lawyer, and the first chinese- american state governor in u.s. history. his current post, trade to overseeing the 2010 census to warning against blizzards and hurricanes. please welcome to the national press club secretary of commerce gary locke. [applause] >> thank you for the introduction. i assure you the blizzard is not happening today, or at least not right now. enjoy your lunch and coffee and desserts. coming today. thank the press club for hosting us and recognizing some of our guests. i want to indicate that a to leave for a vote on the hill.@

she left her father here who is going to report all we say and do here. the senator is a great proponent of helping the economy export around the world. in the state of the union, president obama announced a series of proposals that will put americans back to work and our nation on the path of sustainable economic growth. . . work and our nation on the path of sustainable economic growth. a key element in helping to meet that goal is a new national export initiative. that aims to double american exports over the next five years and support 2 million jobs here at home. there have been previous endeavors by the government to elevate the importance of exports. what sets this effort apart is what sets this effort apart is that this is the f united states will have a government wide export promotion strategy with focused attention from the president and the

entire cabinet. this initiative will correct an economic blind spot that has allowed other countries to chip away at america's international competitiveness. for all of america's economic strengths, we stand out among developed countries as one of a few whose government does not have a focused and comprehensive export strategy. at a time when traditional drivers of economic growth, like consumer and business spending, are strained, we simply must elevate exports as a key part of our economic recovery effort. that is what the national export initiative does. i am here today to tell you how. first, the national export initiative, or nei, is going to provide more funding for export promotion and more coordination between government agencies. secondly, it will make sure that

advocacy objectives get wide government support and that we do a more effective job of advocating for u.s. products and services in our interactions with foreign services and government officials. the initiative would create an export promotion cabinet reporting to the president that will consist of top leaders from commerce, treasury, and state departments, the secretary of agriculture, the office of trade representatives, and the small business administration. to put it another way, prior to the nei, export promotion may have been a some of the time focus for many agencies and departments. the nei makes it and all of the time focus. -- makes it an all of the time focus. all agencies to the cabinet will be responsible for submitting a coordinated plan to the

president for how they look collectively enhance u.s. exports. the mandate is broad. it will address key issues affecting the ability of u.s. businesses to export. here are some of the steps we will be taking to improve our export promotion performance. number one is a more robust effort by the administration to expand trade advocacy. that means educating u.s. companies about opportunities overseas, directly connecting them with new customers, and advocating more forcefully for their interests. no. 2 is providing access to credit in the wake of the financial crisis, especially for small and medium-sized businesses that want to export. number 3 is expanding trade laws to remove barriers that stop u.s. companies from getting open

and fair access to foreign markets. before i detail the specifics of these efforts, it is important to talk about why president obama has put exports front and center. today, too many americans are having trouble doing things like sending kids to college and saving for retirement. the fundamental assumption that our lives will be better than our parents', and our children's lives better than ours, has been shaken. in the last decade, most families have stagnated or declined. that was true even before the recession began. meanwhile, the same families have seen the cost of health care and tuition skyrocket, in the case of health care 155% since 1990. it is time to get back to the

basics that let this country build the strongest middle class in history. from the advent of the phone to the automobile to new drug therapies to the internet, america's strength has always been its ability to create and sell products and services that help others around the world. even amid the last decade of speculative mania, exports have remained an integral part of the economy. last year, they accounted for 11% of our gdp, which is three times more than it was 50 years ago. exports support nearly 10 million jobs in america and almost 7 million jobs in manufacturing. manufacturing jobs pay, on average, 50% more than the average wage. for every $1 billion in exports, 6250 manufacturing

jobs are created or supported. while the u.s. is a major exporter, we are underperforming. u.s. exports as a percentage of gdp are still well below nearly all of our international competitors. less than 1% of america's 30 million companies export. that is a percentage that is also significantly lower than all other countries. of u.s. companies that export, 58% export to only one country. with our increasingly interconnected world, where 95% of consumers reside outside our borders, there are opportunities american companies and farmers cannot afford to miss. the national export initiative will help our country to seize this opportunity. i would like to further explain

the key areas where this initiative will have the most impact. in this globalized economy, companies from every corner of the world are competing like never before for business in foreign markets, especially in emerging countries like china, india, and brazil. american companies need advocates on the ground that will fight for their interests. that means leading trade missions and working to educate companies in the united states about opportunities abroad. it also means the government pounding the pavement alongside u.s. companies to drum up business. for example, even large u.s. companies with well-developed contacts in foreign countries are finding that procurement decisions are increasingly being impacted by political factors. with massive infrastructure plans all around the world, this represents billions of dollars in potential business. let me provide a quick example

of the u.s. government advocacy done right. in 2009, in april, general electric requested support for its campaign to provide the kuwaiti ministry of electricity and water with a combined cycle power plant. at stake was a $2.60 billion contract g e was battling for against european competitors. staff working in kuwait, with their colleagues in the u.s. embassy, began an intense round of engagement on behalf of ge. there were 20 meetings, dozens of e-mail's, and dozens of telephone calls. on september 14, ge was awarded a contract to provide a 2,000 megawatt power plant in to wait. -- in kuwait. this plant will contain $1.10 billion in american export

content from some 240 suppliers located in 24 states. we need to see more success stories like this one. the national export initiative will help by giving senior american officials traveling abroad a second job description -- advocate and salesperson for u.s. companies and products. ge is a multinational corporation, and their challenges are different than those of small and medium-sized companies. many american companies do not export or export less than they could because they do not have the resources to identify promising markets or the necessary contacts in foreign countries. this is an area where the commerce department will be escalating its already substantial efforts. ita has a global network of

trade specialists posted in 109 u.s. cities and 128 u.s. embassies and consulates in some 77 countries around the world. as part of the national export initiative, the 2011 budget is requesting a 20% increase for ita. with that, ita to bring on 320 new trade experts, mostly in foreign countries, to advocate and find customers for u.s. companies, allowing its commercial service to assist more than 23,000 clients to begin to grow their export sales in 2011. the budget increase will also allow ita to put a special focus on increasing by 50% the number of small and medium-sized businesses exporting to more than one market.

58% of all u.s. companies that export export to only one market. we have to drive that number up so that those companies export to two or three markets. the budget increase will allow ita to increase their presence in emerging high-growth markets like china, india, and brazil. the budget increase will enable ita to develop a comprehensive strategy to identify market opportunities in fast-growing sectors like environmental goods and services, renewable energy, health care, and biotechnology. ita is not waiting for extra funds to step on the gas pedal. next month, we are launching a 12 month program to help create jobs in america by identifying new markets for existing exports, increasing the number of foreign buyers at u.s. trade

shows, and working with private sector partners to increase exports. finally, by getting more clean energy markets -- -- by getting more clean energy companies involved in foreign markets. we will work with companies that have a proven track record. our commercial service staff go out and find buyers and distributors for american products and services. if you are an american firm and want to sell your goods or services abroad, all you have to do is call 1-800-usa-trade. commerce experts will do at an international search for customers or distributors overseas. they will work with you to design and implement a market entry or expansion strategy. think of it as matchmaking or speed dating for exports. we will search and find partners and customers for you until you

find the right fit. that is a toll-free number -- 1- 800-usa-trade. gold key is just one of the services we offer. like many ita's efforts, we're like many ita's efforts, we're going to focus on small and this is the biggest source of the untapped export potential in america. we help them increase their exports, and 85% of those were small and medium-sized people. the new commerce department will allow us to connect with even more of those businesses. we will be launching a virtual website which will serve as a portal to the businesses to access the full array of the commerce department and the other services that will be able to help the businesses and entrepreneurs.

for the small business owners that are not close to the office -- or did not think that they have the time or the resources to partner with the federal government, this will be a particularly valuable thing. but we do not only focus on the export promotions. there is the department of agriculture -- which will be redoubling their efforts to help the american farmers sell abroad. we have proposed $54 million for the department of agriculture to enhance these activities. this means more technical assistance to help the farmers sell special supplies. more extolling of commodities -- and more direct assistance to the farmers to developñi new -- new markets rather than to exist the market share in current markets. helping the american farmers

simply means that we will have more jobs. exports were nearly $97 billion last year, representing 9% of the goods that we were shipping abroad. exports support about 1 million jobs. these are on and off the farm. this is a cross communities and professions. every $1 billion in agricultural exports supports 9000 jobs. and generates an additional $1.40 billion in economic activity. as we were to export to customers abroad, it is crucial to address the second priority issue we tackle. that is access to credit. although our financial says -- our financial systemñr has weathered a crisis, lending is still restricted for small and

medium businesses. the president has called upon the export import ban to support financing of customers when private banks are unable to. the president has called upon the export import bank to increase its lending to small businesses from $4 billion to $6 billion next year. during the last six months alone, the bank has authorized $1 billion in small business financing and has added small business clients, many of whom were first-time exporters. these companies are selling everything from nanotechnology based cosmetics to date palm trees to sophisticated polymers. they are exported to countries around the world. to make businesses better aware of these funding opportunities for international sales, export

import is expanding its work, growing its road show to 16 cities across america, and deepening its partnership with the small business association of america. export import's increased activity will dovetail with the administration's other credit expansion efforts, including president obama's recent proposal to redirect repaid tarp funds to boost lending to small businesses. finally, the national export initiative is going to sharpen the government focus on the barriers that prevent u.s. companies from getting open and fair access to foreign markets. the office of the united states trade representative is working toward an ambitious and balanced way to provide new market access opportunities. the office is going to be opening markets in key growth areas such as asia 0 with the

trans-pacific partnership, which could set new standards in trade agreements and market access. we will improve enforcement of existing international trade law and address outstanding concerns with pending free trade agreements. the united states is the most open major economy in the world and that is not going to change. but that commitment is coupled with an ongoing focus to ensure that competitiveness of u.s. companies in foreign markets. free trade only works in a system where all parties live up to their obligations. the united states is committed to a rules-based trading system where the american people and congress can feel confident that when we signed an agreement that gives foreign countries privileges of more access to our

domestic market that we are treated the same and to the same level in their countries. that means of forcing our trade laws, combating unfair tariffs and barriers, cracking down on practices that harm u.s. companies, like the theft of our intellectual property. despite america's dependence on innovation for future growth, the current system for protecting u.s. intellectual property is fraying at the seams. every year, american companies in fields as diverse as energy, entertainment, and pharmaceutical, lose $250 billion a year to counterfeiting and piracy. this theft -- outright theft, is especially damaging for companies selling abroad, as 50% or more of our exports depend on

intellectual property like software. that is why commerce and our partners at ustr, as well as the justice department and homeland's security, are committed to remedying this problem and securing i.t. enforcement -- securing ip enforcement. this drives ambitious goals, a doubling of exports in five years supporting 2 million jobs. the broad scope and urgency of this mission demand that we scale up our activities quickly. i am confident we have the infrastructure to do so. when i came to the department of commerce, one of my goals was to improve interagency cooperation. we revitalized the trade promotion coordinating committee, which in many ways have been ignored in recent years. the coordinating committee brings together 20 federal agencies and departments to work

on export expansion efforts. it will now help operational lies -- it will now help operationalize, at the staff level, these initiatives. for all the different economic challenges our nation faces, our ultimate goal will be pretty simple. we want to help write more success stories, like the one we saw in texas. working with the export import bank and the export assistance center in fort worth, air tractor required -- a tractor relied on growing foreign sales to survive and thrive during the recent recession. the company has seen its exports grow from 10% of its business to 45% of its business. they have doubled their work

force from 100 to 200. this small company in a rural area of texas is now selling its crop dusters to countries like spain, brazil, and australia. along the way, they have relied on the export import bank to support financing for their customers that may be sales possible. today, export import has assisted with the completion of the financing of some 70 deals. if there tractor can do this there is no reason other companies across america cannot do the same. they can grow their sales abroad, create new jobs here in america, and get our economy moving. the message a want to send to all the company's struggling to find customers or to hire people, or to increase the hours of their current workers, is this -- look abroad.

there are opportunities in other lands. the national export initiative is a clear signal that president obama and his administration are committed to helping you find those opportunities. thank you very much. [applause] >> thank you for your time, senator. we have a stack of questions. if you are watching this on c- span, you can go to www.press.org and submit questions. when you are speaking of your doubling of exports goal, is that a doubling across all sectors or are there some you expect to carry more of the weight, such as manufacturing or agriculture? >> that is an aggregate goal. there are opportunities in different sectors, not just agriculture. that is why the president has

proposed an increase in the export promotion budget of the department of agriculture. there are opportunities in green energy and technology to help combat global warming and to provide energy efficiency and clean energy. there are a host of sectors. we know, for instance, in our exports -- exports supports some 7 million manufacturing jobs. we are not focused on one particular area. there are unique advantages of u.s. companies, products, and services that we must capitalize. there is high demand all around the world. we need to put more effort into matching that need, that desire, that demand with great products and services by u.s. companies. >> with the goal of doubling in five years be aspirational, or do you have a sector by sector

breakdown? >> we do not have a sector by sector target, but we are confident that we will reach that goal. part of that depends on the success of other efforts by president obama and the administration on strengthening our economy and rebalancing the global economy. we are confident we can reach it. we are now waiting for 2011. we're not waiting for the budget increases proposed by the president in 2011. as i indicated, the president has directed the export import bank to provide more financing for small and medium-sized companies next year. we at the department of commerce are prioritizing our programs and funds to focus on export promotion. >> both the imf and the world bank project slow-growth of global trade over the next few years. to double u.s. exports, exports would need to grow more than 40%

per year. is this a case of growth being slow early with more later, or is it going to be about growing in contrary to the world trend? >> part of the strategy of achieving the doubling of exports depends on the growing world economy getting america back on its feet economically. other agencies focus on this as part of the president's agenda. strengthening our economy and having growth will also provide export jobs. actual commitment to advocacy, helping find companies customers for our u.s. businesses as well as working on trade barriers that our companies face around the world -- and financing, using the great work of our bank or the small business administration -- we can make loans to help

companies expand and grow. the department of commerce will help them find customers and take advantage of manufacturing of products and services with finances from the sba. it is a holistic approach, using the state department and others to serve as sales people on the ground. >> how dependent is the administration on depreciation of the dollar against east asian currency? >> our goals are without any regard to the currency issues. it is a given. we need to focus on advocacy, promotion, contacting, matchmaking, and distributors around the world.

we're focusing on overcoming barriers that companies might face as well as financing. our goals are respective of the value of the dollar. -- our goals are irrespective of the value of the dollar. >> if this would be like giving a substitute -- subsidy to the manufacturers. would it be helpful to have a substantial decline in the value of the dollar? >> you will have to talk to the secretary of the treasury for the monetary policy. let me say that we are focused on better matchmaking -- of the great products and services that are made by american companies, and offered by the american companies, with the great demand that is out there. we in the department of commerce must do a better job matching those opportunities,

advocating on behalf of the u.s. companies. we want to serve as advocates, salespeople, promoters for the u.s. companies. the initiatives that the president has laid out -- we will work with the export council, the national export initiative. we will focus on the things that we can control, right here. >> what would you say are the biggest obstacles. >> there is the access to credit -- with a company that wants to expand their operations, and purchase more equipment -- they have difficulty finding financing and that is why the small business administration is much more engaged. that is why we have greater support for the programs of the

administration. but if we look at this from the life cycle -- you have to have the product and services. this may require financial assistance. the banks are very slow to land in the credit is tight. we need to find the customers for the increased output and that is where the commerce department and agriculture comes into play. as well as the state department and the other federal agencies. and we are financing the deal. we are really -- we are focused on greater coordination, directed by the president. this is the first time, ever, that we have the support of the president -- and we have this export cabinet. >> one concern is the difficulty in bringing foreign customers to

u.s. trade shows because they cannot get visas on time. what are you doing to ease the says -- to ease visas? >> that is something the commerce department along with the state department and homeland's security have been partnering on. it is one of the early tasks of the trade promotion policy coordinating committee. we are making good progress there. it has been very collaborative. we are encouraged. we know it is an issue. the state department knows it is an issue. trade groups have brought it to our attention. we are working to speed up the process. >> there is a business concern about bringing in foreign workers in high-tech industries. how important is immigration reform toward the goal of increasing exports?

>> obviously, the greater degree to which u.s. companies can innovate and continue to engage in research and development to produce higher quality and more advanced products and services -- that will be more attractive around the world. getting skilled workers into the country that can help lead this innovation is very important. i think brent scowcroft issued a report last year, a recommendation to presidential candidate mccain and obama. he called for the sec control as part of an export strategy -- he calls forvis visa control as pat of an export strategy and to

allow foreign workers into the country. he said it was an issue of national security. the president is looking at that and addressing that. >> we had several questions about what is to be done with the exporting of u.s. jobs. do we need more punitive legislation for companies that offshore? >> the key is to focus on helping american companies export our goods and services. the president does not believe and protectionism. he does not believe in creating more walls. that can lead to a trade war. the answer is not to restrict imports. it is to increase exports. that can be a rebalancing of the global economy. that is why american companies need to export more. the world economy should not be

based on consumer driven that -- on consumer driven, debt driven consumption in the united states. companies need to start relying more on exports. we need to export in exchange. the president has issued some proposals to try to insure that companies are not simply going offshore to avoid taxation. he is trying to close a variety of tax havens where people are moving money offshore and jobs offshore simply to avoid taxation. even people in the business community agree that these loopholes and mechanisms need to be closed and stopped. >> the administration has proposed to cut tax breaks to multinational corporations that transfer patents to foreign affiliates. a large proportion of u.s. exports are between u.s.

companies and their foreign affiliates. how can you pursue tax law changes without discouraging foreign investment and the exports that depend upon it? >> i am not very familiar with that type of u.s. tax law. i would have to defer to the treasury department and the irs for an answer. >> just before the copenhagen climate change conference, there was a program announced by which the patent department would a accelerate examination of green patent applications to more quickly bring those to market. how will the government deal with the increased risk of giving patents to ideas that should not receive them? >> we know that a lot of these innovations have the potential to create good paying jobs, a lot of good jobs. we need to get these ideas

commercialized as quickly as possible. that is why we have an express line for patent applications dealing with certain sectors of green energy, not all. they are very tight areas and very narrow areas. we are on a mission within the patent and trademark office to substantially speed up the review process of all patent applications. right now, it takes more than three years before an application is granted or denied. that is unacceptable. that is unacceptable. having patent pending is no great comfort. it is like saying you have on clear title to your house or to your business property. how are you able to get financing with unclear title to remodel or expand your home or

your business? we are on a mission to reduce that process in time to a year. at the same time, we need to improve quality. issuing a patent that is subject to litigation over other issues is of no benefit either. the focus has to be on speeding up the patent review process and improving the quality. >> in korea can -- if korea can reit -- can reach a decision on auto concerns, will it go to the president? >> there are specific issues that have to be addressed. they are being addressed by u.s. trade ambassador kirk. as soon as those issues have been resolved, including automobiles in the korea

agreement, they will be brought up. >> canada is the largest customer of the united states and the top export destination for 35 states. how would the measures announced today affect the trade that crosses the border of canada every minute of the day? >> can and that is a major export destination for the united states. for many states, it is the number one export destination. we depend a lot on goods made in canada, could we take for granted in our daily lives. -- goods we take for granted in our daily lives. we have a strong partnership, government to government. a lot of companies that export export only to canada. we need to help all american companies that export to only one country, whether canada or

mexico, consider other markets. these are companies that understand border issues, customs issues, legal issues. they are ready to take on additional markets. that would be one of our areas of focus, helping those companies that already export export to an additional company. 58% of all u.s. companies that export export to only one company, most of that to canada. we want to help build on their good experiences to export to other parts of the world. the >> on the topic of job creation, in addition to manufacturing, travel and tourism are a huge employer. what can be done to encourage more foreign visitors to travel to cities such as las vegas? [laughter] [laughter] >> what is wrong with disneyland or our national parks?

we have great attraction in the united states. in my home state of washington state, climbing mount rainier. disneyland, you name it. foreign tourists are considered an export. that is classified as an export. it is an export at which we have a positive trade balance. . . the congress working on -- the congress is working on legislation and we are very supportive of that and looking forward to working with the congress on this eventual legislation and the implementation of more advertising, with a great destinations in the united

states and the opportunities, whether they are enjoying the outdoors, vegas, disneyland, disney world. all the great attractions. >> how do these provisions impact your perception of america and abroad? >> i think that these provisions have raised concerns in other countries about whether or not the united states engages in protectionism or if other countries should retaliate with protectionist measures of their own. the president says that once countries are being protectionist, there may be a trading war. and when this happens, everyone is losing. this provision does not apply to goods and services, coming from other countries into the united states, through which we have

trade agreements. we do have those trade agreements do have those trade agreements with so many parts of the there is a misunderstanding about this provision and we have to get this message out to many of the trading partners. t message out to a lot of our trading partners. >> what steps does the administration propose to take to counter efforts

there are a lot of movements for trade, with providing medical care, and medical equipment, energy efficiency, cleaning up the environment, and, there are enormous opportunities for farmers and ranchers and this will help the people all across the world raise their standard of living. and so, this is what we are looking for. at the same time, there are great opportunities for collaboration. we also believe that focusing on the enforcement of international -- intellectual property -- this is beneficial to the other countries. as they are beginning to innovate -- they will also want to have strong provisions for their own creations and

inventions. working with the other countries to have a strong pattern and enforcement of intellectual property rights benefits the companies that we have and in the long term, will benefit the current and other countries. >> the united states has a trade surplus with the free trade partners. beyond what is currently under discussion, what other countries may be possibilities for free trade agreements? >> the president is wanting to try to conclude an ambitious round of doha and we know that many of the developing countries that are poor will benefit, economically, and raise the standard of living if they are able to sell some products and services in the united states. we want to make certain that in other advanced, developing

countries, we have access to products and services. this is what the president will be trying to achieve. and what the trade ambassador is trying to achieve. i mentioned that there is the possibility -- and the president has indicated a desire to be part of the partnership across the pacific. ed a desire to be part of the transpacific partnership, which would be a new multilateral, multicountry trade agreement where the united states is being invited and has an opportunity, and the president has committed to participate, where we can actually set new higher standards in labor, environment, and market access that could then serve as a template and model for future trade agreements. >> our discussion today has been dominated by trade issues. a couple of questions on other topics. what areas of government

oversight are you prioritizing and what programs do you feel have been most vulnerable to fraud and abuse in the past? >> i only oversee the department of commerce so -- >> we can keep with that context. >> we at the department of commerce have some 50,000 employees and other than about 130 or 150 of that that are appointed by the president, the rest are career folks. these are highly dedicated great professionals with great pride in the organization and the department of commerce runs the gamut. we're like a holding company. we have a census. when you get your form in the middle of march, please fill it out. only 10 questions. very easy, mail it back because we want an accurate portrait of america. and we also have patent and trademark we talked about.

international trade administration, helping promote exports and also the bureau of industry security, which restricts exports so that we're note infringing upon national security. to noaa and the weather service and prediction of hurricanes and monitoring the health of the oceans and our fisheries to our national institute of standards and technology, which has several nobel laureates, devising standards by which industry can create products for use. to our economic statistics bureaus and also to ntia, dealing with telecommunications and the allocation of spectrum and providing grants for broadband high speed internet. if there's one thing that unifies us all as a common theme, we are agency promoting

innovation, all to ultimately hire more people. that's what we're focusing on. job creation and business competitiveness. we're finding that we have a great group of people here but we can certainly always prioritize. we need to be much more effective, efficient in how we're doing thing, whether it's speeding up the patent process, to making sure that we keep the cost of administration as low as possible so that we're able to pass on more dollars, whether it's for infrastructure and job creation in our communities. >> the constitution requires a census count of all people in each state. given the current political

climate, would you expect any illegal immigrants to participate in the 2010 sen issues? >> the census has been tromblg from its very beginning. 17 0, the first was conducted under president george washington. the first veto by a u.s. president was by president george washington dealing with information obtained from the census and george washington at that time thought there had been an undercount. so we have these issues since the beginning of this great democracy and this republic, but the u.s. constitution requires a count of all people in the united states. it does not say a count of only registered voters, not a count of only those who are u.s. citizens or those born here. it does not distinguish between those who are naturalized citizens or people here on a green card. all people living in the united states of america.

and so that is our mission, we will do that. we know that because of immigration fears, for those who are here without proper document tation that there might be an inclination not to participate, but we urge those to participate because all the information in the census form is absolutely confidential. we do not share it with any other federal state or local agency or any other arm of government. it is confidential and it is a crime, a felony for any census work tore divulge information. but the questions are only 10 and take only 10 minutes to answer and not a single question asking if you are in fact a voter or what your citizenship or immigration status is. we don't know whether a person is here legally or illegally. nor do we care. so fill out the question and if you don't want someone knocking

on the door ash a government worker -- all the more reason to fill out the sen issues questionnaire, the form. 10 questions, 10 minutes. mail it back and again, no one will know anything. [laughter] can be >> before asking the last question, first, a note to our audience on future speakers. monday, february 8, we'll have secretary tom vilsack of the u.s. department of agriculture who was hilet the obama administration rules on the health of america's children. on friday, february 12, we'll have admiral ted allen of the coast guard, who will discuss the state of the coast guard, and on march 5, mitt romney, former governor of massachusetts, will discuss the case for american greatness.

second, we would like to present our guest, the man of the moment, with the traditional national press club mug. >> thank you very much. [applause] >> for our last question, going back to your introduction, one of your duties as commerce secretary includes blizzard warnings and my question for you is, do you believe that low pressure coming from canada could lower temperatures to the point where the storm would be sent further south or that current weather forecasting models would go forth, leading to 24 inches of snow in the washington, d.c. area, leading to havoc and canceling a lot of people's weekend plans? >> well, just be prepared. [laughter] >> watch the news and all the

information that you're getting from your weather forecasts on radio, television, newspaper -- all comes from noaa, the national weather service. thank you very much. [applause] >> and that's weather on the eight's at the national press club with commerce secretary gary locke. i'd like to thank you all for coming. i'd also like to thank menda cook and pat for organizing today's lunch. the video archive of today's luncheon is provided by the national press club's broadcast operations center. nonmembers may purchase transcripts, a and videotapes. for more information about the national press club, please go to our website at www dont --.press.org.

thank you. we are >> and nancy pelosi says that democrats may wait to vote on the "don't ask, don't tell" policy until after the midterm elections. the weekly briefing is about 20 minutes. >> thank you. good afternoon, and thank you very much for complimenting the change in schedule. we had an engagement at the white house. we will spend the time well. i may have to leave shortly.

let me say how happy that i am to speak to you on this special day, on the floor of the house where we are debating paygo. when i became majority leader, i made this the rule of the house. in order to have an investment, you would have to pay for this. we have no open-ended spending. this was the rule from the beginning -- and this is the law of the land. this was sent on to the president. this is a transformative action, in terms of how we legislate here. if you have to pay for this -- you have to get every initiative to very tough scrutiny. you have to prioritize.

it is important when you put this before something else, how you will pay for this. i would say that when members would comeñi to me, with ideas r legislation -- does this reduce the deficit, and does this create jobs? this has been the standard -- and now we will have an incentive -- a dynamic where everything is subjected to this scrutiny. this is part of the approach. the president has his initiative for the cuts in the budget for next year. and i am very pleased with that. we have to protect every federal dollar that is spent, to make certain that the taxpayer is getting their money's worth. and they will be addressing the entitlements. there is a serious action on

every front, how you pay for this, the revenue side, as you make the proposals and how you cut, in terms of the corporation size, and how you address the entitlement. this is a happy day. the right and left -- george miller -- at the 1982 democratic convention, they have a resolution that became part of the platform that year. it was not until later that this was implemented, and part of the successful part of the book -- the budget of president clinton. and now we are pushing back into the deficits and obama will be leading us out of this. we will continue to work with the senate and the white house -- passing the jobs bill.

does this create jobs. that was the recovery package -- that was this -- that is what this was about. that is what the budget of the president was. we had the job creation and the deficit reduction -- and stability for the future. the bill was passed in december -- and we will look forward to working with them to have a bill on the desk of the president as soon as possible. we are moving ahead on the health care front -- and we are on the pathway to passing legislation and until we can pass the bigger bill -- we will be having the anti-trust legislation. for 65 years -- the insurance agent -- industry has had an exemption from the anti-trust

legislation -- with the collusion -- you name this. what this translates to with the american people is that when this bill was signed into law -- this will increase competition and give more choices to consumers, and there will be a lower cost for health care in the country. with health care jobs -- and pay as you go.

the subcommittee will reconvene. our apologies for the lengthy delay. it is a matter over which we have little control. i am pleased now to welcome our panel of witnesses and i'll say a brief word of introduction about each. mr. brian roberts is the chairman and chief executive officer of the comcast corporation. mr. jeff zucker is the chief

executive officer of nbc universal. ms. abdoulah is the president of cable and telephone. mr. michael tiorile is the chairman of the nbc tv's affiliate board, the president and chief operating officer of the dispatched printing company. dr. mark cooper is the director of research at the consumer federation of america. mr. adam tha dwrchlt er is the president of the progress and freedom foundation. we welcome each of you. thank you for your testimony. without objection, your prepared written statement will be made a part of our record. we would welcome your oral summary and ask that you keep your oral summary to approximately five minutes. mr. roberts, we will be pleased to begin with you. you need to turn your microphone on and pull it as close as you can so we can hear you well. >> thank you, mr. chairman.

is that okay? it's a privilege to come here today to talk about comcast planned joint venture with ge regarding nbc universal. as has been mentioned, my father, ralph is sitting just behind me started the company almost a half century ago. ralph built the company from a single small cable system in tube l tupelo, mississippi, to where we are today. with this combination, we are taking the next step in our improbable journey. this is indeed an important moment in our history. let me briefly summarize the transaction. under our agreement, comcast will become majority owner of nbc universal. we will create a new venture that combines nbc used broadcast tv, cable programming, movie studio and theme park businesses with comcast limited video programming channels. comcast will hold 51% of the venture and will manage it while 49% will remain with ge.

the transaction puts two great american communications companies under one roof. it will help to preserve traditional broadcast television, a business that faces serious challenges. it will also help to accelerate a truly amazing digital future for consumers. together, comcast and nbc universal it help deliver the multiexperience that americans want. well be a more creative and innovative company that will meet customer demands. our success will stimulate our competitors to be more innovative too. this should be good for consumers, innovation and competition. to leave no doubt about the benefits of the new nbcu, we will have more public commitments to how we will bring viewers more local programming, children's program, more diverse programming on more flat forms.

we have made commitments to reassure our competitors that we will compete fairly in the market pla marketplace. let me offer two examples. the program access rules have never applied to retransition consent negotiations. we volunteers to have them apply to our retransmission negotiations for nbc stations. second, we want independent programers with quality content to know that we are determined to help them reach and audience. so we have committed to add at least two new independently owned cable channels to our systems every year beginning in 2011. the combination of nbc and comcast will have no significant overlap between the assets of the companies. it's primarily vertical, which generally poses fewer antitrust concerns. that also means no massive layoffs, no closures of facilities, nothing to produce hundreds of millions of dollars

of, quote, synergies. this same lack of overlap is why washington can, because we will grow these great american businesses over the long term and make them more successful, not cut them. congress has recognized the benefits of vertical integration before and adopted rules in 1992 to address potential risks. at that time, there was almost no competition to cable and more than half of the channels were owned by cable companies. congress created program access and program carriage rules to ensure that a company which owns both, cable content and distribution, cannot treat competitors unfairly. those rules have worked in the past and will continue to work. in the last week, some have suggested that our prior legal challenge to certain portionses of the program access rules is inconsistent with our

commitments and connection with this transaction. while we have argued and believe that today's marketplace is sufficiently competitive to do away with the program access rules, we didn't pursue this transaction with the intention of not following those rules. we don't intend to behave any differently. we are willing to discuss with the fcc making the program access rules binding on us even if they were to be overturned by the courts. in the past decade, comcast has come to washington twice to seek merger approvals. when we acquired cable systems from at&t and indelphia. each time, we explained how consumers would benefit. in each case, i believe we have delivered. we spent billions of dollars upgrading cable systems to make them state-of-the-art, created video on demand which our customers have used 14 billion times. from a standing start four years ago, we now give millions of americans their first real phone

choice. once again, we have described how consumers will benefit. i want to assure you that we will deliver. mr. chairman, we are asking for the opportunity to make one of the great icons of american broadcasting and communications part of the comcast family. we promise to be reliable stewards of the national treasures of nbc and nbc news. it is a breathtaking and humbling moment in our history. we hope we have your support. thank you. >> thank you, very much, mr. roberts. mr. zucker. mr. chairman, members of the subcommittee, thank you for the opportunity to testify here today. as the president and ceo of nbc universal, i am proud to lead an iconic media company shaped by two great american brands, nbc and universal. i am grateful for the opportunity to tell you how the proposed venture between comcast and ge will help nbc universal

thrive and also benefit our local communities, our employees, and the american consumers who enjoy our content. in today's intensely competitive, unpredictable and dynamic media markets, this deal is critical to realizing these benefits. the marketplace that i live in is a media free for all. a media donny brook, whether you look at the overall media marketplace, the cable charnlgs broadcast networks or the internet. there will be more change in our space in the next five years than there has been in the last 50. this deal will not change the fundamental competitive dynamic or the extraordinary rate of technological change but it will help nbc universal compete in the new media world. why is this transaction good for nbc universal, for the u.s. economy, and for the consumers we serve? my answer can be captured in two words, investment and

innovation, both of which i believe are essential if we are to remain a vigorous competitor in the 21st century media market and a growing source of high-wage jobs in an economy starved for employment. first, investment. the creative programming that lies at the heart of our business is neither easy nor inexpensive. it will require investment this year of nearly $4.5 billion. every year, we invest another $1 billion in news gathering and news production. an investment of half a billion dollars annually makes tel a mundo the leading in spanish programming. comcast's desire to expand our business and invest in programming will benefit nbc universal, the american consumer and the u.s. economy. also, with regards to investment, comcast's written

commit to over-the-air broadcasting has been widely unappreciated. in addition, comcast has expressed a willingness to play a constructive role in the business negotiations between broadcast stations and mvpds. those two positions could play a pivotal role in finding a sustainable new business model for the struggling broadcast business. second, innovation. we believe comcast history of delivery, innovation and technological vision will help us better serve the 21st century consumer. we must find a sustainable business model to meet consumer demands for access to programming any time, anywhere. we need to be more nimble in taking advantage of more dinlg at that time distribution capabilities, on demand, on line, mobile and beyond. this venture with comcast positions nbc u to being a leading innovator to deliver contact where they want it, when they want it and how they want it. in this extraordinary

competitive industry, sustained investment and innovation will be the keys to remaining a vigorous competitors. this is not your father's media market. less than 40 years ago, three companies enjoyed 90% of alltel vision viewing. oh, how simple it was. today, the world could not be more different. each of the five largest 3450me companies in america now only account for between 5% and 10% of all viewing. a multitude of smaller competitors account for half of all viewing. television is also a shrinking portion of the media market. people choose not only between broadcast and cable television but the internet, xbox, iphone

and playstation. this transaction will not change the tidal wave of competition inundating today's media market. the big winner is the consumer. more investment leads to more and better content and more innovation leads to more access, any time, in he where. let me clothes by saying how grateful i am for ge's excellent stewardship of nbc universal. they have invested more than $22 million since 2000 and built it into the diversified broadcast, film, cable programming and media company that we are today. with this deal, ge will have billions of dollars to invest in new technologies and jobs in it's core businesses. i could not be more excited about the future of this company. this deal will give us the resources and tools to innovate and adapt in an unpredictable media world and meet the needs of 21st century consumers. thank you for the opportunity to

testify. i'll look forward to answering any questions that this subcommittee may have. >> thank you very much, mr. zucker. ms. abdoulah. >> hi. i'm very proud to be here. i'm very proud to represent wow and the american cable association. we are a broadband competitor in five markets in the midwest. 1 million of the households that we pass directly compete with comcast in michigan and illinois. i know customers appreciate having competitive choice. they do not choose wow because we are the low-cost provider. they choose us because we differentiate ourselves based on the service experience that we provide. customers have recognized this. we have received ten jd power awards for customer service. just recently, they awarded us the first place provider of internet, phone and cable in the consumer reports. i don't tell you about this

recognition to brag but to illustrate that when we have direct influence and control over operations, we can be very customer s customer centrick and focus on what the customer needs and wants. as a buyer ofcontent, we face a different set of challenges. we buy most of our content from a handful of large content providers who have significant market power and leverage. the prospect of having comcast nbcu as the largest vertical integrate tore of content at my direct competitor does concern me. it concerns me because the combined company will have powerful abilities and incentives to possibly hurt a competitor like us and increase our costs. i have these concerns because of current behave yoe haf y behavi.

video content is key. so content negotiations are critical for us. the behave yors we experience today during those negotiations are things like price value. not all content is created@@@@@r

faster online speed. then, this carriage ability. content providers with large, significant market power can withhold or delay launch timing by slow rolling the negotiations. one example of this is for online content. the concept of tv everywhere, which basically involves packaging cable networks and allowing them to be viewed by your broadband customers. i think comcast brands their x finity. we went to comcast and the other networks and asked for rights to access that programming for our broadband customers. to date, we have been denied that access. a cable example. we were negotiating with a network that comcast has a significant investment in. during that negotiations, the network refused to include the

rights to their advanced programming that they were developing. the bottom line is this, we're not here to whine or ask for special advantages, because we are the smaller guy. i believe in competition as my peers hear have said. it breeds creativity, innovation and a clear focus on the customer. i think our jd power and consumer report ratings val daid date that. we ask for a thorough and thoughtful consideration of specific conditions that may be imposed so that we can continue to preserve and promote the competitive choice that we provide and that congress sought in the '92 and '96 acts. the types of conditions we would ask for are the following, the terms and conditions for access for content, whether it is cable, online or otherwise, should be the same terms and conditions that are available to comcast. then, business is business. if there is a time when

discriminatory behave yor occurs and market power and leverage is exerted inappropriately, i really ask for a remedy structure that is meaningful and accessible for companies like wow. the current retransmission consent and program access complaint procedures do not help us. an outside arbitration process does not help us. the reasons are, they are time-consuming, very costly. they don't ensure continued carriage while you are in dispute. especially, they place the burden of proof on the complainant who doesn't have the access to the data, since there is absolutely no pricing transparency. to protect the competition and consumers from this combination, regulators must impose different and better remedies for us. we look forward to participating in that process. thanks for having me. >> thank you very much, ms. abdoulah. mr. fiorile.

>> chairman boucher and members of the subcommittee, my name is michael. fiorile. i speak to you today as nbc chairman of the affiliate board representing some 200 independently owned local television stations. for more than 60 years, the affiliates and nbc have worked together as partners. the result has been free and universally available local and national news, weather sports, emergency information and some of the highest quality programming. the question today is whether or not the benefits of this partnership produces for local viewers in your districts, will thrive if and when comcast owns nbc? the nbc affiliates board has been very pleased to hear comcast's response to this key question. steve burke, the chief operating officer at comcast, has assured us on more than one occasion, that the company's intent is to grow our partnership, providing free and over the air television service through the affiliates. in fact, also, comcast's desire

to maintain nbc 10's owned and operated television stations in some of our country's large eflt cities is very important to us and we support that. ownership of these stations will provide comcast with a direct stake in serving local television viewers, just as the affiliates have. this is a very positive start but at this point, it is, in fact, just a start. the fact that never before has a major cable operator controlled one of the four major broadcast networks is here. the stakes for free local television service and for viewers are too high to leave this to statements alone. in the weeks ahead, the affiliates board and comcast have work to do. together, we hope to design and agree upon clear, specific, and enforceable conditions defining what it means in practice for comcast to deliver on its promise to jun hold the network affiliate partnership for free local television service that has served viewers so well for

so long. we have comcast's word on these principles and now we look forward to getting to specifics such as those that have been proposed in the application. first, there must be protections in place to prevent the erosion of the nbc network through migration of popular nbc news, sports and entertainment content and talent to cable channels or other pay services. for example, consider the prospect, if you will, if nfl football games currently broadcast for free by nbc affiliates migrating to a comcast sports channel or consider "nbc nightly news" moving to a pay channel. that would be an immediate and a significant loss to affiliates and to all of our viewers. the public and the affiliates also need assurances that comcast will continue to invest in new and compelling sports, news, and entertainment programming for the nbc network. secondly, comcast must not interfere with the nbc affiliate's right to serve our local communities as the first

point of ability of network programming. this long-standing principle serves the network, the affiliates and consumers by maintaining the broadcast medium with it's unique reach and acce accessability to viewers as a strong platform provided free to all americans. thirdly, this transaction raises questions about retransmission consent. as you know, thanks to this committee, and others in congress, retransmission consent is a market-based mechanism that clearly works. it supports stations investment in local and national programming. the comcast/nbc transaction could threaten this essential economic foundation of nbc affiliates localized services. it puts the station supplier of network programming and the single largest distributor under one roof. simply put, comcast should not

use its control of the nbc market to undermine affiliate signals on comcast systems. one way to address this concern is to keep network affiliation negotiations with the nbc network and to keep retransmission consent negotiations with comcast cable separate in the future as they are today. we are also considering other ways to preserve retransmission consent because of it's vital role in the underpinning of local services that we provide to communities. so you've heard briefly about three principal areas of concern to the affiliates. given your oversight role, we would hope and would encourage you to encourage the fcc to adopt the necessary conditions to protect consumers continued access to free quality local television. like the commitments comcast has volunteered in it's it's applications, they need to be

part of the fcc order and need to be binding. they are off to a promising start in flushing out the principles which both of us consider important. we believe this can strengthen the affiliates and nbc in serving for many years to come. we know that comcast shares these goals. i thank you for the opportunity to be here today. >> thank you, mr. fiorile. dr. cooper? >> thank you, mr. chairman and members of the community to offer a public interest analysis of a merger unique in the history of the video market and will go a long way towards determining whether or not the future of video viewing in america is more competitive and consumer friendly than the past. there is another side to the story. comcast straddles the dominant video distribution platform of the 20th century as the nation's large ef largest cable

service provider. in its cable franchise service territories the market share of comcast in these two vital distribution platforms exceeds 50%. allowing it to acquire one of the nation's premiere video content producers will radically alter the structure of the video marketplace. triggering a bevy of anti-competitive effects that will result in higher prices and fewer choices for consumers. allowing comcast to acquire nbc will increase the likelihood that the ugly business model of the cable cartel will be strengthened and extended to the internet. there are huge horizontal problems with this merger. broadcasters and cable companies have a natural competitive rivalry we witness every day. they argue about the price, channel location, and carriage of content. the rivalry is so intense that each side has attempted to enter the rival's market in an effort

to diminish their market power. they are known as disruptive entrants in each other's markets. this merger would eliminate that primary line of conflict between two of the most important of these potential entrants. these two companies compete for audiences and advertisers in a dozen of the nation's most important local markets, serving about 1/5 of the nation's population. there are more people in the markets where comcast and nbc compete head to head through nbc o&os than there are in markets where nbc o&os own stations and comcast is not present. there is more population that they compete for directly than they do not. these two companies compete in the video programming market where comcast regional sports and news production compete with nbc' news and sports production.

three quarters of the regional sports networks that comcast has rolled out are located in the markets where they compete directly with nbc for eyeballs and advertiser dollars. if that ain't competition, there is no such thing as competition. that's horizontal competition. these two companies compete in cyberspace where nbc has funded an alternative distribution platform, hulu, as well as numerous web sites for its media properties. comcast has launched its own video portal and has big plans for -- to expand that competition. that is head-to-head competition in cyberspace. that is horizontal competition. by combining its distribution market power, that 50% market share, that 24% national share of cable viewers, with a huge portfolio of content, the merger would dramatically increase the

incentive and ability of comcast to raise prices, discriminating carriage, foreclose and block competitive entry, and force larger programming bundles on to other systems. those strategies raise prices and reduce choices, as you've heard from ms. abdullah. the merger has so many anti-competitive and anti-consumer effects that it just can't be fixed. they can't be unraveled. the claim that there is enough other competition to prevent these anti-competitive effects is based on the denial of the existence of a well-recognized $80 billion multichannel video market. that is a marketplace that we recognize and we can evaluate. the likely response in that market to the creation of a giant that has both massive content and massive distribution is to go the other members of the market to bulk up in the

same way. we will lose more choices in that market. the claim that fcc oversight under current law or comcast promises to obey the law for a change will protect the public is absurd. the fcc rules have failed to undermine, eliminate, prevent the stranglehold of the cable operators to date, and there's no reason to believe that they will be better able to tame the video giant that will result from this merger. comcast public interest promises do not even acknowledge the existence of these horizontal competition problems, not to mention offer serious remedies. the temporary band-aids that have been offered cannot cure the long-term structural injuries that would result from this merger. for decades congress has labored to bring consumers price competition in the video market by opening the door to different business models and different technologies.

but in every instance, key policy mistakes were made that allowed the cable industry to preserve and extend its market power. this is the first big policy test for the internet as the alternative video platform that can compete with cable. if policymakers@@mghp '

been here before. paranoid predictions of a media merger apock liss accompanied the announcements of many previous deals from aol time warner to xm sirius. in these cases and most others, the sky is falling claims typically prove to be greatly overstated. the only harm that one could reasonably claim came from most of those mergers was not to consumers or content providers but to the merging firms themselves and their shareholders. that's because many mergers failed to create the synergies and benefits original hoped for and consequently die of natural causes over time. other firms have found ways to make mergers work and deliver important new services that previously were unimaginable or simply too expensive to offer alone. regardless, the point here is that we'll never know what warks unless we permit marketplace experimentation with new and innovative business models. second, the fear that comcast nbc u will act as a gatekeeper over video content is overblown especially in light of the

preemptive concessions that they've made in program access and carriage. it's important to realize that the merger will only marginally affect cable integration in the marketplace. currently the percentage of cable channels owned by distributors is in the single digits and even after this merger, it will only be in the teens. stated differently, the vast majority of cable channels will be independent of comcast nbc-u control. it's hard to believe they would restrict content to distribution-owned networks since they would be losing eyeballs, advertisers, and revenues that accompany the content and carriage of other platforms. likewise it would make little stones block newer, competing channels on their own platform since they would incur the wrath of programmers and the viewing public alike. and those channels will likely find a home elsewhere which could sneftize subscribers to switch video service providers. there's always another place for consumers to turn to find what they want. comcast faces increasingly robust competition in the video programming marketplace from satellite and teleco providers as well as from a variety of

internet-based video providers. nbc universal programming while impressive is a mere trickle in the ocean of content that consumers can choose from. meanwhile, consumers are increasingly cutting the cable cord altogether and instead getting the video they want from a bewildering array of nonline services, next flicks hulu, the sony xbox stores and youtube, vimeo, and other offer a mix of professional and amateur content. in some, there's never been so much competition for our eyes and ears and audience and advertising dollars have become increasingly fragmented as a result. finally, we need to realize that the ongoing digital revolution is opening many business models especially advertising over-the-air broadcasting. and alliances like comcast-nbc u. may be one blueprint for how operators can compete going forward. with the fcc and ftc currently investigating whether journalism and trouble and what it might take to save the news, many

media economists and industry analysts seem to agree that at least some degree of consolidation or collaboration might be necessary. consider last week's news that nbc universal saw quarterly profits plunge a whopping 30% in the fourth quarter of 2009. this is indicative of the general downturn the entire media sector has been experiencing as of late. why not then allow comcast to try to help nbc u. out and try to get back on track instead of forcing them to make it on their own in such a radically uncertain future? it goes without saying that comcast might be better positioned for to protect nbc universal's copy righted content from piracy at least over their own pipes. those concerned about the future of broadcasting and local news should remember that news and local news and broadcast news in particular isn't cheap. unless we want to embark on massive government subsidization to bail out providers, congress and regulatory officials must be willing to grant media operators the flexibility to restructure business affairs so they can continue to provide important public needs while also turning a profit. that can't happen unless we allow media markets to evolve

and let operators experiment with new business models and ownership structures. although there are no guarantees, deals like comcast-nbc universal may be a model that helps create and monetize their media con tent going forward. again, regulatory flexibility is crucial so we can figure out what works and what doesn't. thank you again for inviting me here today. >> thank you very much, mr. theier. we express our appreciation to all of the witnesses for their thoughtful and well presented comments this morning. i'm going to recognize myself for an opening round of questions. increasingly the viewing of television programs over the internet has become a useful and action tractive alternative to viewing those programs over cable television. concerns have been raised including some this morning about the fact that the comcast-nbc combination would place comcast in a position to

inhibit the online viewing of television programs for a very large amount of television content. that concern is heightened by the tv everywhere model that comcast and time-warner cable have now launched through which the online tv programs are made available only to the subscribers to the cable television service itself. with regard to tv everywhere, smaller cable companies including mrs. abdullah's, as she just indicated, have in instances been denied access to the content that is being made available on tv everywhere, and there are questions about whether programs that are offered over the air today and made available through the nbc.com web site for online viewing might in the future migrate into tv everywhere. a very real concern a number of

people have expressed. the concern about the comcast position enabling it to potentially inhibit the availability of tv fare over the internet is also heightened by the fact that for at least some period of time last year users of boxy which is a software application that enables people to see online television programs on their television sets, not just on their computers but actually on their tv sets giving them a very seamless experience similar to what they would get from cable tv. but those boxy users were apparently blocked from being able to view the hulu-delivered programs on their tv sets. and presumably that blocking came from hulu, and i would note that nbc news universal is part owner and one of the founders of

hulu. so mr. roberts and mr. zucker, my question to you is this -- what response do you have to those concerns, and what assurance can you give to us that when this combination takes place there will not be an inhibition put in place that would limit the amount of online video content that viewers can see? mr. roberts, would you like to start? >> thank you, mr. chairman, appreciate the opportunity to talk about some of those issues. first of all, as has been mentioned previously, we have helped create the broadband experience that consumers enjoy today, some of the work out of cable labs going back a decade was one of the first to create high-speed broadband. it's the fastest growing part of comcast is our broadband business. in fact, we are in the process of completing nearly a billion dollar upgrade to create wide

band. and if you say what do you do with wide band, right now i don't have a great answer except that at 50 mega bits or 100 mega bits a second, i trust that there are great entrepreneurs out there to come up with the answers, and we want to be a company on the leading edge. so we think this is absolutely one of the most exciting areas. and i've said consistently for several years that we believe video over the internet is one of those applications that requires more speed and justifies the investments that we're making in wide band and broadband. so we think it is a friend, not a foe. and that position is demonstrated by the surge of usage and the amount of bits that consumers continue to consume each month. and it's growing at a very fast rate. so in this transaction, if you look at the facts, there are 30 billion views of video internet last month. nbc was less than 1% of that.

hulu, of which nbc is one of four partners, i think, is around 4%. comcast is less than a half a percent of any of our video-owned content assets being viewed on the internet. >> well, mr. roberts, in my -- my time is running out rapidly here. let me pinpoint a couple of key concerns. ms. abdullah has said that she has been denied access to the content available on tv everywhere. what's your response to that? >> i'm not aware exactly what she's referring to, but -- >> do you agree that she ought to have access on reasonable terms? >> yes. and she i believe can by going to the biggest proponent of tv everywhere has been -- >> let me accept the yes. >> okay, fair enough. >> the second key question that i have is this -- what about boxy? mr. zucker, you probably are in a better position to answer that. did hulu block the boxy users from access to the hulu programs? >> this was a decision made by the hulu management to what boxy

was doing was illegally taking the content that was on hulu without any business deal, and, you know, all -- all that -- we have several distributors, actually many distributors of the hulu content that we have legal distribution deals with. so we don't preclude distribution deals. what we preclude are those who illegally take that content. >> well, would you have negotiations with boxy -- >> we have always said that we're open to negotiations. >> all right. one further question and my time has expired. can the two of you offer to us assurance that the programs that are delivered over the air by nbc today and are then available on the nbc.com web site for online viewing will not migrate into the tv everywhere format so that they then would be available only to people who have a cable subscription? can you give us that assurance? >> yes. >> thank you very much. i appreciate your answers to

those questions. the gentleman from florida, mr. stearns, is recognized for five minutes. >> thank you, mr. chairman. dr. cooper, you've testified before our committee before many times. and i thank you for coming. miss abdullah, we sort of all on your side. you're the small person in this big room here. so we're sympathetic to you. as i understand it, you don't oppose a merger, you just want conditions in place. would that be an ample way to say your opinion? >> that's a fair statement. yes. >> okay, dr. cooper, though, you're specifically against this merger. is that they're? just yes or no? >> i'm against the merger. i don't think you can unravel the anti-competitiveness. >> okay. and you've been here before, and i know you've testified against other mergers, so i'm going to ask you succinctly if you can tell us that -- you say control over production, distribution of

information, that's critical implication for society and democracy. we all agree with that. no one would disagree with that. the problem is that the proenzed deal before us doesn't speak to all of production and all of distribution. so when you make that statement, you know, comcast, nbc is not all of production, not all of distribution. i mean, you and i both agree there's diversity of news and entertainment from all kinds of different things. i don't have to go into and enumerate them. but how could comcast in your opinion very succinctly now control production distribution to go back to your statement overall? i mean, just in one or two sentences. >> i'm not worried about overall, i'm worried about in a specific local market where they have market power. so in 12 of this nation's markets, comcast and nbc compete head to head for eyeballs, for advertisers, they in many of those markets, they produce

programming, news programming, and sports programming. marquee programming. >> okay, in those 12 markets what will happen as this merger comes? tell me specifically what -- worst case scenario. >> worst case scenario, one of those entities abandons the market and ceases to try to win eyeballs. today they both vigorously try to win eyeballs. tomorrow i've lost a competitor. >> which one of those markets of those 12 you think is most likely in your opinion? >> they're all good candidates. >> just give me -- >> they're all important markets. >> come on, just one of those 12 that we can highlight as we're scared -- >> well, the premiere one is of course philadelphia. >> okay. philadelphia, that's where they are. so philadelphia. so is that -- that's a market -- and this is going to happen in two years, five years, one year, two days, when? >> well, these are long-term structure changes -- >> which would be over five to ten years? >> in those markets we have a

record of comcast making it difficult for competitors to enter. you can -- you've heard from those people -- >> yeah, okay. >> they have used their -- withheld their sports programming. >> okay. i got -- l& @ @ @ @ @

and, you know, i hear a lot of concern about advertisers and viewer options from mark. i'm sure the advertisers will be pleased to hear mark so concerned about their welfare. they're actually doing all right. they have a lot ofonds. i have data i presented in my testimony that showed how many different avenues advertisers can go to and take their dollars to. in terms of viewers, i mean, they're shifting their eyeballs and ears all around these days. so it's hard for me to believe that this is going to be some sort of a nightmare, chicken little scenario where the sky is going to fall in these markets. >> all right, miss abdoulah, you're the person here. given that comcast would not be gaining any new cable properties to compete with your company, what advantage would this company gain from withholding content from you or your customers? >> what -- what advantage will -- >> yeah, why would they do it? >> i can't offer the same content. i don't have access to the content, where does my customer go? to my competitor, to comcast. >> uh-huh. mr. roberts, you might want to

comment on either her comment or dr. cooper's. >> well, i go back to the principle here. first of all, content's going to be made available to our competitors, is available today. in the last two years, colocast has lost nationally over a million and a half customers while phone and satellite and the wideopenwests of the country have added over seven million. in fact the second and third largest distributors of multichannel video in the country are two satellite companies. so there is a very competitive market. one of the reasons we want to get more invested in content is we see the value of that content growing. and i think the premise of the way you phrased the question, i agree with, which is we will be well served to make that content available to all the growing players in the marketplace. so i think this will ultimately lead to more innovation, more

content creation, we see it as a growing business. i'm sure somewhere we'll talk about the intellectual property and how to protect it. we are very much focused on that same issue. and i think we recognize that this is a very competitive video distribution marketplace and this is a -- an opportunity to participate in the growing part and as the internet grows, as the chairman asked, we want to see the content available and growing for the consumer because that's where the consumer wants to be. >> may i respond to that -- clarify -- >> sure, very quickly. >> pardon me? >> very quickly, please. time is running. >> it's not just about withholding content, it's also about putting restrictions and conditions on how we offer that content. those are two things that we need to consider here because that happens, as well. >> thank you very much, mr. stearns. the gentleman from california, mr. waxman, is recognized for five minutes. >> thank you very much, mr. chairman. mr. roberts, nbc has been a long-time proponent of vigorous protection for the intellectual

property rights of content creators and owners. mr. zucker and i have had an opportunity to discuss the need for more robust action by broadband providers in protecting content available on line, online content theft is a serious problem. it's a drain on our economy. and one that i'm committed to addressing. if your transaction is approved and you find that you own nbc's valuable content catalog, can you tell us what actions you're considering to reduce content theft on line? and secondly, will you ask other broadband providers that seek access to nbc content to adopt measures to reduce content theft? >> i think we absolutely recognize the vital nature of protecting the licensed, legitimate, you know, nontheft model that has what -- has propelled nbc universal to where

it is today and every other owner of content. in the distribution business, we also rely on license content to be the successful part of our business. so i think we now have doubly the incentive, double the incentive to figure this issue out better than it's figured out today. specifically, i think there have been technological advancements in the last couple of years. they're going to make it more likely that we can cooperate and to your very specific question, would we encourage the rest of the other broadband providers and distributors to try to find solutions here, the answer is yes. we will now be an active member of ncta, mpaa, and other, you know, industry trade groups that are focused on these questions. i think it's vital that we have cooperative solution, we obviously on one hand have privacy concerns and copyright protection concerns. on the other hand, we want -- by

having such a 33,000 employees at nbc universal that i've got to worry about and 100,000 employees at comcast cable, it's in my interest and i think the consumers' interest to continue the license motdle and find solutions that are acceptable. >> i appreciate that. on this issue about fair competition, the communication act prohibits cable companies from requiring a financial interest in any program service as a condition for carriage or forcing a programmer to grant an exclusive to the cable provider as a condition of carriage. the idea behind this pro-hick is to protect independent programmers from being forced to accept unfair terms as the price for being distributed and seen by viewers. do you agree that this kind of prohibition makes sense? >> i do. and we have abided by that prohibition since 1992. >> there was a statement by --

by steve burke during our program carriage dispute between comcast and the nfl, and mr. burke was comcast's chief operating officer, stated that comcast treats its own programming services as siblings as opposed to strangers. do you agree with mr. burke's statement? does comcast treat its own programming services differently than those outside of the comcast family? >> i'm not familiar with the context of that remark, so if i may, mr. burke is -- >> but his statement aside, do you treat your programming services differently than those outside of the comcast family? >> i think that what he may have been referring to is as employees of the company and just how as chief operating officer he's concerned with with both parts of the company and the welfare of the assets and the people. but specifically to -- we have

six out of every seven channels that comcast carries, we do not have any financial interest in. the competitiveness of directv, wow, dish network, verizon fios, at&t uverse compels us to have a product as fairly exciting, presented to the consumer as possible -- >> and you're going to treat your content and other content not produced by your organization -- >> we have to get the best content, otherwise people are going to not want our product. and i think that's what is driving us from a competitive standpoint is to how to have the best offerings possible. >> let me ask mr. zucker, as a programmer interested in bringing nbc's programming to as many people as possible, are you expecting comcast to look out for its own, and if so, would you expect such a preference to be good for nbc? >> the fact is that we would like our content to be as widely

seen as possible. so our relationship with every distributor is the same, that we would like them though they don't always carry all of our networks and all of our content. and we have those conversations all the time with all distributors. >> mr. chairman, i know my time has expired. i want to point out that companies like people energiy have an interest in taking special care of family members. but in looking at this transaction, i think the fcc needs to analyze carefully what such potential favoritism might mean from competition from independent programmers and ultimately consumer choice. >> thank you very much, mr. waxman. the gentleman from indiana, mr. boyer, is recognized for seven minutes. >> thank you very much. i've worked hard to do my due diligence to examine this from all sides. so mr. roberts, what i'm going to ask of you, if you can grab your pen, i have six questions that i'm going to ask. and you don't have to give very long answers because you and i

have had very good discussions with regard to the word "trust." you can't beat up broadcasters for your entire career of comcast and all of a sudden you become one without answering some -- giving assurances or commitments. so let's go ahead and go down the line. with regard to your testimony on program access rules, you have now given the assurance that you'll abide by them even -- regardless of what the court may do. does that commitment apply even after the rules sunset, that's my first question. the second question is that as i speak with the affiliates, it seems to me that you could fairly easily even get around the rule even though if there's a commitment. for example, a local nbc affiliate could significantly raise the price for all comcast video competitors in that market for retransmission of a station's signal. but for comcast, this would be basically an accounting charge from one corporate affiliate to

another. what can you do to assure that comcast will not use its control of the nbc u. to raise rates for all its competitors to pay for this valuable must-have programming? that's my second question. please also recognizing that if in fact that local market becomes -- you upset the market rates, that does have an impact upon smaller cable operators, likewise. that's my second. my third is with regard to the issue on price. it does appear that you have the potential to gain a significant amount of leverage with your video distribution competitors for the price of access to these channels. now you might offer them access to programming, but at what price that effectively forecloses them from access or raise the provider's cost structure so they can't compete? will you commit at least with respect to the nbc u. programming that you now control, that will control, to maintain for some period of years the programming prices in

the current deals? after all, these were negotiated arm's length before thor have cal integration, and so they should reflect the market rates. secondly on this question -- on my third question. will you agree to so-called most-favored-nation status for similarly situated purchases that are now integrated programming? that is, will you commit all similarly situated cometors of yours will automatically get the best price that you will make available to them? my fourth question with regard to the nbc u. vast array of films in the film library. what commitments will you make about competitor access to valuable programming which is essential for video-on-demand services? next issue is on advertising. i understand comcast does not currently allow its video competitors to advertise their services on comcast cable -- on your cable channels. do you intend to extend this policy to all nbc u. networks

and programs after the deal? and if you do -- let's see what your commitment's going to be on that. because you understand what this could do. the last is with regard to -- i'm not aware of any commitments that comcast has made regarding the availability of comcast and nbc u. programming for distribution on line. the ability of consumers to enjoy their favorite programming on line or to take it with them on various devices is the frontier that you and i spoke about. will comcast make a commitment that it will not deny its video distribution rivals access to the nbc u. broadcast or cable programming for online distribution? assuming that the competitor's willing to pay a fair market rate, will comcast commit not to give its online properties preferential treatment? for example, by making a really hot show available to a competitor for online distribution after comcast

customers have already enjoyed it first? i await your reply. >> okay. going to do my very best. i hope you'll bear with me that there were a lot of questions there, and i appreciate you've covered a lot of ground. i think what we said in my opening statement which you may have caught some of or maybe not all of is that we are prepared to discuss with the fcc either the sunsetting or the -- any litigation that exists on the program asset rules and program carriage rules, having them remain in place after this transaction is completed. so i think we will continue to abide and have lived with and that's not a motivation for this deal is to see a massive change in that oversight that the fcc has on our conduct and behavior. again, want to stress the point

to underscore that it is not the motivation for this deal to suddenly take a cnbc off of directv or in some way try to change that relationship because, frankly, those are the second and third largest distributors, their fastest growing distributors are the telecos, and the fact is that that's part of the growth in mr. zucker's business. >> that's number one. number two? >> okay. affiliates' rates for retransmissions and smaller msos. i'm not totally sure i understood all the implications of that question. could you perhaps just talk about that a little bit. >> a little worried about in our office when you talked about, well, the nbc affiliates are going to feel good about what i'm going to do. they may get better rates. when you do that you're going to change what happens within that local market. there could be cost shifting. and what type of assurances. not only that but some affiliates i've spoken to, it's

this corporate accounting. >> so first of all i hope you as i was encouraged by the head of the nbc affiliates board statements that we're off to an encouraging start in addressing some of the fundamental issues in a troubled business because of audience share declines, technological change, broadcast television is going through a lot of change. we've heard about retransmission consent which i think is the exodus to this question. by being at the end of this deal, about 80% of cable company and 20% a content company, we are still going to have a seat -- a large concern about cable rates and what is the right model and the right answer. sitting here today, i don't have the perfect answer to the dynamic changes that are going through the industry, but the question i think in its essence, are we prepared to try to play a constructive role in the future

of broadcast television and recognize its vital importance when making a huge bet by buying nbc. at the same time, there's been -- there are the opportunities to revisit what's the right answer there, and i hope by being in both sides we can truly play a role in helping make that happen. >> but my time is running out. and -- if you can hit these commitments really quick. >> price for -- >> go to three. >> okay. >> just -- >> program prices in the current deals. i can assure you that all the existing contracts that nbc has which i have not had access to see, we don't intend to abrogate any agreements or attempt to do so. >> four? >> films, competitors' access. we again -- i don't know, i've just met the universal folks. but again, it is not the motivation. i'm sure we're going to try to figure out how to make the best movies. you have many partners when you make a film. all the actors and writers and talent and the creative folks, and you're going to try to

maximize the revenues as a fiduciary of that film. and if other folks want access to it, we're certainly in favor of that. >> mr. buyer and mr. roberts, let me suggest that mr. roberts, you submit the balance of those answers in writing. we're going to be submitting some additional questions to you in writing anyway, and we have such a number of members still to ask questions and limited time. i think we'll move on. thank you very much, mr. buyer. the gentleman from michigan, mr. dingle, is recognized for five minutes. >> thank you, mr. chairman. gentleman and ladies, i'm going to request that a lot of these questions be answered yes or no. this doesn't indicate a lack respect but indicates a very important need to conserve time under the very limited process as we proceed. to mr. roberts, will comcast commit not to tie together retransmission consent payments with payments for network programming provider under an affiliation agreement?

yes or no? >> can you repeat the question? i'm sorry. >> will comcast commit not to tie together retransmission consent payments with payments for network programming provider under an affiliation agreement? yes or no? >> we will not do what you said i believe. i'm sorry. it's -- a couple of things in there -- >> i'll ask the record be kept open. you can give us a more finished answer. >> thank you. >> to that at the appropriate time. >> appreciate that. >> i hope you don't regard that i'm trying to take advantage of you. again, mr. roberts, will comcast commit not to force network affiliates to accept unfavorable affiliation agreement provisions to obtain market-based retransmission consent payments? yes or no? >> we will not force them to take unfair deals. >> and again, i -- i'll ask the record be kept open so that you

can amplify on that. again, mr. roberts, does comcast's public interest filing with fcc include proper assurances that comcast will not migrate critical network programming away from free over-the-air broadcasting to comcast's cable properties? again, yes or no. >> we will not -- that is not the motivation. i believe our filing does address that. yes. >> and i want it clear, these questions are asked with all respect and affection. mr. roberts, again, upon approval of comcast's joint venture with nbc universal, will comcast commit to respecting collective bargaining agreements for its employees and the process by which they are reached? yes or no? >> yes. >> again, mr. roberts, further, will comcast put up roadblocks to first or initial contract

negotiations with the unions? yes or no? >> no. >> mr. roberts, finally, how will comcast view arbitration of first contract negotiations? should they break down between comcast and employees seeking to form a union? will comcast support or oppose such actions? >> in terms of mediation or some third party? >> i'm talking about arbitration. you can use the word mediation interchangeably with it. >> if there's a contract breakdown? >> yes. >> if there's creative ways to find solutions, we don't want to have a breakdown. so if that's a helpful way, that's something we'll consider, sure. >> now these questions to ms. abdoulah and mr. cooper, in 25 words or less, how do you see the proposed joint venture between comcast and nbc universal as effecting the online video market?

starting with mr. cooper. >> frankly, we see it as an effort to extend the market division agreement that has existed between cable operators and physical space into cyberspace. that is the explicit intention of tv everywhere. the statement that they will not use nbc properties to reinforce that does not answer our concern. >> thank you. >> because nbc will stop developing alternative -- >> i'm going to request ms. abdoulah give us her comments. >> i'm concerned, sir, for two reasons. one, we have had a recent experience where we have not been granted the rights for online product. that's number one. and number two, i'm concerned that the current video model where it's a take it or leave it, here's the high price that you're going to pay, gets extended to the online broadband customer base, as well. >> mr. roberts, you have a

comment? 25 word or less? >> i think that the internet is a nascent market. i think that tv everywhere just to be clear is meant to say if you're subscribing the way it was presented to us from hbo and time-warner, if you can get the -- if you're a customer of, say, hbo on television and you now want to watch it on the p.c. this enables that to happen. and i don't believe there's any impediments to ms. abdoulah being able to have the same access from time-warner. those are the principles that were publicly stated and that we thought made a lot of sense. >> thank you. now doctor -- this goes again to mr. roberts. dr. cooper asserts that a lack of competitive pressure has failed to produce appreciable downward pressure on cable rates since 1983. in addition, comcast will arguably be incentivized by virtue of vertical integration to charge competitors more for

must-have content, thereby raising cable rates for consumers. what does -- commitments does comcast intend to make to prevent such abuses? >> well, i think that as a said, we're still 80% a cable company, so our eye is very much still in that perspective. mr. dingell, number two, i don't think the deal change anything in that regard. nbc has great content and charges the best price that it can get from its customers, and i'm not sure that -- that our sneft is -- our sniff is any different given the two companies coming together. i think that the quality of the content and the technology that's changed in the last several years is part of the answer, but i think it's a broader industry question, not necessarily specific to this deal. >> thank you. mr. chairman, i know my time is up. but i think mercy requires that ms. abdoulah be able to comment.

do you have a comment? >> i have a comment on the previous comment that we've not been denied access comcast -- it's not about time-warner only. comcast provides networks on their tv everywhere platform. we asked comcast specifically for the rights, and they -- we got sort of excuses like it's not ready for launch, even though it's been launched to 14 million of their households. we were told there's technical issues, we're technically capable of authenticating it. so there are issues of content being withheld today. >> thank you. mr. cooper, very quickly. >> comcast's sob story about losing cable subscribers is a dog that doesn't hunt. in the past few years, they have shifted to triple play, increased the total number of subscribers they have across their items, increased the price of cable, increased the margin on their cable customers. that is inconsistent with the market that is forcing them to lower prices.

they are counting the wrong thing. the thing they're not really interested in anymore. >> thank you. my time's up. thank you. >> thank you very much, chairman dingell. the gentleman from massachusetts, mr. mark ey is recognized for five minutes. >> thank you very much. i think we have to just continue this conversation. it's obviously at the center of what this merger represents. so as you know, i've introduced network neutrality legislation, and clearly the concern here is that when a company that has the wire going into the home merges with a company that has all of nbc's universal's content that there could be a temptation to discriminate against others. and again, going out in the future, we are concerned about the proverbial kid in the garage.

you know, that's got that great idea. we've got a concern about the kid that thinks up the idea of avatar.com tv, could be a big concept now, huh? and it's not owned by comcast or nbc. we have to make sure that it doesn't get discriminated against because it's not an nbc idea. it's not a comcast idea. so how can we enshrine these principles of nondiscrimination against those great, new ideas from having access to the pipes that go into people's homes that are controlled by comcast, mr. roberts? and that goes to the question of networking neutrality and what kind of guarantees we can get that those other ideas are going to be protected? >> well, as you know, mr. markey, there's a procedure taking place at the fcc right now on this very question of net neutrality, and as you know, as you've said, you've got

potential legislation in this committee and in the congress. so i would first want to point out that i think whatever you do, if you're really trying to make that protection or achieve that goal, there's going to have to apply across the board. and whether that's to all providers, what levels of the internet, what about wireless, the world is changing and converging, and evolving very, very quickly. so i again believe that this particular transaction doesn't really have the potential in my opinion to change that kid in the garage or that avatar tv.com or whatever the example one wants to pick because let's say google today is over 50% of all the video views of the 30 billion views that took place last month would not -- >> will you commit, will you commit to not creating a different standard for access by

jaftor tv? the comcast platform -- will you accept the principles of nondiscrimination? >> we have accepted and voluntarily -- we may have a disagreement on whether there should be a law and what that does specifically, how it's interpreted down the road and what that does to investment. here we're investing in wideband without you in applications. we're count -- without any applications. we're counting on that kid in the garage. what about video gaming over the internet, are you going to support it or not? it's a huge part of what drives broadband are all these now applications. so yeah, i believe that it is not in our business interest. >> do you believe that there should be any conditions which are attached to this merger at all? >> we've made -- yeah. we've said that we've identified a new -- i don't know, at least ten commitments that get involved with independents of

nbc news to program access applying to retransmission consent. what i testified this morning, earlier was that if for some reason the rules are -- program access are struck down by the m)e+u&@ @ @ @ @ o7@ @ @ @ @ v@å

century american competitiveness for the 3% of the population of the world that we represent. and we have to make sure that all of that creativity gets unleashed because that is something we have to brand globally. so that's the conversation i think we have to have going forward, and this agreement that you have really should be a model to ensure that that becomes who we think of ourselves as a nation. so we thank all of you for being here today, and i thank you, mr. chairman, for your indulgence in

giving me extra time. >> thank you very much, mr. markey. the gentleman from washington state, mr. insley, is recognized for five minutes. >> thank you, mr. roberts. i'm told that in may, 2007, comcast obtained the broadcast rights for the portland trailblazers, and at the time the public was told that they would be available through competitors. instead, the blazer broadcasting rights was used to run ads extorting satellite subscribers to switch to comcast because it offered blazer telecasts in the satellite providers did not. it's now been 2 1/2 years, and still there's no deal to allow conveyance of those rights. this leads me to suggest we ought to think about spifing up our rules on how to deal with those -- those access rights. and there's an arbitration procedure now that some have suggested is not adequate to the task of today and has not

worked. i wanted to ask you and miss abdoulah if we should consider bringing those access procedures up to speed, for instance, by requiring continuation of coverage during the arbitration process. or having limits on the period of time it takes to reach a resolution. and/or changing the burden of proof and giving parties discovery of, in fact, the contractural relationships with others. mr. roberts, miss abdoulah, could you address that consideration. >> let me go first. first of all, in the -- my understanding of portland is we would love to have satellite carry that channel. we don't have an ability to begin an arbitration process to ask them to carry it. they're not bound by those rules. it's the other way around. and so i don't believe they have availed themselves because i'm not sure that they have wanted to do that.

i don't know what their motivation would be. so any change that you might have to the program access rules in general i'm not sure would affect that particular situation. but just for the record, we have tried on numerous occasions to get that content carried by satellite and would welcome any way we can get that worked out. as to the program access rules in general, i just want to start -- they were written in '92. they were at a time when i think probably over 50% of all the programming channels were owned by cable companies and cable at that time did not have satellite competition or teleco competition or wideopenwest-type competition, it does not exist. today i think about -- according to the fcc, about 15 period of the channels are owned by vertically integrated companies. so there's a big change in the market over the last 18 years or

so. but i think any revisiting should again go across the whole industry, and we'd welcome that. i'm not sure it's specific to this deal, but it's probably something that fcc from time to time or congress from time to time should look at. that's part of the question of whether the rules are stills in given where the market is, what's happening with other forms of distribution. but i -- i think that we have no problem with the fcc has said it wants to review how it timely resolves some of these matters, and the new chairman i think has sort of said the institution needs to look at how it processes things differently than past fccs, and we welcome that kind of institutional review and want to be a constructive part of that process. >> thank you, miss abdoulah? >> i can't obviously comment on why dish has not -- or satellite

has not been able to get a deal for the sports. i can assume it's because of the price. and the reason i assume that is because we recently went through anegotiation in chicago for comcast regional sports network. when we came to the table to negotiate, we had a high single-digit increase. they had a high double-digit increase. we were getting nowhere in conversation, and went to arbitration thinking that was a remedy for us. quickly found out it was not. it was going to cost about $1 million just to get the ball rolling. it could go on for months, up to 18 or more months. during that time period there was no requirement that the service continue during the dispute. and the burden of proof was going to be placed on us to show that we're not getting a fair and equitable rate. we can't do that because there's no price transparency. there's no market

rationalization for the prices that we pay. so yes, do i think it needs to be absolutely reviewed and reformed and restructured so that there are time limits? the cost is not egregious and out of the reach of smaller operators, that the burden of proof goes on the programmer, the content provider who is setting the price for them to prove that it's decent and it's fair and it's market based, and the timing. that there's a set timing for the arbitration process. otherwise we have no remedy. we have no place to go if we hit loggerheads and we can't come to an agreement. and we absolutely need that to be fair and competitive. >> thank you very much, mr. insley, and ms. abdoulah. we are facing a bit of a time problem now. we are scheduled between 1:00 and 1:15 to have another series of four votes, and then this subcommittee will have to vacate this room because at 2:00 there

will be a hearing involving secretary sebelius on these premesis. so i'm going to ask members if they will voluntarily keep their questions to about three minutes. and that way we can get as far through the list of members still to ask questions as possible. the gentlelady from tennessee, ms. blackburn, is recognized for such time as she may consume. hopefully no more than three minutes. >> well, i'll tell you what i'll do, mr. chairman. why don't i lay my questions out, and then allow you all to respond to me in writing. and that will save some time and allow others to get their questions in. and on the record, mr. roberts and mr. zucker, i'm going to start with you. because whether we talk about mergers ordeals or unions, things of that nature, we -- whether it's large or small, we talk about how it's going to affect the consumer. and i mentioned this in my

opening statement, what i would like to hear from you, from each of you, is a statement as to why this is a good deal for my constituents. whether they're a consumer or a member of the content production community. and that articulation would be wonderful. and it would be helpful to me. mr. thieer, to you, you had in your testimony that it would make no sense for the new firm to block new or competing channels, and that comcast faces robust competition in the video programming marketplace from satellite and telecom providers as well as from internet-based video providers. so given the robust competition and the video programming marketplace, do you believe that government should impose network neutrality standards on this union? and what would some of the

consequences for consumers in vin ovation be if that intervention place? mr. zucker, you've been associated with nbc for at least a decade and ceo of nbcu for two years. do you think the prognosis for free-standing companies -- what is the environment? what do cow think is going to be the prognosis there? and i am now out of time. it looks like. if i can get one more -- i had a question, and this would be for all of you. looking at what the -- what impact this deal would have on efforts by broadcast to develop additional revenue streams. as i have talked to broadcasters and companies, they are talking about looking at other streams. i would like to hear there you all, kind of where you're

planning to move with this. what do we anticipate being the next -- the next move for you? and -- >> is that sufficient, do you think? >> yes, sir. thank you all. i yield back. >> we will ask those to whom those questions were asked to respond in writing? we would appreciate your quick responses to though questions. gentlelady is recognizing for five minutes, hopefully less. >> there are about 200 locally owned affiliated networks, one in my district, kcra. many of my constituents, it's a

highly rated station. many rely on that channel for local news. i want to ensure that kcra is not put to a competitive disadvantage. in your item you talk at a strong set of separation requirements for the subsidies of comcast. can you elaborate? what will you do to ensure that independently owned event tris not put at a disadvantage? >> thank you. the concern i articulate is that we currently negotiate for renewal of our affiliation agreement. we negotiate with a cable carrier for retransmission. the potential exists to reach a

stand still over retransmission consent and have that same company withhold and affiliation renewal from the network. we would hope for a separation between the two. and in familiar, a remedy that that cable carrier could find if we were at stand still in negotiations. is the network could be brought in around the local affiliates, circumventing the process. >> do you agree, mr. zucker, with the assertion that structural division may be necessary? >> i don't think sit. we have been able to, in the course of these conversations with the affiliates, work this out. there's never been an issue. i don't foresee a need for it. >> not at all?

okay, as i mentioned in my statement. there are concerns that the joint venture may cause a domino effect. some feel it will cause competitive pressures. mr. cooper, in your opinion, if this joint venture goes through, how would the landscape change in the long run? >> the great fear is that you create a merger wave. where all of the other entities look at the advantage that comcast has gained. one expressed by mr. fiorile, saying i need as much of an advantage as i can. the cable operator elsewhere will say, i have to have the same deal. you'll create a situation in which everyone is seeking to

gain maximum lempl through that sort of integration. >> i have other questions. i'll beyond a reasonable doubt back my time. >> thank you very much. i would suggest you submit them in@@@@@@@ @ @ @ @ @ @ @ @ @ @ å

larger market share in the future? >> may i take that question? i believe it's wfla in tampa, an affiliate that we're proud to be associated with. i think what's terrific about this venture is that comcast is committed to free, over the air television. before this skroint venture was proposed, i was concerned about the future of broadcasting.

it's been under duress with the economic woes we have suffered. i think comcast's willing tons commit, to step up and say they'll hope to be able to play a constructionive role in retrans conversations, all of those give me hope. i think that's good for the viewers of wfla and your constituents in tampa. >> you heard the answers. what is your reaction to the separation condition? >> i guess i would look for a -- more on the previous question. i would look for a stronger condition and more separation. and some clarity. on nonintegration of both the network affiliation negotiations and retransmission consent. the capacity for . .

over-the-air nbc family, i think that's a possibility. >> if point of fact, comcast will be in a stronger position to demand bigger bundles at higher prices from your local cable operator, who is not comcast. that will have a negative effect on consumers because they have stronger bargaining position as a larger integrated entity. >> the program access rules we've been talking about have not applied to nbcu. they will apply going forward. we'll now be subject to those rules. i think there is a greater benefit as a result of that. and less protection for us. >> and why the rules need to be reviewed? >> thank you very much.

the gentleman from illinois is recognized. >> thank you. i do normally -- i realize we're operating on time restraints. mr. robertson, and mr. zucker, have your companies done all that they reasonably can to fost foster minority ownership? and recruiting and retention of minority employees? to the ex-tent that you can, will you divulge to us what was the last large transaction that you, personally, or your executive team struck with a my authority term. what was the dollars and duration? >> i think it's -- one of my

goals personally is to see our company to continue the improve if diversity, how we purchase, how our employees are made up and reflect the customers we serve. i would never give us a perfect score card. we're constantly trying to improve on it. it's a major priority for the company. in terms of media-owned assets. the last deal i can think of was the new york times company a decade ago, sold their cable systems, maybe a little long e than that to a minority owned group that we participated in called garden state cable. and eventually, mr. lewellyn and his group sold shares after more than half a decade. we built the cable system in philadelphia. we wanted to have local

ownership by minority and women businesses and so we had a separate public company that our comcast philadelphia was owned with and shares were more available to philadelphia residents who were women and minorities. eventually, that got bought up. everyone made a lot of money, ten times their money or more. so as we have, from time to time, had to dispose of certain assets, we have looked for ways to find creative opportunities with minority entrepreneurs. we do the same for purchasing of vehicles and other hard goods. there's a great opportunity to support businesses with smaller ownership than just the large owners. >> mr. rush can we move on?

thank you very much. the gentleman from vermont, mr. welch is recognized for hopefully one or two questions. >> thank you very much. my understanding is you want to be treated the same on net neutrality. if there were conditions imposed, you would want them imposed on everyone else. is that more or less right? >> i'm not sure there should be. there's proof that the internet is not growing fast enough. if there are new rules to be put forth, they should apply for all. >> if in the course of this, would go you be supportive of net neutrality? >> i think it depends on the rule. we're participating with the

fcc. >> i want to ask you about the availability offen in affiliated content. on tv everywhere. are you going to be asking, you, comcast, going to be asked independent programmers to sign exclusivity deals? >> not absolutely not. >> you won't? that's good. i go back to the concern about the bundling of services and whether there are mechanisms to work out payment disputes. i realize arbitration is available for a smaller program, like the wow network had a dispute about pay. is that right? >> there's a dispute resolution mechanism with the fcc. >> does that work as a practical matter? what is involved in you have a dispute with a larger distributor. we don't have to single out

comcast. how does arbitration work? >> you would file a complaint and then there's the depositions and all the data gathering and you asked if it -- is it effective? no. it is a long process. the worst part about sit two things. you do not get guaranteed that the programmer will keep that service on while you're in dispute. that's huge. because customers lose the signal. then it's a problem for the paying consumers. that's a big issue. secondarily, i would have to be the one that would prove that the pricing's not right. i don't have exposure to market pricing or data. >> is there a suction you would have to provide fairness? in this case, to comcast and wow that they would resolve the dispute in a reasonable way?

>> if you listen to the lists of promises that people have tried to extract, conditions, there's 15 or 16. they can't be enforced effectively to preserve competition in the marketplace. the last decade has proven that the fcc is incapable of enforcing the conditions. on this merger, the answer is, it should not go forward and congress needs to revisit all of these other problems as a general proposition. >> how about? >> if it's okay with you, so other members can ask one question? >> yes, yield back. >> from the virgin islands, miss christiansen. >> thank you. some of my questions have been partially addressed. the unions, especially the cwa

has concerned based on what they say have been a difficult history. this is to mr. roberts particularly, but mr. zucker might answer as well. but on the possibility of what might happen to jobs at a time when this country is focused on explanneding job. what do you plan or foresee the impact of this merger being on jobs? >> thank you for that question, because it's something i'm very proud of. comcast today has over 100,000 employees. when we started the company, it was 12 in tupelo in 1963. we have a one-way track record of creating jobs in this country. now, with nbc universal having another 33,000 employees, i'm most excited about this deal,

the hardest things to convince investors, there's not going to be massive job cuts. we don't known a news channel, a movie studio. a broadcast network. there's not the overlap you typically see. where the first benefit is first firing people. the great ideas of this country, google, what apple's doing, are adding, not by subtracting. this deal is a risk. we've been talking about the uncertainty of the future. it's not clear. that it's a sure thing. what's happening to broadcast, in the internet. there's an investment and passion that has to come. i think it starts with having a great relationship with your employees. if they're in a union, respecting that. if heir not, it's their right to choose one. hopefully, either way we create a fabulous work environment and

great products that consumers will want. >> thank you very much. the gentleman from pennsylvania, mr. doyle? >> even though comcast is from that other city in pennsylvania, they have been solid citizens in pittsburgh since their entry into the market in 200the. i would like to enter into the record a letter from our may your and a counscilman in suppot of the merger. in pittsburgh, we're unionized. comcast has worked with the unions in pittsburgh. i want to say that for the record. mr. roberts, there's been many news articles about how some in the copyright businesses have been pressuring isps to disconnect their users if they have alleged illegally

downloaded material. i checked with your staff and i'm told that comcast does not currently disconnect users. i appreciate that policy. there's though avenues for the use toers have a due process. we've seen instants where people have been accused of doing something illegal and they hadn't. i want to make sure that congress will not be passing an explicit man date for three strikes. will comcast continue to commit not the cut off customers without due process? >> well, first of all, thank you for the introduction. what i said earlier, and if i might and we maybe can submit comments as the chairman has allowed for specifically that rule and that test. we think that by having made a multibillions of dollars of

investment here in content, and still being 80% a distributor. we can play a constructive role in figuring out what is the right technological answer that protects the consumer and the copyright. so that what is going over is legal, protected and keeps the businesses viable. we've seen in other industries where that has got son bad that the viability of the industry is compromised. what exactly the answer is, i don't know. i will spend a lot of time and energy on this, more than in the past, because we have such a large stake in content. how best to do that, i don't know. some have said we should go to that three strike. we're trying to figure that out as we speak.

we're going try to use both strois talk to each other through the trade associations. >> i hope it's not based strictly on the people making accusations without some sort of due process on the other end. >> i understand. >> thank you very much. >> thanks to all of the members for their expeditious questions in the last half hour. thanks to the panel members for imforming us on this matter of public interest. we will be submitted additional questions in writing. and the record will remain open for such period of time as is needed to receive your responses. >> i want to thank you for that. mr. chairman, i would also urge that the committee call the fcc and the department of justice before us. there's a number of questions that appear to be in feed of answer. there are matters before those agencies.

>> now a hearing on airline safety and pilot training. this is two hours. jerry costello of illinois chairs the subcommittee on aviation. this is almost two hours.

[inaudible conversations] >> the committee will come to order. the chair will ask all members to turn electronic devices off or on vibrate. subcommittee's meeting today to receive an update on the federal aviation administrations call to action on airline safety and pilot training. i will try and give a brief statement and then we will call on the ranking member for his statement or any remarks he may have and then we can go to our witnesses. let me say that we expect to be called to the floor of the house for a vote in about 15 or 20 minutes so i will try and be brief. the important things that we hear from the administrator and general scovell. i welcome everyone to the aviation subcommittee hearing today for an update on the faa call to action on airline safety and pilot training. of like to especially thank and

we'll come family members of flight 3407, some of them are with us here today. two days ago the and tsdb determine the probable cause of the crash of regional airliner in buffalo new york occurring almost a year ago, the crash is considered one the most significant accidents in recent years because it revealed a gap in the level of safety between major airlines and regional carriers. i want to commend the board for doing annette standing job. i am hopeful that the safety recommendations to the faa many of which are included in our bipartisan legislation, h.r. h.r. 3371 airline sabian pollitt training improvement act of 2009, approved overwhelmingly by the house last october will encourage the faa and airline industry to act quickly to improve pilot training standards, address pilot professionalism, fatigue, remedial training, pilot records in training. after the subcommittee held a

hearing on regional air carriers and pilot workforce issues on june 11, 2009, department of transportation secretary ray lahood and f.a. s administrator babbitt initiated in airline safety and pollitt training call to action to gather the information from the airlines and labor organizations to ascertain industry best practices and seek voluntary compliance with the number of safety programs. plaats september this subcommittee held a hearing on the call to action. i praised the faa's click reaction to the colgan tragedy and the lapses in regional carrier safety that revealed. at bfa on notice then and i would hold a follow-up hearing to call the final report in today's hearing will be an opportunity ford administrative babbitt to provide the subcommittee with an update and to hear from the department transportation inspector general on his assessment of the faa's progress. administrator babbitt in the call to action final report

acknowledged and i quote, this is a snapshot of our work which is by no means finished. we will continue to aggressively push forward with these initiatives that we believe will raise the safety bar even higher in that quote. we want to work with hewitt administrative babbitt to achieve these goals set forth and i believe the real major of the agency's success will be whether it can successfully tried it safety initiatives to a timely conclusion. i respect and appreciate the faa's determination since our last hearing in september to set deadlines to develop key safety initiatives. my concern is not simply that the faa is a few months behind on any one rule. i am concerned these delays them from historic patterns of industry opposition to any form of regulation and that key safety reforms have not been implemented nearly a year after 50 people died on flight 3407.

despite promises of swift action from the faa. as i have said before i believe unless this subcommittee and congress pursues an aggressive oversight our legislative mandates are in place the kind it takes for the faa to address the most critical safety issues raised by the accident, it is far too long. that is why we introduced h.r. 3371 to address many of the issues raised in the call to action. i want to discuss the status of several key initiatives discussed in the call to action on a report. first, in 1995 the faa proposed a fatigue world based on the recommendations of an aviation rulemaking committee. we avoided 15 years and we are still waiting for a final rule. last year the faa with true that 1995 proposal and form another arc and plan to publish another 50 proposal by the end of 2009. yet we are now being told the

faa is to publish a rule that has slipped to the spring of 2010. the second of january of 2009 the faa published a proposal to overhaul crew training regulations that included increased use of flight simulators and stronger uptick recovery training requirements. something that the ntsb has recommended and that we have mandated nhr 3371. administrator babb a.u. testified before the subcommittee that the faa's proposal was quote the most comprehensive bakhri to update training requirements in 20 years end of quote. rapter extending the comment period bfa a receipt 3,000 pages of comments and now plans to revise and publishes proposal in the spring. finally the call to action plan states d.o.t. and faa reviewed cochair arrangements between air carriers of regional partners. this is particularly important given the majority of air

travelers are unaware when they purchase a ticket from the mainline airline that they may actually flight on the regional airline. in fact the ntsb express the need to look more closely and safety issues surrounding cochair arrangements during its february 2010 meeting on the colgan final at the airport for cochairmen oberstar and i have requested the department transportation inspector general conduct a review of domestic cochair relationships. there have also been positive developments resulting from the faa's call to action that we should not ignore. for example more airlines appear to be willing to adopt voluntary safety best practices like establishing flight operations quality assurance programs. however the faa and the subcommittee from the to follow up in the coming months to see if carriers actually followed through on their commitments that they have made. the faa published in advance notice of proposed rulemaking yes sir the to strengthen the

training requirements and flight hours necessary to be in airline first officer. i will continue to keep my commitment to exercise aggressive oversight to strength in airline safety and pilot training qualification standards. i assure the families of flight 3407, those who are with us today and those who could not be here today and the american people that we will continue to push for the provisions of h.r. 3371. that requires the first officer to hold and air transport pilot certificate in addition to receiving training to function effectively in the air carrier operational environment and know how to fly in adverse weather conditions including icing. before i recognize mr.-- for his opening remarks i ask unanimous consent to allow two weeks for members to revise remarks and permit additional statements in materials. without objection so ordered. the chair recognizes the ranking member of the subcommittee for

his opening statement or comments, mr. petri. >> thank you mr. chairman and i would like to thank you for scheduling this important follow-up hearing to a 2009 hearing on air carrier safety and the faa call to action issue following the tragical vinn 3407 accident almost one year ago. statistically, the u.s. commercial aviation system is very safe. there is obviously always room for improvement. with today's hearing we continue our focus on the common goal of improving our safety record. as the families of the victims of colgan flight 3407 remind us we can and must do everything in our power to ensure that what happened on the day they lost their loved ones never happens again. i believe we are all committed to that shared goal. in the aftermath of the colgan accident this subcommittee explored many issues in the

safety of the airline system with emphasis on regional air carriers. in addition mr. costello, mr. mica, mr. oberstar and i introduced a bipartisan h.r. 3371 airline sabian pilot training improvement act of 2009 to address the critical safety issues considered at our hearings. h.r. 3371 was approved by the house of representatives on october 14th last year and similar provisions have been included in the senate commerce committee's f.a. a preauthorization package. roughly the same time the faa launched a call to action on air carrier safety. i thank the administrators for joining us this morning and look forward to this update on the progress of the wide-ranging initiatives included in his plan. at tuesday's transportation safety board hearing on the colgan accident, the board approved recommendations for the faa regarding many initiatives

explored during our hearings including strategies to prevent flight crew monitoring failures, of fatigue, remedial training, access to pilot records, stultz reigning and airs bill procedures. in addition the ntsb's probable cause determination for the colgan accident approved by the board on tuesday include among the contributing factors to the accident the flight crew's failure to live here too sterile cockpit procedures. in fact pilot performance and nonprofessional behavior have been listed as contributory factors. i applaud administrator babbitt for demanding a higher level of professionalism from all those involved in aviation including airline pilots. as the safety regulator for the industry and a former airline pilot himself, administrator babette understands not only the trust passengers place into

pilots hands but also the responsibility of pilots must be ever mindful of to go on to the. we look forward to hearing from the administrator with specific actions to airlines and the pilot are taking toaádn#@ @ @ @ since fa a's call to action began last summer, the office has been reviewing the agencies and i look forte to over looking the assessment as well as continuing oversight of long term commitments made to the call to action process. i would like to note the

families' efforts. i urge our snat colleagues to pass the reauthorization bill to finalize the improvements and send the final bill to the president. thank you for your participation and yield back what time i might have. for their participation and yield back what time i might have. >> i yield to mr. graves and yield to mr. graves. >> thank you mr. chairman. i appreciate this hearing quite a little bit and i want to thank at fates administrative babbitt for being here and the inspector general too. but in october of last year we did pass h.r. 3371 widget the airline improvements act and fall of recognizes legislation moves in the direction of improving pilot training standards i couldn't support it at the time. specifically my concerns lie with the 1500 hours minimum flight requirement for 3371 that

establishes or establishes the issuance of an airline pilot transport certificate for all crewmembers. currently only the captain is required to hold that atp sir and not the pilot. i know all too well pilot training is a complex process focusing on the quality of pilot education and training as opposed to the overall flight hours and i believe it is a more reasonable approach. with that said i'm not opposed to increasing the minimum number of flight hours but i think we have serious concerns with the 1500 hours. i think it is simply too much and look folks, just so you understand where i'm coming from and i'm not trying to diminish you in any way the losses we have had out here, but myself by may 2000 our commercial pilot and i have fun with all classes of pilots out there in high-performance aircraft and i know military pilots who have

500 hours that i want to put my kids and the plane with an eye no commercial pilots that i trust my kids with. .. in a perfect example of exactly what is wrong with the process,

it's again quality of hours and it's the person in the cockpit is do we need to be looking now. not the number of hours. that is the broad approach. i want to make sure that the aircraft and our lands in our skies and on the ground is just as safe as we can possibly get it. the reason we need to change this focus just a little bit. mr. chairman, i appreciate the opportunity. thank you for having this hearing and i think it's a very important hearing to the overall safety of the public out there and they appreciate you letting me make some comments. >> the chair thanks the gentleman from missouri. ministate for the record and we will get into these issues in a little bit. i just want to be clear that h.r. 3371 does not deal with the number of hours in order to be entered in the first officer. it does far more than that and we will get into that later. the chair now recognizes the gentleman from iowa,

mr. boswell. >> thank you, mr. chairman. i would prefer to wait for a q&a, but the way the schedule is today and may not be able to be here for that. but i want to make a couple of comments and first, thank you for doing this and i think mr. graves makes some good points that i agree with. i think you said don't knee-jerk and i don't think you're going to. we discussed briefly together and talked and so on and i think your on the right track. i think we've got to leave flexeril. i want to want to be as, for example, general aviation back because that's going too far too fast. we've got to walk through the spirit and i think that's what you intend to do. and depending how they accumulate the experience, we all know it makes a lot of difference. you know, the 250 hour commercial pilots if they have a right through the program and did everything one after the

other, they're pretty proficient, versus a person that maybe took them two or three years and there's a difference. i used to be an ip and i'm sure you do too. it makes a difference. and so as we think about how he buddleia up to get these folks say for a more proficient and so on, somehow if you cannot some flexibility in their. mr. chairman, indicate anger to 50 hours for some situations or maybe more. in other situations of this is tailored for they can be intensified and follow-through day after day. and then go right out into the field and start executing and using -- it makes a big difference. so i would hope that somehow you can keep that flexibility in there and i think you can. i think it can be done. so, we are headed the right way.

i read some of your statements there and i think you're on the right track. and this is good. the public wants. i want it. we all wanted. so thank you very much. >> the chair thanks the gentleman from iowa. let me in for members and eyewitnesses said we have been called were both. we have 13 minutes is left in the vote. but i intend to do is recognize to notice mr. titus and mr. defazio for pre-pre-statement and that will break and go to the foreign votes in combat and go right where witnesses. i would ask members other than ms. titus and mr. defazio to enter into the record. the chair now recognizes ms. titus. >> thank you very much, mr. chairman. i just like to begin by saying how pleased i am to be able to join this important subcommittee

appeared to resume critical part of southern nevada's economy and sharing safe and efficient travel at mccarron airport around the is important to our economy and that's why it's important for me to serve on this committee. i look forward to working with our members to ensure that civil av solution is safe and aviation in las vegas has the resources it needs to shuttle tourism, tourists and visitors. we like them coming to las vegas back and forth. today's hearing is critical as we work to reassure these travels the federal government is doing everything possible to enhance aviation safety. the colgan air accident last year brought to light some of the flaws that existed in aviation safety and i appreciate that the faa has detailed these flaws and of call to action plan on airline safety and pilot

training. so i'm looking forward to hearing from the witnesses as we address issues of pilot flight time and fatigue, pilot training, professionalism and safety so that we can do all we can to protect the public and assure them that that is indeed the case. so i would think her witnesses for being here today and i look forward to coming back and hearing what you have to say the faa is doing along these lines. i thank you, mr. chaiman for this opportunity. >> i think the generally front about it and i recognized the gentleman from oregon, mr. defazio. >> thank you on mr. chairman played please do have administration and an essay that is that dean in the spirit of the law was amended after the tragic crash in florida a number of years ago during the clinton administration tiered pricing that i've been arguing for more than a decade that the faa could not both regulate in the public interest and assure his safety and promote the industry.

unfortunately, even though after that horrible accident i got the law changed finally. you know, there are some within the agency was still think it's their duty and there's some in congress who think it her duty to promote the industry. no, you know, we are here for a staff to assure safety. and then secondly, we want to have a healthy industry that is safe. and just hearing the earlier comments regarding quality versus number of hours here i have been raising the concern since, you know, the early 1990's that i don't believe that you can provide him a no matter how high the quality is inadequate amount of training for a commercial pilot and difficult conditions with the minimums we have today. and our hack a lot of carriers to believe that, too. because they won't hire someone with a number of hours. but there are the low-budget drive the industry down to the lowest common denominator operators who will.

and there are those who will defend that practice. it's got to end. i still don't believe as i said that to be a manicurist in oregon requires twice as many hours of training as the current minimum. so i don't want to hear people say we'd just can't mandate higher minimum hours. we just want to look at quality. no, it's our thing quality and quality will come with more hours than comprehensive, you know, well-thought-out training. so i'm fully in support of what the chairman has proposed, where it seems the administrators had it, but we're going to continue to push to make sure we get there because we know there's tremendous pushback from the industry. even though will only hire pilots with a number of hours have a little farm team out there, which is the low-budget carriers and in some of the big carriers like the budget carriers because they drive against their competition people who are trained to provide higher quality regional air service that we should never have another tragic event like

we had. i mean, you know, that crash of colgan air, i mean, what kind of training could have pilots have with a stall warning to pull a nose up like you know, that is beyond belief. we've got to fix these problems and it's going to take both more hours and better quality and i support any efforts that would get us there. and they're going to cost something, but you know what bioassay of never met someone at 40,000 features thrilled that they saved a dollar in their ticket because they're pilot of font is just learning how to fly. thank you very much, mr. chairman. >> i think the gentleman and his point is well taken and the point that i've made which are bill h.r. 3371 ima just does not deal with increased number of hours. it deals with a comprehensive preemployment screening and a lot of other things. so i appreciate the gentleman

comments. i would ask her witnesses, we have five votes on the floor right now. so i would ask her witnesses and everyone else that wants to come back to return to be in the room by 11:10, ten after 11 if you want to give a cup of coffee or something and we will resume the hearing at that point and go directly to the testimony as administrator babbitt and general scovell. so this time the subcommittee is in recess untilñ'ñ!ñúñú?z?ñíz [inaudible conversations] >> at the subcommittee would come to order on the chair again welcomes administrator babbitt and also general scovell to the

subcommittee hearing today. administrator babbitt, let me say that i am frustrated and it are family members and others with the time that it is taking to move forward with some of the provisions and are bill on h.r. 3371 in the time it is taken the faa to work through the process. now having said that, but they say that i have worked with a number of administrators of the past 21 years. and i said, i spoke to an organization this morning that said i believe that we have an administrator now that is trying to leave the agency forward and to do the right ring. i hope that in your testimony and i've had a chance to review it thatno carrier cwç/ñ/o/o/w/ço/o/o/ño/o/ñoç

>> i really believe this is a disservice to the hard-working safety professionals who have been working tire less li on these and other issues. i have seen firsthand how

dedicated the faa work force actually is. i have spent a lot of time to present an accurate understanding of what they do and the safety impact that it actually has. i am well aware there is always room for improvement as well.

on what should be done to improve s >> i explained at that that questioning voluntary action was the fastest way to move forward. most immediate result that i could get. i also told the committee i thought the best approach for receiving faster results was to achieve consensus and move forward on those wherever possible. and i sense some skepticism at that time and i continued to get complaints although we feel to live up to our initial goals. but again i am concerned that no

one is taking account benefits detailed that we have actually achieved the progress we have made. chairman oberstar charged mindy is my bully pulpit, if you would, to influence the industry and that's exactly what i tried to do. in the aftermath of the call to action the faa initiated a two part focuses action of aircrew training qualification and management practices. faa inspectors observe 2419 training and check events are the evaluation. at the side of the evaluation, 76 carriers had systems that replied with remedial training requirements. fifteen carriers had some component of remedial training and eight carriers didn't have any remedial training provisions whatsoever. they lacked any remedial training and therefore were identified by s. of having greater risk and therefore wanted additional scrutiny. today seven months after the

call to action all characters evaluated today have some component of remedial training, with respect to you now have seven months after the call to action we now have 11 new carriers that have adopted focal program since july 2009. and one application is currently pending. similarly, all three of the carriers that did not have any asap reporting programs, all three now have an ace up her one employee group in space and for their carriers have established additional asap programs for additional pilot groups. we also ask your carriers to meet with their smaller partner airline to exchange safety practices and encourage the adoption of best practices. faa is encouraging the carriers that are doing it and were encouraging them to continue to be part of the airlines periodically and to ensure a continuous exchange of information. and as they say here today, i am pleased to tell you this is currently happening now at all

scheduled airline carriers that have regional partners. in addition the council is now included the safety directors from the national air carriers association as well as the regional airline association in their quarterly meetings. many other examples of recent accomplishments that i have to mention during the course of this hearing, but i would like to announce the agencies advance notice that the rulemaking on requirements, which was posted today on the federal register's website this morning. i look forward to hearing from the industry and the public on the range of issues that we need to consider as we move forward. as i stated repeatedly, there's a difference difference in my mind between knowing that i pilot has been exposed to all critical situations during targeted training versus assuming that simply flying more hours a automatically will provide that exposure. unlike some things in life, safety is not again.

it doesn't have a goal line. we reach one goal only to set up for a new one. safety professionals do not cross the goal line and claim victory. we're forever searching ways, new ways to advance a future technical and procedural improvements as well three continued up the sense of professionalism. and just because the final report on the call to action is issued doesn't mean that our efforts will stop. no one should assume that. they shouldn't even assume they'll slow down. i've been very gratified with the response i received them suffer. i think the collective efforts of the faa, the airlines, the labor unions evolved and of course our friend here in congress will continue to work together and i'm certain it will result in implementing advanced best practices, transfer and have experience in achieving an overall improvement in airline and safety. mr. chairman, this concludes my remarks and i'd be happy to answer any questions that you might have for the committee. >> thank you, administrator babbitt. the china recognizes the inspector general for the

department of transportation, general scovell. >> mr. chairman, ranking member petri, thank you for inviting here today to discuss the status of the phase of verse to improve air carrier safety. after last year's colgan accident the faa took swift action by creating a call to action plan. faa has made progress and implement in the planned ten initiatives including levinsky deforms across the country. however, progress has been slow and implementing initiatives of the greatest potential to improve safety. specifically those related to pilot fatigue, training and professionalism and efforts to strengthen their carriers, voluntary safety programs. my testimony today focuses on concerns related to these initiatives. to address concerns about pilot fatigue, as they establish a special rulemaking committee to propose new crew rest requirements. the committee met at september 2009 deadline, however faa missed its milestone to issue an npr and a december 2009

and now plans to issue this spring. however, the past is prologue the new book of years in the making. numerous attempts to update these requirements, which were last modified in the 1880's have failed due to disagreements among faa airlines and pilots. faa is facing similar challenges with revising crew training requirements. faa issued an npr and on the new requirements over a year ago and received over three dozen comments. faa now plans to offer supplemental notice in the very near future. at the same time, faa's reviews let crew training and qualification programs like the rigor needed to assess effectiveness. we question the thoroughness of these reviews in part because faa did not provide specific review criteria to inspectors. many of whom had never assess remedial training programs for pilots. faa surveillance questions also raised concerns as the number

were not relevant to many air carrier operations to moreover, some questions were not comprehensive enough to detect flaws in training programs here for example, while inspectors observe more than 2400 pilot evaluation training event, there were no questions on whether pilots completed the evaluation successfully. a key measure of a training program's effectiveness. faa has also been slow to address concerns regarding a lack of pilot professionalism, and issue raised by ntsb and for the last six they'll accident involving regional airlines. to better ensure pilots adhere to professional standards and plate discipline, faa plans to implement a mentoring program. however, faa has not specified how or when it will accomplish this. while professionalism cannot be mandated, faa can take action such as expediting training and rulemaking and streamlining communication between carriers that would directly impact pilot

performance. another key goal of essay is called to action is to expand regional carrier participation, involuntary safety efforts in areas such as pilot records in a voluntary safety programs. while faa requested commitments from air carriers, is progress toward this initiative has been mixed. the typically, 80 carriers responded to faa's request for safety improvements but many were vague as the actions they plan to take in their timelines. and 14 did not commit to expand their pilot record reviewed her in the hiring process. with regard to the most important voluntary safety programs, 22 carriers responded they did not plan to implement folk rock and they did not implement asap while cost equipment availability and fleet size presented significant obstacles for smaller regional air carriers to implement voluntary safety programs. faa has not presented any plans to have carriers establish these important safety programs.

further, faa failed to follow up with carriers to ensure their planned actions will effectively be safety goals or the carriers will make completion requirements. faa also do not follow up with those carriers that submitted fake responses or no response at all. get faa concluded this initiative achieved its intended outcome. before closing, i'd like to note other critical safety concerns highlighted during the hearing after the colgan crash but not in the call to action plan. these include pilot domicile, differences in pilot training and hiring and pilot experience and pay. these issues present significant challenge for faa, congress and industry stakeholders in determining the nature and extent of actions needed. at the request of congress, we are viewing the potential impact these issuers have an pilot safety and plan to record our findings later this year. mr. chairman, this concludes my statement. i'd be happy to answer any questions you or the member subcommittee may have pierced my thank you, general scovell.

let me ask you to elaborate on one of the final point that you made. you mentioned while the faa received written responses from 80 of the 90 carriers, many were only partial commitments or no commitment at all an addition we found many carriers responses were either beg him not detailed in dreamland or stated they did not intend to take any action. i guess mr. scovell before ask you to elaborate i'd ask mr. -- administrator babbitt to respond. >> yes, sir. a response that we got i think we need to be cautious with the numbers that we're talking about. that 82% represents 99% all of all the passengers in this country. also a program of gathering data across the fleet and looking for trends. that's the purpose of photograph. if you only have one or two in a fleet, roughly speaking the law

books provide that turned for you. you don't need to gather data. and so, what we have exceeded the experience of the carriers not participating as for the most part people who are very small fleet or older airplanes that simply don't have the capability to provide that data in digital format to be gathered. >> would you agree with that, general scovell? >> mr. chairman, i'll acknowledge the validity of mr. babbitt statement, that their air carrier commitment initiative covers a huge majority of aircraft in operation in the country today. our point has to do mainly with faa's lack of a follow-up effort in response to the air carrier commitment. what the administrator had asked for was that for all recipients of his request to respond to him. and though the 80 who responded, our analysis showed with respect to the most important efforts of the request pilot records, 14

either didn't commit or submitted letters that did not state their intention on this issue. one carrier stated it are to have a pilot selection process and another carrier stated it complied with prions, which in fact was not the subject of the substance of the administrators request. one carrier most interestingly remarked to us when i.t. was on-site at their location that while they appreciated the faa's desire to expand pilot rockers with you for utility during the hiring process, they wondered why faa purged records of accidents and incidents of the five-year mark because i carrier thought that information might be valuable to it in making hiring decisions. now we realize that there may be statutory or regulatory requirements to purge records at designated intervals. but recognizing the carriers may be hungry for that information, we would encourage the agency to do what it could to honor their

request. with regard to voluntary safety programs, folk was being won, 25 and 80 carriers responded that they did not plan to implement or giving nonspecific response. again,@@@@@@i jo we could expect those carriers to follow up. with respect to asap, is 11 carriers have not responded. they have been held up as a key corner stone of aviation safety. we expect the agency to follow up even down to the smallest carrier in an attempt to impact

the further carriers. this was the question that the administrator asked, does the carrier have procedures in place to ensure regional and main line characters have the best practices? 15 carriers did not respond or schmidted unclear responses. respond or submitted unfair responses. again, we would hope that the agency would follow. >> you know, just a two weeks ago i heard an interview of someone interviewing president obama. he was asked to rate himself on his first year in office. let me ask you to grade the faa. he talked about the positive things, some negative things come of challenges. what grade would you give the faa at this point on the call to action? >> on the call to action as her statement makes clear, we would

give it with mixed success. if you were to press me for an actual grade and i resist that inherent in the past. i would have to tell you, sir, that i would read it incomplete. i certainly wouldn't grade it pass fail at this point because of mr. babbitt has the knowledge, very much needs to be done. i wouldn't grade in a comedy, or a thief. i do want to acknowledge that faa under mr. babbitt's leadership has signaled an intent to engage on two of the most important initiatives having to do with the teat and the rulemaking have to do is crew training. i'm petite, sir, were in a fix as pointed out in your speech based on medical science that is even older than not. san saba was issued, much medical research has been done by faa itself and by nasa at the request of the congress and funded accordingly.

get the current tool doesn't incorporate that. despite the effort in 1995, which met vociferous within the industry. faa in the intervening years and tell mr. babbitt arrived, chose not to engage on this front. i give great credit to mr. babbitt for signaling publicly in the call to action that he is going to press home i'm petite and crew training requirements. that said, other statement makes clear, we would take issue with how faa designed, implemented and followed crew on a number of its initiatives to include attention to the professionalism matter, the initiative attempted to do that through mentoring. second-year carrier commitment to its most effective practices i addressed that in the last question either.

which yielded some important information for the agency for its flawed in design implementation and some guidance to key inspectors who were designated to carry it out lost some of its impact. so for those reasons, sir, i'd have to give it an incomplete grade at this point. recognizing that there is room to improve in time to do so. >> thank you. the cherner recognizes the ranking member mr. petri. >> thank you, mr. chairman. i think the inspector in his testimony made reference to the fact that in four of the last six phaedo accidents there was a lack of highly professionalism and performance was cited as a contributory factor. and i'd like to ask administrator babbitt what is in

the works to do with the problem. >> thank you. as i stated in my testimony in our call to action, one of the things we did we had 12 meetings around the country that were well attended and from those, we also called in both the air carriers themselves as well as a pilot unions. a birdie at one meeting just for the leadership of the pilot unions representing 95% of all commercial pilots in this country which scheduled for a meeting next week. it took a long time and i do appreciate the concern that some of these things are moving less quickly than someone like, but i'd have to remind everybody the industry didn't get to this state. the industry didn't devolve into the state of where we see serious professionalism and attention in the cockpit overnight. it took years and it's going to take us years to bring us back. and i'm pleased to tell you that i had a wonderful response.

i could cite and if you like i would submit for the record i received a report from the airline pilots association of a group they have now done a university outreach program. i have with me here -- this is the independent pilot association where they apply for ups. this is a special publication issue devoted entirely to professionalism. on the back of the code of professionalism. this was never printed or circulated before this. several of the carriers have done this. i've been asked to submit pieces to several different pilot unions to put a piece in our professionalism. i would say we've gotten their attention and i would say they're taking very, very proactive actions, recognizing, working with us on working with the company. so i'm actually very pleased and to be candid, it's difficult for me to understand why people can see some of the positive actions that are resulting from this.

>> i certainly would agree that we need to be focusing on and working hard for years to maintain professional standards in the cockpit. i hope it doesn't take years to achieve those standards because people are going to be flying in the meantime and we want them to be flying under professional conditions. >> in addition, i've had, if i may come a carriers have indicated several of them that are working with their private groups to revise the transition training when a pilot goes from the first officer to a captain and refresher training for captains as well as the transition to enforce professionalism. it's their duty. it's their obligation and did something like you see in a lot of places. some people just have to be reminded to get it front and center of them and i'm pleased to see both carriers and their pilot groups recognized and working together to help achieve overall safety. >> general scovell, we've been

wrestling with the area of the sterile cockpit rules here. the violation of those rules have been in both lexington and buffalo accident and have prompted the national transportation safety board to recommend the faa take actions to prevent further violations of those rules. what specific steps might be taken to step up the enforcement of the still cockpit conditions. >> you raise a good point because while it's also said that professionals and can't be mandated. i agree with that. it's a concept we take apart that concept and recognize that there are discrete behaviors whether they relate or fitness for duty, training, the obligation to behave professionally in the cot that some of those discrete behaviors can be regulated, not to say that they always should be.

sometimes the voluntary or consent this method is the way to go and those should always be impressed and enforced using that eerie but sometimes enforcement methods should be in place. i'm not in a position now because i don't have a body of work frankly on which to speak near it but i would say that we have instances that are common knowledge where we can say that those enforcement methods have been put in place. for instance, if a professional pilot will not report to work under the influence about golf. we would lie in the judgment of that individual to sustain a standard. no, we've got a bottle to throttle rule. the professional pilot of the report for work overly fatigued. again, do we rely on individual judgment? know, for him and her employer we have crew rest requirements. there are a number of other actions. when we get to sterile cockpit,

that's going to be a tough one. ntsb in its golden report just this week addressed -- tried to address these points when it recommended to assay a workload management training, leadership training and a complete ban by the carriers and that dan would be required by faa on personal electronic devices in the cockpit. those are the kind of enforcement reactions i can occasionally be necessary. i would urged this analytical framework if we were contemplating enforcement. what is the nature of the problem? what's the extent of the problem? with the danger to safety if the problem continues? what are all the turn this to address it? the advantages and disadvantages to that approach, my office in gao and a few others in government can help this committee and the secretary identify those and it becomes a policy question thereafter.

>> by thank you. mr. petri had to go to vote in another committee. he will return very shortly. let me just comment and then i will call on other members to ask questions. administrator babbitt, you indicated we didn't get where we are overnight and it may take years to bring it back. i understand where we are overnight, but i don't agree that it's going to take years to get us back. and that's one of the reasons why we introduced h.r. 3371 because of our fair that it takes so long to the rulemaking process to address some of these issues. it were not just talking about the atp required and for additional hours. but both a qualitative training and experience need to be applied. you cover that many times. then our legislation, we provide comprehensive preemployment screening, pilots including assessment of skills, aptitude,

suitability for functioning the airline's operational environments. we raised the minimum requirements of course to the atp, which there is some disagreement on. they're a number of other things that pilots must receive training effectively didn't air carrier operational environment outburst weather conditions including de-icing, altitude operations and multi-pilot crew. those are things that need to be addressed and that should not take years to bring us back. i'm not why acted so quickly to introduce this legislation after this tragedy. and that's why we did it in a bipartisan way and pasta to the committee and through the house of representatives. unfortunately, it's been over in the other body like many other things and we hope the very shortly that will take this legislation as too so we can hammer out whatever differences we may have an come up with a

different bill that addresses many of the needs that need to be addressed sooner rather than later and i think you agree with that. with outcome of the chair now recognizes the gentlelady from nevada, ms. titus. >> ms. titus went to vote in another committee and told so will return in the chair recognizes the journal of men from michigan, mr. schauer. >> thank you gentleman for testifying. i too very distinctive differences and the first one i'd ask mr. babbitt if you could take just a short amount of time just to address. my district in battle creek, michigan is a home of western michigan college of aviation, i think the finest university-based pilot training program. power the call to action recommendations integrated into university pilot training programs and well today's notice

of proposed rulemaking provide them an opportunity to offer alternatives the knickerbockers onto that briefly if you'd like. >> yes, sir. several fronts that multiple components of that to answer number one is indicated several of the pilot association has started an outreach so that you can begin to train young pilot on the value of professionalism and living examples right in the classroom during guests begin experiences, helping the curriculum. i know several of the pilot organizations are part of the board that the curriculum. we encourage that and am pleased to see they are actually engaging in that. second, the proposed rulemaking that we have out the advance notice, certainly recognizes the variants and i would note for the record that we were discussing this prior to the point in time when people began to focus on this. i was concerned i felt that a commercial pilot license was not