bipartisan anymore? we agree -- if we agreed is something we should do, maybe we should agree that no one should get credit for it. >> the american people are pretty smart. we always tend to think they will go for the slogan rather than understanding what is going the bottom line is that the lower tax corporate rate will mean more revenue for the federal government. i think that is why you can get bipartisan support from. thisfrom . .

>> at the political level, we have seen almost a total campaign on green energy as though that would lift all boats. i won't go into this, but i have made a study of that, and the subsidy area -- the germans know

that very well and are willing to pay for their green with their conventional industry. that leads me to the second point -- i have to challenge the point about basic research. the america compete pact is coming up for reauthorization. there are huge amounts of money going into basic research, although my studies show -- and published a book last year that the linear theory of basic research by some magical method leads to some revitalization of the country was disproved by project hindsight in the 1960's. many academics know that, but it is extremely sensitive. in short, you are attracting the

best talent in the country into the ivory tower with a published papers that circulate in disciplinary fields. i see this as a completely different from the educational policy of every advanced nation in europe and asia. please comment if you will. >> >> the government's basic role is basic research, not picking industries or particular applications or we wouldn't have an intellectual basis for doing it. i agree that the true innovation is a very nonlinear. what we know about contemporary innovation is that it's not a professor with an idea. it is a shop floor use and scrubbing of the idea, which is why you can take life sciences -- academic health centers don't just have smart profs, they have

hospitals where the practical innovation reinforces research. i think for the u.s. to decide to support application would be a mistake because we don't know which applications will do it. the private sector is good at that. what the u.s. can do more of the needs to continue to do is support basic research. >> i think we have time for one more question. >> one subject i'm surprised has not come up, and i'm reluctant because it is a large and controversy subject is [unintelligible] at least it's proponents say it can generate in come for the

deficit. i wonder if you can speak a bit about your own impressions of the degree to which it would be a favorable or unfavorable step. >> one is economic in the other is just where we are in the political cycle tax policy. i think has come up several times in the remarks this morning that it is best not to tax capital. if you're starting from that, it would be a good tax policy. it's more like eating at your wheaties, but it's a good thing to do. we have just seen large tax increases on high-income people in the income tax to pay for a new entitlement. u.s. income-tax base is actually relatively narrow compared to the consumption tax base. going forward, the president has

left us with a simple but powerful choice. we're either going to confront spending or we are going to have to have a vat, there is no other political choice. >> we have done a lot of work on tax policy and our conclusion is if we could restructure the tax code and if we could have a vat that was not an add-on to everything already, it would be a good step. the challenge of how do you did it without it being an ad on? one thing i was going to say in my remarks was one of the real problems we confront in the climate being created in this country is the huge deficits we're facing. the congressional budget office analysis of the president's budget said 9.8 trillion dollars in additional debt of the next 10 years. debt reaching 90% of gdp by

2020. that is staggering and disconcerting and certainly creates lots of pressure on the tax front and a variety of other places that will have impact on the environment we have in this country for competitive enterprise. >> of like to see if you could address one of the chief objections to the vat, which is the nature which can be applied to various levels of production. so the effects, while real, the fact that is hidden is troubling to people because you want visibility and political accountability. is that a problem? >> a lot of people who are not presently in the income tax, which is more than half of all americans, should not think they're not disturbed by the burdens of that tax. a lot of the inefficiencies of

that tax affects their jobs and wages. that's a hidden tax. the nice thing about consumption taxes is that it is easy to educate people that everybody is paying this tax. >> i think it is a legitimate argument and i also think you can take steps to make it transparent people, what is the taxpayer paying when they purchase a product or service. we could try to do something to address that issue, but the bigger issue is do you tax capital or do you tax consumption? in this world, today, it's not smart to tax capital. >> that is all the time we have. thank you for joining us today. join me in thanking our panel. [applause] [captioning performed by national captioning institute] [captions copyright national

cable satellite corp. 2010]

>> we're going live now to the newseum for a conference on news media and regulation. we will hear a discussion on new technology in the future of journalism. the federal communications bar association hosts the event. this is live conference -- this is live coverage on the c-span. >> welcome to this building. we hope that this and other conferences will engender discussion and perhaps solutions for issues confronting all five of the freedoms in effect today, but the topic we're here for today is news media and the first amendment in the 21st century. the freedom forum is a non- partisan foundation founded in 1935.

it is the principal founder and builder of the newseum here in washington. we have three initiatives -- the first amendment center, the newseum and the diversity institute, which is about training people in diversity in newsrooms across the country in all forms of media. this is particularly appropriate to have today because the newseum is not just about the past or present, but the future of a free press. that is what we hope to do here, have the public, interested parties, journalists, and others, mix, talk, argue, raise points with each other in a civil way and take a look at this exciting, challenging and confusing future that we have. we're glad to have you here and i look forward to a very

aggressive set of questions and engagement. it is the first amendment center and you can say pretty much what you want. a few housekeeping chores -- for those of you might have any outstanding warrants or other issues, we are televising and taping today's event. out of experience, join me in shutting off yourself loans. -- said it is -- shutting off yourself loans. -- shutting off your cell pho nes. let me bring to the microphone robert pettit who is head of the federal communications bar. >> to thank you. let me add my welcome and offer some things before it started.

particularly, thanks to the newseum and the freedom forum. i cannot tell you how happy we are to be here in this magnificent space. let me think feet -- let me thank the mass media committee. please join me in thanking them for this great program. it does look to be an excellent program and i do want to get right into it. i do hope this becomes an annual event, to focus on health and future of the first amendment. i think i can pledge to the fcba during my tenure to plan for that and hopefully we can make that happen. as you see from your schedule, we have three panels today.

it is an absolutely incredible line up and we are pleased to have for a moderator today, stuart benjamin, a visiting scholar at the fcc. robert cochran and glenn robinson, a former fcc commissioner and professor of law emeritus at the university of virginia. i cannot say enough how pleased we are to present this program in conjunction with the freedom forum and the aba forum committee. it is one of at least three events we're doing this spring. the next one is coming up at the nab convention. i cannot go to one of these events with out offering in small commercial -- and many of you are members of the fcba, and for those of you who are not, i would ask you to come to know

the joys of membership which includes substantial discounts to programs like this. we aim to be an association of ideas and member service. there are brochures in. please check us out there or on line. with that, let's get into our first panel -- technologies and freedom. what are the implications of the evolving media environment. i will turn over to stuart benjamin. [applause] >> are we all here? i'm going to keep the introductions short and not even terribly sweet, because i think everybody here knows the people

on the panel. on the off chance that you don't, joe waz from comcast, link hoewing from verizon and gigi sohn -- ellen davidson will be year, he had his link to the government -- he and his link to the conference blocked by the chinese government, but he will be here shortly. we a later panel that will be talking more specifically about first amendment issues. when we talk on the phone a couple of days ago, we thought might be interesting thing not to have opening statements from all of them, but just to jump into a discussion initially among the panelists and then soon enough, we will bring everybody in silicon have an interesting interchange. a lot of the basics people can

say, you already know, so we hope to die than at an interesting level from the get go. let me start with first right now and then i will sit down. since none of them expressed any interest in which jordan would go and come i will start from this side -- which order they would go and, i will start from this side. what new or emerging technologies for development are challenging our existing regulatory policy paradigms'? i want the speaker to identify one or two things that have already happened or is clearly on the horizon, not something fanciful. something clearly coming that might change the regulatory world as we know it. then we could have some discussion about what we think is the likely significance of those changes. but with that as a wine that, i will sit down. >> thank you.

thank you for having us here today. i'm going to talk about a technological change that has been with us since 1996, but because it continues to change, i think the implications for telecommunications policy going forward continues to be more relevant. that is something called doxis 3.0. it sends word data over cable -- it stands for a debt over cable. it is the way cable companies figured out in the 1990's to get high-speed data over cable at a time when no one, including intel, said the stuff would never work, famously at a company van in idaho. it's the way cable helped to drive broadband in the united states.

since we used it to bring the speed to america, we are now at 3.0 to deliver 50 megabit speeds and 100 is coming soon. to give you more information, i ask elizabeth to hand out a glossy brochure. this is something we customarily do, i think will give you an idea of how dynamic is and gives me a promise for describing how i think it is going to change things. this involves taking multiple cable channels and this is because our legacy as s a television provider and we tend to slice of the bandwidth into 6 mhz slices. historically, all of high-speed internet services we have been providing on comcast or whoever

your cable and high-speed internet provider might be has been done in the space of a single 6 mhz channel. it's the traditional single analog television channel. as we move into the digital era and a digital transmission by broadcasting has moved forward and cables own digital transition moves forward, we are able to take more of those 6 mhz slices and use them much more efficiently than to carry a single analog channel. so this is channel bonding. taking groups between two and four channels and having the data flow across the network. today, in a single channel, you can get 138 megabits per second service downstream. start multiplying that by four and you get a potential for 152 megabits downstream and the

upstream, we're still doing to channels, so we have the potential of 54 upstream. you can move from 4 to 8 and 8 to 16. as we're able to reap purpose spectrum, as the market demands growth for more speed and more capacity. so let me give a sense of how does this change regulatory policy. let me count the ways. first, it significantly reduces scarcity. for every megabit, somebody will come up with a great new use and that's the way it should be. some of the congestion issues cable has had in the early days of broadband can be alleviated as we are able to devote more and more capacity. this capacity increase and driving more broadband and option availability reduces the need for content regulation. content regulation has been premised on scarcity of

opportunities to speak. today, as the commissioner mentioned in one of her speeches, with a couple of hundred dollars, you can be on line and be a speaker in high- definition video. the barriers to communication from the consumer are falling by the wayside. the fact that doxis 3.0 because been about 80% of our service area, we brought broad band competition to the marketplace. we brought first and drove competition from phone companies and satellite companies and increasingly, the wireless companies. in many ways, it reduces the need for network subsidy. we're able to get broadband on cable systems to more parts of the country.

ironically, even as competitive phone companies receive federal subsidies to compete with us. so i think will have more of an impact on reducing federal subsidies. i think it will increase the urgency of breaking down other barriers to what broadband can do. one reason i was running late was i was completing a blog post about virginia passing a tele- medicine bill for broadband services. these are the kinds of barriers, reimbursement in health care, correct liam -- correct curve -- correctly m -- curriculum barriers in education -- if we address these effectively, it needs to be more of a policy focus for us as we go forward. i also think more than with

increases the need to talk about new regulatory paradigms'. this is something i will defer to link about. he referred to the new democrat network about how the internet ecosystem looks completely different than anything we have seen in traditional telecommunications. it begs for a new regulatory approach that recognizes the ecosystem consists of networks and applications and devices. consumer interests are at stake as far as how all three of those are developed and managed. >> spending most of my time focused on internet technology policy issues, i look at trends. and some of trying to predict what new technology may be coming up in the short term or long term, i thought i would focus on a couple of friends i think are important in the

technology arena. one of the things i think is right on spot which is used quite often is that in the short run, we overestimate the impact and in the long run we underestimated. we tend to think there's a big splash and it will take over the world, but it's a combination of range of factors, including the consumer adopted and how they adapt to it and how it adapts to them. so it takes longer than we may think for the impact of technology to have an impact in our society and policies. it is a technology that has value and is something consumers find can be adapted effectively, as policy implications. i would like to talk about briefly capacity and speed with respect to broadband technology. second is what i call connectivity increases in changes. on capacity and speed, there is a lot of talk about doxis and

the way it expanded capacity on cable networks. we have been talking about different technologies increasing the capacity of the network -- one is fiber to.com technology, using a set of protocols, the passive optical network technology. second is the fourth generation wireless technology around a set of protocols called lte technology. they are designed to increase capacity and the ability of so they have the ability to expand fiber to home technology. over time, we will find we can do more with spectrum as well. all of us have heard about how chip's speed increase over time to read there are two other laws used in technology engineering. one of them talked about how a mobile network has doubled in speed roughly every 30 months.

second is better law which says the data rate of fiber-optic will double every nine months. i do a lot of blogging for the verizon blog. i look at respect to speed on the internet -- and started in 1980 -- 1980's with a 19 kilobit modem. i looked at the kind of technologies i was using and it's about every 20 months, the speed would double. the network or technology i was using. it has been pretty persistent that we see more capacity and a lot of the ideas are relevant to the capacity issue. the first version, we are on something called [unintelligible] we have done a test in one home,

taking 810 gigabit connection to a home last december -- taking a 10 gigabit connection to a home last december. it is not scaled it -- is not scaled yet, but it has the capacity to expand without having to put a lot of infrastructure in place. you do have to change the electronics, which you can do without changing the networks itself, which is a huge benefit. the capacity issue on the fiber side of the home connection is significant and is going to provide a lot of ability for people in the long term to use these technologies it anyway. on the wireless side, lte technology, we are constructing the early parts of the network for 4g technology. we expect to have 100 million people access of around 30 cities. that's the goal.

we saw speeds of 86 megabits per second down. that is unloaded. that's not what people sharing the spectrum, which is what would happen in a real-life situation. so it could be anywhere from 5 to 12 megabits down and 325 up, which is much faster than most standard dsl technology today. so a huge amount of increase in capacity for wireless. those increases have major impacts on policy, everything from competition policy -- when the have networks are expanding -- these companies are trying to one of each other in terms of offering better network capabilities. it has implications for how much regulation needs to be in that space. a secondary i want to touch on briefly is connectivity increases and changes. it's not just the fact we are expanding the capacity and more

people are connecting to broadband. we are around 65 million homes that have broad band, going from 8 million in 2000 to that level is pretty amazing. the connectivity and the way it is being done is changing also. if you look at wireless and mobile, machine to machine connectivity is going to be an increasingly major part of how people use mobile broadband technology. what we mean is devices that help you monitor remotely different kinds of technologies and services, technologies that allow you to remotely monitor medical conditions of people at home or monitorial own energy consumption at home and change it. these are devices communicating and not people. if you look at connectivity, we measured it based on location.

where people had a phone, that is how we considered connectivity. how then we measure personal communication. person to person communication is important. we moved from 95% of house is having a connection on their old phone system to 280 million people having mobile phones today. many more connections because it is not personal. we think that's going to increase dramatically because you have machine to machine communication, devices doing things for people. as a result of that capacity, we are able to do that. we have changed our business model quite a bit from the old retail mobile model with the phone package with the services. now we see changes in the models and companies in the mobile selling services.

we started something called the open development initiative. we actually have a new laboratory and testing process and offer wholesale access to our mobile network. people can bring devices in, monitoring devices of varying kinds, they can bring a cellular telephone and and not go through our retail offices, they can do that and connect it on the wholesale wireless services we are offering. it allows people to come in and try new things and test devices and get them on networks and offer services. the old testing process, what we had the old retail model, it would take 12-18 months. this testing process takes five or eight weeks. so within a short amount of time, you are tested for connectivity. if you want to offer the services, it's up to you how you do it. that's a business model that did not exist driven by capacity and

changes in technology, but also by competition. the industry knows we are in a position now where a lot of people have cell phones. not everybody, but a lot of people do. we're looking at ways to use networks to connect other things, machine to machine. the other thing is astounding which has been happening in a couple of years and is getting closer to reality is we're getting closer to a globe that is really connected. most people on the globe in the next five or 10 years may have a connection to each other. it is astounding we're getting to that position in the world today. a lot of good can come out that as we know. i had six technologies i can talk about, but those are the ones i want to focus on. in terms of policy, the key

issue is the activity and increased connectivity and more capacity and competition -- i mentioned the need for spectrum and in that regard, the new fcc broadband plan is focused on something important -- how do we identify and make available for use the spectrum which will be important for 4g technologies. the other thing that is important as competition policy. our senior executive vice president gave a speech couple of weeks ago and tried to frame how new competition policy framework with look-alike. he focused on three primary principles -- one is he believes we have to focus on how to make sure consumers feel secure and protected on line. we have to deal with privacy and how policies affect them. he talked about how we create and build off of the internet

existing the collaborative self- governing model. how'd we build that model and to the regulatory framework we have today which has traditionally been more command and control. the third thing he talked about is how industry ought to play a stronger role, providing more advice and good ideas on norms and practices in the technical aspects of the internet. the issues we face, all of the become policy, their record in ingestion, network management and those things. he suggested a technical advisory group. people through the internet ecosystem, including advocates have technical expertise to talk to somebody about these issues think about what we can do to suggest norms and best practices and better ways to manage networks. that's my key points. >> thank you.

i would also like to give my pitch for the fcba. i'm glad to serve and i think bob pettit has set a great job. so if you are a communications lawyer, please join. i have to technologies like to talk about today, both of which are out there already, and are already radically changing the regulatory environment as we know it. the first is smart radio technology. smart radio technology allows for greater sharing of spectrum. smart radio can sense interference on a frequency and go to another frequency. i think you will start to see this technology get embedded in more consumer devices. people know about the spaces between digital tv channels that

have been preserved that will allow for a license to use -- allow for unlicensed use that will allow for devices to be used on this spectrum. what is important about our radio technology, because it allows for sharing, it calls into question the notion of physical scarcity of spectrum -- you still of allocation scarcity as the government is still giving out exclusive licenses to certain and these. -- exclusive license and a scarcity. but calls into question whether it is physically scarce. that was the underpinning of the red lion case that allowed for greater content on the broadband issue. also called in to my mind before exclusive licensing.

if radios can sense when there is interference in go to another frequency, why you have to have exclusive licenses? if you not have exclusive licenses and you could have more people using the spectrum, unlike my friend who i disagree with a little bit, it puts the ability to speak in more people's hands, and then you really do have competition. the problem with their competition analysis is their companies have that exclusive pipe. they have the exclusive control over the network. while they may be competing with each other to have bigger and faster, nobody else can join the party. but if you have more of license spectrum, if you have more -- more unlicensed spectrum, -- there is a meme out there where

we could just find more spectrum. let's wrest away control from the federal government and go to the department events and the federal aviation the administration and pay them or force them to get off their spectrum. that's a mighty difficult task and we need to be looking at spectrum sharing. the more smart radio technology comes into play in consumer devices and they're getting better every single day, some are ready of technology is only going to continue to get smarter and i think that is going to shake up how we think about spectrum and how we think about competition in the spectrum space. the second thing is, and i might be taking us away from alan is the cloud. i don't know if you call it the clout of technology or service,

but it is a development our regulatory -- a development changing regulatory environment. it allows you to put all of your content and services somewhere other than hard drive. somewhere in the ether so you can connect to it and download it and play at from any device anywhere. maybe one day from her clothing or what have you. but you don't need to carry around a pc or ipod to carry your music. there's a cloud of music service and he showed me how you can connect to his 10,000 songs library from any device. he's being sued, which is one of the regulatory issues i'm talking about.

but it untethers you from having a hard drive and that is radical. what are some of the issues raised year -- #one as copyright? michael robinson for the second time in 10 years is being sued by the recording industry for this service. every time you upload something, you're making a copy. this is why copyright law, which was last seriously revised in 1976 is completely ridiculous in the digital age. there is a big case that was finally resolved earlier this year that had to do with cablevision wanting to do a network dvr. instead of having tivo with a hard drive, you click your remote and it would go to the cablevision servers and you would record in the cloud and cablevision would provide the movie or show just as if you had tivo. this was challenged all the way

to the supreme court by a number of cable networks and the motion picture association of america. luckily, they lost in the second circuit and the solicitor general urged the supreme court not to take the case. but the cablevision case is not the end of these battles, it is the beginning. one of the arguments made by content holders was every time you click the button and cablevision made a copy, it made a copy that needed to be licensed. when they sent a copy to your home, i want to see one of my favorite movies, it gets sent only to me and no one else, they claim that was a public performance. as of a song was being played on the radio or a television show was being broadcast. they also claim that offer copies necessitate a license,

so the buffer copies that come up with do web streaming, the copyright owner's claim that a copy that needs to be licensed. this is only the second circuit. i suspect what other people come up with interesting cloud technologies and this technology essentially let you upload your digital files to the cloud, he is being sued by the recording industry for an awful lot of money. so copyright is huge. second is jurisdiction. i'm sure you heard about the google executives who were sued and convicted in italy because of a youtube video that according to italian law did not get taken down fast enough. the question is there are no youtube servers in italy, so why should it will even have

jurisdiction? so it is out there, everywhere. what court has jurisdiction over a situation like that? this has the power to tell google where they did the right or wrong thing? finally, privacy. maybe it is more secure than your hard drive, if you put things out there in the cloud, a very good hacker can probably packed into it. but it seems with any new technology these days, it raises privacy issues. those are my 2. >> since i am batting cleanup, i will take a different cut and try to summarize some of the things i thought were common themes. i want to say something that might sound boring but i think is true -- the most important technology development we have been talking about for the last decade and will be talking about in the coming decade is clearly the continued success of the internet, the open, user-

controlled, decentralized, and to end internet. i know that sounds, but i don't think 10 years ago it was as obvious that the internet would emerge as the medium we're talking about. i think it has been demonstrated clearly by the recent fcc broadband plan which kinsella of things about, but it has put the internet and broadband front and center is the critical medium for access to ideas and information and economic opportunity in america and around the world. i will touch on a couple of trends we see that are important and i think will continue to make this an important and disruptive set of technologies. first, computing power is continuing to increase in ways you may not have predicted would continue. there are all sorts of laws.

we see the continued increase in computing power. more important as what is happening with storage capacity. in the last 20 years, computing power has increased thousands of times, but storage capacity on hard drives and memory has increased millions of times. that is a really changing what we're capable blood -- but we're capable of doing. connectivity -- we have a billion and a half or more people on line and that number is growing radically. that's changing access to information around the world. one thing we did not touch on much was mobility. we have a billion and have personal computers out there, but they're close to 4 billion cell phones out there. for people around the world, that's the way they will get access to internet and broadband. what is also interesting is we're finally beginning to see this sort of thing people have been talking about for 10 or 15

years, which is the rise of amazing mobile, location-based services. another piece of that is what is happening with the clout. we are -- with the clout. we're seeing a shift away from the desktop, toward a model where people are getting more and more of their computing power in the cloud. web-based e-mail is a great example of that. google's on search engine, we all operate in the cloud and give tremendous computing power to people in short bursts to do things they cannot do on their desktop or certainly not on their cell phone. these trends are making these

services even more valuable. i think will continue to see this disruptive set of technologies coming out around the internet. in terms of the impact on policy, it is important to look back and see what we were right and wrong about over the last decade or longer. something joe touched on in terms of impact on the first amendment is that we got a right or the supreme court got a right what at first looked at the internet in 1997 and is continuing look at the internet in free expression cases. it is a medium that requires the highest levels of first amendment protection. some of the rationale for control, scarcity is first among them, do not exist on the internet and we do not see them emerging on the internet now. it's what -- is right we

continue to afford the highest level of protection to the internet. we touched on liability protection issues. something we did not talk about much is the continuing rise of user-generated content. users are publishers on the internet and every user can be a speaker. that has become more true with the rise of social networking. people are publishing every day and speaking every day on the internet. for that reason, the liability protections that were so important are even more important today. so the fact that internet service providers, search engines and other hosting companies are not necessarily the gatekeepers to content or responsible for content they do not create, that we set up structures, is going to be

extremely important in the coming years. more important than even has been so far. one thing i think we got wrong in the policy space and how will interact with technology is the notion that a little bit of the internet means you have limited freedom. i think it was a sense maybe 10 or 15 years ago that the internet was going to be an unstoppable force for freedom. if you got the internet, you have unlimited access to information. i think what we are seeing, surprisingly in some ways, is that the internet can be a technology of control as well as a technology of freedom. there actually are ways -- the old conventional wisdom is you cannot stop the internet and i think we see around the world is

there are ways to control the internet and countries are taking measures to control access to the internet. i think it was unexpected and i think that's one of the trends we're going to watch. we are experiencing a firsthand that google and i think it's something we all need to work on as an internet community to make sure people have continued access to ideas. >> i can't imagine what country you are referring to. >> unfortunately, there are a fair number of countries. some of the human rights groups have a list of about 40 internet restricting companies. google said -- google has had our services block in 25 different companies over the last several years. it's not just the one everybody is thinking of. >> in the interests of time -- i have a question t up, but i want to sharpen this a little bit from the way i mentioned a few days ago. what realistic development might

happen that would change your regulatory outlook? i hope we all believe in this world that we are not under ideologues and that we are responsive to what happens in developments in the world and our views are based in part on a certain set of events. so what would change to change your regulatory outlook? just in light of competition policy, let me ask you to think about it in that context. you mentioned some of the buzz words of net neutrality. what would it take for google to have a different perspective on what an ideal regulatory regime might look like? in a realistic way. i imagine that you would say if doxis 3.0 takes off and we swamp fiber-optic so that we are the only wire into people's houses.

if we achieve that level of success, i'm guessing -- [unintelligible] [laughter] i'm intentionally asking, you can -- this is all hypothetical, but what would change in the world that would lead you to say i have a certain vision of what regulatory -- and thinking competition policy -- but you can take another direction. but now i'm thinking this has changed. let me give a small example. you mentioned reno verses aclu. justice stevens majority opinion says users seldom encounter unwanted content by accident. i think that may have been true

in 1997, i would like to know what percentage of people in this room have ever encountered material on the internet that they did want to by accident. has anybody here not encountered material they didn't want to see by accident? that has changed. some people might say as a result of that,, combined with the a bailout -- availability that level of indecency people were not imagining, i think it's one of those cases -- i'm just wondering are there things that can happen realistically that will lead you to say i have to look at things differently? >> i think it's an interesting question. i think there probably would be iterations of the internet where people did not have control. i don't think it's about a random chance encounter with kind that you don't want to see. i think it's about the capability of control that is totally unprecedented.

if that were to disappear, we would have to rethink some of these basic issues. the other end of the extreme is i expressed concern about the ability of people, the governments to control what people have access to. one hopes that has been expressed is that there would be effective anti-censorship tools out there so that people will be able to circumvent -- and i use that in the ground censorship way, not the copyright way, that people can evade any kind of censorship that might be put out to control their ability to access content on the internet. i think those kinds of things were to materialize, we could be a lot less concerned about the efforts to control people see because people have the tools and those tools have not materialized. on both ends of the spectrum, you could imagine a future internet or people either had no control themselves or had in that control and we would be

less worried about a lot of these issues. >> on net neutrality, if we have a world where there are eight meaningful competitors, all of them can provide you with wonderful, high-speed access to the internet, and let's imagine we have some basic transparency rules, so of their restrictive in any way or charging difference in prices, the world knows it. do we need anything more than that? >> i will make this easy -- we have been on the record saying if there was a lot of competition in this space, the concerns about openness and the needs to have basic rules about it would disappear. so in the wireless space, we have off -- we have argued it is a different space. i'm not sure we think it is perfect or have solve all problems, but it's different because there's more

competition that we have seen in the wire of line broadband space. i think it would make a big difference if there was that kind of brought competition, just as it would make a difference if there was only one. >> i want to disagree a little bit. i think consumers have to have a place to go if there broadband provider is blocking their content or inspecting their bets. i think there needs to be a process and that is within that neutrality debate is about. the ability for consumers, if they believe their internet service provider is somehow blocking word during pack inspection without their permission. i do not think it matters how many competitors there are. i think consumers need a place to go. then you have the termination monopoly. the example i usually give it is fiji water.

if he's an at&t customer, you'll never see my website, might be other what -- that will come up faster. city have determination monopoly problem and i don't know how to get around that. you could have 10 competitors, but you still of the termination monopoly problem. i want to get to the point that made earlier where i think the need for some of the competition policies that we a public knowledge talk about -- unbundling, a line sharing, but not be necessary. but it's like technological development that will take care of it. it's a regulatory development. until a technology is created that allows one to provide internet access service without a wire or license for spectrum, the only way we're going to have competition is if the government acts. there's no two ways about it.

maybe the miracle technology is 20 years down the road but it is not realistic now. if the fcc and the government move away from a licensing system and more toward unlicensed, i don't think all should be, but now you have the smart radio technology that allows dynamic sharing at preventing interference when two people run the same frequency, thus our radio bumps you to another frequency, that could allow for more internet access, more competition and that might be a realistic development where perhaps you do not need the other competition policies we've been talking about. >> what would it take for you to think maybe the license doesn't work? let's say there is a new nationwide flood of a certain number of megahertz and it turns out smart radio technology just does not take off.

maybe the investors are not there or the technology doesn't work as well as we thought. maybe some people are using other protocols and there's a level of interference nobody can get through very well. is there a scenario where you would say maybe a license isn't the way to go? >> yes, i suppose there is. if the technology fails -- i have greater faith in applications providers than you do. when people talk about the internet and net neutrality, they say how are people going to build these applications? there is a much congestion and how is video going to go through? . .

>> there are things around privacy and cyber-security online. those kind of things to make are the kind of things that they are not dealt with successfully by the industry and consumer groups than they could be done -- they could undermine the future of the internet.

this is about the consumer. you are looking at the technology does enter active and allows the consumer to have much more control and do things like create their own context. a lot of this has to do the updates and spy where that the consumer does not have control over. we have not gone far enough around transparency and being more clear. i think the applications in these device manufacturers and the network guy have to complain about it. all of them have to work together. the reason they work as they do get together. they talk about these things. many of these things get worked out. a good example is pc visa. there was concerned about

congestion. the application guys came in but we all worked together to make the technology worked better with the networks. many times the applications can have a bad impact on the application, not intentionally, but they can. that is why i mention the technical advisory group idea. if you can get a wide range of folks together in the industry and they are not looking at developing protocols and new standards which is most -- what most of the bodies do, but they can actually talk about what types of things like trends that we need to do to address these issues, let's talk about ideas and not fixes all the time. the policy makers have a place to go where they have seen an issue and people are saying it is a problem. >> i want to chime in to

underscore the privacy issue. if you look at what is happening in the physical world outside of the internet space with the rise of ubiquitous sensing technologies. the ability to collect more information about all of us is growing. there needs to be a response from industry and from government. we need people to get together to work on things as one. one thing that we are working on is how to come up with good rules for government access to this information. we have not updated our own surveillance laws in years. i think we will see this debate on capitol hill and the white house in the next congress about how we update the laws that govern access.

>> i am assuming you are not a huge fan but what if this comes through and verizon wireless just becomes the dominant player in wireless service? if all the other companies cannot cut it and they are shadows of their former selves, pick your numbers. 94% of the wireless market -- at what point do you say that we -- that you and acknowledge that you are so dominant that competition is scared. is there a point at which you can concede that to hit it? >> there is a misperception that our company and other players and the broadband internet industry are suggesting that everything be totally deregulated. if it was not said that we should have no role in

government but a different role of government. the role traditionally goes back -- i read an interesting book about the history of regulation. the first regulator was charles adams and he set a framework that we used in 1887 to come up with the road act and that came -- became the 1934 communications act. we have used that for decades. using that kind of regulatory approach, we tend to be still think things and making it difficult for the internet to eat all. we would like to see an approach that that has a stronger role for the technical folks. we want to get ongoing advice and ideas about how these things are in evolving. the second thing is that the government as a backstop. they are there in ccase there is -- there are bad actors. the third thing we said is that

we do need to deal with some of the consumer issues that are really critical, the transparency issue. does not just the network providers but the application providers. some of them tell you but and people do not know that. privacy and transparency and security are the kind of things we have to deal with. some of them are policy. >> you would say if we have that market power it would be good and what we have it, it would make sense to have a different regulatory regime? >> we are saying there is a need for the different framework now not because there is market power. >> i am just making sure. >> can you rewind because i think you answered the question? let me look at what you said from the other end.

if we succeeded cable in providing the best customer service in high-speed internet and customers flocked to us in droves. we have substantial numbers today and if we win out against a number of other competitors in competitive facilities, we will have earned that started the thing that would make me rethink where i am on this issues is i promise a lot of my assumptions on the fact that facilities-based competition, getting people to invest in competitive wireless. we have approval of the harbinger deal to combine the satellites and terrestrial networks. the best way to ensure competition is to keep barriers down and promote more competitive investment. as long as that continues and we

continue to see more of it from the likes of sprint in the wireless space, even though verizon has reported to slow down employment, i assume they are playing possum. we will not rest on our laurels because bay or at&t may well decide to start spending again. bigger money made go into a mobile. mobile. when wimax and lte can support high-definition video, that is a competitive service. if something were to happen that would cause a significant to ammunition in this kind of investment, lack of support from

the capital markets, forms of regulatory disincentives in the form of regulatory mandates or resell requirements -- or resale requirements,un bundling did not work. we were a competitor on the verge in the 1990's of getting into the phone area. somebody could come along and by government-regulated services from the incumbent. we live in the failure of a regulatory regime. were it to go way for the reasons i mentioned, that would cause me to rethink my position.

>> a quick fall on that -- -- a quick follow-up on that -- maybe there will be the kind of market dominance. >> i want to see those applications come forward the interesting thing about the dynamics between band with and applications, the improvements don't just come on the band with cyprus they also come in the more application -- efficient -- than with side, they also come in the application side which is more efficient. when that happens you don't need as much bad with. -- and with.

-- band with. if we are able to offer 100 megabits, people will come along with applications. our concern is that we have had those fees in foreign nations for a long time. some of the countries are offering incredible speeds. maybe this is a cultural reflection of the bulk of innovation and a space continues to come from the u.s., i don't know. if it is building a fast network, that is not all there is. >> the department of justice on the net neutrality said the broadband market is competitive. they acknowledge there are two primary lamplight competitors but they think wireless is increasingly being used as a

competitive alternative for people. they focus on the fact that all markets are different. you will have 50 or 20 competitors because there probably will not be enough capital to -- that you will have 15 or 20 competitors because there arprobably will not be enough capital to go around i don't think we should ignore that competition is different. it is how consumers are impacted by it. >> the department of justice said it was competitive but not as competitive as it should be. what i am not hearing is how we get to know more than four wireless carriers?

i don't want to get into whether open access is a success or failure but when people have a choice of 13 mauro band searches, that is good success. we can argue about that some other time. net neutrality is not about competition. that neutrality is about consumer rejection -- consumer protection. government has to serve as a backstop. we seem to have agreement on that. how do we get to a world of eight competitors? i would love that. had we get to that unless somebody invents technology that allows you to route around wires and government access? >> google is a phenomenal service. it is still might default browser because i think it is terrific.

the same innovation that could happen in the application stage will happen in the network o spacve. i had no idea that a harbinger of things would come out. they came out as a really effective competitor in the wireless space. when clearwater came to the door, we did not know that wimax would have a run for their money. >> the fcc put retractions on who you could least two. your company is upset about it and at&t are very upset about it. that was an example of government intervention to ensure competition. does not like carpenter is free and clear.

there is a government restriction thing. -- it is not like harbinger is free and clear. there is a government restriction of there. >> we think there are many googles out there in the sense that we have serious competition. >> can i quote you on that? >> we have yobbo and people -- we have yobbo -- we have yahoo! and others. people may decide not to use a google.

we expect that to continue for awhile. the more important thing is rather than just say that we should have neutrality and applications and content space, which is the message we are hearing, what are the rules we can agree with that we should have? it seemed for a while is that we agreed that users should be able to control their experience. they should decide what services they go to and applications they use. it seemed like we were coming close. i still believe there is actually a hope of people in this debate saying that there is a very narrow set of rules that we seem to agree on. >> joe gets one sentence and we will continue on. >> if anybody squid -- wants to

switch from verizon to at&t i will keep their switching costs as low as i can. >> there's an article recently and they point out that while smartbike from devices alleviate the problem, it does not eliminate it. there is a signal to noise ratio that limits of the throughput and there is no getting around it. in the wireless space we have not that those limits but we are getting close to them. the good news is we are using the spectrum more efficiently. the bad news is these policy advocates suggest this problem will not go away. i would like to hear your reactions. do we have a world where we do not have to allocate that

anymore? >> i don't know. i am hoping for that world. i think it is realistic. it may not develop that way. if it doesn't, we are back to talking about getting more facility-based competition. i was trying to get away from a line sharing. i want to imagine a world where we did not have to go there. >> i think there may be ultimately limits but there is a tremendous amount of innovation going on now. what we have seen in the market is that when people are given

the opportunity will make use of that. i don't think it is either for but what we are seeing is there's a compelling argument for more now. >> on the 4g side, you already have wimax. there might be 100 million people who have access by the end of the year. at&t will start next year the idea that we have a limited number of competitors is astounding to me. if you look at delathe landline side, competitors are switching. they certainly have the ability to do it. >> anybody want any final notes? we are at our appointed ending time.

great thanks to for a great pal and we will reconvene at 2:45. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] [no audio]

[no audio] >> this is the newseum in washington with the federal bar association taking a break until 2:45 eastern. they will have a panel on the future of journalism. there were a number of participants in that. later on this afternoon at the white house, there is discussion at the white house of workplace flexibility. first lady michelle obama spoke to the group earlier and the president will speak later this afternoon this morning, we have the national advisory commissioner co-director and we

will show you some of her comments from this morning while we wait for the panel to resume at 2:35. continues. host: our guest is katie corrigan, co-director of workplace flexibility 2010. when we talk about workplace flexibility, what does it mean? guest: i think every person in america knows what it means. when i tell people what work on -- what i work on every day, they say, "oh, yeah." when you are trying to do a job and take care of your family, you know workplace -- you know what workplace flexibility means. if you are out of the workforce for a period of time, you are able to get back in.

i started this job a@@:::r'::::z >> this is not one group problem, it is everyone's problem. this is a national policy problem. what the white house is doing today is to acknowledge the work place flexibility has been an undercurrent of many different conversations and they are servicing it. host: tell us more about the white house will be doing this afternoon. they were guest: the holding a forum where they have invited leaders from industry, businesses big and small. they have invited labour unions and researchers and some real people to come and talk about these issues and really start a

national conversation about how the private sector and the government can move forward to make our workplaces more flexible. host: the president and first lady will speak this afternoon during the 4:00 hour. we will have that live on c- span 2. our guest is co-director of workplace flexibility 2010. plug your group to this broader topic, what are you up to? guest: we are trying to define the field of public policy in this arena and bring some definitions to the table and come up with new ideas. we have been trying to bring the relevant stakeholders to the table. we reach out to employers and employees. we are asking what the government should do. over the past five years, we did not have any opinions because we wanted to keep an open mind.

for this next year, 2010 is our last her off, for the last several months, our goal has been to start this national conversation and set the table with good ideas and identify some really good people to talk to policy makers. host: we will give viewers to phone in with their experience or desires or opinions on this idea of workplace flexibility. what should the government be doing? guest: think they need to bring people to the table. that is what they are doing today. this is the beginning of the compensation which is rooted in years and years of work. the private sector has done some interesting innovations and that is where the government is starting.

they will ask employers what they have done that has worked. the next part of the conversation is to say now that we have heard the best practices, how we make it the normal practice? how do we work together to get everybody these flexible options? host: what do you see going on that is working? guest: bodies that have paid attention to the major demographic shifts in our country -- companies that have paid attention to the major demographic shifts in our country are recognizing that the new economy will demand that we get retrained. jobs are not what they are today that they were 10 years ago. we need to stay relevant in this economy. there are demographic changes going on and employers are saying that they need to measure success differently. they want to stop thinking of

this as a 9-5 economy. they want to know how they get their business practice to align with the needs of real people so that we do not have the fallout of having the mismatch between needs and how workplaces are structured. host: speak to the economy more. how do you get attention and work done when talk is about a higher unemployment rate and we're the new jobs? guest: the state of the economy is the most important issue. workplace flexibility is a core part of that conversation. when you think about how you rebuild and redesigned jobs, flexibility needs to be a part of that. if you do not deal with it now, you will continue to have this mismatch and the resulting fallout. companies do not do flexibility because it is a nice thing to

do, they do because it is good for their bottom line. they get to keep people that are good and keep their heads in the game. best practice companies have been doing this for hourly and salaried workers does it works for them. host: our first call is from phoenix, ariz., good morning. caller: good morning. thank you for taking my call. i am all concerned about this because it is interesting that we are talking about workplace flexibility this morning. this is definitely something that should be considered in the conversation in terms of building our economy and put americans back to work. i agree with that. that is great that you are looking into that now as opposed to later when the jobs come back.

at the same time, i feel this conversation may be premature. i think workplace flexibility is important but how would of employer -- how could we, right now, in 2010, what could employers do in terms of workplace flexibility to increase job production and to increase jobs and bring people back to work? guest: i think you raise a really compelling point which is what would employers look to this first or second when their primary concern is increasing the number of jobs? one thing that has been interesting in this recession is that employers have actually

turned to flexibility as a solution because sometimes they cannot give raises, often times they do not want to lay people off. they have done create of things like offering more flexibility rather than a raise o. some people wanted to be flexible but they did not know they have that option. if you leave a job, it is hard to get back into the workforce. phasing down to a part-time job might be a solution for you so that you do not lose the job entirely hosty. host: obama's flexibility for the workplace is the headline. they talk about the percentage of children with parents working full-time.

you see the changes over the decade. it was 25%. in 1988, that number was 39.7% and now it is just under 50%. guest: i think the statistic is a really important part of the store when you think about 30 years ago, it more than doubled the number of parents working in household credis. you have the important job of home as well as the two careers. many times that means you are aging parents. host: detroit, another call from michigan, independent caller, good morning. caller: productivity has gone up in the last 20 years.

but jobs are going down. this government needs to make the hard decisions of practicing protectionism, scrapping the nafta treaty and having a fair trade. that is what we need. we need to turn back the clock a little bit and say their families and instead of having two people working two jobs and neglected children at home. we need to start taking care of ourselves. guest: you raise some major economic concerns. my only point is that flexibility deals with the reality on the ground. you do have lots of families where both parents are working. another reality that does not get mentioned is the aging of the workforce. we are all going to be living longer and that means we will have to be working longer. we need to be able to work in different ways and flexibility is something that when aarp

polls their members, that is something they want. caller: my biggest concern is the government involvement. we have government and everything now and we have a lot of flexibility they are employers. you get maternity leave and everything else. we have so much flexibility. they should focus on lowering taxes so they can hire more people. guest: our project was actually created because the sloan foundation want us to understand what is happening in the private sector already one of the hallmarks of our approach is absolutely to engage employers and business both small and large to ask what is happening

on the ground. what are the most innovative practices and where are they happening? the conversation at the white house today is not to say here is the best government policies, rather it is exactly what you're getting at which is before we jump, let's talk. let's really here where the private sector is that, what is working, and how we can work together, problem -- public and private sector so that works for everyone h. host:"the baltimore sun" says many groups will be participating in this conversation this afternoon.

guest: sarah lee is one of the leaders. going back to the previous caller about enough flexibility, when you look at studies, 80% of employees, men and women, young and old want more flexibility. the company like sara lee, that is fantastic and we can learn from how they have done it. it is good for their bottom line and employees. host: there is a separate chart here. the took about firms offering flexibility benefits. they said that over half of these firms have policies which allow folks to return to work gradually after childbirth or adoption. a lower percentage here of

folks to take unpaid or paid time to improve job skills. is that what companies are pursuing more? guest: that is one where an individual company may not need to have their employees retrained at this moment. that is one thing that the white house is raising is a broader economic issue. there is a report from the council of economic advisers focuses on job retraining. even though companies aren't doing that now, that will have to be the norm in the future for us to stay relevant as a nation and have a strong economy y. host: they want to change starting and quitting times. why is that important? guest: when you think about raising small children or whether you have an aging parent

or whether you are trying to make it back to community college, things change in life. that is that day-to-day struggle of trying to make things work out exactly where you start to see spillover effects. that is what companies have done this in terms of recruitment, retention, and productivity because they see this bill over effect from a mismatch between our lives are going and the structure of the work. host: does the federal government offer incentives to companies >> we are leaving this "washington journal" segment on white house -- on workplace flexibility. president obama will address a gathering at 4:00 p.m. eastern, live on c-span 2. we returned to the newseum for the second of three panels looking ahead media regulation and first amendment rights. the topic next is the future of journalism.

>> there are a more of a variety of courses than ever before. the digital revolution is demolishing some of the pillars of traditional news business models. the former executive editor of "the washington post" and a media scholar published a report that said the economic foundation of the nation's newspapers is collapsing and newspapers themselves are shrinking. the knight foundation's report said local journalistic institutions are themselves in crisis with financial, technological, and behavioral changes taking place in our society yet, there is universal agreement that help the journal's and is a vital agreement -- a vital part of a democratic society. -- agreement that held the journalism is a vital part of a democratic society.

at this moment of tremendous change, what course should policy take? how can we guarantee the survival of an independent( media serving the public interest? what role can government policy makers play that does not breach first amendment rights? we have assembled a panel of experts that have different points of view which promises a very lively discussion. let me introduce the panelists. first, susan desanti is the director of the office of policy planning where she previously served from 1995-2006. among her current projects is a study on changes to the news media in the internet age. to court right is courtpolashinski the director of the first amendment center. he is a veteran journalist who

held executive positions at usa today and was a correspondent covering washington for debt. gannett. we also have a senior policy maker for the senior access project. he has been with them since 1978 representing citizen interests before the fcc and congress. then we have steve waldman, the senior advisor to the communications commission directing the study on the stage of media. he was co-founder and ceo and a editor in chief of one publication and before that he was national editor of "u.s. news and world report" and a national correspondent for " newsweek." we have the vice president and senior associate general counsel of agnnett co. where she

advises television stations, the newspapers, and website to on issues including intellectual property rights, at this, privacy, and libel. she has been with gannet since 1985 and was previously in private practice. please welcome the panel. [applause] i make it three journalists of vs three attorneys. this should be interesting. we will save time later on for your questions but first, i would like to begin by asking susan and steve to tell us what they have learned so far from the studies they are conducting on the state of the media. i would like to start with susan. >> thank you very much. i want to emphasize that the views i expressed today are my own. they do not necessarily represent those of the commission or the individual commissioner. this is important because the

commission is still in effect gathering stage. as barbara mentioned, the fcc has a project on the future of journalism in the internet age. one of the first questions i often get is why is the federal trade commission involved in this? i wanted to share with you a fact which is not well known that the ftc has a special statutory authority to gather facts and issue reports on events and trends in the economy that have significance. we worked on a report on the radio industry in the 1920's that was an event that led to the formation of the fcc. we did a report on patent law in the 2000's. does not something totally new welvq are doing here. it certainly is the case that when you look at the situation

in the news media, you see a lot of financial difficulty. there are trends that have significance not just for the economy but also to whether we will have a situation that includes the citizenry. what has the ftc done with this project so far? we have had two workshops. in december, 2009, we had a workshop that was basically gathering the facts about the economics of the industry these days. we found at least three critical factors. the first is that there are critical financial difficulties that have been caused by over leveraged purchases of newspapers in times when it was thought that margins of 30% would continue for a long time. they obviously have not.

is important to note in that context that most newspapers that are stand-alone enterprises, they are still profitable. if you look at them as stand- alone enterprises, but you cannot because they are part of much larger organizations that are still saddled with debt from those over leveraged acquisitions. second, there have been significant reductions to advertising revenues to newspapers. that is important because newspapers traditionally got about 80% of their revenue, at least during the 20th century, from advertising. what are the causes for that? the two main ones is the great recession of 2007, 2008, 2009, 2010. the recession has hit traditional advertisers for newspapers particularly hard.

that includes all the dealers, retail stores, housing, etc. the other causes the development of on-line advertising. this is most striking if you look at classified advertising. it used to provide 40% of newspaper revenue. it is now substantially reduced. that is because you can put a classified ad on craigslist for free. why would you list and in the newspapers? -- why would you list your ad in the newspaper? let's look at this in terms of the question for today's panel which is it time for a bailout for newspapers. in my view, there is no reason why you would want to bail out newspaper owners who have made bad business decisions. i have not heard the newspaper owners asking for no one is suggesting that the financial world would tumble it newspaper

owners did not get a bailout. in terms of the recession, there are many businesses that are having very hard times during this recession. there are many people who are being laid off, not just journalists. eventually, we believe the recession will left gradually. it will probably take longer than we would like but that is still a phenomenon that is a short-term phenomenon finally, let's look at the online advertising. this is the phenomenon that i think might justify some kind of shift in government policy to provide more support for news organizations in general. i want to be clear that we are talking about news organizations, not just newspapers. this has to be across platforms. this is especially since almost

all news organizations are on line. the differences between platforms is getting blurred to some extent in any case, there is evidence that this movement of advertising on line can up and the business model for these organizations, especially newspapers and broadcast news. there is a great deal of innovation going on in the small on-line news gathering organizations but no sustainable new business model has arisen. there are reasons to believe that the free market for news, especially public affairs news, is potentially subject to market failure. that means that there is the possibility that a new business model will not emerge. finally, it would not be novel for the government to provide indirect support for news

organizations. i emphasize indirect. we had a workshop in march for two days to talk about the other experts and what might some of these policy options be that to be considered. that is where i will leave it and i am happy to elaborate when we have time. >> we will definitely come back later and hear what comes next. steve, same question to you, where does your study stand and what do you think the next step will be? >> the ffc study is a couple of months behind the f÷ study but we have a special emphasis. in addition to understanding what is happening with the news business as a whole, the federal communications commission has direct regulatory authority over

every part of the media industry other than newspapers. local broadcast, cable, radio, wireless, etc. we need to make recommendations in general for congress but also specifically to make sure that the ftc is approaching these issues in a wise way. some are the roles of the fcc books were conceived before there was an internet. some of them were conserve before there was tv. to assume that the people the constructed these got it right back and is probably wishful thinking. i agree with susan's general assessment that this is a pretty serious potential problem going on in the news business.

the drop of 44% in revenue for newspapers since 2000 and news magazine staffs have been cut in half since their peak, local news has cut back, across the board you have a very serious contraction. what does that mean in terms of government intervention? the term "bailout" got put into the discussion about news because of a call into the timing. the contraction of charnels happened at the set -- a journalist happened at the same time were bailing out the oil industry and the banking industry. i don't know of anyone who is advocating bell out of marriage papers or any part of the media in the same way -- was advocating bailout of newspapers or any part of the media in the

same way. that is not to say that the crisis is not just as severe as what is happening with automobiles or banks. the banking system might up -- might not have collapsed because of newspapers declining. what is being lost is the ability to hold public leaders accountable, the ability for consumers to be protected, the ability for democratic institutions to function well. that is a big deal. that is why the fcc launched this project and the first place for it does not so much that we have an interest in the economic health of these interest is, what does it mean for democracy? there are many different points that we could talk about. i think the most important ones,

one is the importance of bumbling and un bundling. it refers to the ways that newspapers and other media institutions were able to cost- subsidized different functions within the same operation. people have their favorite example whether it is horoscopes that or subsidizing the city hall reporter or the sports scores were subsidizing something else. ?uthere seems to be the idea tht one of the reasons that journalism that was not cost- effective and a strict sense was that news papers could to create an overall -- and overall bundle. if you break it apart and start applying supply and demand

models to each component, everything changes. you can get your box scores for free online and then some. íyait basically called the quesn for the first time in perhaps 100 years of what are you willing to pay for news. the answer may be not much. there's an interesting dilemma of what happens in a world where people are not willing to pay for something that has an important social value. the other thing that has been coming out over and over again is a confusion that has developed between an abundance of media outlets and an abundance of journalism. i often hear people ask about there being a crisis or shortage when there are tons of new outlets and new web sites where you can get information more

ways than ever before. it has the feeling that we are in an age of abundance and in many ways we are. and yet, if you trace back the information that you get all these many different outlets, you find to is actually a small and shrinking number of journalists that are providing the information that goes out to an ever-enlarging number of outlets. you have this era of abundance on one part of the media spectrum and an era of shortage and scarcity on another part. it is very important to disentangle those two forces. if you want to think wisely about public policy. >> thank you. that was a great start spread i will turn to you barbara next as someone who represents a very

important media company. how do you see this situation as described by the two previous speakers and how did we get here? >> susan at the nail on the head. i think the workshops you have been conducting have been informative. the point that steep that are very profound. gannett is a company that publishes 82 daily newspapers. we have 26 television stations a romp the country as well. -- around the country as well. it is hard to know how we got here. what susan pointed out is exactly correct -- the decline -- the decline in classified advertising has had a huge impact.

as you said, 80% of newspapers have been supported by advertising. of that 80%, up to 60% has come from classified advertising. a decline in classified advertising has had a profound impact on the dollars available for news gathering. secondly, the new strings of revenue on line simply do not pay as well. as the old streams did. there have been formulations of this but publicly, the most precise is the one that was mentioned that one of the workshops which is that in print, a pair of oddballs per year is worth about $500 p. online, those eyeballs are only worth $75. it is hard to see the lines crossing with the emergence of the online products.

we are growing audiences online at a very good clip. the dollars that we derive from those audiences are smaller than those that we derived from the traditional print products. the fixed cost nature of the business cannot be discounted. parentes capital-intensive. distribution is very expensive. we have to maintain the cost structure where as new website come in and they do not have those expenses. it is the confluence of those three major developments that has brought us where we are today. >> andy, do you have bought whether there is an approach -- you have a proper thoughts what the government's role is in all of this?

>> i find myself in an odd situation of agreeing with what has been said so far. let me hypothesize somebody who is not here, someone who talks about citizen journalism and people and their proverbial pajamas blogging away and providing a function that replaces traditional journalism i would disagree. with that person because there is this irreducible role for these people called journalists and these people called editors who create these products that tell us things we did not know we wanted to know until we saw the headline or so the story there -- or saw the story there. it is produced with professionalism. i think this is a public good. i think there is a serious

danger of market failure. there is a tradition which susan alluded to, going back to the very start of the country. it is inherent in the goals of the framers of the constitution and the first amendment to create a well informed electorate for making sure that the voters are informed about issues of the day and able to make wise decisions in the democratic process. i will actually read a couple of sentences from professor michael john, talking about the permit role of government in this congress. . .

would have done it since the beginning. people have written wonderfully about postal subsidies, an incredibly important role that

they played in creating a robust and effective journalism and how for the last hundred years, we have had a profitable cross subsidize journalism created by large advertising revenues. we're now facing a real dilemma. i think it is entirely appropriate for government in the tradition of these neutral subsidies, advertisements for public notices, postal subsidies, public radio in the non-commercial space, there are ways to do this that do not impede and greatly promote first amendment values. i will leave it to barbara. i do not think that hurt years

in an npr that the fact that some of the funding that came from the government competed the effectiveness of the the journalism of npr. there are some terrific models. we certainly want to incubate. i would like to have something like a national endowment for journalism to take new models and try them out to assist people in trying to develop new and different ways to do it. it may well be that we will not come up in this new environment for a journalism that is truly self sustaining without some governmental role. i think it needs to be eight -- and a very -- a very important part of the discussion. >> thank you. in the next part of our discussion, we will get to some of the specific proposals. i want to give gene a chance to

get in. she has first amendment and the title of his job. >> i am going to run with that idea and try to take a longer, a larger perspective. it is -- let me react to what has been said here. the concept of public funding for laboratories and experiment, for new development, to assist industry in -- that has never been all that good at innovation, quite honestly. we change the width of the columns. we congratulated ourselves will meet adopted color 50 years after technology made it possible. i think when we talk in this context, there are a few things to think about.

in some ways, we're talking about a crisis of mechanics, of the corporate suite in terms of acquisitions and expansion obverses the core product of news. we're not talking about a crisis of journalism. in terms of the market model, we have this incredible formula for success in terms of a free press. we have a tremendous and growing need for information. we have new mechanisms for which to deliver it. we have an incredible thirst for that information on the other end. from that basic model, you could not pick a better product than journalism. in the longer view, if you think about three speech, freedom of

press, we have gone through an evolution. from the village green to the village screen. we have circumvented in some ways these entities that grew up, starting about the late 1800's. we're interpositions between the consumer and the news itself. we have this marvelous innovated. . having said that, too many of my former colleagues are out of work. to many local stations have cut back staff. to many journalists have been redirected to other careers for me to say that there is not a crisis. when we talk about the subject -- i am struck because we have done other panels on the subject as well. we are in a transition period when from a model that worked for 100 years to something new.

we're dipping cops into the water fall right now. we're trying to find it in this tremendous flowing environment. if we come up with a solution today, it will not be inappropriate solution for tomorrow in terms of what happens with an entanglement of government. we need to be very cautious about this. not trying to ignore the fact that every day, fewer journalist are employed. we're also losing a high-end spectrum of a journalist, senior people with the most experience are leaving in numbers that we would not have anticipated ever. we're losing that talent pool at the top that has that 30 years. i grew up starting with smaller

newspapers. what i learned there is that often with somebody with that 20 years of experience knew more about that county budget than anybody in office. they had been there through all of those administrations in transitions bridge when we talk about the grand solutions, which look at these mega solutions. we need to think about preserving that kind of thing. most newspapers are viable entities. community newspapers are seen as that important news conduit. those are the places that are still robust. when we look at solutions, and we look at these, i hope we will consider that in. what do we need to assist that

role? we need to worry -- i understand and i have read the report to -- who published the report. the founders were of very specific. the 45 words are out there and it does say, there is no barrier. congress shall make no law. what was implicit there was the government -- the desire to keep government out. with all due respect, with the shackles, the shackles. i know we have dealt with postal subsidies. we need to be very cautious about stepping forward on this.

we also deal with the big unknown, the skeptical public. they will see any assist as the hand of government somehow tilting the objectivity or pushing the object -- pushing the objectivity. we need to be very cautious. i would like to see innovation. i think subsidizing universities for innovation is a good idea. >> i really just want to interject very briefly that we have been burying the newspaper industry. really is a bit premature. around the country, this quarter, you see the numbers improving we still think we have a very vital business. it was exciting last fall.

there were three days of meetings and the message was, watchdog journalism is our future. local watchdog journalism is our future. we think we have our future. we recognize that the bill at notion is a little far-fetched. even -- bailout notion is a little far-fetched. there are much smaller steps that can be taken to improve the financial health of newspapers by the government. i will mention a couple. the killing wisdom seems to be that the postal -- the going wisdom seems to be that the postal subsidies have benefited newspapers. in fact, something of the reverse is true. the periodical rate applies to

weeklies. the beneficiaries are magazines and weekly newspapers. for the daily newspapers, there has actually been a postal trend that has hurt us quite significantly. that is that the postal rate commission has given much lower rates to saturation mailers. why does that matter? saturation mailers are like the -- they sent advertisements out to an entire community. what we do at the newspaper is that we take the same inserts and we put them in the newspapers. for those people in the community that do not subscribe, we mail. that is called high-density mailing. high-density mailing, selected by address, is much, much more expensive than saturation mailing. when the increases come through, we see very low increases for saturation and

much higher for high density. that is a very small thing. it could benefit newspapers and the advertising revenue stream that is essential to the survival. i will not talk about cross ownership right now, but we are treated like the dominant voice. if we are looking for ways to have consortiums or joint ventures and be able to have them approved the the department of justice, there are very small steps which involve looking slightly differently and more realistically at the market that could help us along the way so that there would not be a need for a handout from the government. >> i saw susan making a note when you were talking about the postal rates.

i want to return to you and ask, what kinds of policies -- policy changes are you thinking that be -- that the ftc might be considering? >> we just had the chairman of the postal rate commission, and speak at our workshop -- come and speak at our workshop in march. unfortunately, the postal rate commission and the postal service is not doing well financially. they are really not that enthused about any ideas that would include lowering rates for anybody. >> making them even might be a star. >> yes. more power to you. >> just a thought. >> is a valid thought. i think that the general notion

is that the postal rate subsidies did a lot more for newspapers at the beginning of the country when the founding fathers really had a notion that they needed to subsidize newspaper delivery to help bring the country together and to also inform citizens and help get democracy functioning. they are not helping newspapers or news organizations these days. another idea that is most readily of interest is this notion of how you increase increase -- increase revenue to news organizations and how do you reduce the cost of news gathering? we have presentations on some of the work that is being done to make government data more readily available and more

easily manipulate -- readily available. that is a trend that is going on in many areas. we had somebody come in and explain to us how they have developed new types of financial reports that companies are now required to submit that allow you much more easily to compare across companies what the various factors. there is more and more that can be done. it would facilitate some of the watchdog reporting that you were talking about the future of news. we did also discuss new types of organizations that would be either a hybrid of nonprofit and

for-profit or for-profit with a social purpose. news organizations might fight into that kind of an organization which would allow newspapers to thrive at a 5% return in investment, but would allow -- that is not the kind of person who would be running this organization. these are organizations that would be run by -- run for the purpose with getting some return for the investment, but for also having a social purpose. there would be specific bylaws that would allow members of the board of directors to take into account social purpose in making decisions. >there are many -- this is a big

movement. i can feel your shopping at the bit. -- i can fill you chomping at the bit. there is a much broader movement for the four-benefit corporations. newspapers might be a beneficiary of that. the problem is, the irs has not been brought along the, shall we say, on some of these issues. there are significant tax implications that need to be worked out there. the corporate side of the law is being worked on and developed. the tax side of the law, not so much. we talked about copyright and i will let other people talk as

well. >> and again, i think that the concept of the public focus to entity reporting news and information on the surface sounds really wonderful. i worry that, going back to 1791 or earlier, that we had a system of government determination of social purpose. we see that replicated into today's society called licensing. printers are licensed. i do not want to engage in hyperbole for the sake of recounting history. when i hear of -- when i hear an entity defined by social purpose as a news entity, i think we open the door for what pushes the limits. if it is watchdog journalism to

take a look at how well municipalities or congress is doing their job, that is fine. but when something approach is that line -- when something approaches that line, they fail or succeed by their business acumen. i am worried about the zone in the middle. they approached things and there is suddenly a great debate. in terms of a free press, where we draw the line? >> i just want to be clear. the is organizations, nobody's talking about licensing them. >> broadcasting stations are licensed. do you want to talk a little bit about it -- about the things you're thinking about? >> we're talking as if the debate is whether or not the government should get involved in regulating media. right now, all of the television

stations in america and all the radio stations in america got their licenses from the public through the agency of the federal government. the government decides what kind of wireless spectrum is auctioned off. the government decides what -- how much of the satellite spectrum should be set aside for educational programming. the government decides how many radio stations a single company can own, company towns can have cross-ownership between newspapers and radio stations and on and on and on. i am not offending any of these policies in particular. -- i am not defending any of these policies in particular. the government is involved in the media world and all sorts of ways. the goal is to make sure that this is done in a wise way. there tends to be a little bit of a newspaper -- it gives a

misleading representation. the newspapers are the least regulated and of the media. broadcast is really a different thing. one of the things we're looking at is there has been his starkly than public obligation for broadcasters. that has been a subject of argument and debate back and forth for decades about what that means, what the government's role is in enforcing something like that. it is tricky. on like someone who has just set up shop with a printing press and there is an on limited amount of printing presses that can happen, there is not an unlimited spectrum. the spectrum belongs to the public. the government decides to get some of the spectrum. for a long time, the government said, because you're going to get this scarce public

resources, you have to serve the public interest in some way. that is -- that has had implications in terms of the news, public affairs programming. what does that mean now? what does it mean to have a public interest obligation now? is it fair? is there a public interest obligations for wireless? most importantly, is there a way of three conceiving our notions of public interest -- reconceiving our notions of public interest? >> everyone will want to know, how does the current discussion of a broad band having broadcasters sell back some of the spectrum, how does that fit

together with an inquiry that suggest that local news in particular might need some support to? it seems like a mixed message. >> not necessarily. one of the things that local broadcasters said to the fcc when it was going to the process was that we should not be treated as if this is just an economic equation. we are entities that have special relationships with the community, often touting the importance of local news. i think that is great. the responses -- the response is that the best way to make broadcasters sure that they have all the spectrum they need is to fulfil their obligations to the community. it could be a win-win. if broadcasters took seriously the need to improve their local news will have a much robert

case in terms of spectrum, but more importantly, they will help solve this problem of the potential crisis in journalism of america. >> first of all, in direct response to your last question, the possibility that some portions of the spectrum that is presently being utilized by television will be rededicated to broadband purposes underscores the extraordinary benefits that television broadcasters are now getting free of charge and the responsibility that comes with that. i look forward to the day when we can develop spectrum sharing and other technologies that will change all this around great for the near term and midterm, this spectrum? television broadcasters are using is highly valued. it is reasonable for the public

to expect public service in exchange for use of their spectrum. more broadly, gene's concerns are well placed. it is possible to make these things viewpoint neutral as well as platform neutral. the traditional postal subsidies that we started talking about, they did not ask whether you were a republican or democrat or a federalist newspaper in a day when newspapers were frequently owned by political parties and were highly partisan. it is possible to devise mechanisms that can free the

government from any notion about making a value judgment about the content. it is tricky, but then again, the goal here is to preserve the democratic process. it is an important one and a tricky one. >> did you want to get into the spectrum discussion? >> i want to make a slightly different point. the question of whether the government should fund journalism in any way, shape, or form is that the heart of the first amendment that we have been discussing here. i came across the other day a study for -- for argentinian and newspapers. this was a study that was conducted by a harvard business school professor and a northwestern business school professor. they looked at the argentinian

newspapers over 10 years and they looked at the amount of coverage in those newspapers that was critical of the government. then they looked at the amount of advertising that had been placed in those newspapers by the government. in argentina, that is quite common. it is done by whim. the government can put any amount of advertising it wants. surprise, surprise bridge -- surprise. there was a huge correlation between the amount of dollars that were spent in the newspapers by the government and the lack of coverage of government abuse. whenever we talk about here today has to be against that backdrop that if you are looking to the government to fund you, you are not going to want to offend the source of your

revenue. >> can i respond? the wall street journal's largest advertiser by column inch is the united states government. on the back of the paper, there are all these dea forfeiture advertisements. this is largely done by bit. -- bid. i do not think anybody can say that the wall street journal polls its punches. -- pulls its punches. >> newspapers are still the best way to give notice. that is not a form of necessity.

it is therefore a completely independent reason. it is true -- through bid. >> i just wanted to add one point. i am not espousing government subsidies for news organizations. i do want to note, in service of audiences, -- it is not impossible. there certainly have been bumps in the road there. it is also true that in many, many countries, most countries in europe, there are government supported news organizations like the bbc. i am simply suggesting that

there are ways to construct chinese walls, etc. does this country want to go in that direction a lot more? that is not my perception. it is not every government involvement implies in tandem much. it is important to make sure that that is the case, that you've structured properly. >> we had a session here on march 15 and that manipulation of government data to make it more accessible to anybody on line, but also some news organizations who do investigative reporting. the free press can do what it. not to be facetious, if you look back, we have the bill of

rights. good intentions. for public interest, we had the fairness doctrine. someone say, it failed andrew broadcasters away from editorials on line. -- some would say that it failed. in the public interest, it had a detrimental effect on the free flow of information. i am not saying -- there is a reason for government and i acknowledge the beneficial aspects of government doing its own thing. but i think we have some historical aspects -- examples where government acting in what

it calls public interest in the moment really thwarted the free flow of information. i think the public is -- has a marvelous opportunity to be that watchdog. history teaches us some things about these early discussions. >> i am going to ask another question operate if you have a question yourself -- i am going to ask another question now. but if you have a question yourself, there is a microphone. i wanted to ask you what the relationship is between the study that you are doing and other things that are going on at the fcc. in localism, there is a

discussion of possibly local news counsels and that kind of thing. how do you see all these pieces fitting together? >> a lot of them will get rolled up into the future of media reports and we will make recommendations on what should be the status of the previous localism. the ownership review is a slightly different track. it has a different legislative history and has a schedule dictated by congress. we're cordoning. that is basically -- we are coordinating. we are looking at the regulatory steps. the idea right now is to look at

the full slate of what the government does to see if there are things that the government should stop doing. >> barbara, want to suggest anything? >> we could go on all day. >> let me just pick up on a point. when you talk about localism, i think there has been in the discussion of public funding of the media kind of a conflation of national news and local news and everybody thinks it is all the same. it is quite different. the european examples are primarily national news organizations that have been funded. i am very close to the local news business. we have newspapers in big cities like phoenix and detroit, but we

also have appleton and oshkosh. caller: would be on that council? who would be judging the quality? >> just to clarify one thing. there are two different local news councils that have been talked about. local news council that has been proposed -- what was in the fcc paper was a question of whether or not there were ways to get local tv stations to do more aggressive outreach to find out what they should be covering. i can claim total ignorance because i am new at the fcc.

there is never been any attempts or interest to establish local news councils of that sort. >> ok. good. i think we have a question here. if you could identify yourself. >> i want to pick up on a point earlier. i want to address a question to and. -- andy. i do not know of anyone who would suggest for a local government to build a library is somehow a violation of the first amendment. i want to go to the notion of

the entanglement that comes with subsidies. everyone has mentioned postal subsidies and i know you are familiar with the long history of government trying to manipulate postal subsidies to either favre -- favre speech that the government like. the supreme court has held that because of the nea subsidy, it can demand conditions based on content. public broadcasters are a wonderful asset, but they do not have the same commercial rights as advertisers. with those examples in mind, how would you respond to the entanglement and the first amendment problems that are created? do you see subsidy as an

opportunity to impose conditions on media across platforms that you'd be unable to do through direct regulation? >> these points are very well taken. it takes us down into the weeds, of course. i am not saying that it is easy. i am not saying that it is without difficulty. i am saying that we are facing a genuine problem going forward. barber is right that -- barbara is right that the journalism is a profitable business. we're not talking about the death of its. there is a secular and cyclical change going on and only when we come out of the recession are we really going to know how much is one and how much is the author. anyway you look at it, there is

part -- part of this is secular and there is some very fundamental change. i do think we need to look at ways to do it. there are better ways and there are worse ways. if you believe that journalism, especially local tourism, is essential to democracy. again, i am not endorsing that. i am just pointing out there are ways to skin this cat. we want to avoid the mistakes of the past. nothing is perfect. i point to the example of for all the problems that there are , npr and pbs has worked

remarkably well. it has great promise. these are platform neutral things. i do think that we need to design them. i do think that you make a very, very important warnings about the kinds of problems that can arise. we need to design around them. >> we heard on the earlier panel that a broad band internet and we have clearly seen its effects on the newspaper industry. does it pose the same problems for broadcasters?

>> do you want to answer that? >> again, it is too soon to say. we own broadcast stations and it has been a trying time of the last couple of years. there have been bright spots on the horizon. for one thing, the citizens united case is going to benefit local stations. i really do not want to go there. you are right, that it is all part of a very long term secular -- cyclical change. >> have you formed any views about that at this point? >> i think the short answer is that it is not quite as bad for newspapers -- as newspapers.

the other factors that affected newspapers are also affecting television stations. the lower add rates online -- ad rates online. i do not mean to be a downer, but some things will get better. on the other hand, there are some ways in which the negative parts of this have not fully played out yet. we do not have universal broadband. for all the benefits that broadband will bring, it will exacerbate some of these problems in certain pockets. one of the reasons that community newspapers are doing relatively well is that craigslist has not gotten there yet. but he will. >> maybe not. >> so when the classified sales

keep going down, some of the smaller newspapers are going to have those problems as well. >> have you found anything so far in your study that would be a response to that question? >> i think steve summarized very well. >> good. >> thank you. i think this is addressed to anybody who wants to take it. six months ago, my thinking on these issues were very close to gene's. today, is a little bit closer to andrew's. a lot of it is based upon research of the historical role government indirectly subsidized in the press and some of the ideas that were talked about here. it did cause me to think about this issue in a much different way than i had before. my own view has sifted as a

result of that. i am a child of the 1960's and 1970's. when one talks about journalism, there is one more that captures journalism at its best. are we in danger of losing the capability of this happening again? that word is watergate. that is the classic example of how journalism save the republic. if we are going to move into a situation now where the ability of investigative journalism is going to be harder to maintain, because of these economic problems, why are we putting at risk? even though i am concerned about the first amendment side and integuments, the lesser of two evils is having some sort of subsidies that preserving the ability to do what investigative journalism did in the past. is that a price worth paying? >> i see what you are saying in terms of moving to the middle of the panel. i think these are robust times.

i think that investigative journalism is going on in some many different ways from groups that are internet-only. they live, investigate, ago. there is a model in china where localities hire investigative reporters to report on certain government corruption. i think these are great, robust times for that. i do not see that in the same fashion. i think there is a commercial viability that still exist. news organizations that have been with us for a long time still have trust despite skepticism. there still seemed -- they are

still seen as trust for the venues and sources of information. i do not think that necessarily this innovation is practiced -- is what we're talking about. we're talking about the mechanics of saving entities here. >> i am also going to give a response even though i am the moderator. i am one of those people that is action working in journalism in washington when that watergate story was being investigated. even in those good old days, there was still a tremendous pressure placed on the washington post company because they also owned television stations that had to be licensed. that was used specifically as a threat. the reason watergate was successfully investigated by the washington post because of a courageous owner who saw her duty and had some very good

people working on this story who were able to begin to unravel it. for my money, it will always depend on the commitment of the ownership. what barbara said about to commit to watch dog journalism, that is going to distinguish journalism in the future. that is helpful. >> there are now 60 capitals that have no reporters covering them. -- there are now six state capitals that have no reporters covering them. there is a significant loss of a journalistic capacity. that is what we're really talking about here. we're not talking about particular entities. we're talking about the journalistic capacity, in particular with respect to public affairs journalism. that combined with the local

nature is really where the most concern is an economic theory would suggest there should be the most concern. >> to highlight that point, there had been a $1.6 billion contraction in newspaper spent on editorial. then they went around to foundations and said how much money do foundations put into journalistic start ups? it is a tremendous innovation. they came up with about $150 million. that still leaves a gap. >> last question. >> this is picking up on the last conversation. i hear discussions of how expensive it is to print and mail newspapers and the failure of classified and horoscopes and what have you, it sounds to me

you're talking about business models and you're not talking about journalism. we're really talking about saving the newspaper business model? i think mailing newspapers to people, i do not think you should even think about that. >> we're not mailing newspapers. >> we're not mailing newspapers. we are mailing advertising to people. that is what i was saying. we do not mail newspaper. may be some very small communities do. we deliver them because people want it. there are still many people who want that newspaper there. yes, we are looking for a business model. we're looking at ways to tweak our business model, to save money in ways that do not inhibit the journalism. for example, it has been widely reported better newspaper in detroit, we reduced home delivery to three days a week.

we're still printing newspapers seven days a week. the delivery cost being so high, we're just delivering three days a week. it has been a tremendous success. there are ways that we can look at saving journalism and saving our business and the two are not mutually exclusive. >> my concern is that a lot of discussion is about preserving business model. steve, you told me that a lot of the folks have come up to and talked about how do we say their copyright? how can we make sure that google does not link to us? if we're really talking about saving journalism, let's talk about that. let's not talk about preserving business models. business models have to change when you have destructive technology. >> i did not hear anyone say that they did not think that business models should change. i think there was a real connection brit anybody else want to respond to that?

>> i just think that you cannot talk about how you are going to maintain journalism without talking about the business model. that is why people are talking about business models. they're not talking about business models in the sense of, we need to save every single newspaper that is out there. at the moment, however, newspapers -- is currently the case that newspapers get 90% of their revenue from their print version. yes, they are facing competition from that from on-line news organizations. they're not at liberty at this point to just say, we're all going to go on line. that is not going to go -- that is not going to work. there is a big transition going on and the whole question is,

how do you save journalism? word you get the money to save journalism? -- where do you get the money to save journalism? how else can you get revenue for foundations? as part of its, it is the government policies that could change that would help us with the funding for journalism broadly conceived across all platforms. >> there is no shortage of demand for news now. there is traffic for news on line and it is booming. the problem is not that people have decided that american journalism is on interesting or unreliable. the problem is the business model. that is what has caused the

collapse of journalism. a couple of people used to turn market failure and it has a specific economic meeting, but it kind of robb's me the wrong way from the colloquial sense. a lot of what happened is rampant market success that has caused this problem. part of why ad rates have gone down is that advertisers do not have to waste half their revenue. people do not have to pay for stuff that they were not interested in. they can pay for just a sliver that they are interested in. advertisers can go directly to the product that they want to be associated with break in a lot of ways, -- associated with. a lot of ways, things add up to create this one serious problem with accountability journalism. >> i want to explain the term

market failure. market failure in this sense means problems that the free market on its town may not solve. -- on its own may not solve. there is a nemesis on public affairs news because there is a possibility of free wr iting. if i am a voter, i can be rationally ignorant of how i should vote in the election. the chance that my vote is actually going to make a difference is infinitesimal. i will not invest my time and energy in finding out all about who i should vote for and all that kind of stuff. i am going to -- i am not going to pay money. i am not going to demand news

about that. this is an issue that has been studied t. it is a potential source for an insufficient consumer demand for public affairs reporting. the basic concept of this type of market failure is this. you do not kids significant consumer demand. we're all delighted with the vast quantities of news that is available for free on the internet. unfortunately, that free does not pay for journalist salaries. >> we're going to have to call an end to it and continue this on the coffee break. please join me in thanking our wonderful panel. [applause]

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the irony was that they thought that the new technologies might not be technologies of freedom of speech. as electronic media had become dominant and displaced the print media, they brought with them a culture of regulation. they are creatures of regulation and beginning with the telephone regulation.

as the electronic media came into prominence and replaced or displaced the print media, they brought with them a different culture of regulation. they might prove to and not be of freedom but a trojan horse smuggling an army of regulators past the gates of the first amendment's. -- gates of the first amendment. i wrote an article in which i took issue with most of the assessments. i pointed out that it did not seem that the first amendment had gone away all of this time. you could make an argument that in some ways it had expanded. also, some of the regulations

that he decried had actually been eliminated. a lot of content regulation had been diminished or disappeared. if i was to write that article again today, i might have to reconsider some of my arguments and conceded that the arguments might have been better than i give credit for. we have seen efforts to revive otheother forms of regulation. localism, if there was ever a trojan horse for regulation, that is it. we have seen a revival of

decency regulation. the fact of the matter is that regulation has not disappeared and it might actually been increasing. one thing i could not have been considered in 1993 was the internet. today, any test of the thesis would have to come to grips with the internet. in contrast to other electronic media, the internet has been famously on regulated. -- unregulated. here at last was a test that

would disprove poole's thesis. here we have an anarchic medium. what we are hearing and nowadays is that maybe the internet will not remain an unregulated media. i am not talking about net neutrality but regulations to some parts of the internet. these are what people consider to impose a common carrier type regulations on broadband providers. whatever the merits of these, you cannot dismiss the possibility that the internet will become part of the

regulated media. in short, yogi was right, it is not over until it is over. i will not try to introduce our panel. suffice it to say that all of them have substantial expertise the game plan here is to began in the order of proceeding. we look for some interactive

discussion and some comments from the floor. why are we regulating this? >> well, i am working on it. but i have a brief power point. this is a terrific introduction of what we will try to cover during this panel. this has been a problem regarding the fcc. this will begin to provide a partial answer to our problems. i will go to some of the background on the issues and then hopefully set it up for the rest of the discussion on the panel. technologies come and go. the telegraph being the great new advanced technology of the 19th century. when we get technologies and various ways of thinking, that technologies may go but the

regulatory models tend to remain. at the time that the telegraph was a new technology and the government was looking for ways to regulate new technologies that camel long, they looked to whatever regulatory models they had. -- the government was looking for ways to regulate a new technologies that came along. you look at the statutory mandates and some sound some like the first amendment. you find that the decisions that interpret the statutory mandate are something different than the standard first amendment rights that apply to print media. you can trace them farther back than the nbc case in 1943.

there was a different level of protection for the broadcast media. this is a cycle that has continued. you can look at the impact that the media has had to in order to control speech as well as with government. we never had censorship euros before we had a printing press because you did not need them. the printing press was a very important part of our political system and this was protected in the first amendment. that has not in true with other new technologies. every other new technology that has come along were considered to be not protected by the first amendment, starting with film, of course.

there was a decision in the supreme court in 1915 in which it was held that motion pictures are just a spectacle and not part of the draft and receive no protection under the first amendment. as technologies become more mainstream, the courts tend to catch up. 37 years after the mutual film decision to, they reconsidered and held that cinema is protected by the first amendment. this statement is particularly important, "each method of communication tends to present its own particular problems, but basic principles of freedom of speech and of press help

freedom rule." this is the same cycle we saw in the case of broadcast in 1932. there was a decision of holding the denial of the radio licence issued by the federal radio commission. the government argued that radio was not protected by the first amendment and the court agreed. they said that this is just within the scope of the municipal regulatory power. we have had a different level of protection for each medium as it comes along. imagine if your hypothetical regulator walking into a room and you see a monitofive monitos showing the same image. the question is, can't i regulate this -- can i regulate

this? that answer will be, it depends. it depends upon what they're talking about in terms of the media. not whether you can regulate the information. as broadcast regulation developed in the united states, we applied a ninlnine from a decision which said "each medium is a law unto itself." we have had a number of constitutional reach seems -- constitutional regimes. there was no affirmative public interest regulations, no

regulations for that speech except for obscenity law. cable television, it took the courts a while to work through this. there are some local programming, there are less special restrictions on a bad programming. direct broadcast satellite is very much the same as cable. there are some set-aside requirements. none of the special restrictions for indecency because of the subscription medium. no affirmative public interest obligations and no decency regulations for the internet. broadcast television, however, is now laboring under the same model articulated by the supreme court decision in 1932. there are affirmative public-

interest obligations by virtue of the grant of the license. there are special restrictions on bad programming. statement on that one. whether the picture tube is half full or half empty depends on your perspective. if you look at that technologies on the end, tateenddvd/dvr, broadcast, cable, the internet. the middle has various levels of communication. what happens in a world of divergence? if we have created different first amendment test, what happens when the media comes together? we will have a mixed. why do we have regulatory

convergence where some of the requirements that existed for broadcast media apply for everyone or do that previously applied regulations fall away because of the nature for convergence? we don't have an answer. we have begun to explore the issue. there was a case, reno verses aclu. there, they tried to regulate indecency on the internet as they do on television. the supreme court says that this is not a scarce commodity and it held that on-line communication is a converged medium and it is nnot obligated to --

this is the first time that this has happened so quickly. it usually takes decades. what happens to this medium as we look at further possibilities? some have suggestion as different media uses different methods of communication that the regulations associated with one should transfer to the other. because newspapers are using satellite distribution and therefore you are using spectrum, you should be able to regulate the content of their editorials because they would be more like newspapers. i was wondering if anyone could tell me who was responsible for saying this.

anybody? we have already had this kind of theory. we should have a more lawful plainfield by extending regulation to all media rather than looking at them individual. -- we should have a more lawful playing field. some of the same arguments are being made the former chairman heinz case speech in which he argued that the time for broadcasting is essentially done. it is time for the internet and broadband to be that, in medium.

this implies that there should be public interests applied to the new medium as the old. of course, one of the historic to justification's for extending this kind of regulations is children who have access to a broad range of media that did not exist when the standards were first created. it has been repeated in a number of ways. congress charged the fcc to study various media platforms to see whether or not parental empowerment techniques were effected. they asked them to look at this across all platforms. they reported to congress last august and provided a comprehensive report that explained a broad range of parental technology. they concluded that we need

further study. that came in the form of a notice of inquiry that is currently under way. like a the pact before this, this notice asks commentators to provide comment on all platforms to see whether or not there are adequate protections for children or some basis for extending fcc regulations beyond its traditional sphere of power. if this is the trend, if this is where we are going, how far do these arguments extent? ron collins suggested that it is inevitable that sooner or later we will see regulation of devices like the kindle.

they use the wireless spectrum. we have to worry about what kind of influence that the children could get. this is one of the most widely centered books in america because of complaints of witchcraft. -- widely censored books in america because of complaints of witchcraft. amazon does not have all of the books, it has about 450,000. eleven people might feel they might have been excluded considering they did not have all of the "new york times," best sellers. some people could demand that campaign biographies should be

included as a kindled download. -- kindle download. we have a number of proceedings currently under way. these key up these issues to determine where regulation goes next. >> that is a great explanation. >> we want to talk about constitutionally building on this survey of where we are. i like the title of this panel. what is the rationale for regulation? what is the rationale for regulating new technology? that it turns out to be easy. the supreme court has given it a strong guidance that new

technologies should have the same full first amendment protections as the print media. not all countries see it that way. article 19 of the declaration of human rights talks about freedom of expression regardless to borders but we never had a medium that would act regardless of orders. once we had it, many countries tried to put those borders back up. here, as in other countries, the state can regulate data protection and privacy, prosecute crime to regulate deceptive trade practices. as the content on new technologies, the first amendment should be full and robust. what happens to the regulation of legacy media when you have

these new digital technologies that are getting full first amendment technologies? does the advent mean anything to the existing technologies? the answer is clearly yes. content regulation and structural regulation. i will continue to focus on broadcasting. the supreme court held in the 1970 cost that broadcast media had the most limited first amendment rights of any media. -- the supreme court held in the 1970's that broadcast media had the most limited first amendment rights. there was no videotape or dvd media available. direct broadcast did not exist. the internet did not exist. mobile telephones did not exist.

radio was the only mobile medium out. there was not even a walkman. the court found that broadcasting content can be regulated because of its unique and pervasive presence, because it is impossible completely to afford. today, we have a very different picture. 90% of homes use cable, satellite, or stelco systems for their -- telco systems for their television. you can block objectionable channels. thousands of hours of program are available on the internet. our kids use all of these sources interchangeably. is time to revisit the way that

we regulate content. -- it is time to revisit the way that we regulate content. broadcasters compete not only against television and radio but against satellite, cable, telephone companies, the internet, new distribution centers, outdoor advertising. many new media is deployed by the broadcasting business. for the fcc to restrict ownership of newspapers and television stations like they did in the 1970 cost does not make any sense to me. -- in the 1970 cost0's does note any sense to me. all of the new information

sources have arisen. the department of justice also investigates the merger of newspapers as if newspapers only compete with each other and television stations only compete with each other. parity in a regulatory approach makes sense. p,we need to look at whether te constitutional basis has fallen away. i don't think that the supreme court would go that far. regulation of broadcasting was based on the scarcity of spectrum in an older decision. because not all who want the spectrum can use it and the government is able to use regulation on those that do use the spectrum.

whether there is scarcity of spectrum is a different question. the fcc chairman has spoken out inspection crisis. we now have a national broadband plan that repeats the current fcc's opinion. the court could find that scarcity is the wrong measurement to use. even if they have constitutional authority to regulate at 40, the question is if the advent of new digital technologies should encourage them to exercise that authority. i think it should. there are burdens on broadcast and the other media do not there. the current fcc seems to be looking for a new vision in the

broadcasting industry. any data driven analysis on how the media should be regulated will recognize that there should be more equality with regulated media and this could be done in a way to provide incentives and a greater degree of diversity. >> i distributed slides which are in your hand out. i will skip and using them because of the format. this is part of a paper i have written and it will be in on line. when we solve the internet our rise, there was many things said. this is the death of

wholesalers. there will be no mediation in the economic arena. we found out that that was not true. if you are a hospital, you have to buy approximately 40,000 products. you will not want to shop all of them directly. in the low value items, you can negotiate other deals. we saw this on the economic side and on the free-speech side. the internet means that individual speakers will connected directly to their audiences without dealing with intermediaries. that has been not true. why? there is a lot of that speech out there that we don't want to run into. -- there is a lot of whabad

speech. spam, viruses, various types of things. they were expensive to maintain, they were extremely buggy. we have that filtering but the vast majority has to into the network. it is cheaper to catch this them early before they deliver it to your desktop. -- is cheaper to catch the spam. there is a wonderful new feature of about catching bot nets. they get instructions from a centralized web site and they can turn a into a distributed supercomputer.

they can launch attacks and services tax. there is a new detection mechanism that looks at the request for web site addresses. but if one of these programs was on your computer, it would have to get instructions from somewhere. they can look and see why all of these people are going to a russian website. they are looking at the information as an aggregate on the network. this depends on looking at a lot of different computers and looking at their behavior. it is not necessarily fighting that content with but finding good content. -- it is not necessarily fighting bad content.

i look for good content and people that i trust. sometime in is a search engine. sometimes i will have a new idea. i will jump on a search engine and try to find the information. i cannot crawl on the entire network every day. the real question is not is there will be an intermediary but hoopewho. we turned to the first amendment space and we needed these people to make good speech useful. we had a very much for line of precedent from other forms of electronic communication that explains the value of having someone serving as intermediary.

what is interesting is that, they start off by looking at newspapers. if you look at the newspapers, and they recognize the rule of absolute freedom. they said that newspaper editorial discretion is limited by their ability to attract enough readers to cover their costs. it does not matter if they served as a conduit for other people's speech. that to editorial ability is absolutely perfect. that was reaffirmed in other cases have. it has been said that it does not matter if there is a limited amount of voices.

it does not matter if there is private censorship the first amendment is a restriction on the government and not on private actors. it is not that the dangers of private censorship do not exist, but government censorship is worse. to have the government fixed the problems with private censorship, the cure would be worse than the disease. we have some intervention. what does the government do? broadcast is different than newspapers. if a the exceptions to not apply to the internet, then the internet gets first -- gets full first amendment rights. there would be a tremendous amount of channels.

565 cable networks currently available as recognized by the fcc. if you cannot get on television, it is probably because your program is that not because of a lack of opportunity. in reno converses aclu, that dr. and does not apply to the internet. -- in reno versus aclu, that doctrine does not apply to the internet. this is and medium that is universally accessible to children. the supreme court has held the rationale does not apply to the internet because it is filtering

technology. you have taken the action to initiate a search. that deals with broadcast regulations, what about table? this comes out of turner one. this embraced the newspaper model as a baseline. it says that there is a physical bottleneck. it cannot just be an economic bottle neck. they said if there is a physical control, then you have an exception. but courts have held in all of these cases that this does not apply to the internet because you have a competitive internet space. you have cable and dsl fighting it out. you have wireless coming on as i

increase in the effected platform. -- on as an increasingly effective platform. there are actually two overlooked by presideprecedents. the one that gets the least is telephone. there is a dial-up set which says that in fact a phone company can keep certain kinds of objections material off. the first amendment challenges against the rules preventing telephone companies from providing cable television programs. even though you are providing a

common service, you have a right to be free from the government preventing you from the sending mass media if that is what you want to do. in the world of carriers, there is a great deal of editorial discretion. there are a couple of cautionary notes coming from the broadcasting world. what happens when at the government tries to regulate editorial discretion? there is one example of when private individual's exercise t o little -- private individuals exercise too little. you have an obligation to make sure the channel is used propertproperly. what we found is that the bar

on time was hurting foreign language programming. the other side is too much editorial discretion. there is the frustration about the ability to develop standards. the total reduction in the total amount of speech was sound. there's also the manipulation of the rules for political purposes. what has been shown is that there was a product by a systematic campaign by the cold johnson and kennedy administrations to silence the -- a systematic campaign by the johnson and kennedy administrations to silence their opponents. people will use the rules to whatever leverage they can use.

the internet is not new. in the supreme court cases, they say that intermediation is inevitable and that beneficial. with people adding their own content and that increases the need for addeat a tourist to sift through it. -- editors to sift through it. the case recognize that except for the exceptions and cable and broadcasting. the regulatory history is not comforting.

>> i am here to provide balance. i am a professor at the university of nebraska. my point of view is slightly different. yesterday, a friend of mine said that you have to check out this clip on youtube. it is called "star face --, scar face cool play." if you have seen this movie, it is very violent. some school is putting on this

play of "scar face." there is a line or the nine year-old says "you fudge me, you fudge with the best." i wish there was a word that was a combination of disturbing and awesome. i am glad that the clip was able to be shown. i was pleased that the internet could communicate what ever they want. i don't think that the cable companies should be the intermediary.

freedom of speech is an exception in our constitutional ansystem. them we want to be able to debate different -- we want to be able to debate a different political issues openly. all across the world, we believed freedom of speech it is important for democracy and structural regulation of media is important. after world war ii, the u.s. government helped to shape the german broadcast networks. i have met with arab regulators for the first time and i asked them about what kind of system they should have. we have had friends that have

written the plans for iraq post war. secretary clinton has announced the secretary clinton doctrine is that we support an open internet around the world. this is to promote democracy and their own security. the question of what system we have in our country is a question of what kind of democracy do we want. freedom of speech is an exception. we want to make sure that a majority cannot determine questions of speech. the first amendment takes this in hand and uses it to strike down majority decisions.

there are not laws that all of us would agree on. some of the indecency cases, i have written against the fairness doctrine. we can have a structural rules. the reverse sources of speakers. ownership limits. newspapers can't own broadcast stations in the same time. also access to other people's infrastructure. think about a common carrier rules. you can pick up the phone and call whoever you want and say whatever you want. the phone company cannot block or silence certain types of speech.

network neutrality is an issue that has come up often, that to be a rule that would provide all consumers access to an open internet without the phone or cable company intermediating the experience. that is where our biggest disagreement is. i tend to think that the government should have some discretion to impose these kind of rules -- ownership limits, access rules. we see this in broadcast but also in satellite, cable. we have seen them imposed across the board in phone regulations. you can see it on wireless phone service, wireless internet rules. you see it across many different

regulations that impose different kinds of rules. i think that a lot of them are not required. if it is imposed by government, if i have gone to the system ended the rule has been imposed, i think that courts do not stand in the way. i say that as a former advocate for consumer groups. i would like to make one point about all of this which we agreed on which is that most of you at some point or another have agreed to some conditions. turner's case was a case of

holding cable companies to carry broadcast stations. of course, broadcast asians do not want to be subject to their own access rules. they needed to make sure that broadcast rules were imposed on cable companies. i have seen a lot as editorials in favor of network neutrality. they are moving from print to the internet. they would like to do this without getting permission from every carrier in the country. i am assuming that these newspapers will be very happy to argue that access to the cable infrastructure for net neutrality makes for more freedom rather than for more

regulation. there are millions to agree with me out there. i want to make one other point about first amendment judicial activism, striking down rules that are access rules. i will give the example of the internet. the federal communications commission issued a report. this was full of stuff that would regulate the cable carriers, broadcast, etc. the net neutrality rule is a role that would say that cable or phone companies cannot speed up or slow down their traffic. the internet is not a speech idiom, is also close to our economic activities.

i purchase my books on amazon, i bank online. if we have judges who are imposing a needed experience over the will of congress and the fcc, that is economic regulation coming straight from the court and this is something that we abandoned back in 1937. to the extent that the internet is a based infrastructure for economic and all of our speech, it would be dangerous for the court to strike down rules that have been adopted after years of study and debate on the issue. >> let me throw a couple of questions.

and this relates to the comment about the value of the spectrum. for get the scarcity issue, the value of the spectrum now occupied by television broadcasters and it has an estimated to be as much as a million dollars. just except that it is possible. the fcc has actually used this figure. a trillion dollars is a lot of value. shouldn't they be getting something for that value? what about a vat? forget about the scarcity. you hav>> this goes to my pointt

what are the ties. there are regulations that they would not otherwise permit if there was some benefit. there is no end to that question because you can look for some kind of benefit. newspaper trucks it roll down public rights of way. cable companies use public rights of way to extend their lines. as long as you can argue that there's some connection to a public benefit, that can then become the justification for regulating in and other way. there is no end to how far you go for what the price is. you can say that you accept this and i can impose the new regulation.

>> let me change it somewhat. suppose we decided this is a game we cannot play with the broadcasters so let's just take it away from them. let's just have cable. is that ok? one of these cases is allowing broadcasters to cash in their spectrum. >> if you are talking about a purely voluntary arrangement, that would be one thing. you are talking about the government forcing people off of the spectrum they are using because they prefer to use it for another purpose, you run up against some legal problems. there have been proposals that

the fcc should affirmatively use regulation to drive broadcasters off of the spectrum. i don't know if that is a serious proposal or a rhetorical question. >> from a policy standpoint, now that we can use the internet protocol platform, there is no policy justification to have that much spectrum dedicated to one format. this is not about policy but politics. you have people who can have that spectrum for a long time. the problem is getting them off. but bad the. --

you can have the radio when you want it, any thing when you want it. the days of having this just video do not make any sense. >> a lot of these debates should remain policy and political debates. that turned into constitutional cases. there are institutional competence and this is why there are certain circumstances where the judges are in a better institutional place. however, they don't have a better position in terms of policy decisions than the sec

and congress. >> when you are talking about net neutrality, or you suggesting that there would not be any kind of constraint on net neutrality rules? they cannot sell to content providers of expedited services. one-size-fits-all. you can charge a subscriber for different types of services but you cannot have a two-sided market. >> the question is does this violate the freedom of speech. at first blush, it looks like an economic regulation. it does not strike me as much

different than the rules we have already had on phone companies. >> gets to the regulatory classification issues. you would not want a phone company to intervene in a conversation with your grandmother. this goes back to the way in which they were divided and they provided one civil service and nothing else. at that point, the service was different than now where they are providing a range of services on different media. no one would subscribe to a phone company if they could break on to your line whenever they wanted to. >> architecture e facts content.

-- effects content. m d protocol will do one thing well and other things not so well. the internet is a person to person set up for a file transfer, it is bad at multitasking. the internet is a shared medium. what i get depends on what you are doing. the amtrak is offering wireless service on the fastest train. there is something in the packet that says don't download video. if you do this, you will take up the band with. would lead to interact with each other. they're doing this because this is a shared medium and today are trying to meter this on the

basis of applications. there is a contrast between fios and uverse. we have leverage the existing wires. now we are getting new wires. the price tag for putting in the fiber was $24 billion. at&t is doing it for $7 billion. they are doing this by leveraging the and the sistine infrastructure. -- leveraging the existing infrastructure. they have to deal from one source, themselves. limiting people's ability to manage the