, are all talking together. in looking at these things and understanding their own interdependencies a and that's critically important. we're able to achieve that and get better and better at that each day because we have very talented people at the department of homeland security and i'll talk a little bit about that. i'm going to talk a bit about the role of technology, and

that's a particularly important and a challenge for on the legal front, so for those of you in this room, i think you'll -- some of the challenges that i want to talk about there will resonate with you, and i'm finally one of the most important aspects of what we do which is the public-private partnerships, a lot of people roll their eyes, and have refused to even mention the phrase anymore, but in fact, i'm here to tell you, it is a reality. that we benefit from each and every day at npbd and the department of homeland security. i'm going to start with my

favorite part of this is the -- we have always had the benefit of being led by people with extraordinary talent. i continue to be amazed at the people that we attract. the people in this ram who were there at the creation of the department and folks who have helped shepherd it along the way who have made this an exciting place for people to come to work. we are very fortunate to be led by secretary jay johnson, who in addition to being a lawyer, most recently came to us after having been general counsel at the department of defense. so he brings not only the experience he had in private practice representing businesses, private sector, entities of all sizes, which is again, a critical part of what we do, but he also comes and as brought to the department that post goldwater nicholls sense, the importance of the sense of unity of effort. so those of you at the dod know this, about four years after the department of defense was created, the department passed goldwater nicholls legislation to bring greater unity of purpose to the department of defense. i remind them that it took about

40 years for the department of defense to get where they needed to get to begin to get where they needed to get on unity of effort. we don't have 40 years to get this right at the department of homeland security. but it does help you to keep in mind how young we are, as a department. but secretary johnson has come with a sense of you are generality, to bring the legs sons learned from the department of defense with regard to bringing that unity of effort across those elements of dhs, a very important part of what he's doing. and it is perfectly consistent with what i have been doing, trying to do at mpbd since i came in october of 2011. to bring that unity of effort that i taked about earlier, across npbd, to make sure we are fully leveraging, understanding, data, knowledge, across those es of mpbd and that we are helping to leverage that all across the department. we're also very component head, so he was the head of -- has moved up to be the deputy and i have to tell you that it really is wonderful to have someone in

that position who has led one of the components of the department. and understands that relationship and how important that is between department of homeland security headquarters and its operational components and really appreciates the kinds of things that need to be pulled up and really centralized and managed from headquarters and those things that really need to be distributed out to the components. and as interesting as i watch that, because it is the same

sort of lessons that i take back to mpbd, as i look at the relationship for what i am, at mpbd which is headquarters and our sub components and have the same kinds of discussions about what needs to be centralized and what needs to be distributed to create a really effective, agile, dynamic and effective organization. so that is happening, so we are seeing changing at the departmental level. in an effort, as i say, creating that unity of effort to enhance effectiveness and efficiency. the challenge that we are facing on a daily basis is to make sure that we're in sync with each other.

but it is in large part thanks to the great leadership that we have at the department. and within mpbd, so we were increedingly excited to recruit our cyber deputy secretary. quite a while ago now, she can no longer play the i'm new here card. so for those of you who don't know phyllis, she comes to us from the private sector, she was the chief technology officer at mcafee. someone who comes with the understanding already of the importance of policy because she was chairman of the board at info guard, which was a private sector outreach group that was really managed by the fbi. and also with that terrific forensic analysis effort up in

pennsylvania, outside of carnegie mellon, the center for republican sick and technology si analysis as it's called. she's outstanding and-she also helped us to recruit for our assistant secretary for cybersecurity education officer that the brings great technical knowledge. again, an understanding of the inner agency because he, prior to joining us, was at the white house. working with michael daniel at the national security counsel. and he has come in and provided some really outstanding leadership along with his deputies greg and bobby. we have got just an outstanding team in place in the leadership of cs & c. and they continue to attract the best and the brightest. we have turn over, which is to be expected when you're recruiting really top talent, particularly in the cyber sector. it's not surprising that the competition would be able to lure them away at some point. it's always a los, and we're always sad to see them go, we

just lost a couple of our key leaders, but we know that we have top talent lined up and ready to come in and join the fight. that is really a wonderful feeling, to know that we will continue to be able to recruit the best and the brightest to join us in this really important mission. we have great leadership across mpbd. and i just want to quickly highlight eric patterson, who's a retired air force general, who leads our federal protective service and they are increasingly, those are the folks that watch federal facilities all across the country. they are in charge of security at over 9,000 facilities across the country, and they do work very similar to what our protective security advisors and our office of protection are doing for the private sector. they assess security at federal facilities, they provide recommendations for mitigation. but then they also manage the guard force, the private

security officers that stand guard at those buildings, day in and stay out. and the lessons we can learn, the insights we can get from that day to day interaction to see how these mitigation measures actually play out when they're implemented, is something we're working to bring back, in our private sector to help enhance the work that we do at the private sector. so our cyber folks have responsibility for the dot-gov. fbs is the sector specific a gt si for federal facilities.

so again, one of the things we're doing is saying, this is a really powerful combination, we have federal asset systems and networks, physical and virtual, that we have responsibility for protecting, and we are increasingly looking at that in a hole listic way. how do we leverage those insights on a daily basis, not just to ensure the continuity of critical federal missions and activities protecting the people who work and visit those federal facilities each and every day. but to be able to bring that knowledge in, whether it's from what we're skiing in our dot-gov tools and programs or what we're seeing in the physical realm

together to provide those instilgts to our dotcom stake holders. that gives you an insight into what we are, when i talk about unity of effort at mpbd, that's what we're talking about, how do we bring all of these things together to help all of our stake holders, by leveraging more fully the kinds of things we are doing, and eric patterson is doing a great job leading the federal protection service. we have got great leaders at our office of bioidentity management. they are taking a leadership role across the departments how can we utilize buy owe metrics. and our newest entity which is the office of cyber and infrastructure analysis, which is a real institutionalization of that looking across cyberand physical. and that group is doing glaet work, bringing together, our cyberninjas, particularly those who have unequaled expertise in understanding industrial control systems.

together with the physical people who can say the so what of cyber. so ow industrial control system folks can say, here's all of the ways that somebody could hack into you know, status systems and industrial control systems, and the processes that are controlled by those systems. and then the physical, the folks who understand how to model and simulate and understand those interdependencies can say here are the consequences from that. and that is a critical part of prioritization, right? all of us understand that we have limited resources, limited time, and we have got to make decisions about how we prioritize the allegations of resources.

will it's a superstorm sandy, a cyber attack or a physical sabotage. something on the scale that we at the homeland security department are worry -- to keep generators going, and it is the folks at npbd that says, there's a communications hub that people aren't paying attention to, that if it's running out of fuel in our generator, international communications up and down the eastern seaboard will be affected. we have to get fuel or generator help to that facility. that's the kind of dynamic prioritization that our folks in ocia, the office of cyber and instruction analysis do. so the growing expertise at npbd

is actually increasingly being recognized by outside observers. for example, i mentioned phyllis snek, and bob stanley, they were recently recognized as two of the top 50 it professionals in government. our colleagues have won major awards from organizations like the -- and the information systems security education. phyllis i think has been particularly pleased to gain an understanding about the wonderful expertise and talent we have in government. she came from the private sector and confessed that in the private sector there was a lot of talk about, you know, the private sector had better talent than the government. she had said time and time again that she had never worked with smarter people than she has here. we recently got the most recent

kudos from our stake holders out there, from a company that we had sent one of our sert teams out there to assess, who wrote back and said that he had never worked with a momore professional and talented team. those are nice things to hear particularly for a young organization that's still building and still growing. for those of you, again, who have been with the department, i just want to really emphasize how proud you should feel about where the organization had come that you helped to stand up. my second point that i want to talk about is technology and how that impacts our mission. as we have talked about, we are increasingly at risk, our

nation's critical infrastructure. and the technology, as technology advances, it challenges and opportunities for the folks who look at vulnerabilities, who look at threat vectors and who look at consequences of litigation, but it's also a challenge for the lawyers and dan and i have frequent conversations about how this presents increasingly challenges for us. because our adversaries are not slowing down in their evolution of technology and techniques, and we have to be equally agile. in the cyber context, when people ask me to summarize the nature of the threat, i typically draw a matrix, right, so on this edge of the graph is

destructive intentional and on this angle is capacity. those who have the greatest destructive intent at the moment, have the least capability. i always point out that this top -- those who have les capacity today are constantly gaining kpas capacity. and this bottom point, depends

on what's happening in the world and at any point could flip up. so that's the threat picture, it's very dynamic, and we're aware that it's very dynamic and we never get too complacent and a lot of that is because of technology, just as our adversaries are taking advantage of the advance in technology, the department too is looking at and making great strides in terms of the kinds of technology that -- our department -- science and technology director has some very innovative programs under way, both in the cyber context, and also in the physical context. so those of you who are familiar with the metcalf electricity substation out in california, understand the importance of transformers and that they are a long pole in the tent. our science and technology director has for some time now been working with their private sector colleagues to develop transformers that can be -- as i

said, that's a significant vulnerability and a long pole in the tent. our colleagues at ice, who are also involved in our cyber activities and do work on forensics, to uncover and prosecute criminal activity online are constantly innovating and using technology to get faster and better at the ways in which they are able to do that forensic activity. secret service is closing complex international investigations and they are crippling international crime networks and again becoming increasingly innovative, not only in the ways in which they do prosecution, but also maybe really working hard and rolling

up their sleeves in the way they can carry out a successful prosecution while sharing information with us to share to our private sector and government stake holders as quickly as possible. and that is a real challenge and something that has bedeviled in the past. the secret service and fbi are working hard at that today. we have terrific stuff going on in our cyber ops center, the national communications and cyber community integration center, the nk, it's our 24/7 ops center, it has sitting on the floor of that ops center, not only our colleagues across dhs, but also our colleagues across the interagency including law enforcement and the intelligence community, and programs most significantly our colleagues from the private sector, who come together and with increasingly sophisticated tech until and tools are able to provide us with stational awareness in the event of incidents, but also understanding how to detect and

stop and block those technologies. who are developing the tools and technology, we have the spopt for.gov. there we have employed our intrusion prevention technology, but also continuous diagnostics, which is going to revolutionize and assess the health of our government networks. right now under the federal information security management act, this produces every three years ago, a big, fat, binder that's a compliance checklist. what cdm will do, and within a matter of hours, scan your network, assess your network being government networks,

assess the health of those networks, and tell you where you've got problems and help you prioritize what you've got to address first. you will have near real time sense of the health of your network. it is really truly remarkable. and an example again of the ways in which the department is taking advantage of technology to try to stay ahead of the game here. the mkik. is again an illustration i'll talk about in a minute in terms of public-private partnership. since 2009, they have responded to nearly half a million incident reports, and they have put out over 26,000 actionable alerts and i will tell you, these -- actually they are making a difference. we just got word from a private sector company that they had gotten an alert from our mkik, some of the information from that alert came from the secret

service, we put that information out through our mkik and this private sector company got an alert about a possible mall ware and they said to their tech folks we have got to figure out if we have got this, and they looked and indeed they did, and they were able to take mitigation measures for that. of that is exactly what we are about. we are all about getting that information out, making sure it is actionable. and trying to prevent, mitigate the consequences of cyber and physical intrusions. technology as impacting the law, as i referred to earlier. as you can imagine, we are -- dan and his team are dealing with a number of cutting edge issues in the law but a number of them have to do with technology.

and the reason it's such a challenge, and i know you all understand this, is that there is really a disconnect, still, between the incredibly rapid pace of technological change and the intentionally deliberate speed with which the law changes. all right? the law is intended to be thoughtful, careful buildup over time, whether you're talking about the development of law through the judicial process which can take a long time. or the development of law through the congress which can sometimes take forever and which often runs the risk of being outdated as soon as it's enacted. so this is a huge challenge, it

is one with which we wrestle and what you wind up doing is that you're going to laws for legal guidance that were written -- that lie behind those legislative enactments, you're familiar with the number of questions and the areas in which this takes place. speed, i referenced that. that's one of the issues. quantity is one of the issues that we are increasingly confronting and that you are seeing play itself out in supreme court cases and lower court cases, right? are we in a place where it is really true that a difference in quantity becomes a difference in kind. the amount of information that technology allows us not only to

gather, but to understand and make sense of so it's both the sensing and the sense-making part of technology, that has presented some interesting new issues for our courts and our lawyers as they look at those issues. the boundaries, the buckets that we conveniently as lawyers have put these issues whether it's breaking things down between international or foreign and domestic. between nation state actors and nonstate actors, between criminal actors and nation state actors. and these lines that have served us pretty well in the past to try to understand who has the authority and how that authority is going to be implemented. how just exactly how the fourth amendment applies, et cetera, those things are being

challenged as we know. and that debate and those questions are being asked and we, you know, we're looking at do we need new kinds of buckets, how do we make sure that our legal framework is keeping up with the real keeping up with the changes in the world? and one of the ones that we deal with, again, on a daily basis and that is roles, particularly the role of the government and the role of the private sector. those of you who like me came up in the traditional national security world, you will remember that we basically -- if we interacted with the private sector, it was generally in one of two contexts. they were either a contractor providing you a specific good or service pursuant to a contract, or they were a potential victim about whom you had incredible threat information and you were warning them, right? so this notion that the department of homeland security was in part stood up to implement of treating --

recognizing the private sector as a full partner in achieving that security and resilience that is our fundamental mission, that is a new concept. again, despite the fact that we've been talking public-private partnership it seems like forever now, it's actually a very new way of thinking for traditional national security folks. and i have watched as folks have sort of begun to get their head around it, but it is a challenge, and it is something that we, you know, again, work on day in and day out at the department of homeland security and in mppd and that we go to the traditional national security table, you know, having to constantly remind our colleagues that the private sector actually is part of the security solution. so, for example, we have a private sector clearance

program, where we can clear folks on the private sector, not pursuant to a contractual relationship, but pursuant to this partnership, and so we can bring in critical infrastructure, owners and operators, with top secret clearances, show them all the intelligence that we have, and say here's what we think we see in this intelligence, here's what we think this is saying, what do you see? what are we missing? and most importantly, help us to craft the unclassified alert that we can put out through our appropriate channels to all of our critical infrastructure owners and operators across the country, so they can take action. tell us what in this classified information you would really need to know as the chief security officer of a piece of critical infrastructure or as the ciso, the chief information security officer, and that gives

us ammunition then to go back to either the intelligence community or the law enforcement community and say this piece of information is really important. our critical information and owners and operators tell us this is what they need to be able to take the action that we look to them to take as our partners in addressing this security challenge. and that's a really powerful combination. and just one example in the way in which that plays out which leads smoothly into that next topic, which is that public-private partnership, because we really do recognize that we are not going to achieve the security and resilience of critical infrastructure. we are going to do everything that we can to assist the owners and operators of that infrastructure, whether they're federal facilities or private sector or public sector utility owners and operators, to maker wiser risk management decisions. so traditionally, that meant

that the government would -- you know, would provide the threat information. right? and we still do provide significant threat information as i just described. but increasingly, particularly in the cyber context, the private sector is developing threat information and in some cases, better and more threat information than the government. at least -- certainly with respect to what's coming at the private sector. so we are in a situation where, again, we're having to think about this in a very nontraditional way. how do we share threat information, not just one way but bidirectionally? how do we do that in a way that is consistent and appropriate with the private sector, with private rights and civil liberties? that task is made easier for me at department because we have a statutory private security officer and i have an mppd, my own privacy security council, and she has a team, emilyndrew

and her team, and they are a full part of our team. they are with us at the development of programs. we don't go to them afterwards and say we've built this program, now tell us how to make it consistent with our privacy. they are there right from the get-go to bake is in from the very beginning. we do that the not only -- we do that for a lot of reasons, not only do we have some legal obligations to make sure that we are complying with privacy laws, but our privacy counsel helps us to focus our efforts, and again in a time of scarce resources, we want to make sure that we're really focusing on the things that really matter, so they are helping us accomplish our mission of strengthening the security and resilience of critical infrastructure. and perhaps most importantly that close relationship and doing this right is essential to that trusted relationship that we have with the private sector. right? that is -- again, that is our

reason for being. we are only here to assist our stakeholders in that security and resilience of critical infrastructure mission. and we can only do that if we have the trust of the critical infrastructure owners and operators of the american people. and so we are extremely grateful to have this team helping us with the privacy and civil rights and civil liberty issues from the very get-go and all the way through. the importance of our private sector partnership is reflected in the national infrastructure protection plan for 2013, and i expect a number of people in this room have been involved in previous iterations of the n.i.p. so you know what a huge undertaking and what a huge challenge it is, always, to develop this document. we have tremendous collaboration and input from the private sector. folks who worked incredibly hard and for whom this was not really their day job.

right, who have other things to do but who rolled up their sleeves across our critical infrastructure sectors and helped to make sure that we got this right. so the subtitle of that national infrastructure protection plan for 2013 is partnering to enhance -- to strengthen the security and resilience of critical infrastructure, and it -- it reflects the lessons we've learned and continue to learn day in and day out as we strengthen those relation ships and taint action. so, i'm going to wrap it up, you know, the bottom line of my message is, we're from the government and we're here to help. and that's a pretty guaranteed laugh line. but it really is true. and i think increasingly, our stakeholders are coming to see that we really mean it and that in fact we have a lot -- that we

have a lot that we bring to the table to help in what is increasingly seen as a shared mission, to preserve the functionality of those services and goods that underlie our way of life. and that's -- when we talk about critical infrastructure, that's really what we're talking about. we're talking about all those things that go into our day to day, that we depend upon to sustain and enrich our ways of life. that's critical infrastructure. it is that broad, and traditionally 85 mis -- we say 15% of it is owned by the private sector. one of these days we'll figure out whether that's true, but it's somewhere around that number. in any event, the vast majority is owned by the private sector, so that relationship is very important. we have things that we bring to the table, so as lawyers out

there, those of you in this room who work with clients in the critical infrastructure owner and operator arena, you know, lawyers are always very cautious, and i think appropriately so. that's what we get paid the big bucks for, but i want you to know that we do come -- when we come and knock on the door and offer to do a vulnerability assessment, when we respond to a call that says we think we've seen an intrusion or a breach, our -- those of us who are coming from nppd, we are coming for no reason other than to help you. we don't have a law enforcement mission. our colleagues in the secret service go after organized crime and financial crimes, but in mppd we don't have a law enforcement mission and we don't have an intelligence collection mission. our mission is just about helping strengthen the security and resilience of critical

infrastructure. and so i would encourage you to encourage your clients to feel comfortable in reaching out. the information is protected under the pcii, the protected critical infrastructure information regime, and we've never had an unauthorized disclosure of information that is protected under that regime which was set up when the department was first created. you have important roles to play as lawyers who are engaged in transactional activity. i've been working with the american bar association to try to see if we can't get a more clear statement about the responsibility of lawyers who are doing due diligence in transactional activity, mergers and acquisitions, to include cyber security as part of the risk that they are assessing and analyzing. right? i can't tell you how many companies we've talked to