>> and you talked about how comcast is a technology company now. you talk about a cable company, internet distribution company and you are a tech company at your core and these products displayed at the booth. what does that mean for the way people in the future will access content? could i sign up with comcast service without ever talking to a person? >> yes. absolutely. and maybe we just -- we just had a meeting friday, where we saw incredibly exciting road map -- this year road map, not five years, to where every transaction you do with our company, we want to make it digital. and you can take your smartphone and sign up, you could start consuming before you have a box. you could schedule an appointment or schedule a phone call. you don't have to call and wait on line. you can buy on amazon. you can -- you can see that working really well, where you just completely fulfill the

order, scheduling, and installation and never have to talk to a human. so we're going to make a leapfrog and have already begun to do so in the way we talk and communicate and transact with our customers, and i think that's going to be a big positive as well. >> we are out of time but the final question to bring it back to the olympics, how do you think people's perception of comcast is going to change after seeing that kind of experience in terms of interacting with content? >> well, we're obviously so proud of the story-telling, the passion of the company everywhere from the "today" show to "the tonight show," the x-1 technology, and it is our company. maybe you think of it in one way or in the rearview mirror or we made a mistake and didn't fess up properly but we are looking down the road forward and we're growing customers. we're innovating. we're attracting incredible talent.

i would probably say my main goal, your kid coming out of school and you can go work for google or facebook or comcast nbc universal. i hope people will say you know, what there's nothing quite like your company. and that's a great opportunity for me and my future and then we'll have great products in the future by having great people. >> perfect note to end on. brian roberts, thank you so much for joining us today. [ applause ] >> thank you, brian. >> thank you, julia. well done. >> thank you, brian. that demonstration was very special. and it's great knowing where i'm going to spend my summer enjoying the olympics. >> very exciting. also our thanks to julia, who graced our stage today. tomorrow she's going to be interviewing john stankey from at&t and also pete cashmore from

mashable. >> and thank you to our speakers for their views and insight and join me in giving them a round of applause. thank you all for joining us this morning. have a great afternoon. >> thanks, everyone. good afternoon, everyone. welcome to the mid-point of intx 2016. we have had a great couple of days so far. hope you have. we've met ariana huffington. we talked with michael powell. we also had a conversation with brian roberts and quite a display he put on about the upcoming olympics and the technology. and we've had conversations with john king and jorge ramos. we have celebrated some terrific events and programs with cable tv pioneers. the cable center hall of fame last night. outstanding. women in cable. a great lunch. and many other groups.

on the market place floor we've discovered the joys and wonders of virtual reality, of tv everywhere and the ever-expanding content display technology. we've also been immersed in news and information about the internet and television and imagine park through dozens of panel sessions and discussions. so it's fitting that all of those developments have led to this afternoon's great general session. probably the most disruptive of intx 2016. we're going to get to hear from the people who have disrupted our world with game-changing technology and services. fresh from the acquisition of directv, we're going to get a chance to meet at&t's john stankey. we'll gain insights into the world of the internet with the

founder of mashable, pete ca cashmore. it's going to be an interesting conversation. and are & recode's peter kafka is going into the deuce us to nigel eccles. exciting line-up. you won't want to move before we head to the chairman's reception for an adult beverage or two. so to get things rolling it's my pleasure indeed to welcome a true friend of cable and intx. the senior media and entertainment correspondent for cnbc and a shining light in news and business and an absolutely stellar journalist. please welcome julia boorstin. >> thanks so much. and i'd like to welcome on to the stage john stankey, ceo of at&t entertainment.

fresh on the acquisition of quickplay. so we'll have plenty to talk about today. ♪ so john, just yesterday you announced the acquisition of quick play. what is this company and how does it fit into at&t's strategy? >> the headline is real straightforward, we want to be able to deliver premium content to customers on any device wherever they are. if you kind of get underneath what's the details behind it, about 12 years ago when we started to work into the pay tv business we had some decisions to make on platforms and how we did that. and it was a real painful decision to make to walk in and not own your stack of technology to kind of accelerate your entrance into the business. so after 12 years i think what this represents is we finally have a culmination where we own the entire technology stack to deliver services to our end users.

and that's really important. i think everybody in this room understands it. we have this dynamic now where i think most people that play in this industry are going to play in a full stack approach. they're going to be all the way down at the content side working up through the technology stack and ultimately the customer experience and feel really good about the move that this kind of completes for us in making that happen. >> so describe to us how you see at&t's approach. you have a unique position. at&t also has directv. so what's the big picture strategy? >> i was kind of chuckling backstage as they were italian deucing the segment. i got put here in the middle of the disruptor discussion. because most days i feel like it's being done to me, not the other way around. >> probably both, right? >> i think a little bit of both. certainly our approach to this is we do believe that mobility is an important ingredient moving forward. we think the customers are going to want to do more things on the go. we think the fej is going to a place where mobility is going to

allow them many more things on the go. so our desire is to take that premium entertainment experience and the great aspects of what people have that emotional connection with and bring that out into our mobility experience. and the combination of the fact you've got great content mixed in with device-specific addressability allows for new business models, better business models. more targeted advertising, lower ad loads, better yields for folks, allow people to take the content wherever they want to go. start to do things like build scalable infrastructure that ensures people aren't worried about whether or not they're exhausting data buckets to do the advertising -- to dot the consumption they want to do. and then also start to play into the new more fragmented digital forms of entertainment that you see the entire new gen z and millennials adopting that are definitely mobile centric. >> verizon has go 90. what do you make of that aploecaploec

approach? >> i think everybody's about building audience these days and want to be in a situation where they find a way to build audience to do all the things i just mentioned. one is to push some advertising. and there's different ways to build an audience. our point of view on building an audience is it probably needs to start from a position of strength with premium content the people have a repetitive and emotional tie to and grow from there. the advertising business can be built on that, especially on an addressable basis. that's a better place to be in the near term. and we're choosing to come at this problem in a slightly different way. more from the scaled premium content position. have a great cost and be able to work with people who know how to do that and play into that from a position of strength rather than try to come from the bottom up. it doesn't mean the bottom up doesn't make sense and it doesn't mean the bottom up won't be relevant over time. we already have a billion-dollar-plus advertising business and we're going to grow it in double digits by starting

to apply some of the technology and capabilities that our ip capabilities allow us to bring forward. weigh like coming at it from that vintage point working our way down. >> and of course you have other media. obviously cone between at&t and trinity entertainment. i think some of these assets like crunchy roll are massive but many people don't realize how huge and powerful they are. >> so we've built a great audience with otter media and it's coming from the bottom up. these are the newer digital forms of advertising where we're able to take a tremendous amount of impressions in the digital environment and then start to work to monetize that. i think both are necessary. you've got to work from the top down in premium. we think that's scaled and relevant and ready today. but we also want to have our foot in the bottom up and understand and learn about that. there's segments of the population that will be better suited to that. why we did it with otter media is pretty straightforward. we believe that there are certain things that the core of

at&t does well, which is meet the needs of millions of customers on subscription business models and repeat things over and over at scale. what we don't do as well is innovate and do the small things that sometimes need a little bit of care and feeding and nurturing without putting too much bureaucracy or process on them. otter allows us to do that outside of the mother ship. allows that creativity to take root. allows us to try some different business models and learn from it but not do it in a way where it has to kind of be governed by the larger business of at&t. and i think we've been pretty successful at finding that balance. >> so what's your business going to look like a year or two years or three years from now? the marketplace is changing so much. and you have your hands in these different businesses. and in a way experimenting with all of these different products at otter media. how do you see int gracing them into the rest of what at&t's offering? >> so we like to find the places in the digital world where we

start to see some momentum and attraction. we also want to take opportunities of what we have in the premium world and bring it together with some of that new and emerging stuff and kind of fuse them in a way that's better. i think what you'll start to see us do is the things we're getting traction on with gen z and gen x and the millennials down here and start to bring some premium with it and create new categories where the two are blended together. and use our scale with mobility distribution to try to actually turbo charge those. i think if we're successful and we actually demonstrate that we can do that there's also an opportunity to start pulling some of those folks that haven't moved into subscription services into that subscription ecosystem if we really get some traction. and that's we will what the grand experiment is around that to make that happen. >> so it sounds like a new type of digital bundle targeting millennials. >> that's correct. and i don't know that any of us know precisely what that's going to be. i think the beauty of having software distribution platforms

and the flexibility of using mobility for distribution allows you to try a lot of different things, see where you get some traction and then move back from that. >> there are so many players in this space right now. what about at&t's approach is unique? >> so i think the one thing we understand, customers are being real clear. they love using the products and services. but they don't like the overheads that go with it. it needs to be a much simpler and more transparent experience to get the complement of things they want. connectivity anywhere. whether they're at home or on the go. the entertainment they can take with them. and get what they believe is a good value out of that. one of the things we need to focus on is a great customer experience. one that's very transparent. so that they know what they're buying. there aren't hidden fees, no ups, no downs, no extras. they know what the deal is. that there's low overhead in getting that done. and when you start looking at some of these new software-based products the beauty of them is they take a lot of overhead out

of the provisioning processes and the customer support processes and they play right into that nice frictionless mobile experience. so that's one of the things that we need to do very well and play into that. and i think over time as you start to have the opportunity to deal with a stack of technology you can do things like more effectively manage ad loads. you can invest in more exclusive and premium content that you can monetize in different ways. both with subscription and advertising and play on a different scale than you did before. that's what you have to do better. >> what are you seeing in terms of the big picture trends in the industry right now? i just this afternoon talked to pat user from cox. yesterday i interviewed brian cox. and both of them talked about this need to adapt to the consumer, offer different types of passengers, perhaps more flexib flexible, smaller. what are you seeing? >> totally agree with that. the consumer today, if you think about what they're looking at, it's not that they're not engaging with the content and the product that we're offering. they're just engaging in a

different way. they want to do it on their terms. instead of sitting down and watching an hour at a time they want to watch the entire season over the course of a friday and saturday night. they want the latitude to do it in the house and outside the house. some are looking for different price points. there's no question that the industry kind of fit itself into the premium segment of the price point up at the high end. and we've kind of left this gap of people that need to have a starter set and move in. i think that flexibility is a key issue and the way you can come up with different business models and different distribution platforms that start to take costs out of how you deliver these products, that start to take cost out of the support life cycle for customers, that are less cp intensive, all play into that. >> but do you think the starter packages are like a gateway drug to getting people to sign up for a full directv package or do you think there's a new generation of consumers who's never going

to want to pay for a full cable bundle or tv bundle? >> i don't think i'd want to characterize it as a gateway drug, but we definitely believe that there's a need to kind of have a set of training wheels, right? to have a starter set, introduce and try. and i do believe there will be some that never come ton the ecosystem. heck, today we have over 20 million people who aren't part of the ecosystem. some not because they don't want to be part. they can't clear credit checks to get in over heavy cpe-centric models that require you to have in-service lives of 14 months before you get payback. so i think we'll start to see some of this where different size bundles and different size offerings allow you to address parts of the market that haven't brought in today's industrial-strength market. but there are going to be some who just say i don't want to be part of it, i want to be my own curator, i'm okay with this fragmented environment. and that's going to be pyong and i think if you build the right kind of architectures and the right kind of platforms you can

be adaptable and flexible to that. >> so that's going to be okay because you're going to reach them with different types of packages? >> going to reach them with different types of packages. or in our case our goal is to ultimately provide connectivity and move tonnage. that's a mainstay of our business. if they need connectivity to consume other content and move tonnage, we can ultimately earn back returns on investment of that infrastructure, that's an okay business to be in as well. >> as ceo of at&t entertainment, who is your biggest competitor? not for at&t the mobile provider, at&t entertainment. >> i wish i could narrow it down to one. i think we certainly have the traditional set. we look at what comcast has done with their business. and we admire what they've done. they've done a great job of building a nice set of entertainment assets and a great distribution platform to do that. but you also have to look at some of the new non-traditional providers whether it be a netflix or a hulu. they've done some great things to innovate for customer user interface and customer

experience. clearly customers are voting and saying they like that. we've got a variety of people coming at us from different angles. that's the beauty of it. it's an intensely competitive industry with a lot of different business models emerging. it's kind of a mystery to me as to why somebody believes there needs to be more active involvement from a regulatory side in it when there's this much innovation going on. but time will tell whether or not the market wins or the regulator wins on that. >> so you're criticizing the fcc's unlocking the set-top box proposal or what in particular? >> i just ask why we need any additional regulation, whether it's looking at how we're dealing with pricing on transport services or unlocking the box or any other dynamic around it. it's a vibrant industry. there's a lot of choice coming in. a lot of people investing into that seems to be a winning combination. >> so no more regulatory involvement. now, just a final note because i know we're running low on time. later this afternoon we'll be hearing from the ceo of periscope. we've seen facebook make a big push for its live streaming

video. what does all that mean for you? is it good to have people streaming more video on their mobile devices or is it competition for your content in. >> i think it's a great thing. i think the fact that people continue to want to engage and use data and find ways to be more connected and connect more devices at the end of the day is always good for our business. from the dawn of time what we have made our money on and what we're good at is moving a bit around. and that's still core to our company, and it's core to what we do and it's what we think we do well. and our job is to continue to invest on our infrastructure that we can continue to lower the costs of how people move those bits so they can find more applications and more opportunities to use applications like periscope and feel good about using them. and we think that's a good thing. and our approach to that is just constantly invest to drive costs down. i think if you look at what's

starting to happen right now, we're starting to see the dawn of the upstream consumption of data now. it used to be all push and send. now we have more individual creation going on. we have more information being sent up to the cloud. we think at the end of the day that's great for a network business like ours. we do entertainment because it drives bits on a network. not necessarily because we think we're great at entertainment. >> and do you think we'll continue to see the rise of traffic going in both ways or is there a limit to that? >> i think we're going to continue to see the increase in traffic. in fact, if you look at the growth rates of upstream traffic right now, they're far outstripping the growth rates of downstream traffic. admit thely, it's on a smaller base. but you just now as networks are becoming more effective, more capable, you're starting to get to a pure construct that works. i think we're just starting to see the front end of the innovation in the upstream dynamic. >> fantastic. well, unfortunately we're out of time. but thanks so much for joining us.

john stankey, ceo of at&t entertainme entertainment. really appreciate it. [ applause ] so up next, we have the ceo and founder of mashable, pete cashmore. >> good to see you again. >> so pete, you come from a very different type of business. you built a digital content business, and about a year ago you started investing heavily in video. >> mm-hmm. >> and just recently a couple months ago you announced a big investment fund and partnership with turner. >> mchl hm-hmm. >> he will it us about this partnership with turner and what brings you here to a room full of a lot of television and cable executives. >> yes. i think the way that i think about it is mashable is a startup but it's also a decade old at this point. the first wave was newspapers, magazines coming online. and we were able to build, you know, one of the biggest new media companies with the biggest

distribution and really build the future of newspapers and magazines online. i think now it's quite clear that there's another revolution happening, which is how are people going to consume video in the future. and i think, you know, smart companies like turner are looking at this and saying we're aiming at o.t.t. companies like mashable are saying we think there's some over-the-top solution that's going to work as well. and we bring to them -- we have a data platform called mashable velocity, which is about producing content more efficiently, targeting audiences better. fighting for our distribution, which is something that as a digital media company we've always had to do. and i think really it's about marrying those strengths together. >> tell us about velocity. i don't know how much the audience is familiar with it. but it's something that's been very effective in your digital content production throughout the ecosystem. from the creation to the distribution. how does velocity work? >> we came up with velocity. it's a patented algorithm.

about three years ago because our readers want to know what's new and what's next in media and across the web. and we saw our editors sitting on social media trying to figure out what's going on. and at the same time our readers would look at our site and say i don't want to they want to see what was upcoming. so, basically velocity is a algurhythm. and a lot of other factors because it's a learning algurhythm p algurhythm. and 300 million index, at 2 million a day and watches the whole web and gives dashboards to our staff that says here what you should focus on because there's lot of life left, and here's what you shouldn't focus on because it's peeked. and here where's you should focus your piece, here's where you should avoid.

once we put an article out there, we can say this is going strong on facebook, let's update it to the main page. or this is something we need push harder on youtube. we do things like branded content creators can put in words "over the past three years what ideas resonated with female millennials interested in buying a car?" and we can start the process. really, this ability to look through everything that's worked and then retarget those people again once you've made the series is powerful and we found it to be big advantage in video. >> how do you expect this to help in your partnership with turner? >> we have online distribution. snapchat, youtube, facebook. we have 30 million plus followers online.

we started at the start of the social revolution. we have the most influential twitter followers, facebook fans. and there's a two parts to the way we work with the tv ecosystem. one is digital distribution. and one is developing shows using our data platform. it derisks the show when you can analyze the data, targ tit to the an audience. it makes a much saferer bet. we signed a deal with bravo to create shows for them dig tale. we just announced on friday that we're looking to bring our branded content offerings to linear in the future. that will be a unique opportunity to say you can take it all the way to linear. >> you've clearly been having a lot of conversations with

television companies. what do you see about how their needs are evolving in this landscape? >> it's a completely different world when you look at it. i've really been learning a lot about how when you produce for tv, there's a group of people that come together for a project and we, in digital media, have always been about people learn from the data and learn from the readers, whatever project. so, it's a different personnel function. but the real needs are digital distribution and as always, this is surprising, how do you have a hit show? how to you target the right people? and what is a hit show now? more and more we can target the right people for the right show. what used to be a niche show is something that's very sustainable. >> it's interesting that after

building this big business online, you're shifting attention to traditional, old-fashioned television. does that mean there's less opportunity in traditional online advertising than you thought? >> we're all aiming at online. when we talk about tv, people start to think about okay, it's the screen and my house and it must come through this particular pipe. what we're really talking about is in some cases, many cases you're going to have a bundle but it'ser going come to your house in a different way. it's coming to you probably through your internet connection. and everyone is aiming at that and that is the future and it's more data driven , more competitive. it's still online. the dollars are still technically online hours. it's a different way of getting your media p.. .

>> what's the biggest challenge for are you as you switch gears from mashable? >> we spent the last -- if you want to understand where digital media is, there's two transit n transitions that's happened. one is going from being a singular plalt form to being a multimedia platform. we have a team that develops for that, we have to tell stories across multiple platforms. facebook, and 35 hours a month with facebook live. so, going from singular platform, everything happens on mashable.com, is something we've done and with match book studios i think we've hit the formula and that's something we launched last summer. and the other thing that's changing and we're very focussed on it is the fastest growing part of our business is branded

content. so, rather than let's put an ad next to content, how do we work with brands to make series and integrate their messaging? we worked with wells fargo on mashable explains finance. they said we want millennials to be interested in finance but how do we have it be entertaining and still get across the message? those are the two big changes s. we think wreerb really nailed both of those and that's why we've focussed our shows on the multiple resources banner. >> there were sponsored game shows -- >> bringing it back. >> so, bringing it back, are there going to be challenges to that? do you thinks there wrr going to be resistance from madison

avenue and viewers? they expect to know exactly when a commercial is? >> i think what we found in video is disclosure is much easier, you can get across a lot more information in the video format. as long as the disclosure a clear, i think viewers want great content. it's sponsored by a car company but it's really entertaining and that's what i care about as a viewer and i know it's sponsored and viewers are aware that is how their media is paid for and i think if the disclosure is clear, they're perfectly happy with that. >> we were just talking with at&t entertainment. there are all of these new bundles. amazon prime video, you have verizon go 90. and hulu is working on live video bundle. what is the future of these bundles? >> we announced deals with go 90

and amazon prime video. nobody really knows who will win in the bundle play but it's a great time to be a content creator, because more and more people want the content in their bundle because we have the millennial audience and more and more people are paying for the content in the bundle. if you're creating something people want, you'rer very well positioned. i think there will be a few that consumers will go this is the bundle i want to go for but right now there's a lot of opportunity. and for us it's which bundle do we want to be part of and let them compete for content? >> is it a bit of a cane tent bubble because there are so many buyers and they can't all succe succeed? >> no, i think it's really just a huge opportunity -- like, if

you think of the size of the opportunity if this really is the future of how you get the media and how large the entire ecosystem is, if a lot of the dollars are up for grabs it'ser people figuring out if they can be a fubundle provider. mashable isn't trying to provide a bundle. we'd like to be a content provide er to those bundles. it is great to be a content creator right now. >> how do you manage a business with the higher costs of creating video? >> and also a higher margin. as we talked about earlier today, we've had 69% growth on branded content over the year. i think certainly -- we spent a couple years investing figuring

out video realizing it'ser more expensive to produce but there's higher margin. and the reason networks are coming to us for creating their digital and linear series is we use data lot more. the great thing about being online, for example our series "camelot" which we featured on friday, we had sthipg show up, this guy was responding to scam emails, he'der written a book about it, we covered it as a text article. the text article went viral. we said, huh, we'll make a viral. we put it on youtube, facebook, and see who's watching it. oh, this is big and we said we'll make a whole series. it ran dig tale, six episodes. and many millions of views and

we say how can we do this again and repeat the process with longer turn with data coming across three years of velocity. it's a much more affordable way to make video and we don't have this huge legacy business that's expensive to maintain. we can come up with something, see if the data supports it, see if we have an audience to target. >> do you find the data you get from your velocity alga rilhyth is different than on print? >> velocity was designed for a quick turn and we've -- velocity can tell you with 83.3% accuracy which is it going to double on the story and it can say here are the topics you should be focussed on. this particular story about trump is taking off. you can look at anything on the

web and see how much life it has left in it. with video we do longer turns. we'll commit to a whole series. it'ser about looking at the historical data base. >> because it take as lot longer to make a video and write an article. >> it's more that it takes longer if we're working together with a brand to figure out together is this something you want to do? we don't call them up necessarily and five minutes later get approval for it. there's a bit more communication going on. we would love to do that if people wanted quick turn video and we're doing that in text where we actually take over their whole content strategy, produce on our site and cmf and do really quick turn including text and video. we hope to do more of that as well. >> on the heels of your upfronts pres presentation. thanks so much for joining us.

appreciate it. guys, thanks so much. for our next conversation, please welcome senior editor of media peter cofka and co founder of fan dual nigel eckel. >> boy, we did one in february. you're a good person to talk to every couple of months because your business keeps changing. a lot of people heard you last summer, last fall. then it looked like your entire industry and company would shut down. you're still here. why don't you give the folks here a quick update of where you're at legally. fan dual's still operating legally but not in the u.s. >> obviously, as you touched on

last auoctober, the industry haa crisis point. fantasy sports has been in operation for years and suddenly people are starting to question the legality of it and the attorney generals questioned -- >> is this gambling or not is this. >> yes. and our perspective is fantasy sports is a game of skill and not -- however, some people have different opinions on that. and texas, new york. >> stopped operating in a number of states like new york, texas. i was reading before hand -- a quart shaller of the population. a year ago, you didn't anticipate that? >> no, we certainly didn't. i would say that i always knew -- the lies that apply to

fantasy sports were fine when this was a small grass roots activity. 50 million people play it. but it's waysant a big business. it it wasn't going to become a multibillion dollar industry. we knew we had to get from here to there. we didn't think it would happen as quickly as this. so, that's the big thing that's happened. so, in some of the states like texas and we've exited those states and what we've been doing is working with legislatures in almost over 30 sports to say we're very supportive for consumer protective regulations. so, let's clarify the laws and we've been very successful. we've seen bills been introduced in almost 30 states in the last six months.

we've seen bills pass and become law in almost six states now. >> so, you're having to go state by state and lobby each legislature to say would you create a law that allows us to exist? >> that's kre correct. people are looking at this and going maybe the law isn't as clear as you'd like. and we want to put in consumer protection. so they'll be looking for virginia. and you clarified as a gamnt of skill p. we want you to do things to make sure you're protecting players. >> you got to spend time and money, you raised a bunch of money. when you guys were raising money, you were raising hundreds of millions of dollars last summer. you didn't anticipate you'd spend your money going state to state. are there things you thought you were going to use that money

for, expansions that youv ror had to put on hold for financial reasons? >> we've definitely increased in regulatory and legal. i would say in core investment of the products, that standser . we view that we're transforming the way people view sports and tat that's a multiyear effort. we want the product to keep getting better and transform sports entertainment. >> and you're able to higher engineers? >> that's been very strong. we had number fire and that drove sports analytics and more recently we've been bringing people on as they can understand we've building the platform to

drive that sports engagement. >> we talked about it at the beginning of the conversation. if you aren't aware of draft kings and fan duel. in ret ruspect, was that a good idea? >> i would say we definitely did mistakes mistakes. we knew we had a product people loved. our biggest issue is people weren't aware of it. we thought we knew what people liked about the products. i tihink the level of advertising -- we didn't sell all the benefit said. and we over exposed it, over time we were getting there and i think just the naturer of it, it just blew up last year.

>> there's two negative side effects of blanketing. one, turn people off the product and two, seems like you raised your profile enough that the attorney general of new york said i'll look at this company. was that part of the back lash? the legal back lash? >> people were going to ask the question. so, the issues were going to happen anyway. i just don't think they were going to happen as quickly. >> you and your competitors spent hundreds of millions opfootball related ads. it's what drives your business, right? >> football, largely is still the biggest sport but basketball has been the fastest growing one. and in fact, if it you look over the last 15 years, one of the biggest drivers of the consumption of the nfl has been fantasy sports.

what we're seeing is nfl is still very important. number one important. but what we're seeing is huge increase in consumption of the nba. i think nba will be number one. >> so, near term, this fall as you make a push to rekrooet krut people, what's going to be different this year? >> the first one is we're definitely going to step back on the -- ewe have tons of awareness. that's not an issue. this year's more about shifting energies and new aspects of the produ product. ref i think that's something we made a mistake on last year was -- it became very serious and we wanted to be -- >> there's a lot of emphasis on how much money. >> that was the focus and we wanted more to get back to -- people say fantasy because it's

fun. advertising really missed that. >> thafr rr not doing it as a voekz. >> we want to keep clearly explaining the fun. its part of the advertising as a core part of the experience. >> so, the tone of the ad will change. i'm assuming you don't compare notes to the folks at draft kings. bitter rival? and i was watching football last year. i had to see ads for both of you guys basically at every commercial break. are you going to pour money into tv and football broadcast? >> i don't think there's any medium as good as telling a story and building a brand of tv. but we've seen a shift of more and more digital. paicularly social and mobile. the opportunity to target and

track are so much stronger. and 30ly, the opportunity to cut and chase very denomically is very powerful. i see the shift more towards those channels, away from tv. >> so, will the spending increase? >> down significantly. >> overall p. and the mix is more digital and are there people you feel you reach? because it seems you have the one product you should be advisetiziadvised advertisin advertising. if anything you should be pushing tv. >> absolutely. and the great thing for us is we know impaexactly where our fans. we can target them very, very closely closely. there's still a shift away to

digital mobile. >> are there pockets that there under utilized? >> i'd say on digital, facebook for us is very, very effective. it gives us great targeting ability. and a nice way of looking at facebook this year is much more impressive than what we could do last year. and ways of targeting people. for example when there's a debt or cost to install. >> their product was changed? >> they're shifting their product and even more edadvert e advertising friendly. >> and you want someone to download the app? >> absolutely. i think trar k they're very wel. we like to have the awareness. i think as we shift our

messaging more about the fun of the product and it being fun and introduce people to part of the product we didn't talk much about. i think that's better as a band. >> and part of your pitch is you work with investors. or you work with individual teams. have any of them pealed off in the last year? >> so, the nba is an investor and we're partnering them. we've partnered 15 nba teams. they're a core part of our brand story. fan duel is about sports. so, one of our things is to bring people closer to sports. we can take a cleveland fan and take him to a cavaliers game and put him on the front row. we can only do that -- >> i understand why you'd want to partner with them.

>> they've been incredibly supportive. they see, particularly in the narks th nba, this is such a driver sports and they've been very supportive over the last six months. >> we were talking back stage that assuming you get to a point whereer fighting state by state battles. i think one of your pitches is many of the networks are investors. it might surprise them that you want to become a media platform because they're a media platform. >> we have 1835-year-old male platforms, tlar on the platform every day.

so, someone like bug bud light, they're like this is the absolute demographic we've won. and we had tournaments every day during the nba playoffs. so, that's a way to reach our base and attract with the brand they associate with. it's more of us marketing them. >> you're paying? >> yes. >> so, you're generating advertising? >> yes, and we feel it will be a revenue contribution to us p.. >> we knew the level of engagement we were driving. we really were trying to work out the way to package it for them. so --

>> i assume most of the consumption for you is on the phone. >> over 80% of our users are on the phone. >> and is it happening while the game is going on? >> there's really three parts to it. the first one is research. the second is constructing my team and the third is live scoring experience. historically a lot of the research has been on the web. but we're putting more of that -- through my laptop and lots of different sites. in terms of pulling together your line up, more and more on the phone and the live scoring experience nearly all on the phone. people in the sports bar or at home, it's much easier to check my phone than the laptop. >> and are you able to say that we're going to see a bump in

viewership? >> and we can show an increase in consumption. people were watching four games a week and now seven game as week. the interesting i think is if you think of the experience, you put it in what i do. the next step for me and the golden opportunity i think for us is scoring experience. already i'm doing everything on my app, why can't i go to the game and see how my players are doing. watch a clip. oh, there's lebron scoring three points for me. i want to do that in the app. >> you want me to be able to watch the game on my phone? >> absolutely. >> but they're expensive. they're owned by the tv networks. >> tlar rr going over the stop

and saying these rights are separate because some of the audience, they're not getting them through prezipgz. just one clip and so i think it's an adative one. >> there's always talk -- >> you've got two very similar companies, seirius and xm. seemps lod seems logical you would combine. >> we're really excited about our business and our projectry. >> are the players loyal to one or the other? >> casual players tend to be loyal to one. takes time to get to know more platforms. there'd new ants where peemnt lt are like i like this in this

platform and i like that in that platform. >> and the other big issue forrfor you was a story that said you have positioned this as something anyone can do but the winners go to a handful of players. you'll lose. how do you fight back geagainst that perception and reality? >> that's something we need take on. we're absolutely -- this is a game of skill. the more you work at it the better you get. some of our tournaments are different from others. we have the most challenging competition, the hard stz to win but at the same time we have new player leagues, beginner leagues . and really you'll see it this season more as we want to move more to those ones and say these

are the ones you should be playing in as a new playerer e >> not in the world series of pokerer. >> and that's something that i think historically we weren't clear enough that people went straight into the more chals chging competition instead of taking their time. >> but you can still have the computer jockeys. >> the kizy pool -- we do that. and so with some of the regulations we're putting in, we have to label the hieghly experienced players and we have to carve up areas. >> and then this is a thing you can put in a dollar. >> put in a dollar p. you're playing other people who just started the product and you're playing at much more friendly environment. and the other one is the social side.

playing your friends p. wea. you know how good they are. you probably think you're much better than them. >> so, games where it's me and my buddies. >> yes. you've always been able to do it but we've not pushed it. >> good. and advice for folks. maybe wish they could work at start up. a year ago, everyone was a unicorn, now a lot of people are faltering and you did in a very public way. what's the biggest lesson you've taken from rough year? >> i'ver facing certainty. we had a start up in 2000. we went through a lot of challen challenges. ultimately became a very successful company. they don't grow on a linear fashion. you have to deal with the bumps

as they come. and we know it's not going to be an easy road. in fact, last year. >> it's one thing to say and that another to lose 25% of your user base. >> yes p. and we've been at this in 2008. we were one week away from having to shut down because we couldn't raise money. start ups always have uncertainty and that's part of the thrill of being an entrepreneur and i think if you don't have the stomach for uncertainty, don't do it. >> thank you for proving you have the stomach to talk to me multiple times a year. thank you. [ applause ] hello. want to switch gears briefly. and bring in kevin from periscope.

>> did i butcher it badly? >> you did great. >> so, you're in the media business p. . >> apparently parenapparently. >> this is your second start up. >> my co founder and i started a company, we built mobile applications for universities. >> education tech. >> i like to think we started out building things we wanted to use and at the time we were students and wanted to build something we could use and no different than periscope. we wanted to build something to see the world. and we graduated and no longer could be consumers of our own product but with periscope we use it every day. >> you've had a pretty interesting 18 months. you've sold the company to twitter

twitter. launched a little more than a year ago. same chairs. your ceo left. so, you've been working for jack dorsey for the last year or so. how are things different at twitter with dorsey running the show? >> to work with someone who's an inventor of the product over a decade ago. you have a spiritual connection to the product which is rare. to be able to do what we do and work closely with jack and kind of his contexts and vision for what he sees twitter's value in the world is very special. >> so, he came on in an interim fashion last summer and came on as a full-time ceo last fall. when he came on, did you say all right, there are things i want you to do differently than

before. >> no, one of the great things is i think he's one of our biggest cheerleaders. he was one of the biggest advocates for periscope joining twitter in the first place. there was no dramatic moment where he was like you were x and now you're y. he was one of the folks we were most close to. >> i'm putting a clock on. just so we know when to leave. maybe they'll boo and tell us that way. he didn't give you any different marching orders. >> they were continue doing what you guys are already doing, which is build up your product and let us know what we can do to he to. >> there was a company called meerkat that maybe looked like competition and that went awaiaaway and now facebook are paying media companies, celebrities.

youtube is starting to look at this. what's it look to compete head-to-head with facebook? >> i think media likes to paint a very dramatic picture about competition but i think the reality is even when we entered this market we were never the first first. we could name dozens of live streaming apps and many more that will come to the market big and small. that's one of the things that drove us because we didn't want to be first, we wanted to be best or different or something that wasn't first. that's helped us in a variety of ways. one to not get fixated on we were first and lets us focus on a really fantastic product that people love to use. but it's not the first time that companies have incentvised financial financially.

>> but it's facebook. once it turned out the people weren't going to use that thing, didn't matter if you had equity in meerkat because they weren't going to use it. and there was going to be an interview with president obama, didn't work. but i'm sure they'll try it again. at every opportunity -- they say mark zuckerberg thinks this is very important. it's not any other competitor. it's 1.6 billion people really pushing you. are you reacting at all? >> first and foremost, we're flattered that we're good enough that people would want to jump in the space. reputable companies that are as launch r large as they are. >> you think that's a reaction? could we a random coincidence. >> could be. but our reaction was to double down on what we're doing and

staying the course and building a product people want to use and when we first launches, the narrative was very different. people don't want to spend the time live strieming and a bunch of bes mystic views on whether this median is interesting for people to use. i'm excited that conversation has evolved that they don't question the efficacy of the face. >> you don't even want to mention facebook by name. >> smashe book. >> i love the internet for a bunch of reasons. one is i can do whatever i want to do when i want to do it . i love the on-demand notions

haspread to other things. why is live attractive to internet users who are used to being able to watch things when they want to watch them and not when they're on? >> one of the things attractive about live is it works in tfirs place. i can walk on the streets and the snap of my fingers command an audience of hundreds of thousands of people. there's something super heroey about that people will exercise. i thing that is new. from a consumption standpoint, even though we're uset to the luxury of being able to watch our hbo go whenever we want. there's something about the way periscope and other tools achieve it that brings value and purpose to the immediatacy of the interaction p. when i watch a tv show live, the fact its live may matter spiritually but not from an interaction

standpoint. >> comment and direct a comment? >> i can't ask wolf blitzer a question on cnn, he's not going to respond. but if i say, hey, peter, i want to ask a question about an article, there's something that exists that doesn't in other forms. >> he said its novel, the idea of doing it. how do you get people over the idea this is a novelty? and all right, that was not very good. turns out it's hard to do. these people are going to get better at it. are you encouraging them to profession professionalize them. >> i think the actual interaction of the item will get them to stay. what atracts a broadcaster is different than a viewer and we

focus on both of those tracks differently. in the context of broadcasters, we try to make the kind of tools more interesting over time. now gopro inintegration and drone integration. so, you can be switching between your phones, camera and gopro all in the same broadcast. that's anotherer creative lever we give broadcasters they didn't have anymore. we have to make it a utility they can use to interact with their oddance. >> does it make sense to have that built in yourself. it's not an app. it's a button and you're periscoping. >> i think there are pros and cons either way. using the phone as a nexus has a laut of at vantages. you're strapping the gopro to

your chest and cruising down the mountain. you don't want to touch the device. >> and twitter need to be in the hardware business for this to work ultimately? or can you work in other people's hardware? >> i think there may be advantages to owning invasions. but i think there's lot you can accomplish with billing an api on top of that. >> one of the things smashe book is doing is we're going to broadcast live but you just take something you've recorded and put out. really it's tv . >> i think we can get more types of live content on our platform. it doesn't necessarily need to be captured from a mobile device, which is why you see us entering the space with gopro

and drones. and if you come from device that's not any of those, it can come from studio feed with multiple camera angles. and how what we care about is a platform for troouth truth and empathy. the thing we can hold on to is right now when it says live you know it's happening and someone in the world will show you the latitude, longitude. i think when we enter a world where we're getting nonphone inputs the to the ecosystem, we have to denote that in a way where the viewer can go i understand this is not being captioned from a phone but at least it's served me that information. celebrities will use periscope, we're talking about kevin heart back stage. are there those who are native

or just periscope stars? >> we observed how it'ser evolved 37 you have all this opportunities of stors and they're super niche. the hair styling community or the pottery community. and the potters will spend hours on periscope broadcasting their craft. and for those who just want to observe the craft. they're mini celebrities within their own ecosystem. >> how do you make money? >> the platform itself isn't. there's n nothing in the periscope real eskate. maybe and simple example is we're starting to see brands with a blown wheel. and thoi were promoting had

tweet of the periscope on twitter. one way you seeat creators monetizing, and they can go to brands and sponsors and either help bring the brand to the periscope platform by doing a collaboration or some sort of -- >> jm rri'm assuming advertisin advertising. >> if we were to pursue advertising, what we'd feel strongly about is not the traditional my body peetder's live i have to watch a preroll. i think we'd want to be more inspired than that. >> it's worked pretty well for youtube and allowed them to build up a whole echo system. not the worst thing in the world. >> no. it's one very effective way to monetize. >> are there things you weren't

doing a year ago you're able to do now technically? >> we're investing a lot of the video infrastructure. that matters both in terms of the fundamental capabilities of how low the latency and connection time is. and we have rebuilt a lot of infrustructure. a how many people are working on periscope in twitter. >> we have the benefit of collaborating with a lot of our friends at twitter p.. we get to lev thnl best parts where the relevant parts, video instruture folks and others that allow us to do what we do without having more full time people. >> at sh point does it start being a function of twitterer? you said you were testing a go live button on twitter.

>> we think there's lot of value in having a separate brand. but that doesn't mean you won't see over time more and more integration with the twitter product and we now have full consumer plaik invasion p. so, if you stumble 92 a smooemsh that didn't exist six month said ago. p. the go li-- and you'll continue to see periscope invest in -- if you have a separate app that's about seeing and creating live video, we think that deserves to be its own space. >> and a year ago, there was lot of question about whether you were going to enable piracy. there was a many pacquiao fight and whether people were going to watch it through there or periscope. >> i think the conversation

originally started because it was probably the first time you had a break away consumer live application. so, there's a lot of hub ubabout this idea. is she writing roses. >> the people have asked about ever since you started pitching investors. one, people realized that periscope isn't a very effective tool to use against piracy. if you want a boot leg copy of "game of thrones." there's probably better ways to do it. i think we've done a good job being very vocal externaly. this is not something we want on our platform and we have a lot of procedures in place to be responsive to that stuff and the other thing is that a lot of these partners concerned about

their content being redistributed, they became users of the product as well np dodgers and the mets are using periscope almost every game. and that saends message that periscope a way i go to watch the dodgers, the mets. cnbc was broadcasting this morning. the cog beenation -- >> six months ago, they were kicking people out of their san francisco studio because of periscope issing. we'll come back in a year and see what's changed then. >> appreciate it. the empire is increased, there wir great love affairs but a family where fathers kill their sons, where wives have their fathers over thrown and murdered and sons collude in the

murder of fathers. >> sunday night on q and a. he discussed his book the romanovs, 1316 to 1918 about the dynasty that ruled russia for over 400 years. >> all the children were wearing their own bazar bullet proof vest. not bullet proof vests but vests sewn with the romanov diamonds. hundreds of diamonds could be sewn into their underwear so they could have money in case they needed to buy their money out. so, when the bullets came, tragically these made their execution, their agony much longer because the bullets bounced off diamonds and they didn't die. >> sunday night on c-span's q and a.

our c-span campaign 2016 bus continues its travels throughout the country to honor winners from this year's student camp competition. recently we stopped at montgomery blair high school, 41 students were presented with awards in fronted of class mates, teachers, parents and elected officials, including a first prize documentary called "driving forward. "and he also made a stop in washington d.c. where mark jackson and ali received honorable mention for their videos and awarded $250 each. and they won $750 on their videos on money and poverty and homelessness in the united states. a special thank you to comcast

cable for helping coordinate these and you can review all on student camp.org. $305 billion for surface transportation irastructure over the next five years. senator john chairs this two-hour committee. good afternoon, this hearing will come to order? thanks for joining us to discuss the implementation of the fast

act. we've just passed the six month anniversary of the enactment in more than a decade and after 36 short-term extensions, the fast act helps to improve our inf infrastructure and spur economic growth. showing once again the senate is back to wu work for inamerican people. it helped to reform regulatory structures and improve planning for free. with reforms covering everything from railroads to cars and trucks and ports as well as research and technology, this legislation was a true team effort to reduce congestion, protect passengers and improve the supply chain. each member of the committee contributed to the success of the fast act. wicker and booker formed a bipartisan team for

infrastructure programs. and the process for rail projec projects. h the fast act contains many provisions that protect lives on our nation'sroway roadways by improving corporate responsibility for vehicle safety. i'm pleased that the motor vehicle whistleblower act, which i introduced with nelson and others incent vises employees to blow the whistle when manufacturers sit on important information importantini importantiniimportant -- information. and ignition switch defect, the general identified serious lapses and questions about the

agency's ability to identify and investigate safety problems p.. following the inventives, understand they've made some reforms, closing eight of its 17 recommendations. clearly there is more work to be done and you can expect continued pressure from this committee to increase efficiency. and the law adds a new grant to supply 24-7 sobriety programs p.. a program that originated inicizeicize. i'm pleased that the department seems concerned about the safety grants but they need to improve the partnership with the states so they can tackle their own unique high school safety challenges. in addition to vehicle safety, the fast act includes a rail title by wicker and booker that

improves amtrak 's finances and make it more efficient and accessible and most importantly, raises the bar on rail safety. i commend the department for its thoughtful fuful your approachs expudishes action. and while some of the riff reforms are tied up with the innovative finance bureau, i hope nonetheless, they can repay credit risk premiums and provide stake holders with grader certainty. on rail safety, i'll look forward to the forth coming actions. >> including stated states. in 2015, the second most common cause of railroad fatalities after tress passing. i strongly encourage them to provide states with engineering

strategies to reduce accident risk. there more effective yous of program funds . i also look forward to implement my amendment involving cameras on passenger trains. and helping crews better monitor crew and conditions. and positive train control is fully and safely implemented. the fast act accelerated the deployment of this safety technology technology. this bill builds on the map 21 to insure that freight planning is truly a multimole. highways bring freight to our stores and doors. but ports bring goods across the

country. recognizing our transportation system is dependant on each element, to farm to truck to rail to port. the performance working group will insure us and our economic competitiveness is depend on our ability to compete and if it's more expensive because transportation is more expensive, that means our competitors are going to win. i'd like to close by thanking you and the department to neat deadline in the fast act. we understand that the comprehensive legislation includes safety mandates and reports and greatly appreciate your efforts to help this legislation deliver for the american people. there's next work to be done over the next four 1/2 years. and we'll work to insure the programs.

the fast act as implements and faa. pipeline safety. and i'd like to thank you personally for your continued partnership and improving all aspects of our nation's transportation network. it's been great to work with you and your team and i think we've had long lasting, valuable result results. >> thank you, mr. chairman and thank you for having the secretary here and i'll echo what the chairman has said with are regard to the fast act which we refer to as the highway bill, which has uth r things in it other than highways, including improving 48 and an additional 8

billion to repair the nation's passenger rail network. and so you all are going to distribute a lot of this money through these grants and for the economic engine of the country to keep pering along, we have to keep the engine of transportation going. now, mr. secretary, one area that we've got to do better is vehicle safety. over the last couple of years we have seen this saga play out on the takata airbag recall and its unbelievable. its up now, just in this country, of 70 million vehicles being recalled because of defective takata airbags that have killed over a score of

people and have injured hundreds. and so part of the work of this committee has released a report just last week that assessed the automaker's progress in recalling and replacing defective takata airbag inflaters. and i'd like the insert in the record the 14 companies that we wrote seeking this information and i'll tell about that information that we received a little lathe later. >> without objection. >> what we find is some alarming facts that the completion rates range from as high as 57% to less than 1%. these defective airbags are

still being produced. still being produced. this is with the ammonium nitrate and installed as replacement inflaters in the recalled vehicles. meaning, that millions of consumers are going to have to replace their airbags not once but twice. but the most shocking part is the discovery that four automobile makers out of all those letters or responded that i knew of that they're selling new cars with the defective airbags that are on a schedule to be recalled in two years. and so that means that a new car buyer is going and buying a new

car and then they're going to find out that it has an airbag in it that's going to be on the recall list scheduled from two years from now. that doesn't sound very good to me, except the quandary that nitsa finds itself in. it can't emake enough of these replacement airbags and so it's going after the ones that they think are the most defective. which are the ones that the ammonium nitrate's been exposed to heat and moisture. and i can't produce enough of the airbags with the moim moisture absorber in the compound of the ammonium nitrate that absorbs the moisture.

so, they're selling defectediiv airbags in new cars p. cars. what i'm going to be asking you is not only your ability through nitsa, to stop the sale of a car since the law says you can't sell the law. the law says you can't sell it if it has a recall outm and in this case it's going to be an item that's going to be recalled in two years and at the very least i'm going to ask you, mr. secretary, shouldn't we at least let the buyer know that that irare ethey're going to ha airbag that's going to be recalled in a year?

and they've had a parked. that is going to have to come in and get replaced. so, where i'll be going with the question. >> thank you, senator nelson. thank you, please proceed. and we'll give our members a chance to ask questions. >> thank you, mr. chairman. and let me respond in like manner to say to you and the committee how much of a blesher it's been to work with you through the last three years p. you all have taken your roles extremely seriously. members of the committee i want to thank you for inviting me to testify today. regardless the progress in implementing the fast actpub one of the points of discush was the

need for the that a and pass a long-term transportation bill. while the fast act is not everything we need, i want to thank you for heeding our nation's and department's call by passing this bipartisan long-term measure. it has removed a cloud of uncertainty hanging over our surface transportation system for the better part of a decade. and as a down payment for building a transportation system. i want to applaud them for ninety-first time infor including in an authorization bill. since the fast act was enacted last december, we have been laser focussed on distributing as much as the results possible to states and others through

formula dollars and discretionary opportunity said. and we've notifieds three key areas. safety, project delivery, innovative finance and research. first, as you know safety continues to be our top priority. and we've taken a number of states for example in march we made a rule that raises maximum fines against automanufacturers from $35 million to $105 million. we also move quickly to solicit nominations for the motor carrier safety assistance program working group to analyze the formula for the program which provides much needed support to state agencies. in the coming months, we will

seek to prohibit rental car companies from knowingly renting vehicles subject to safety recalls. this gives nitsa an important tool to protect u.s. motorists as they operate some of the largest fleets in the country. second, in the area of project delivery. the fast act adopted a number of proposals to further speed the review while protecting our nation's historic treasures. just last weeng they opened to review and we also have additional of rule documents underway to eliminate dupelication environmental reviews. third, there are a number of 48 programs and related provisions in the fast act that address challenges outlined in our

beyond traffic study released last year. as our study indicates, it is estimated that by the year 20 fraith volume will increase 45% from 2014 levels. projects including multimodal projects to deal with these growing needs. we just closed the application period for the freight and highway competitive program we call fast lane last month. which will provide $759 million -- i wish it were billion -- in grants for critical projects. fourth. i am pleased that congress sought to build on the administration's successful build america investment initiatives by establishing a national surface transportation finance bureau in the fast act. in the next few months we will provide updated guidance for the

riff program that incorporates changes provided for under the fast act including processing procedures and an application dashboard. and finally something that goes hand in hand with all of the department's efforts is research and innovation. in march we began the competition for utc grants which allows students and faculty to work together towards innovative transportation solutions. we've received 212 applications for the 35 grants available. i'm proud of the work the department has accomplished in such a short period of time. but this is just the beginning. and it would not be possible i would like to repeat without the work of this congress on a bipartisan basis. we will continue our aggressive schedule to execute the reforms you put into place because if our nation's going to have the type of transportation system

tomorrow that is better than it had today, wasted time is something none of us can afford. so with that, mr. chairman, i want to thank you and i look forward to your questions. >> thank you, mr. secretary. and i'll lead off and then we'll open up to our members in the order in which they arrived. your testimony noted that the federal railroad administration is making progress on a number of important initiatives from streamlining the permitting process to reforming the riff program and i'd like to get a little bit more specific if i mike about the expected implementation timelines, in particular you mentioned that fra plans to propose expedited procedures this week. do you plan to finalize those procedures before the end of the year? >> that is my plan, yes, sir. >> and when does the department expect to have a functional, innovative finance bureau and what riff program reforms can be implemented as the bureau is set up? >> we're using a belt and suspenders process by basically

two-tracking everything to get it up and running. i expect that we will have the bureau office space up and going by the middle part of the summer. i also expect that we will issue -- and i think we may have already done so -- job description for the executive director of the bureau as well. so, my goal is to have it fully operational no later than the end of the year but you'll see the rolling out of it steadily over the next six months. >> can the riff reforms get going in the meantime? >> yes. they actually already are under way. there's a lot of work to try to consolidate a lot of the program structures of the riff program and the tifia program so they look more like each other. i think work is already under way. i think you'll start to see a steady rolling out of that on the outside as well. >> the 24/7 sobriety program and impaired driving acts wassing? that the fast act made some

significant reforms to, and has a number of highway safety grants that provide more flexibility so that states can qualify for the grants and address their own unique highway safety challenges. and this new grant aids states with a 24/7 sobriety program is something we were very focused on while maintaining the all-offender alcohol ignition interlock grant so now you've got a program that's worked very well and proven to be effective but we believe the 24/7 sobriety program is something that will enable states to use all the tools in their toolbox to combat the problem of impaired driving. i've pointed out in the past south dakota has been an innovative in creating the 24/7 sobriety program and the rand corporation recently showed that such programs reduce repeat dui and domestic violence arrests at a county level. so, can you give us an update on

the approach the department is taking to work with the states to provide more flexibility as you go about the process of implementing these grants? >> yes. on may 16th of this year we issued an interrim final rule on the ignition interlock and 24/7 sobriety program. at this point a lot of the work we're doing on this is working with the states to get the word out so that they are aware of the flexibility they have. we will be doing that through the summer and the fall, but i expect that we'll have a very robust response given the additional flexibility. >> thank you. during consideration of the fast act there were a number of senators focused on supporting the needs of rural states. when implementing the law the department i believe should consider the burden of regulations on rural states and areas as the cost of implementing regulations on a per capita basis is higher.

i'm told that current proposed performance rules would require all states to file reports for all parts of the national highway system. and the question really comes back to do states really need to prepare reports to show, for example, that rural roads are operating at the posted speed limit? i mean, some of the reporting requirements it seems to be a little bit extreme. >> i'll take a look at it, senator, and perhaps maybe respond either in an rfq or in a letter back to you on some of the questions related to this. >> i would just simply say that it seems to knee at least that a more targeted approach to these reporting requirements would make some sense and it would save money for investment in transportation as opposed to reporting, so i would encourage you, mr. secretary, as you look at those to be more skeptical about how some of these proposed requirements may work and how they would impact rural areas of the country. finally, let me just talk a little bit about csa. as you know, the dotig and the gao and an internal d.o.t. report concluded that the

program was in badly need of reform. while there's broad support for the intent of the program to focus limited enforcement efforts on the least safe truck companies congress expressed concerns about the quality of analysis used to develop scores for motor carriers. the fast act required the scores to be fixed before they could be publicly held out as safety data. and we appreciate that the scores were removed on the date of enactment and that the raw factual data was restored to the website in a timely fashion after adjustments to the website were made. so, the question is, when will the program be reformed so that the scores can be returned to the public website with confidence that the analysis is appropriate and represents the risk of an individual carrier? >> based on our preliminary assessment it's going to take a while to do revised analysis of this.

and i would expect it would have to be maybe a year or two. probably more like two years before that information will be posted back up. >> okay. my time is expired. senator nelson? >> okay. mr. secretary, on what i had talked about before, back in march we sent out letters to 14 automobile makers involved in the takata recalls and we said we want you to identify all the new models that are equipped with the defective takata air bags that are offered for sale or are contemplated to being offered for sale. now, some responded and some didn't. and we put that into a detailed report which we released last week. but a bunch of them refused to answer whether they are currently selling new vehicles that contain the nondesiccated or, in other words, the ones that don't have the moisture

absorbent desiccant that has been mixed in with the ammonium nitrate. so, this is a failure of informing consumers. and i think your regulator ought to be getting answers on this. now, i can tell you, this senator -- and i think i can speak for a lot of senators up here -- intends to get answers. and that's why i put in the record the 14 letters that we have just asked again for complete disclosure of any new models with those defective air bags. and i'm expecting them to give

us complete answers. so, now let me go to my question. under current law whether it's the law, whether it's the fast act or whether it is the amended takata consent order, do you have the authority to say, number one, stop selling a new car with a bag that is going to be recalled in two years? and the second question is, do you, in fact, have the authority to require the disclosure to the buying consumer of that new car? that it's got a bag that's going to be recalled. >> first of all, senator, first, i want to thank you for your persistence and the dogged determination you have to get to the bottom of this. i share your frustration with takata. we have been doggedly pursuing this issue from day one.

we've gotten a consent order with takata that we keep amending as the environment continues to change. the questions that you've asked i think on the first question, we are bound by our authorities to act where there is clear evidence that an action can be taken. and absent that, it would be something of a pyrrhic victory to recall vehicles without having the substantiation to be able to hold those recalls under the lawsuit. you would effectively find ourselves twisting in the wind on lawsuits before people would actually not have to be in those cars. >> okay. let me interrupt you here, then. what i think you're saying where

as the law says -- because the chairman and i put this in the fast act. it says that you cannot sell a new vehicle with a recalled item. but the fact that they are selling a new vehicle with an item that is going to be recalled in two years -- >> correct. >> -- you're saying you don't have the authority? >> that's correct. >> that's correct. >> okay. how about disclosure? how about the protection of the consuming public? >> within our existing authorities i do not believe we have that authority. i will ask our lawyers to confirm that for me, and i will share the answer with you. however, within the consent order we've been able to obtain additional requirements from takata that would not have otherwise been available to us. and so what i would like to do is to pursue getting that kind of disclosure requirement within

the consent order and within the remedies that we've been able to obtain from takata and so make those disclosures happen. i agree with you that these disclosures should happen to consumers before they are purchasing these new cars. >> and, therefore, if your lawyers determine that you do not have that authority, then would you tell us what we do so that the buyer can beware, so the buyer knows what they're buying? >> yes. >> if they're buying not the full package of what they think they're buying, they're buying? that they got to go in and have it recalled in two years? >> yes. no, we will work together on this issue to get to the bottom of it, and i pledge that to you, sir. >> great. and will you also, please, help us if any of these automobile makers are dragging their feet, not responding to these 14 letters, that we just sent out, will you help us? >> i'll help you, yes, sir. >> maybe you ought to call a

little prayer session with them. >> we did that back in january. maybe we'll do it again. >> thank you, mr. secretary. >> thank you, senator nelson. also good line of questioning there. hopefully we can get some follow-up. senator fisher? >> thank you, mr. chairman. secretary foxx, it's good to see you, again, and i do thank you for your good leadership in this very critical area. my first question is about the national freight policy which we established in the fast act. and in order to remain competitive, we need to have a robust multimodal freight policy that enhances the efficiency of both our rural and our urban first and last mile connectors. in fact, d.o.t.'s national freight strategic plan noted that freight flows across all modes will increase by 42% by the year 2040. in your perspective, what is the status of the implementation of that national strategic freight plan, and how do you think the

states are doing at designating those very critical rural and urban corridors and how's d.o.t. providing any kind of assistance, technical assistance, to the states so that they can move forward quickly on that? >> senator, first of all, i want to, again, thank you and this congress for the focus on freight. this is an enormously important issue to our country, as you know. and what the fast act has done both on the policy side and on the resource side has really been to pivot the country towards focusing on this much more. i want to speak on your question to two things. one is the formula-based freight program. we have provided guidance to the states as of this winter to help them understand how to access

those resources. and our experience to this point has been there's a lot of interest and excitement at the state level to implement on the formula side of the effort. the period has closed as i pointed out in my opening statement for the discretionary freight program, which we will hope to make announcements on that program in the summertime. but our goal is to continue not only putting the resources out there but things like the expedited permitting and the categorical exclusions and all the work that's involved in trying to get projects teed up. we are moving on an accelerated basis and we made a lot of great strides. >> thank you. there are resources out there and states like nebraska i believe are ready to nove on this so that we can start some good progress. as you know one of the elements of the highway bill that i'm really pleased with are the regulatory reforms that i authored for the fmcsa and that

was to help with transparency and consistency. but also with the public being more involved in the rule making on that. i understand that next week the department's motor carrier safety advisory committee is going to hold a public meeting concerning the implementation of that section 5203 of the fast act and that would require the fmcsa to conduct a comprehensive review and assessment of all the regulatory guidance that's currently on the books. in relation to this meeting how does the fmcsa plan to continue the process of reviewing regulatory guidance so we can look at the consistency and the necessity and also creating greater transparency as we move into the future? >> well, i'm also very pleased to report that the fmcsa has

been conducting listening sessions throughout the country and will continue to do so even above and beyond the commission that you just referenced. this is helping us understand the perspective of industry, understand the perspective of other stakeholders and frankly i think it will benefit our operational approaches but our policy and regulatory approaches going forward. in addition to that we have created a regulation evaluation division as of last year. this division is working to increase the use of available data and has advanced the agency's efforts to help to arrive at the best available solution on various regulatory and technical issues. we're also using that agency to increase transparency in our regulatory evaluations which is also of great interest to our stakeholders. we're also committed to advancing the -- advance notice of proposed rule making or pro

seeding with the negotiated rule making considering major rules that require sufficient technical or scientific information. so, these are just some of the process changes that we are working through in response to the language that you were good enough to put in the bill. >> do you think that will help you to respond quicker to stakeholders when they are dealing with that so that the agency can have a formal response in a more timely manner? >> i think it will help us -- >> time's money in building roads. >> i think it will help us with speed and i also think it will help us with transparency, because the more you're not communicating in a vacuum the more people are constantly having communication with us the less surprises there are on both sides. so, i think it will be very helpful. >> exactly.

we want to see commerce continue and the fmcsa is important in making sure that our stakeholders are able to do that. thank you, sir, it's good to see you. >> thank you, mr. chairman. thank you, senator fisher. senator klobuchar is up next. >> thank you, mr. chairman. thank you, secretary foxx, i know you were there in spirit but we just dedicated the overpass that you helped with with the tiger grant. i know we talked about that. congressman emer and i were there. and that's in his district and it's going to save a lot of lives. >> that's great. >> it's the worst intersection in our state. and i want to thank you and the department for that. some really fast questions here related to the fast act and the map 21 and the fast act and trying to reduce delays. what progress has d.o.t. made to date in implementing the project, delivery reforms in the fast act, how are they going to communicate with state governments? this question i talked to some of our state people, it's their question. and how do you plan to monitor and assess the effectiveness of

the reforms? >> so, we're doing a number of things really across a variety of modes including fra, fta and the highway division. but with the highway division specifically on project delivery we are looking at the expanded use of categorical exclusions. we have through our bureau that was alluded to earlier we are also working on speeding up the permitting process by incorporating more concurrent reviews in the work so that there are fewer documents flowing between agencies and government. we're using one table to make these decisions which actually helps speed up the time. those are two of the proof points of what we're trying to accomplish and there are many more and i'd be happy to give you a more elaborate answer. >> very good. i'm going to move on from the safety issues with rail, but we've just gotten a statewide rail director appointed who is coordinating these efforts, and so i hope your department will work with her.

i put a provision in there about the rail crossings, and obviously you and i have talked about in the past but it'sing? that continues to be a concern. takata, i've been long calling for this recall. we have a woman in minnesota who was blinded. she was a passenger in a car. i guess my question there is just related to how can we make sure consumers know what cars are under recall. what better job can we do with that? because there's still people confused about what to do. >> we are working with the industry to ensure that when we have a consent order or a coordinated recall effort that we are using every tool available to us and to the industry. and so i've got a long list here of various strategies that we're trying in relation to takata

that include a recall campaign of safe car, save lives. proactive use of internet, social media. there's a lot of things that we're doing to try to get the word out in some unconventional ways. our goal is 100% compliance and we are now tiering and holding the manufacturers accountable when we do a recall and establish a consent order to get 100% compliance through that consent order. >> and what more there's that issue of the replacement inflater, what more can we do to make sure they are available as soon as possible? >> so, the unfortunate reality is that there's only so much supply. i think some of the recall activity has actually triggered some additional suppliers to come out of the woodwork so to speak and as that supply comes online we're just going to continue to tiering it towards

the risk as best we can. but i think we're doing everything we can within the universe of supply that's there and hopefully we'll see more suppliers come into the market. >> thank you. last, distracted driving. i think the chairman and the ranking member for including the provision i had with senator hogan. as you know there was a huge, i know, a big priority of yours as well as your predecessor. there were grants available to help states to educate drivers. it's more and more of these deaths and injuries are occurring because of distracted driving. it has not slowed down and yet we had a pot of money sitting there that no one could access i guess, only the state of connecticut, senator blumenthal isn't here, but that happened one year. we made it easier for the states to get in compliance so they can acis ex access the money as well as the graduates driver's licenses programs and we made changes there and i thought you could comment in general on distracted driving. >> it continues to be a huge issue. we're going to have to continue

working particularly with our younger cohort of drivers, but it's really across all demographics. in may of -- may of this year we issued an interim final rule implementing the fast act distracted driving grants as you point out. >> thank you. you did that quickly. >> absolutely. and so there will be comprehensive distracted driving grants as well as special distracted driving grants available to states and we'll move the money as expeditiously as possible. >> thank you. i think timing is critical here, so i really appreciate it. thank you for your good work, secretary foxx. >> thank you. >> thank you, senator klobuchar. moving further west, senator shots? >> as west as you can go. >> and way warmer. >> thank you, mr. chairman, and thank you, secretary foxx. i wanted to follow-up with you on tifia financing for transsit-oriented development. as you know we reduced the

dollar amount threshold for eligibility for projects and also included as eligible projects tod. and i wanted to get your view on how we are moving along in terms of finding projects that are appropriate. and i've heard some concerns expressed from the private sector about exactly what the eligibility requirements are. and i want to get your assurances that we're moving along and interpreting the statute in as flexible a manner as possible. >> first of all, yes, sir, we are very, very excited about this new flexibility for our loan programs. we have actually -- fhwa released tifia guidance that clarifies tod is eligible under fast act. we expect fra to follow suit shortly with the riff program. and so we don't have any -- to date any applications, but we've heard a lot of interest in this program.

and if there's anyone who has a question, i would really urge that you or others direct them to our build america transportation investment center which can help them figure out not only how to make use of that tool but any of our other creative financing tools for transportation. >> great. thank you very much. we've talked a lot about complete streets, and i really appreciate the department's focus on transportation generally speaking, that it's not the department of highways or the department of rail. it is the department of transportation and we really need to be thinking about how to move people around in as safe of a way as possible and i've been working with senator heller and others on complete streets. and i wanted to first get your sense of how we're moving along. we wanted something a little more proscriptive in the