emanuel has done this, it is time for him to resign. if the president knew about any of it, weehave a larger problem. it offering political appointments is the president's proposal for job creation, we are in for more economic misery. the time has come for more than claims from the president's lawyer. the department of justice should step in and sign an impartial referee, either in the form of a special investigator or an independent counsel who can sort out the facts and answer the question -- what did the white house offer? who authorized the offer? who knew about it and what was the expected trade-off? the president promised transparency. all we have is a series of transparent cover-ups. so much for change can believe in. >> every year, the cable and television association puts on

an event called "the cable show." "the communicator's" was on site in los angeles. we will hear from two of the attendees. one of the major topics discussed this year was how and whether to regulate broadband. we had a chance to talk with ray baum, of the oregon public utility commission. he spoke about ederal efforts to expand broadband and how it would affect his state. >> let me start with your responsibilities in oregon. there is a big push at the state and federal level to get broadband to as many houses as possible. can you talk about the challenge in oregon? >> the challenge is one of geography. you have low populations that are not near any kind of broadband network.

it is difficult to serve those folks when there are only a few of them out there and sometimes hundreds of miles to get there. the challenge is whereedo you determine to go and where does the business case not justify the investment. you want to go where industry cannot do it. we're trying to map it and determine where those areas are and focus on them and figure out a way to serve them in the least cost fashion to the federal and state funds. >> let us start with the easy question -- mapping. it seems you will need to figure out a way to do that in order to monitor compliance, from a regulatory standpoint. whaa are the challenges of mapping, especially in a large rural area? >> we have to get the data from the providers. some of that is proprietary. they are kind of reluctant to give it to us. i think we will be successful in

getting that information, but that is the first step. you have to do surveys to verify the data to make sure it is accurate. that gives you a picture of what you are dealing with, where the on served areas are and the underserved areas. we want to determine what areas have service but the usage rate is down. people do not seem -- people do not see the value. it is too expensive. some people do not understand the internet's importance in their life. we need to work on those issues as well. >> that is philosophical. some people might decide to live in rural areas because they do not want that stuff. it sounds like the government is suggesting you've got to have it. >> to put it succinctly, if you are not on the internet in the next few years and doing so in a very intuitive manner, it is going to be a difference to you

income was like the difference between a high-school education verses a college degree. there will be a divide based on texas to the internet. -- based on access to the internet. there are folks who do not have phones. that is less than 3% or 4% sign of the population. they will probably not get internet service either. but we have to give the rest of those folks a chance so they are not left out of the digital boom that is going to bring a better quality of life to most americans because of the benefits of broadband high-speed internet. >> explain my other citizens should subsidize that? >> when you want to go out there and visit these places, you want to hook up. people want to be in touch. they want to check in with the office, to take care of work and do some things. this allows them to do that while they are there.

it is a highway. you want to drive in the rural part of the country, but you want a nice highway, not a road with pot holes. it is that kind of critical infrastructure. they should target unserved areas. there may need to be a federal benchmark amount of money that consumers could pay in those areas before there is a federal subsidy. that is part of the federal broadband plan being discussed by the fcc. >> you mentioned the universal service fund. it was not made for this kind of use. there is debate on how to reform it. what are your thoughts? >> it is all technology -- telephone lines. you have people on telephone lines, but the majority is moving not only to broadband but to mobile phones. this fund has to provide that broadband service for the

economic models of private industry do not make it pay. you have to change that fund from a telephone line fun to a broad band fund without doing damage to existing business models that provide broadband service in those areas. you focused additionaa moneys on where broadband service is not, if we can get it there. >> the panels at the convention -- there were discussing federal level regulations. they made the point that the thinking is perhaps subsidies for deployment but not for operation. the question is if you managed to get broadband -- even mobile broadband -- to these areas, is there still a business model? how do you overcome that aspect? >> there will have to step up 10% to 5% of those areas. support to be served.ngoing

the business model does not allow them to charge enough to do that. the rate would have to be hundreds of dollars. one of the principles of universal services is to keep rates in urban areas and rural areas comparable. they do not have to be even. the have to be compatible. that is the policy. we do not want to price people out of the internet because of where they live. there has to be operational money in some areas because there is not going to be enough population to make it pay on a reasonable basis. >> from a policy perspective, it has essentially been decided that access to broadband is a right. everything you are building has suggested that people ought to have it if they want it. >> the s.e.c. will make a public policy choice -- the fcc will make it public policy that we

should have it throughout the country. that means it is going to have to penetrate rural areas where the business case is not currently made. it will be a challenge to control the cost to do that. i think they can do that. if you are not hooked up to the internet, you're going to be left behind in this current environment. >> moving to older businesses, there have been a couple of deals in oregon, including the verizon landline business. i wonder what they suggest you about the future for land lines. >> they believed it all rests on providing that to the customers at a reasonable rate so they can compete. the challenge of all wireline companies that do not have a mobile wireless component is how they're going to do the mobility component without being an at&t and verizon, with both wireless and wireline divisions that can serve the customer on a bundle basis. that would be the challenge is

how to avoid losses if they are suffering from their own phone line. they could try to make up their revvnues for the loss on the wireline sign they are using by folks dropping their wire lines altogether. >> what are your charges as chief regulator, with the rapid advance of technology? >> we are caught between trying to facilitate it and staying out of its way. we can never regulate it enough to anticipate what is going to happen. we do not want to pick winners and losers. our best option -- if we want to be there for consumers so they can have their complaints resolved, we want to facilitate competition and try to mitigate the opportunities for abuse of economic power when networks are controlled by just a few players. they can exact a higher price from competitors and consumers

pay in -- than they otherwise would. we would like the market to take care of that. but in some high-cost rural areas where there is not a lot of competition, we will have to find a price mechanism to avoid that from happening. with all this competition, cable getting in the business and wireless getting in the business and existing incumbents like at&t and verizon -- in the urban and suburban areas, let them go at each other. let the market decide who the winners and losers are. on the fringes of society, for those who are poor -- the least, the lost, and the last -- the poor who cannot afford it and do not understand, the people who do not see the value in it, and those on the edges of the network who do not have the service -- those are the things we need to focus on as

regulators, and stay out of about 95% of the market. that can take care of itself. it is the remaining 10% we have to engage. >> satellite has traditionally been the way to reach the farther out people. >> that is probably why the last five% felt it was going to be a big play. satellite is more expensive and has latency issues. it probably could be improved. right now, it is kind of a competitor but not an effective one on a band with basis. pandwidths are going up to tens of hundreds of megabits. that requires fiber, to a large degree. i know 4g is coming, but it has less -- it has yet to prove itself. you have to have fiber out there and make sure this new technology -- videoconferencing, distance learning, telehealth, how you

control your home network from faraway places -- all require lots of bandwidth. i think the private sector is probably the best place to build that. >> from your seat in washington, how does the federal debate over title ii and the fcc's valve for a light touch affect you? >> once comcast decided to sue the fcc in federal court in washington, d.c. district court, we knew there was going to be trouble. the d.c. court treats the fcc very skeptically. in the past, the fcc has not been as careful about their record as they could have been. this is a gamble on the part of the industry. the federal record -- the federal court could take the fcc's jurisdiction away and force it to reclassify broadband

under title ii and make it a common carrier. that is problematic for the industry. be careful what you do. you could end up in a place you did not anticipate and you could win a battle and lose a war. the war has kind of moved to title ii lite, as it is being called. it will be interesting to see how that shift occurs. we would be happy as regulators to give them jurisdiction as long as they focus on nondiscriminatory access and interconnection access. we're not excited about content stuff or anything like that. we also believe everybody has to be caught in the game. the big players, whether you are comcast, at&t, or google -- everybody should think about market power and market control. what is the best way to do that? the private sector has done a good job. there have been a few incidents, but they have been addressed.

what they are worried about is these big players that will start squeezing the innovators and compactor's out of the market. the big players pushed back and say that is their investment returns. they need reasonable congestion management practices. this gets thrown into the lap of the fcc. regulators are watching it settled out. remember -- the district of columbia and alaska are very different. make sure you build in some flexibility. the conditions are different throughout this country. do not take regulation out. it needs to be there to protect consumers. >> the work you do for the national organizations of regulators -- is this a big worry you have, being cut out of the process? >> yes. at the end of the day, the federal government -- one side does not get all.

the federal government is slower to act on consumer issues and state regulators. we do not want 50 states doing this. my personal view is we need federal leadership on this and then have flexibility to allow the standards to be changed to fit the growing concerns that consumers have. we want to make sure everyone has the same consumer rights, whether they live in the district of columbia, alaskaa oregon, iowaa or hawaii. this is an interstate, global service. that should be good quality wherever we go. internet is going to perform all of the functions from beginning to day-to-day -- dated downloads, but it is also the place where you call the sheriff. you will have to get hold of emergency services. it has to run those things well. that is where the industry is going to step up and take societal costs on.

the question is how far should the fcc go beyond those basic things toward regulating the internet. that has yet to be determined. >> what are the top complaints that come into the commissson over the past five years? >> the complaints are mostly about speed, costs, and getting dropped off of the network when they have free services. the customer does not believe they got what they bargained for, that service does not work in that area. industry has gone a long way into writing that. there was also a big row about termination fees. there were charging $200 to change services. now they are providing that. the industry is responding. the regulators raised the issues. those are the things we have to be careful of. sometimes, the consumer has a

different expectation from the company than what the company delivers. we have to make as much as much as possible. when consumers are bounced out they have to have a place to go. they are not going to go to the s.e.c. and they are not going to go to federal district court. they do broad class actions. state regulators have to have a role in settling those complaints, which mostly result in companies being the party in the right. we need to have some place to park those complaints. the states are the best way to have that done. >> oregon was particularly hard hit by the financial crisis. the realistic foreclosure rate hassbeen really high. has that complicated the telecommunications business and the regulation thereof? >> the growth that was going on obviously is. the utah commission basis -- the telecommunication business -- the major complaint at the puc was utility bills that could not

pay. they needed electricity. we had some complaints about wireless bills as well. it is a lot more expensive and people do not have the money. they call the puc and said, "what can you do about my utility bill/" would provide subsidies and things like that, but there is not enough to go around. we are letting people get what they can. ultimately, we have to come out of this recession. it will be better than. >> are you beginning to see a turnaround? >> i think so. we are an export driven state. we sell a lot to the far east, china, and europe. china and japan keep buying. we are in good shape. if iraq remains in the dump, we are not. there is a slow recovery going on. we do not know whether the

sovereign debt issues overseas and the problems on the new york stock exchange will cause psychological damage to investors. we are waiting and hoping that things settle out and the economy comes back and we can get back to sufficient revenues to run the state. we have huge budget calls to deal with in the next two years. >> the next question is the biography question. you came to this job from legislator.as a state i wonder how the responsibilities transfer. what does having the legislative experience do for your perspective as a regulator? >> first of all, all processes are give and take. regulation is not a science. it is an art. there is a range of outcomes that could be right when you the methodology can be humane. court's judgment on final results. in the legislative process, they delegate their authority to set rates on the monopolies they

granted. we are just like the legislature. we do what they would otherwise do. understanding that they are our bosses, and the government as well, we try to do our bidding the way they would like us to do it. you have to make sure the regulators and governors are on board. you implement the policies they give to you in the easiest way to benefit atepayers and be fair to the companies so they get adequate capital returns and existed the financial market. >> thank you for visiting with "communicators." >> that was the head of the oregon public utility commission. we also spoke to carol hevey, with time warner cable. she spoke about regulation and expansion, as well as her new responsibilities. >> your new title as a result of consolidation wiihin the company -- could you explain a

bit about what the thinking is with the new structure you have in place? >> we are aligning the company into regions. the purpose for that is to simplify our structure so we can be responsive to our customers, responsive to the marketplace and competition, standardize our practices and some of our product offerings so that we can get quickly to market, and make sure we are being responsive to customer needs. >> i read there is a new customer service survey coming out at the show this week. the result is probably not surprising. given all of the options available to consumers, there fuse is getting shorter about customer service issues. how did you respond to that real competition in the customer service sector? >> we see that every day when we

respond to customerr. we know that the demands are great. we focus a lot of attention on making sure that we have the right resources, the right tools, the right training for our people so we can be responsive and give customers the best possible service. we are very focused on that. >> it has to be more expensive as the technology in houses gets more complicated. how'd you find that balance of cost containment and customer service? >> that is a really good question. i think that we have a lot of tools that allow us to do a better job than we ever have of serving customers in their homes. oftentimes, we are able to solve a problem for a customer without going to the home. it is more convenient for the customer and there is a cost savings for us. we find we are rolling your

trucks and we have in prior years -- rolling fewer trucks then we have in prior years because of the upgrading we have done with the cable network. the cost of customer service is a cost that pays back in additional products and services that customers will purchase. we believe it is a smart investment. we invest where is necessary and to the extent it is necessary. we try to be smart about the way we serve our customers. >> you come to this job out of the carolinas, the banking capital of the united states, the epicenter of the financial meltdown. how is that region pairing? is there a sense the economy is getting better? >> i would say things are definitely better than they were a year ago. for example, in charlotte in particular, it got hit very

hard in the most recent recession. the carolinas generally saw a decline -- increased unemployment. we are starting to see some recovery. the housing market has started to pick up, which is good news for us and good news for north carolina and south carolina. we are pleased to see there are some signs that things are beginning to get better. >> listening to the open session yesterday, one of the demographics that seemed to be happening was many more multigenerational families that are being established. people may be living differently as a result of this economy for some time. how are you planning for that? >> i think that we are listening to our customers, understanding the needs they have for products and services. customers' lives are more complicated and busy than ever.

our products and services need to help them simplify. we need to beeable to respond with products and services that meet their needs. we do that. we are doing that all the time, staying in touch with the needs of our customers. >> as the housing structure changes, there may be new opportunities for business. >> absolutely. >> looking at the growth in broadband, which has been incredible in the last quarter, what the sea in three to five years? video to broadband -- how does it translate? >> it is really interesting to see. it is especially true, being here at the show and looking at some of the technology being developed, that there is a convergence of what have been separate and distinct products for us -- video, data, and voice. they are converging. customers will get their video

through a variety of sources. we know that. we are preparing products to offer to customers that will allow them to do that -- to meet those needs they have. the other trend is mobility. we are involved in launching some wireless service in north carolina and other places in the country to respond to that need. >> carolina has always seemed to be a beta site for time warner. why is that? >> there are a variety of reasons. we have an engineering presence there. our engineers are based in charlotte. we have found that that lends itself to charlotte being a base site. it is a great market. customers are responsive to products. they give us good feedback. we have a network of customers we work with to get feedback as

we beta test and try different products. this is something we have built in the carolinas. it works well for us. >> how are you doing broadband issues, ith regard to more and more demand for all these applications and services and your ability to deliver? >> i think we are looking at those demands, staying on top of those demands, and making the necessary upgrades to the network. over the next several years, we will be upgrading the speed and capacity of our networks. we do that on an ongoing basis. as customer demand increases over the next several years we will upgrade and do what is necessary to respond and meet those needs. >> why are you better able to serve the needs of customers in your region than verizon? >> verizon does not have a presence in the carolinas. as i move to the rest of the

world, i do. our data service has the same capabilities -- is faster, better, higher quality. >> broadband will distinguish it with regard to video delivery, which is a new application. do you have an advantage over what they are offering? >> i think we have a history of we are attuned to what the needs are. we are attuned to what the products our and need to be. we are responsive to that. >> a lot of what you have described comes back to the people who work for you. as an employer, it seems as though you are demanding more and more of the people who work for you, in terms of their knowledge base. are our schools graduating the kind of people you are going to need to employ? >> unfortunately, i think most of us know that we do not have

-- we are not graduating the number of students that we need to have specialties in science, technology, engineering, and math. that is a concern across america. it is certainly a concern for time warner cable, as those are the future employees that we need to be able to hire. we need people with that skill set. in response to that, time warner cable has introduced an initiative to support education around s.t.e.m. across the country. we are focusing in every community that we serve on supporting schools and supporting young people, and encouraging them to look at career opportunities and pursue career opportunities that focus on technology, science, engineering, and math. engineering, and math. >>