effectively using these drugs half are being supported bypepfar. we will continue their success by increasing their funding. funding was $5 billion in 2008. in 2011, president obama has requested more than $5.7 billion, the largest amount any country has invested in the fight against global we seek to direct the tree and then 4 million people worldwide, double the number of people who receive treatment during the first five years. we are raising our goal for care to more than 12 million people including 5 million or friends and vulnerable children. we are raising our goal for prevention. through the global health

initiative, we aim to prevent 12 million new hiv infections. to do that, we are embracing a more comprehensive approach and expanding on what works. we are moving beyond abstinence , the faithful, and consistent with the correct use of condoms to aid in the approach to prevention. we need to use every tool we have, medical, behavioral, and structural intervention that includes male circumcision, the prevention of mother to child transmission, disinvestments of making detection were available and affordable, affordable, and when needed legal or regulatory changes that will make it easier to protect the population. the united states and the world has already made strides to stop this epidemic.

we know we confront 2.7 million new infections every year. we need to get better results in prevention. our strategy under the global health initiative will enable us to do so. the immediate reaction will be that its prevention strategies will become more comprehensive. similarly, we are strengthening our support for other health programs refund around the world. reducing the burden by 50% for 460 million people. against tuberculosis, we intend to save by increasing access to treatment. we are scaling up our work in fandom -- family planning, areas in which the u.s. can and must lead. every year, hundreds of thousands of women die from complications related to

pregnancy or childbirth, nearly all of them in the developing world. for every one woman who dies, 20 more suffer from debilitating injuries or infection. every year, millions of children die from preventable causes. saving the lives of women and children require the range of care from improving conditions. this includes increased access to family planning. this represents one of the most cost-effective public health interventions in the world today. it prevents maternal and child deaths by helping women space of their birth out and bearing children in safe years.

the united states was once of the forefront in the developing successful family planning programs. in recent years, we have fallen behind. we're making up for lost time. all told, we will save millions of additional lives through our increased support to existing u.s. health programs throughout the world. what about these systemic challenges that surround usaid and other u.s. funded health programs? the constellation of logistical, structural, and legal problems that decrease health for the woman that i described minutes ago. this will limit any donor impact. women me save it from aids will die in childbirth. children we've said from polio

will die from a virus. on a broader level in the terms of the scope of the public health services available, the future will not look much different than the present. we need to lay the groundwork by tackling some of those problems and working with partner countries to get rid of some of these deep-seated the obstacles. that is how we can make our investments yield in the significant returns and save the greatest number of lives today and tomorrow. let me explain a few key ways in which we are pursuing this goal. first, we are working with countries to create and implement strategies so they take the lead in designing based on their distinct needs and we are helping them build their capacity to manage, oversee, and coordinate health programs over

the long term. in practice, this will mean different things in different places. in some countries, their training community health workers to develop and answer basic health questions. in other countries, we are setting up supply chains to establish drug protocols to ensure madison will reach patients. we are helping to set up health information systems so you can analyze more data from the number of births, deaths, and the number of women who receive care in the prenatal clinic. countries need a sustainable system to monitor and improve their own performance. second, we are focusing on the median contribution of women and girls who are still frequently overlooked and underserved by

health professionals to do not notice they are suffering or hear their concerns. our commitment to promoting the health of women and girls is for their sick but also for the sake of their families and communities. when a woman's health suffers, there is a ripple effect throughout the village as well. when women are healthy, the benefits are similarly broad. to often the social and economic factors that restricted their access to health services such as gender-based violence, child marriage, female genital mutilation, lack of education, lack of opportunity and other forms of discrimination remain unacknowledged and unaddressed. we're linking these to a reuter -- it to the broader development problems. we're working with governments,

civil society groups, and others to make sure the needs of women and girls are recognized as critical not only has us but by the health ministers, the people at grass roots to the minister care everyday so that they're taken into account in the budget and planning. we are improving how we measure and evaluate our own impact. this includes shifting our focus from inputs to outcomes and impact. that is determining your sex -- determining our success by how many people actually avoided malaria by using them directly. a fuller picture the demands we invest in improving how we, ourselves, collect, analyze, and share data. we are investing in innovation, focusing on developing tools that will help diagnose,

prevent, and cure disease in the communities where we were which are often remote. many of the tools and techniques we use to keep people healthy here in the united states are not suitable to the realities of life in other places. we need to be innovative about how to reach people effectively. one example is by using cell phones. in several countries, we're working with public and private partners to help develop -- help prevent maternal and births deaths by sending critical information via cell phone. another exciting example of the impact of innovation, we achieve a significant break for just a last month. scientists in south africa successfully tested the first microbial gel to prevent the transmission of hiv.

this was made possible with funding through usaid and the south african department of science and technology. it has the potential to be a major breakthrough in the prevention of aids because it is an affordable tool that women can use without needing permission from their partners. to often the men decide whether condoms will be used. with such a gel, women will have the power to protect their own health. we are improving coronation and integration. that begins with a lining all u.s. government programs within one country by linking hiv and aids programs with maternal and child health, tuberculosis, and family planning. coordination starts at the top here in washington.

the global health initiative brings together experts across the government. here today are the three extraordinary heads of agencies who also happens to be three exceptional doctors who are leaving the day-to-day operations of the initiative. the administrator of the u.s. agency for international development, the u.s. global aids coordinator, and the director of the centers for disease control. their agencies along with the national institutes of health and other agencies from the department of health and human services, defense, the peace corps, and others will work together under the guidance and direction of deputy secretary of state who is also here with us today. this is a unique leadership structure. it in beds our commitment to coordination at every level from the white house down.

we are working with existing partners and is seeking for new ones. we want to align our efforts with other donor countries and multilateral organizations, many of which do outstanding work. let me mention one in particular, the global fund to fight aids, tuberculosis, and malaria. and has had a transformative an attack on the world on only in the millions of lives it has saved about by creating a new model for how the global community can come together. the u.s. was proud to be the first donor and its largest donor. we remain the largest donor under president obama's request. our most critical collaboration's will be with partner countries. we will call on them to bring their full commitment to the effort.

their contributions will determine whether you we succeed with our goal of building coordinated sustainable systems for more of the world's people. we need only worker -- look around the world today to see how critical country leadership is in cases where governments invest in their people's health, where civil society groups are empowered and engage, were helped as recognized as a priority in every level of society. consider the progress in south africa with respect to hiv and aids. this country has one of the world's highest burton's of hiv. for too long summer of south africa's leaders had a view of the epidemic that denied the link between hiv and aids. that has now changed. under president hamas, -- zuma,

there is a new way to increase testing and treatment. the united states has demonstrated our support to help south africa build capacity to meet those goals and address the epidemic over the long term. to galvanize country leadership, we are bringing to bear the full weight of american diplomacy. our diplomats are working closely with their counterparts worldwide to invent a deep commitment to health only in the offices of the health minister but the foreign minister, and finance minister, and especially in the top at the offices of the prime ministers and presidents. too often receive health relegated to the sideline in terms of how much money is allocated.

we seem countries taking money away from health thinking we will make up the difference. the u.s. is willing to invest our time, money, and expertise to improve health in countries, but we are now asking their governments to demonstrate a similar commitment in terms of human-resources, pledges to build capacity, and financial support where feasible. we expect these countries to step up. this will not be easy. the changes we're working to achieve to the global health initiative are broad and deep. there are many obstacles standing in the way. if we succeed, we will have transformed how health is delivered and received across the world. now, we have already come so far as a nation and as a global community in saving and improving lives. we are grateful and for all who

brought us to this point particularly the heroic health workers from the determine the scientists to researchers, committed activists. thanks to them we are able and obligated to go even further to save even more lives, take on more difficult tasks, to commit ourselves to the patient, persistent work of building the foundation of a healthy future. this is a challenge worthy of us as a nation and a people. we are rising to meet it as we have done many times in the past. together we can give millions of people a chance at healthy lives and create a healthier, more stable, peaceful world. coming here to talk about this is a privilege to the this is a place that will be providing the leaders we need in the future to realize this tradition, to ask the hard questions about just

because this is the way we have always done it before coming is this the way we should continue? to challenge the time press whose own structure often treated still five stuka -- still the pipes. investing leaders that -- convincing leaders that investing in their own people's health is not only were the goal but critical to the future of security, peace, and prosperity. we are aware of all of the pitfalls, all the obstacles, internal and external. we cannot sit idly by. we have to do all we can in our power come in this time to make a difference. that is why i know you came here, in order to find your own way forward. we welcome your participation.

we welcome you to be part of helping to solve some of the world's greatest challenges in now and in the future. thank you all very much. [applause] [applause] >> thank you, secretary clinton for that comprehensive and compelling description. there is no one in this audience today or in the audience of the media then thinks they heard this speech for today. young leaders will be learning about this speech four years to come. we are privileged.

secretary clinton has agreed to except questions. let me return the program back to her and many thanks again. >> i do not know what the arrangements are. do i call on people? >> whenever you like. >> like colin you come you can stand up, give your name and affiliation, be brief and only ask one question. >> it will be a pleasure to come join both of you. i think you for a terrific speech. i appreciate the attention you bring to global health issues. i think everyone really appreciates that. use the global health has everything to do with foreign policy and i completely agree.

i wonder if you could talk about this affects global health and how you implement that when the u.s. is engaged in places where we have humanitarian and strategic interests window >> we have interests all across the world, not just in the places which are so well aware of right now. i like to think about every day, considering with the headlines are. equally important, what are the headlines? one of the problems the u.s. will deal with in one year, five years, 10 years, 20 years if we do not begin thinking about them and acting on them now? this is such a clear example of that. as i pointed out in this speech, we have so many intersecting

goals when it comes to being the leader in global health. of course, it has to do with foreign policy. it has to do with the health of our own people. it has to do with the values of america. it has to do with how we prevent -- how we present ourselves in the world. when it comes to how better to integrate and coordinate this, diplomacy is a key role. from the very beginning of my time a secretary of state, i talked about elevating diplomacy and development alongside defense and go -- alongside defense. as i look at the world in which we live, they are not separate. we see, perhaps, the military taking the lead in some places, but the development experts are in there every single-doing what

we can to improve health in the education. it is the as a necessary cooperative integration of power. we're trying to they get every program that we have across the government and more effectively deliver on that promise of integrated power. we will be releasing the first ever quadrennial diplomacy review. the defense department has done one for many years. having watched the affected this for the defense department, congress, and the public to put together a statement of those commissions, and strategy really gives life to what we're putting

forward toward this integrated approach. when we think about a country like nigeria, we have the cdc, pepfar, and usiad -- usaid all in nigeria. we had development experts on the ground doing extraordinary work. we responded to what became a series of rumors about how the polio vaccine was designed to sterilize children. the matter how hard our development experts, are doctors, our nurses, or anyone from our agency worked that problem on did much of the effort that we were engaged in.

we launched a diplomatic effort to goal of -- to go along with our efforts. when the deputy secretary was in northern nigeria recently he went to see the chief of the area, the mirror -- the emir. he vaccinated with the oral polio vaccine his own grandchild. that spoke more clearly than any argument we could make. we cannot do one without the other. we have to have a coordinated effort. what happens to often is that people work so hard. i have never seen harder working people in the people i have seen from usaid, pepfar, or the cdc. the work so hard to improve lives, change lives, change

governments. very often in the countries in which they serve, they do not work together. i have had members of congress tell me repeatedly who are interested in their development work that they go to the embassy in the country in latin america, europe, asia, and they want to meet people in development. all the different leaders and workers come together. that is the only time they are together. we need to end that. we have the smartest, most able, dedicated people working in development working in the united states government. if they do not work together, they cannot possibly leverage what they're doing to get anywhere near the goals that we set. this is a passion of mine.

i want this to be viewed as the best in the world across the board and wanted to become the premier development agency across the world. we cannot afford in a time of limited financial resources to have everybody be doing their own thing, you know? if we are going to have a clinic, they need to do not on the h.i.v.-aids but family planning, polio, and other matters. if we are trying to have a team in a country working together, they do not all need of their own suv's. we need to get smart about how we spend our money. we do not have a limitless resources. i feel a particular obligation, as i have said numerous times in the past 18 or so months, at a

time when american unemployment is recorded as slightly less than 10% and we know structural unemployment is worse and we are asking hard working, maybe unemployed americans to keep paying their taxes and some money will go to fund our development and clumsy efforts worldwide, i have to look them in the eye and tell them they are getting their money's worth. we have to get smarter, more agile. i have seen these doctors in their own agencies working to bring that idea fourth. now we are going to try to do this across government. those of you who are checking in for your first year here is not easy. any ideas you have come a send them our way it is we are

committed to making the changes for the long term. >> any students over here? the young woman with the brown hair. if you could wait for a microphone. please remember to give your name. >> i am a second year student here. thank you so much, secretary clinton, for coming here because this is an honor. i'm glad to speak on behalf of my class. as a current in turn on usaid, i am not speaking behalf of the u.s. government, this is my personal -- [laughter] rwanda just underwent elections. a lot of the sub-saharan countries are going through their own elections.

hardy you reconcile leadership especially in africa where a lot of our global health funding is going into the impact that has on whether or not the program goes forward and has the support, maybe future recommendations working with you -- future african leadership. >> great question. at the core of some much of the work that we do and the analysis that we undertake every day, that is why i mention south africa. leadership matters. it matters enormously. for years, the south african leadership, unfortunately, was in denial or was refusing to accept the facts about hiv. the epidemic exploded in south africa which now has the highest percentage of hiv-infected people anywhere in the world. the president has changed that. we were in south africa last

year and we saw firsthand what a difference it makes when a president starched to treat people, at 3 more people, produce more drugs, get a health minister that is dynamic and very committed. it was stunning and wonderful to see. leadership matters. we can go into countries and deal with emergencies. we can even set up parallel systems which we have done because there is no other way to do it. we run our own health clinics. we run our own immunization programs. we improve the quality of life. if there's nobody in from the leadership, these are not sustainable. we have countries in africa, asia the are becoming quite well

stay in one respect -- quite well see yet you see none of the money going into health. we have to tell countries that we cannot help them any more than they are willing to help themselves. maybe their health is just getting the right people appointed to the right jobs because they do not have any more resources than not. sometimes it is allocating their own resources so that all the sudden care where the money goes. some of it is working with us on training programs. there is a myriad of ways that leaders and governments can show their commitment. i have been enough countries everywhere in the world to know that leadership is the alpha and

the omega has to whether you have sustainable, effective health care in any country. i am hoping that through this partnership, this global health initiative, that we will see greater by and -- buy in. if they will come in and do health that we will do roads. that is a good substitute. our argument has to be, this has to be a comprehensive approach. of course you need roads and that can bring people to the clinics. it cannot be one or the other. we want to do more work with other donor countries and other ngo's. doinge're trying to do in

this, we would like to see it globally. we're talking with donor countries that have programs in the countries regarding the global health initiative. we are trying to see how we can maximize the impact. aeally, i'd been led to see map of the world all the up. the scandinavian country to take their resources and go to this country which the united states can not do and no one else will do and we would the global fund to been supplementing in not supplanting the resources that go in. and is very difficult. we also started discussions with china on development that

secretary geithner lead in beijing. the chinese are on a presence in africa, latin america, and déjà. but -- and asia. there are millions of chinese that are working and involved in the contract. and the businesses that are being developed there. often, the chinese will offer some kind of development aid in return for a mining contractor. ifn we're trying to do is they're wrong to do it then gets integrated. the chinese are building a road and we are building a hospital and we would like it if the road came to the hospital. those discussions are ongoing to

go back to the first question about development in diplomacy. we are trying to look at this holistic play. we are buttressing and supporting leadership, trying to get health ira. it needs to be one of our biggest economic difference with his we cannot really accomplished this if we do not have the support and buy ins. >> i hope there are students in the back to have questions. if you could take a microphone. >> madam secretary, i am a student here. my question is a relation between the house initiative and the mdg. while these are ambitious, even if they are achieved by 2014 we will still fall short.

do you see these as no longer achievable? if you do, what outcomes will you be looking for from the summit next month in new york? >> i see them as achievable, but i see their achievements as taking longer than any of us would have hoped for when they were first adopted back in 2000. as a forward to the summit in the general assembly on september. i agree to participate because what we're doing is continuing on the path toward the millennium develop and falls. we are taking stock and we have met with the u.s. officials to ask that everyone takes dogs. where have we made progress and why? worm with fallen short and why?

what can we do you try to fill the gap and we can continue on the path toward achieving the goals set for us. i am sensing a much greater openness to this done enough just to care ala. he have to to ask yourself how much good in my really doing. is this in a well in advance to maximize progress. the picture in 2010 compared. i think we can save pleasure and pride. child mortality is down. there are some positives that have been reached from the way to the goal. we have met a long way to go. we hope to use the u.s. firms

this in september as a form were bringing in a lot of the multilateral organizations and the donors to give it to have this very for a discussion. rod shaw has started this argument in usaid to solve global challenges. in the u.s. we are working on them. we think technology can make a big difference that will help us better educate people. we see the glass half full. it has a long way to go before it gets to the top. we are committed to the process.

>> last question, hopefully by a student. >> thank you. i am an incoming student here at sais. what metrics do you intend to use with regards to promoting women's health? >> we will be rolling out met rics, right guys? [laughter] let me answer that in a brief statistician way. cdc is like the epicenter of evaluation and reporting. they can give the rest of us

help on how best to do that. there are many different indicators. we are focusing on maternal mortaliity because it is measurable. we have a better idea what works and what it will take to have more women delive4r. a safe birthing kit, a bar of soap, plastic, a razor, all the way to tertiary care for complicated pregnancies. we will be judging outcomes and how do we meet the needs along the way. it is built into the ownership

conceept. better access to family planning is directly related. if women are better able to space out their children and the births are more likely to be safe and successful, we also would like to see increases in the legal age for marriage. we know young girls are more likely and that physical risk for pregnancy and delivery of new. this is another way that development in diplomacy work together. we are encouraging countries to pass stronger laws and enforce them. so you do not have girls between 10 years old than 16 years of trying to deliver babies. we're looking at the access to care which is the example that i gave because hiv and aids and

now has an enormous a lot of work to be done to prevent the continuing sexual abuse of girls and women by men infected with hiv. some have the very unfortunate superstition that having sex with a young girl cures you of the disease. there are a lot of educational components about how we try to change behavior and protect croats and women. these are some of the examples on how we will in a broad matrix judge ourselves. we would really like to see mwih the mdg's agreed upon measurements. they are honored more in the

breach than in the actual implementation. i think there is a lot we can do by pulling together what we already know and trying to, frankly, published it in a more digestible form. it is fascinating to me that in our last strategic dialogue with afghanistan, both when i was there last month in in the recent visit by president karzai and members of his government, of their number one developmental request was to help fund the issue of maternal mortality. when you think about it, i run back to the first question about foreign policy, diplomacy, and development. there are varying degrees of attitudes within the afghan culture about interventions in health. there is general agreement about trying to keep women alive as

they deliver babies. the united states working with other partners in a concerted effort on maternal mortality in afghanistan gives you an opportunity to connect with segments of the population that may or may not be particularly supportive of anything else that we and others are doing. you have to look at how this fits into the overall strategic goals we have in foreign policy. that is why i will end where i started. sometimes with humanitarian emergencies, like what we are seeing in pakistan, like what we saw in the haiti earthquake, you just acting and do what is right because it is the moral imperative to do so. the american people are very generous in responding to those disasters. once the disaster has receded

and the human cost of death and destruction, and jury, devastation of infrastructure and farmland is left, then i think we had both a humanitarian and a strategic imperative. i think we are at our best when we are able to produce results where people see us as we see ourselves. the american people see us, and i certainly see our country as an incredibly generous nation. we have gone time and time again to the aid of others with whom we do not have much of a connection and perhaps the real politic would not dictate that we should, but we have. if we are going to be investing time, money, blood in our

efforts that we go into this with a very clear view of what we are trying to accomplish and we take into account the values and the cultures and traditions of others but we recognize there are certain issues that have to be addressed, leadership being absolutely have the top. i'm very optimistic about the global health initiative, about what it can mean in terms of results, and what it can represent as, frankly, a new model of how we better present ourselves to the world, how we are no rigid more cost-effective and efficient in delivering services and real united states leads by our values and people can see what that means to them. thank you all very much ringbone -- very much. [applause]

[applause] >> defense secretary robert gates says he plans to leave his job next year. the foreign policy magazine issued today, leaving in 2011 gives him time to oversee the major offensive underway in afghanistan but to back out

before the 2012 presidential elections. he has been defense secretary since december 2006. last month, he fired the u.s. top military commander in afghanistan, general mcchrystal. it has been announced that general mcchrystal has been hired to teach a course at university. -- at yale university. >> "washington journal" continues this week with a look at financial regulations law. tamara, the impact on banks. a new topic every morning at 9:15 p.m. eastern here on c- span. >> i think what we're trying to do is to, frankly, take away profit. that is what drives crime. >> tonight, intellectual property theft on the internet with immigration and customs enforcement assisting the

director on c-span2. >> i think it is important that every flitter -- floridians know that i will stand up for the principles. i will not be part of the campaign a special interest. >> campaign 2010 and the c-span a video library makes it easy to follow the debates, rallies, and a concession speeches all free on your computer any time. >> emergency responders are looking at using the internet and social media for communications during a crisis. the american red cross recently held a conference on the subject. in this portion, officials with the los angeles fire department talk about their experiences. this is about one hour. >> that is obviously an illustration of just how important this community has become to wallow less. that is why i am super honored

and excited to have my friend, heather blanchard, here, the cofounder of crisiscommons. she has taken such a huge personally to follow her passion here and has been an incredible leader to all of us in figuring these issues out and really cultivating a passionate community. without further review, have their -- heather blanchard. >> i think she is a rock star. her and her whole team. i want to recognize kill foster, jeff livingston, for your help coaching, hanging out with me, i

really appreciate that. thank you so much for being there for crisis comments, crisis camp, and answering our million questions. the chief of staff at the red cross, we appreciate your friendship and throughout all of the years. we appreciate that. i will try the clicker. crisis commons as an organization built with volunteers. we use technology. we are not all programmers. two-thirds of us are programmers or people who can utilize skills on the web. far be it from me to describe all the good things that they do. i will let them show you what they do.

>> my name is chad. i work with volunteers. we are a community of disaster response and relief specialists. we have a firefighters, people with the u.n., red cross, and people from google and yahoo. it is a bunch of people trying to build applications for this kind of situation. >> the reason why i came is because it is a happy surprise as a coder and programmer we can help the people in haiti. >> our goals is to build a new

base layer map. another is to coordinate all of the missing persons directories and applications into one application. >> i am on twitter right now. i set up an account. i confining other -- i am resending all the information about donations. i am haitian american and this is a story that is very personal. some of my grandmother's brothers are in haiti right now. i could not sit home and watch at cnn. i could not just give money. i felt like i needed to volunteer and do something. >> you send money and that is it. you feel like you can get on the plane or help people. we have a set of skills here and we are trying to apply them just like the rescue teams. they have skills. they can lift rocks and find

people. we can code and google maps and try to provide them a better way to find people. >> i do not know how six people, but i knew how to fix computers and code. if i can help people live by doing that, i mean, that is the best. [applause] >> that was an amazing experience. on january 12 when the earthquake in haiti happened, we wondered what could we do. what could we do? we created crisis camp in 2009. we brought together a great people.

we put it out on twitter and said, "let's get together." we waited six months and then haiti happened. what we did was really amazing. the volunteers helped open street maps and create the first base layer mouth of port-au- prince right after the disaster. they created the first creels english translator so you can get on your iphone right now -- creole to english translator. a guy came in to crisis camp and said we needed to get more wifi to the ngo's out there in port- au-prince. are there 10 firm where -- firmware hackers who can help? 10 hands when other. to know the you have 15 firmware hackers in one space is amazing.

they could extend long distance wifi in haiti and it connected the international red cross. and is amazing. there are a lot of crisis cameras here today. i want to stand up. who is here? a big round of applause. [applause] today, we are here to talk about building a common language. we might want to think about, when we build a common language, it is about people working together. it is about the collaboration. building a technology road map is kind of a tricky business. technology changes, people change. it really is something to really think about. i think before we start to say are these great new tools, why do we think about -- why do

we not think about where we have been? forgive me if we recap a few things. during 9/11, we learned the . the internet work. [unintelligible] we learn that mobile access to resources -- could you go back one? to resources, people were on the road and evacuating. they needed to know what was going on. it really gives you great situational awareness. we learned that one text message can go around the world in mumbai. during ike, learn alternative access to communication, when crisis response agencies ask us to use the internet, go to the website, call a 800 number, we

need alternative access to get there. more lessons learned. the iranian election, we learned when you share price disinformation it may harm you. -- share crisis information it may harm the. we learned a global community can get together and a volunteer to do good work in haiti. we learn that local knowledge and research are all over the world. they have lived in the same town their whole lives? anyone here? then you know something about somewhere else. you have local knowledge you can share. everyone has something to contribute. in haiti, short coats are great for getting information. the public must know about them before hand. we really understood the role of the university system as a major

role to play during crisis response. what we know for sure -- i am a big oprah fan. she always asks, "what do we know for sure"? they want information to make the best decision they can about themselves and their family. the biggest question of all is, "should i stay or should i go"? people want to connect with family and friends. at the end of the day, it is all about people. the pellett said of the disaster, they want to know about the resources to get to the people to help. everyone wants to help. people want to know where you are, location. they want to know if you are ok. they want to know your status. they want to know if you need anything. if you start talking about data standards and one of the most

important in the first 48 hours, there you go. the central point about all of this is it is all about people. it is all about people. ok. when we say it is all about people, how are we using it the things that we have every day, like our mobile phones? this is how my mom talks to meet this morning. and this is actually a big secret. [laughter] let me tell you about my mom and text messaging. i worked for homeland security for 10 years. she knew i was into preparedness, here are the things you need to do, mom.

i really think you should get on facebook, come on. i was employed down at hurricane ike. so my uncle lives in the woods. that was hit pretty bad. my uncle was text messaging, have you heard about the electricity? what are you hearing? their power was out. they did not know. that is how my mom learned how to text message, because her brother was like, i am ok. we are ok. you do not have to worry about us. now she uses it to do things that she does every day. dressed nice, where a lot of fabric, the things that moms tell you to do. at the end of the day, we talked

a lot about crisis and how we behave in a crisis, but it is about how we behave every day that really matters. all that happens in a crisis is -- that just speeds it up. i want to talk about my mom for a little bit, and kevin bacon. i was so excited to get kevin bacon into it. everyone knows about the kevin bacon game? all right. good. we are putting kevin bacon and my mom together. i was taking a look, and of course, because my mom is not on facebook, of course 28% of people are not on social media. then i started thinking about lessons we have learned from africa. if that one village has a mobile phone, and they connect that village to another village, do you know what they do with that mobile phone?

they move money across it using prepaid phone cards, they find out whether information, crop information. they find out information by proxy. when you look at 28% -- they cannot all be facebook ninjas. but i guarantee you there is a connection. so here is my mom and here is me. she does not need to necessarily be connected to social media, because i will work it out for her. because she is my mom. here are all the other people in my network. it goes further ways -- it goes both ways. if she wants to get to me, there are all these people in my social network she can talk to. when you start thinking of people are connected to social media, that may be true. there are a lot of people who may never be connected to social

media, ever. it is a fact of life. but everyone has a cell phone. 91% of the united states right now has a cell phone. who here does not have a cell phone? you guys -- overachievers in this life. anyway, some 91%. ok, december 1995, which was the exact month and year i graduated college. only 13% of people in the united states had a cell phone. the most interesting statistic is the 1.6 trillion texts that are sent every day. my mom may not be on facebook, but does not know what [unintelligible]

is, probably thinks it is related to a koala. but she can text me. snee -- she texts me, do not go out with that guy. [laughter] i would have to admit in public i do have a little bit of a crush. when i saw his talk -- tech talk, my head exploded. i've looked at what he was doing, and i thought where is the version of this in crisis response? he is the chief human behavioral scientist for nokia. he studies how people are using their phones because we want to

sell more bones, right? p hones, right? he says people are using their phones for survival. i said, whoa. yet someone over here is saying that studying this across the world saying, people look at their phone and say, i need my phone in case of emergency. how many times have people said that? millions. he definitely captured my attention after that. then he did something even better. he said, you know priority needs -- it fills those, too. then he goes one step further, which i can totally relate to. he said, we will have a study on what people carry. we are following them, going into their houses, looking in their purses. we are going to try to find out

what they will carry. nokia wants you to carry a cell phone, right? i found a great. he is like, well, people carry keys, money, and a mobile phone. maybe that is not a big deal to you, but as soon as he said it is across cultures, languages, barriers, communities, he had me sold. how do you know all this? what if you knew all that and applied it to how people are utilizing these pieces of technology in adapters? in a disaster, what are you doing? what do you carry with you? you come to a shelter, what do you have? what do you need? that is the kind of research we need. i am putting it out there.

maybe he can come and talk to us. we would love to talk to you. this research opened my eyes. this is 3 years old. i really encourage you to take a look at it. it was really inspiring to me. it was really inspiring because of the time, after i saw that, hurricane ike, i was like, well, people are of that because the phone lines, he could not get through to the 800-numbers. what could you not get through? if you're telling people to apply online, and they do not have power and they do not have internet connectivity and they may not have mobile web on their phone, you are giving them -- you know, where are you going to go. -- where are you going to go? there are 20-minute waits, half

an hour wait. we are sitting here and talking about what are the most important things, and i know we want to talk about social media, but the mobile home -- mobile phone is so important. not everyone has it. not everyone is on social media. as crisis response agencies, we ask people to use technologies to contact us. hey, you're in the middle of a disaster. get on our website. seriously. i told them. you know. so i am sitting here, like, how do you expect them to do that? when we start thinking about the expectations, these are the kinds of things that are -- these are the things we know. all right. so, i love this video. i know, again, we are talking

about social media, but i want to hammer on this idea of consumer expectations. people expect things because they are consumers. when i called and 800-number, and they put me on hold, i get a little irritated. do you guys like being on hold? do you like the busy signal? i do not. why don't you like that? anyone? [inaudible] we are so not. i know. it is, like, late. you are going to hang up. the businesses are all closed. so this is actually a very interesting way that people during hurricane gustav got information. go-ahead and roll it.

by the way i love whoever did this for them. >> katrina was a real eye opener. i want to look at that. >> southeast louisiana includes new orleans, slidell, the community we live in. that is below sea level. it is pretty country, but it does give you awareness of being prepared. >> we have only been here two days. there was the panic. katrina had other plans. >> i had not talked about -- much about things like where we would go or how we would get there. we were just trying to find our way around. >> our tempers were short, trying to find someone to drive,

things like that. >> we just talk about something like -- it made me determined to have a better way of doing that. >> as we were dealing with hurricane gustave, traffic on the interstate 10 was an unbelievably back up, because we've all been required to evacuate. so i had someone help us get to highway 90. we made an alternate routes to hattiesburg, mississippi. >> absolutely, mrs. logan. you are covered by crisis assistance. >> thank you. >> is there anything else we can help you with today? >> we need to stop and eat. can you help us locate a place? >> certainly. >> this will be free because we were in a hurricane area.

that was unbelievable. that was a great feeling to know someone was caring about what happened to us here. >> right there. someone cares about me. >> i found it to be the most convenient. the onstar system is different because you can rely on the operator. that is different. >> we were able to get out quicker than other folks in the area. when you have lost property, -- [inaudible] you have to place each other. >> you have to place each other. >> and that is our onstar story. >> i like that. do hand for the logan's. -- give a hand.

that is the city where my grandparents lived. i saw my parents when i saw this video. they were like, we are in a traffic jam. my mom is yelling in my stepfather. you are not going the right way. we will call onstar and it will give us the right information because they have gps. they can see where we are. by the way, they are doing it for free. even better. you know, this is something i found this week. can you hold on a second? here is a hurricane gustav in all the calls. notice they are all on the highways. wow. they are turning to onstar for highway information they can get on their mobile phone. because they feel safe.

someone cares about them. that onstar system did not even need to work to work during the crisis. when you start thinking about social media and data, you have to think about -- how are you going to get the logans information? how would you get information back from them? there are so many other avenues to think about. click. click. ah. who has an iphone? i have one, too. i love my iphone. who has lost their phone? how many people lost their fun? gullible, i know you lost your phone. now you can -- for 100 bucks, i

am sure -- you can find your phone. that is a great tool. that actually it serves the purpose. great. i can find my phone. what if my mom knew i had my phone on me? would she not think -- if i can do this by myself, why can you not find my dollar daughter? you can. exactly. the thing about it is, but those are consumer expectations. but they are consumer expectations of crisis response agencies. when we start to think about why can -- what did we hear earlier? why did you not come to my parents' house that's a tree fell on it. -- what did you not come to my parents' house? a tree fell on it. at the end of the day, i would say when we start talking about,

you know, how we are going to be engaging, we need to look at consumerism, because we all are consumers. so, when we start looking at stats, three or four people would expect help to arrive within an hour. this is based on facebook. of course. who do we turn to for help first. do we call 911 first, or do we call our friends? i do not know. i kind of do that. they need to call 911. or i call my mom. so, you know, 75% of the people call. this is really about social media. they posted on facebook. "i need help."

why would they not help you? his here is -- here is onstar, perfect strangers, they are going to help you. it is the person that is going to help you with a test -- who is the person that is going to tell you with a test that who is going to mow your lawn? i have a facebook friend and a neighbor, too. of course people will turn to their friends. but should you turn to your friends in our real emergency? i think we have talked about that today. the thing is, taking that research and putting it into reality, it is real. it is very real. you have roles in australia. g irls -- girls in australia. they are calling 911 or what ever they have in australia. they use the art of delegation.

they did not have to call 911. they just said, hey, i need help. someone help me. and help arrives. when you look at the statistics and say 75% would expect some action in an hour, that is going to have been. in the philippines during the flood, there was a girl who used facebook as a switchboard. people were friending her and saying, "hey, have you heard about my friend?" she was doing that all day. when we start thinking about human behavior and who you should call and when you should call and what you think is the most important for a corporate thing to do, we need to look at that.

so, we always get beat up on you cannot prove this information. did we not just hear that? dave from the white house has this. sorry. i have a great story. this is an undisclosed city. i walked out of my car. i go to the apartment, and i look in my rental car was busted into. and they took pictures and video. i was like, oh, my god. now i am thinking the rental car company is going to sue me. so i called the police on the non-emergency number. i say, hey, someone busted into my thing. are you going to send somebody out?

they laughed. she said i can take your information on the phone and we will file a police report. file a police report based on me telling you what it was? "oh, yeah. or you could do it online." i was having an epiphany. do not tell me you are not going to verify information. do not tell me that. here is a crime scene. and someone has boasted in my window. and it is like, we are basically, we do not have the resources to send somebody out, and to do the investigating and all the other stuff. i do not know. so, i will not say because i love that city. it really drove home to make,

and it was well worth it, because if a police report is not verify data, i do not know what is. the insurance company takes it. i do not really have -- there is still some much to happen on unverified data. onre's a lot of ranking probability. there is a lot of work in this area. just right now, where we are right now. the busted window approach. all right. just want to recap. have we learned from these lessons? we just went through the past. i would love to see a paper detailing all of the technology after action, the last 10 years. that would be a great paper.

research people. understanding consumer behavior because it is at the root of how we behave. companies spend millions and millions and millions of dollars on us. had we understand how people behave? -- how do we understand how people behave? how did that information, and knowing about how people behave during a crisis, build a better iphone. how can that be an end to it? and what does that mean by verification? we really need to know that. it all us to be true. -- it all has to be true. i think there is a better way. there are a lot of smart people in this room working on that. part of the presentation was named "roadmap to the future."

when i looked at that, i was like, oh, my god. i do not know if i have the brain power for that. these are my pet projects. it is really about collaboration and participation. i cannot say that enough. the first step -- so we are talking about social media, and oh, yeah, we're going to take all this data from the public. we need to figure out where our own data is. maybe we can take some of the data and give it to the public. maybe they can innovated. do you have data maps? do first response organizations have those facts there is some really great work that is really great, the city of san francisco is doing an open date that

initiative. how much data can we get out there? -- the city of san francisco is doing an open data in here the -- the city of sentences go is doing an open data initiative. i like this. we talk a lot about crowd surfing. talking differently about it all day about, how do we get this information to the public? then we talked about verification. let's talk about this. public and say, we are going to take all data, why don't we start with the first responders? when you create your own map, with three layers of data.

the fire department, the police department, everybody in government. here is what all be affiliated organizations, the volunteer organizations would come in, anyone affiliated with crisis response, they would have a role to play. imagine having all those different pieces of data together. imagine having location, hey, we are doing this and we are doing that. you cannot do it and roll it out. people need to see the benefits of sharing information. so if you are going to attempt the public, maybe you can learn first in your own house. just saying. it might be something to think about.

in the mumbai attacks, the hotel was saying, we cannot talk to our employees. we cannot talk to our employees. we do not know what they are doing. we are disconnected. we cannot have all their cell phone numbers. this is a nice continuity jump. so what if all those people in the hotel work messaging what is going on? what if someone at headquarters was able to say, hey, everybody, this is what is going on. do not go to the left hand side of the hotel, because there are bad people there. that could have saved lives. this is almost like expert sourcing. these are your trusted crowd. why don't you start there first? then you will have lessons learned, and by that time, he will be more ready for the public. bring it. that is my favorite saying.

so the second step. we've talked a lot about community. again, build an inventory. has anyone done nothing? communications people? if you are doing social media and you do not to stakeholder mapping, i do not know what is going on -- and do not do it stakeholder nothing, i cannot know what is going on. you have this great, like, emergency response center, but you do not have a super computing center that has tons of fiber down the street. do you know that emergency response centers do not have fiber connectivity? that is crazy. we are putting fiber in our schools, but we're not one to do it for emergency operations centers? i would call that a number one

priority. , but we cannot know that. need to do an inventory. who is in your town? want to know you have resources, you were able to connect with them. it could be a government, but it could also be a non-profit. take the leadership. you do not have to create a crisis camp. they are a great way to bring people together. in every town, the private sector is what makes that town work. we cannot discount the private sector. they make the technology. there's a lot of evidence that that is great. there is room at the top for everybody. i would have to say that in a town, it is like e.f. hutton.

there is one company in that town. people pay attention to what they are doing. instead of like corporate giving, instead of money, why don't we think about -- we don't need your money. we want your smarts. we want your time. the whole world is changing right now. time and theirs smarts. that is going to change the world. it is changing the world right now, turning everything upside down. transform the way that you want to connect with people. do not go into those and say, hey, we will $100,000. say, we want 10 people to help us out. share resources. the private sector is great for having space, for having the facilities, for having people that can help.

they are great for that. the other thing is in the united states, 98% of business is small business. to not always go after the big technology companies. they are great. love you. hurt you. -- heart you. i encourage you to talk to the small businesses in your community. academia. during haiti, we learned about the role academia could play. they want research projects. they want to experiment on new data. they are creating a lab, and that is historic. people are able to play around with real time data. that has happened everywhere. that could be in collaboration with the ucla, you csc -- ucsc, cal tech.

they are a member of the community. this is the way they can contribute. it is always the computer science departments. there are sociology departments, security apartments. there are so many departments. engage them. they want to help. it is amazing. if we want to start an academic consortium, they want to play. i cannot even pick all the different departments. it is so diverse. that is the thing. if you think you know who you're stakeholders are, i guarantee you you don't. i would have to say the academic community is a great environment for my fun little slide that is coming up next. people were wondering how to

volunteers connects with the internet management process. this is really just during a disaster. you have to connect. if you are operating outside the operations center, and you have no connectivity to them, they do not see you. you need to be a part of that. you need to know brian humphrey. i know. everyone does in your local time, the emergency operations center is the highest. this is where all the decisions are being made. i knew read our new ideas. they are new ideas. the way the emergency operations center works, i was going to said -- i was going to say --

since you took it, everyone does need to know about the framework. they also need to know what ess are. did you know about the framework before you came here today? good. most people do not. here is one, two, three, up four, five new ideas. the way the u.n. works is, they work in clusters. i thought it might be a good suggestion that in the operation center anyone that can deal with technology, including the guys who are making sure your computers are working, but it is really about the way the data is flowing. they should be working together. they should be working together, not in the disaster, but in the exercises and creating the -- that needs to be there buddy

right there. there should be an analytic sell. if we are talking about data, whose operations center is going to court made that? currently? what esf is going to coordinate the information? esf 2 is only carriers. any other ideas? the knees to be an analytic set up. the world -- there needs to be an analytic set up. the world has changed. we need to understand the world has standards. people need to be crazy about standards. that is what we really need. those are the people that would know. it would be part of the technology cluster. this is where i get into,

perhaps, my soap box. for those who do not know what esf 15 is, it is public affairs. public're pio, information officer. i would argue that within the first 24 hours, social media is situation awareness. that is different from the pio, except for brian humphrey, because he is awesome. it is more an operational role. it is not just one esf. information technology is across everything. they should understand what is going on. they should benefit from the

technology cluster. how is the operations center working with the community? i was supposed to create a data operations center that sits outside the eoc. the data operations center could be a great place. they have a big fiber. they have expertise. they have facilities. it is a great place for it. that is where, when people were asking, where can i go to help? that is where you can go to help. that is where you need tons of people, going through that information. that is where you go for help, right there. if you want to haul, help the volunteer technology community. -- if you want to help, help the volunteer technology community. it could be the perl guys, the

apache folks. it could be anyone. it could be microsoft creating a team that could deploy in their local town furious -- local town. the need to do a little training so people can understand what to do. but when you're talking about people canere facilitate an crisis situation, they do not like to show up. they really like this way. what is cool is we are able to help them with three main areas. searching information about people. aggregating information about people. and then nothing. when you are talking about all this information -- and then mapping.

when you are talking about all this information, that is what thatcell can -- that is what this cell can do. this is where that can happen. the analytic cell is not crunching data. the eoc -- if you have ever gotten thousands of e-mails, and you are like, i give up, it is intense. that is not where people should be crunching data. the head of the emergency operations center, we really need to know where everybody is. we need to map where all the shelters are. over to the eoc. bam, done. we saw this in haiti. we were like, it would be so great if we could combine all

these list and you could give bomb -- give them back to us in two hours. i would argue the best part is we have l.a., seattle, and san francisco -- i will pick on you guys. if something was happening with brian in l.a. and in kristen on the west coast, and they can and up to their eoc's, they can help brian. they do not have to be anywhere near the disaster. they are giving out local information. you were saying, how do you plug into the emergency response? this would be a good place to start. so, and i am beginning to wrap up.

does it go? i have some really big thoughts. this is like baseball a little bit. technology councils, technology committees would be really great. the line between global development and crisis managers, i think you will see a lot of innovation on technology through that. if you're going to have a lot of technology volunteers there must be a part that is going to happen in that will take some time. and then come up one thing i do want to point out that we have talked about is ceo level engagement with crisis response agencies. health and the technology sector helped before the

disaster? also, how can the crisis response organization the part of that tax r&d -- are indeed process so they can consider -- tech r&d process of the consider what will be needed. as everyone knows, it i am on twitter. people wonder why i am into this. i just want to share with you, some of you ever heard the story. i wanted to share with all the folks that are here. when i was 12, i was watching live it. 1985. like 16 million people around the world, we all watched.

we watched. we could not help it. we watched. our television had five channels. note cellphone. no internet. i did not even understand why there was a crisis in africa. why is this happening? how can i get more information about this? in 1985, there was no way i could get more information unless i got up from my chair and walked to the library, which is not even close to my house. i wanted to help, but i wanted to watch tv. this is the 25th anniversary live aid, and sadly it went unnoticed by most of us in the world. to me, it is an important day. it reminded me how far we have come in 25 years. today people can help. they do not have to get on a plane. they can help from right where they are. they can look at imagery.

they can look at maps. but can do things virtually. they cannot even have to leave their house. they can get information that first responders. people around the world are benefiting. they are making economic investments in businesses in africa and asia to help economies grow in those regions. at the end of the day, this is all about people. people knowing how to use the tools they need every day, to help themselves and their friends and families, people who like me once had the option of just watching the crisis up and don now get something. and not only can i get up and do something, i can get up and do something with people like me all around the world. i would argue the passion has always been there. it is up to all of us to harness

the tools, the power of good, and give the world another option. [applause] thank you. oh, i do want to share one thing. i did an experiment. and then i will shut up. this is about who would help me on my facebook. let's see how many, how many of my friends came out. say i needed help, who would help me? 15 people. in 40 minutes. and they are from around the world. from our round of world. it will happen. it is happening. and we all have the power to do something about it. thank you. [applause] >> thank you so much, heather. unfortunately, we do not have

time for questions for heather. if you want to capture, she is going to go to the hotel. we are going to have a very brief windup remark from the ceo of the american red cross, gail mcgovern. >> i promise i am going to be very brief. i do have a confession to make. my brain is exploding. it is absolutely exploding. when we started this morning, we talked about the gap and the fact that people expect response for a cry from help on social media within an hour. in the aid organizations and emergency responders and government are not ready to step up yet. i have to say, i have learned more in one day than i have done in months about what we can possibly do about it. even though this is the problem i struggle with and think about

often, and i think about that? , -- and i think about that gap. but it scares me. i today sought the terms of a lot of solutions. -- i today saw the germs of a lot of solutions. in my experience, it is easier to sell technology problems. people will do what they want to do. i learned an incredible amount, just on technology. i thought i grasped social media. i am walking out today feeling more like a novice. there are so many extraordinary things going on. i also learned a lot about human behavior. i always understood the power of

crowds, the wisdom of crowd, but what i learned today, it is not just people who have an opinion. you can harness those crowds. they want to help. they want to get engaged. i think we have crowd response. when i think about what the american red cross can do, we can feed massive numbers of people, we can shelter mass numbers, but we cannot get it instantly. we still cannot deem ourselves up like scotty could in star trek. -- we still cannot beam ourselves up. people can get off the couch and walked out the door and help each other until more permanent help is on the night. i of heard many times -- i have heard many times critics speak about teenagers in government. he captures my imagination every

time. i have never heard about the spirit of cooperation before, that local government wants to cooperate with state government that wants to cooperate with federal government. i had high hopes for the day. it has exceeded all my expectations. and my wildest dreams. having said that, there is one problem. and that problem as we all want more. and so many of you during the break have said to me, what are we going to do next? how do we get more? how do we keep the conversation going? here is what we are going to do? we are gathering all the information at the table about what we have learned from this conference, and we are going to update the wiki. you get the second version of the white paper. we will then make sure we sift through all the data, and figure

out, and points of interest, and we will pull those communities together and ask for volunteers from this room to help keep the conversation going, either virtually or physically, whichever is the easier way to proceed. some many of you have said, when is the next summit? i went up too windy and said, when is the next summit? she looked at me like, no, you have got to be kidding. [laughter] i have to say i have had more people volunteering during the course of this day to volunteer for the next one, it is our fervent hope we can meet again and continue the conversation. we really and truly could be saving lives if we continue the dialogue, and i am looking forward to it. thank you for taking the time. we really appreciate it, and i look forward to working with all of you in the future. the last thing is if you want to continue the dialogue with me,

that me give you my e-mail address -- mcgoverng @usa.redcross.org. thank you very much. [applause] >> you are free. [laughter] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] cracks from the associated press

this afternoon, the obama administration will no longer allow deep water drilling projects to go forward without reviews. yeah administration announced the new policy today at the white house council on environmental quality. it was reported that bp got environmental exemptions based on decades old data. the biggest impact will be after the current moratorium on deepwater drilling in the gulf is that it. -- is lifted. >> what we are trying to do is take away profits. profits drive crime. >> tonight, international property theft on the internet. we will be talking with erik barnett. >> the series continues tuesday

with the impact on banks. wednesday, we look at the effect on consumers. on thursday, we look at changes for investors. friday, we wrap up with a conversation on which provisions were provided to prevent a future financial crisis. that is washington journal on c- span. >> earlier this year, the u.s. stock market suffered a drop of more than 1000 points in an hour before trading was stopped. since then, there have been investigations into what could prevent such a drop in the future. mary schapiro join the conversation on this topic. this is about an hour and 10 minutes. >> again, i want to thank the

panelists, because that was very helpful. i can just tell from the 10- minute break that is the case. the next item on our agenda is from the subcommittee. as we mentioned at our last meeting, we believe it is important to provide the public with as much information as we can about what we're doing. as a result, we will have reports on the subcommittees. the agenda, as we mentioned, i know you have only met a couple times, but the two committees actually appoint committee chairs on on your wall. i know you all are thinking about who wants to be a committee chair. in the meantime, reject that would be helpful. in the meantime, we are asking

staff to report. the first committee is the cross-market linkages committee, which discusses topics related to the futures market. this committee is directed to address topics including the 500 contract and the liquidity and selling pressure we saw on may 6. that includes joe stiglitz. she is not here. we can make her chair. i see a vote of three and one abstention. let me just -- jim, i will hand

this over to you. this is a pre-trade risk- management subcommittee. i would note that pre-trade risk-management also happens on the futures market. the subcommittee will provide an analysis of liquidity and selling pressures, provide an in-depth look at trading of dislocated securities and trade practices around the implications of may 6. additionally, the subcommittee will provide a review of the latency issue that has long been sketchy. members of the pre-trade group, the other four members -- [reading names] i guess i know who you all are appointing as chair.

susan will be great. >> this is susan. i am on. >> protected. >> all right. >> susan, we of -- i apologize. we should have allowed you time to ask questions. we did not allow you time. i see you are speaking up to make sure you are represented not to be chair. greg berman is going to report for us for the sec. jim, taken away. >> good morning. in analyzing the cross-market presentation panel from the two conference calls that were held since the last meeting. first, on july 6, there were two presentations made. first an analysis of the 500 futures trading volume, and there was an analysis of the order book.

on the analysis of the trade volume, we found that trading activity exceeding 60,000 contracts per minute at 10 points on may 6, at the point when prices declined precipitously, and an hour later, 10 minutes before the close, trading activity was divided into two groups. the first prepared aggressive selling. the second group pared aggressive buying to selling. compared with these aggressive price changes, we found a clear pattern emerging. the price drops much exceeded aggressive buying -- the price troughs much exceeded aggressive buying. with that difference increasing threat afternoon in reaching a minimum -- throughout the afternoon and reaching a minimum.

this also coincided with the price rebound. as for the analysis of the order book, using the blowback message data, they constructed an order contract based on the sixth of may. the order book appears to have been well balanced with a number of buy orders generally close to the number of sell orders. at 12:30 eastern time, there was a sharp drop off of sell orders, with a drop of of orders to buy slightly linked. and then matching orders to sell. 3:00 p.m., orders to sell slightly spiked and recovered, approaching previous levels. it did not quite get there. it approached previous levels.

this was provided in the may 16 preliminary report. this is the process that the cme was using. they ordered constructive analysis of all standing orders. the analysis it differs in that the death can be seen to decline throughout the day -- the depth can be seen to decline threat today. the staff noticed that sell orders can be expected to accumulate throughout the day. we are not entirely comfortable with analyzing that portion, but we can tell the buy side was declining throughout the day. these are both critical days and normal days. days and so-called normal days.

if i may go one on come on the 29th of july, one presentation was made in that case and trigger behavior and indeed june 2010 contract. in this case, the group was made third, fourth, and for it and then a third data group on may 6. trading? of the patterns observed in the previous patterns -- trading activity day patterns observed in previous patterns are categories as traders, buyers, sellers, opportunistic trader and noise trader. activity levels were similar for those of the assigned categories. the largest differences were for the seller and opportunistic seller categories.

there was an increase of 10% -- excuse me, a decrease from 10.10% in the previous period to 6.95%. opportunistic trading increased from 33.4% to 44.3% in the event. we also notice that the noise trader, although small, it did drop by half. it went from 2.2% to 1.04% during the event. the relationship between category to normalize the government changes will obtained some estimates of predictive price index from changes in the trading activity of any single group. that is all i have. let me wind this up by thanking

the advisory group for their insights. and has been an interesting summer. it reminds me of when i was a university research professor and we used to do all of our research in the summer. >> questions from the full committee either to a gym or to members on the committee who were in the subcommittee. and i want to make sure because the last time i did not -- susan, do you have any questions on this one? >> no, i'm fine. thank you very much. >> greg? >> thank you, chairman. since the latest fall meeting of the joint advisory committee on june 22 we have held two conference calls with members of the free-trade risk-management

subcommittee. our investigation into the events of may 6 is based upon a two-pronged approach combining data analysis, with direct insights from market participants concerned with their actions and decisions on may 6. the first subcommittee call held on july 7, we discussed interviews to date with market participants. at that time we had already held a series of extensive interviews with market equities and exchange refunds from which an emerging theme had developed. we recorded that most of the traders interviewed significantly held or halted their activities during the rapidly down trading prices at or on the afternoon of may 6. -- pat or on 2:40 p.m. on the afternoon of may sex. -- may 6.

every market maker implements automated stops the trigger when any questionable data is received. one way of identifying potentially bad data is to look for large rapid price moves, which were unfortunately route insignificant bundles on may 6. for example, the rapid decline in the contract around 2:40 p.m. triggered a number of market rhythm a algorithms, even though these price declines were, of course, accurate. rapid decline in securities also been treated to data integrity concerns and triggered likewise pauses. some indicated that trading -- others found delays in the market fees themselves and question their own ability to track prices accurately and in real time. many were concerned that trades were going to be broken and that they would be adversely left long or short on one side of the

market. -- inadvertently left long or short on one side of the market. we further noted that since exchange-traded funds are based on baskets of securities, any data issues, whether real or perceived, can trigger data pauses, and hence, there is a knockoff affect. this is one of the reasons that 80 has may have been disproportionately affected on may 6. -- this is one of the reasons that ats may have been disproportionately affect on may 6. some relied on automated sub " to fulfill their market trading obligations. others were not able to keep up with the unprecedented volumes that were ever more concentrated as other market makers contribute -- continued to withdraw.

we were actually able to trace back and significant number of trades that were subsequently deemed curious and broken by the exchanges later that evening. our interviews with market makers was only a first at ines -- in an extensive series of planned interviews. at this time, we're pleased to report that in addition to atf market makers, we have detailed interviews with many other groups. the noted behavior across almost all markets were dispensed seems consistent with the what -- with the rapid withdrawal of liquidity. the detailed summary of these findings will be presented in our upcoming september report. in our seconds of committing -- second subcommittee meeting held on july 9, we covered three into

related topics. they were chosen because they're both complicated and settle in nature, have lots of technicalities that afforded a lot of questions, and not necessarily because they -- not necessarily because we believe that presented problems on may 6. a number of those topics were demonstrated today and -- were discussed today and, as the mystery, there are many opinions about them. exchange traded funds are a specific type of exchange product registered to the investment company act of 1940. about $1f's represent billion in assets. they're often designed to track a given index or sector. unlike mutual friends, they are not individually redeemable -- unlike mutual funds, they are not individually redeemable. only market participants can .irectly interact with etf's

these transactions are executed at the end of the trading day. in this fashion, the prices of etf's the securities that underlie them are linked through a detailed arbor tries relationship. understanding how these relationships function provides context and covered into the behavior of the -- context and color into the behavior of mark toregas and on may 6. essentially represent price bands within an individual security can trade in an automated fashion. when the best offer moves above or below the lrp limit, " on that side are marked as low as movement is suspended. -- " it's on that that side are marked as low as movement is suspended.

if an lrp does not resolve itself in a short time frame, it is converted to the security option and priced outside the band. other changes are allowed to trade your any quotes nyse marks as the slow. it also noted -- the presentation by nyse related to the variety of statistics drug the last year -- just statistics throughout the last year, hours of timber report will cover these as related to the events of may 6. we then included what is known as the self help solution.

this role generally requires traders to implement reasonable policies and procedures to prevent trade truce of preventive quotations and other markets. it was noted that the declarations of self-help by one market center against another are not uncommon. our september report will provide more context on self-help related to the events of may 6. >> thank you. questions? jack? >> i do not want to ask you to place psychologist, but what was it the market makers told you that prompted them to fear broken trade? why on may 6? there are lots of times that the

market is volatile and you get that sense. >> there is not necessarily a rule, but a bit of unwritten convention regarding rapid price movement of more than 10%. the exchange prices can declare a freeze over 10% very quickly running as. it was not certain the trades were going to be declared erroneous. even if there was complete certainty and the market make -- and the market makers' new head of time something would be declared iran is, the market maker does not want to be caught with half about. they will choose not to participate at all rather than have the market be broken. >> can you explain a little bit

-- if at the end of the day , how doere still close td the etf's debt priced? maybe this does not happen. get priced?e etf's maybe this does not happen. >> i think i understand the question. during the day, the pressure aunt -- the price depends on the technical pressure. there is a second wave at these prices get heard. what happens is, at the beginning of each day, i believe, a basket of securities is identified as the one that will be treatable for creation units cannot or will be redeemable if you are going to

redeem some shares -- for creation units, or will be redeemable if you're going to redeem some shares. even if the markets are closed, the securities can still be exchanged and redeemed. there are circumstances where you have etf's on international markets where the -- the ends of the days do not coincide. that is where you have a transfer occurs. >> does that answer your question? >> i was going to say, i believe -- i do not know how you would take the closing price of an individual stock that was close, but i assume is still going to the last trade. tf euann i think at eztf also record the last price of the day to be traded. if you are talking about if there is a circuit breaker at the end of the day. >> that was the question, but it

is not like delivering wheat were you actually deliver the wheat. i assume there is a cash settlement of some kind. >> maybe there is some special and of the day ruled that at the end of the day the etf plays. much like a mutual fund. this is not the case were securities go back and forth. this is only in the case that in lieu of transferring securities you want to transfer the equivalent of those securities, in which case you would need accurate pricing for the authorities. >> against the actual question is, will you actually do the settlement? >> it eliminates the discount on a traditional closed net fun, right? -- closed net fund, right? >> if something is missing, what do you do? but i do not know what happens

if there is -- i'm not sure -- >> i do not know what happens if there is -- i'm not sure that we have been through it. i'm sure it happened on october 27, 1997. but i'm not sure if the stock markets are born to close at the end of the day. >> we are going to lot of wheat issues in kansas city and chicago. exchange-traded funds, you can literally deliver the securities, like you can deliver the wheat, as you do in kansas city. but you have to be one of these authorize participants and then only done by a large blocks. because you ran a complex, right? >> that is right. >> did not have this convergence issue commodified guess they could deliver a stock -- this

convergence issue, but i guess they could deliver a stock. >> the question of how you and deliver the price after the stark market is closed is more general. the exchange's would need to come of with a new closing price. i believe that would be relative to the etf. >> do you have a question? >> just to follow up on the data integrity, and you reported the minutes, which again was echoed this morning. do you have a better feel as to what that integrity was based on? were you trying to execute a -- execute trade throughs?

was that across the board or were they spotty? >> most of the purges of and to explain that they put automatic triggers into their system to look for anything that has the potential to the erroneous data. the first thing that they've put in is a rapid price move. while it is true that there were data integrity issues that we are focusing on in various platforms, there are also some internal issues. it was accurate changes in prices that, i believe, triggered most of these alarms. as soon as you have a rapid change in price, even if that is real, someone has to look and see maybe if it is not correct. that closes this huge cascade. when lots of securities have rapid changes in price at the

same time, folks cannot necessarily respond very quickly because each one of those securities need to be looked at it changes aree sure that right -- that the changes are right. if the fees are completely correct at, then there is something fundamental going on and that would also cause you to pause. we think those were the majority of the issues. >> i understand why people would not want to trade in the market volatility, but they were using the vocabulary of the erroneous data. you would have thought there would be a mechanism separating out these types of problems.

one of the concerns in breaking the trade, again, in terms of the erroneous data and breaking the roundy's transfer -- the erroneous dregs, in one case it would seen that you would want to add those that are not erroneous, but with larger variations than one what people want. those are really quite different concepts that are being mixed together. one would have thought there would be ways of distinguishing between these two. >> i think clearly he romy his trades and the erroneous data -- the clearly erroneous trades and the erroneous data are very different. in the clearly erroneous data come on the exchanges got

together -- in the clearly erroneous data, the exchanges that together to discuss how to deal with that process. completely separate from that is trading on erroneous data, iran is marketed or trainetrading whu are placing an order and you do not immediately get a confirme ation back. sometimes i can imagine when a trade is erroneously placed because of erroneous data. i do not think that is really what played into the afternoon of may 6. those are two separate processes. >> could you describe the process for choosing the 60% figure, for declaring those trades and which ones should be broken or not? first, is it across all of the

trading centers? and secondly, why not 55%, why not 65%, one of 35%? >> the process was not across all markets processes. imrick is shaking his head -- which is shaking his head. >> i am glad to defer to you on this begin the process. [laughter] -- this particular process. [laughter] >> you said the exchanges, but what about the other markets? >> i believe that clearly erroneous trades are under the door made of the exchanges. rick? >> you are trying to explain the process, but it may be beyond me. each of the registered exchanges who had trades in the security, plus finra 3 trf -- or

what ever it stands for -- facility, essentially stands for the finalized trade through the dark trade volume. they work together to have a single decision with respect to the roundy's trades. erroneous trades are erroneously predictable. when it involves a single in roundy's trade, or a machine gun like number of -- erroneous trade for a machine-gunned-like number of triggers, the market reaction then flows like a waterfall from that in large numbers of securities. that is a situation with much less guidance. there were some similar

situations in the timber and october during the credit crisis, but not quite like this -- in september and october during the credit crisis, but not quite like this. i notice the exchanges have more flexibility and less guidance in how to work in a situation. there were not any error trades. what there was was a market panic reaction from infrastructures can point that resulted in trade that could not be justifiable. -- from an infrastructures standpoint that resulted in a tree that could not be justifiable. about only breaking the most extreme trades -- these physicians do not trade alone. they are traded out of or trading hedge positions, or a variety of combinations.

trading in these ways when it is not necessarily predictable always has consequences. there is not something justifiable about 60% of the number rather than 50% or 70%. it was a unique number given in the absence of evidence in a particular area of trade to only knock out trade, by some standards, undoubtedly with persons involved in it not normal or not real. that was the point that the exchange's landed on was 60%. >> did you put a bunch of pieces of paper in a hat and pick one out? >> i was not there, so i will not testify as to what happened. [laughter] do you have an indication as to the market participants were

that were broken? >> we are still working on that and will have more detailed in our becoming september report. our initial inclination was to follow the retail pack and we believe a good number of those trades were actually retail trades. most of the professionals got out of the market as soon as the decline started to happen. your institutional outfit managers would have pulled we believe many of those were originally retail trades. >> i know the may 18 said how many trades, but you are asking who is behind them. do think you would be able to summarize that for the public? >> yes. >> just to follow up on your comments, that seems to say that the last part of the client -- of declines was almost all due

to retail trades and it was the retail traders edwarthat were causing this dramatic decline? >> the question is, who was getting stuck with the bad side of that trade? that could be because the way they structured their offers. >> right, i take it is a group of stock traders, since you say that all of the professional traders are out of the market. now we have the last crash by retail trade rather than professionals? >> i do not want to get too far ahead of the finra results in september, but what we are seeing is that most of the professionals had exited the market, but many of the retail investors, some of those were stop-loss orders. they were triggered automatically.

others are market orders. they were the only ones trading at that particular time. you went to sub quotes and then they were later to cancel because of obvious reasons. >> at what point from 60% and then toward 30% and 40% were the retail investors still involved? >> sudano if we have information at that level. what i can tell you is that if you have 20,000 -- i do not know if we have information at that level. what i can tell you is that your 20,000 organ trade, if you can find with the lowest point was, you will find it is the barbaro. -- it is a bargo. a huge number fell 90% or more.

of the area between 20% and 90% is very sparsely populated. either you went our way down or use it at the 10%, 12% level. the difference between 50%, 55%, we're talking a handful of trades in those regions. either it when all the way down to a sub " or close to it, or it went down and all the way of and came back. >> were they mostly small volume? >> that is something that i think we will have some cross sectional analysis on that in the final report. but i think the answer to that is yes. but that is not to say something about the broken trade. most trades are small size trades today. >> [unintelligible] >> could you repeat that? >> when the broken trade -- were

the broken trade spread across all markets? >> i believe we have a preliminary table that illustrates for the 20,000 or so broken trades. different markets had different percentages, obviously. the nyse did not have bergen trades because of their lip's, and others execute the market orders directly. one thing i would like to know is that market orders are often come voted -- converted to a limited orders before the exchanges themselves. there is a limit to what the exchanges can do if they receive a limit order for one penny because then that is a limit order for one penny.

the situation is a bit more complicated than just sending the retail orders to the market centers themselves. >> we were talking earlier about a large reaction to the broken etf's. were they a lot of retail trade in the etf that were broken? >> my comments are really for all broken trade and of some 60% or 7% or more was applied to the broken etf's. so, yes. >> susan, did you have questions for this or even if you just wanted to share because there were five or six questions about

marketing orders exifor memberss shares. the crowds are member that it was predominantly the etf's that were predominantly the broken trade. but i also wondered about -- >> i remember that it was predominantly the etf's that were predominantly the broken trade. but i also wondered about the futures markets. >> jim can answer that. >> we did not have any in the futures market. >> thank you. >> we are going to stay in our seats, but i think are you going to do anything or no? that even makes it easier for me because maybe is already done. -- maybe it has already been done.

i want to thank greg and jim with regard to what they have done. as we said, in early september, the staff will deliver a follow- up report. we will have the may 18 and then we will have this follow-up report. we will have them to the joint advisory committee based on their research in the past free vote -- three months. and once the committee has received this report, the next up would be to link the staff report back to the broader mandate of this joint advisory committee. to that end, i would subsequently ask this committee to prepare a shorter document, may be a shorter document than the staff has done. it can be as long as you want, but we are not saying it has to be -- you know. delivered to the commissions, ideally, by early october. we know you are all busy, but we

are trying to move this along. it would address the following points, basically, and a specific recommendations that you have regarding to cross market policies and the issues directly relating to may 6. across market issues are all of the six, seven, eight items earlier. and i believe the chairman particularly said some of those items earlier. some of those were identified around colored market -- colored market orders and things like . but the things we talked about earlier, the pauses and limits and so forth, those topics are the circuit breakers across the market. and secondly, just general areas for further consideration for the cftc policy based on cross

market themes -- and some of those are things that we talked about today, fragmentation of the markets and so forth. they were debated this morning and there were obviously a lot of things raised by members here and party rules and things like that. -- by members here, priority rules and things like that. this committee does not go away with the report, by the way. it goes further. if you are not off the hooks yet. -- you are not off the hooks yet. to aid you in the process, we're happy to have staff work with the joint advisory committee, collect your individual thoughts on each of the points, aggregate and synthesize the information before the final document.

greg berman and rob cook are here. the sec runs the oversight of the trading in markets. karomoser and andre caroling linko are also available to help out. i want to turn to my fellow commissioners, mike dunne and joan sommers. i think each have some thoughts. >> thank you very much, mr. chairman. first and foremost, i would like to build on what you are just -- what you were just saying and recognize the importance of this advisory committee to us to ensure that we have an orderly

working marketplace. balad falls on your shoulder. lot falls on-- all loa your shoulders. i appreciate your efforts. i just finished reading joe "freefall."ook, since we are not paying, i can plug them. [laughter] not the advisory committee, but the panel members have said that what happened on may 6 can happen again. in fact, they expect it to. mr. chairman, you made the analogy of the terrebonne auto accident that i was involved in -- of the terrible auto accident that i was involved in and how

it happened in very quick time and it was the same with these stocks. but in my case, somebody broke or rule. somebody went through a stop sign. we do not have a broken role here in this case. that is what we're looking this advisory committee to do, to provide us with the rules of the road to ensure that these accidents do not happened in the future and that they do not happen with the same magnitude. i want to build on something that the chairman was talking about. he was talking about the franc- dog-francl -- be bill. -- dodd-frank bill. i hope that we would follow up and a similar format that we have in that we have an open

meeting and everybody is privy to the same types of recommendations that we were mandated to take a look at and what our staffs are going to be recommending to us. to that extent, there are other regulatory bodies that i still feel we ought to be working with as well to be sure that we get that out there. i would really like to thank the staff of both the cftc and the sec for the work they have done for us as a commission, but also as an advisory committee. since we are not paying you, we do not expect you to shoulder all the burden of that. as we say in an agricultural area, work them like a rented newell. -- work them like a rented mule. [laughter]

>> i do not know what to do with that last statement. if the cftc and sec have been working tirelessly to get there. we are working round-the-clock to get these things together. between the ftc -- the cftc and the sec, we will have forms open to the public. and i do not think we will have as many cameras here. the topics will be related to data come on governance, these new swap execution facilities and so forth. and jointly hear from the public on very critical issues. and the ftc commissioners and the cftc commissioners will be allowed to go. it will save me from having to run these things, probably.

commissioner summers? >> thank you for following up on all of that. i want to say how much i appreciate all of the panelists and committee members for being here today. it is extremely important that we look across the equity markets, the security markets and the futures, and how to appropriately in polls for the tools that we have -- appropriately impose the tools that we have. i think as markets have evolved andproducts like etf's equity index futures, as they have increased, the affected the regulation in the markets. but we have completely different market structures and completely different rules on either side. some of the issues that we talk about today, high frequency trading, colocation, and just general market structure is used

before both of our market agencies. i think i cannot stress enough how forms to increase the cooperation and dialogue between the two agencies is extremely helpful to me, but i think to us all as regulators. thank you for being here. >> commissioner chilton? >> we are bound to get a sound bite here, i know. [laughter] >> thank you to the staff in particular. you have already been working like rented mules. it has said that it could happen again and, of course, it could. i think it is less likely with the group that is assembled here today. and as we move further down the road, it will be even less likely. it was fascinating from all of the suggestions that the panel had. but people come up with these

phrases about what happened on may 6. they say cannot it -- they say, it was a pervert storm, or a collection of culprits. i think -- it was a perfect storm, or a collection of culprits. i think it is too easy for us to rely on those things. on the same token, the panel and the staff should still be looking for a smoking gun. and one of the areas -- and i'm not saying this was a smoking gun, but one of the areas that was not discussed much today is this gap between the consolidated tape and the premiums tape on the new york stock exchange. at times there was more than a 22nd delay. what i think we need to do is -- more than a 20-second delay. when i think we need to do is make sure there is no price trading. the algorithms could have gone in there and simultaneously bought on the real time feed from the nyse and then sold on

the delay defeat, the sod -- the consolidated feed -- on the delayed feed, the consolidated feed. collectively, it could have been a larger amount. when i started thinking about this, -- we have eight technology advisory committee that chairman o'malley convened a couple of weeks ago. i asked questions of them to make sure that i was not being a conspiratorial person thinking this was crazy. and the experts said they thought i was crazy to ask. of course i could be going on, they said. -- of course that could be going on, they said. that 20-second gap may not be a law -- may not be a lot in a lifetime, may not be a lot for

folks at a game. we need to make sure that they are not going after something that they should not have gone after. thank you again for everything. >> thank you. rick, do you have anything? [unintelligible] >> two questions. if one is, we have been talking about the u.s. market. there are similar spikes in a couple of other markets. has your staff love that any other markets where and out -- looked at any other markets were anomalies of this kind have occurred? we have been talking about the different rules and the impact. it might be of some interest to see whether they have gone through similar kind of action. >> we are aware of the different

structures in different international jurisdictions and other types of markets. there is something around the u.s. equity market there are at least nine to 12, depending on how you like to count and panelists like to use the number of 40 as the number of venues out there. 4040 is the 1600 different kinds of -- 40 times 40 is 6000 different kinds of combinations. >> if there are these kinds of spiders occurring, even without this complexity, hours may be more prone because of the complexity, but it would remind us that even without that, we have something to worry about.

>> we are also looking at the border but activity on other days. two of the days, as i recall, were in the third quarter of 2008 when there were sharp breaks as well. but what we want to do is analyze and see the -- and see what ways these things had short breaks. >> i think that australia had a big spike. it was an upper one. and ended their case, it was an -- it was a wrong order. somebody pushed the wrong button. but the reason i mention that is because it shows the fragility of the system to mistakes. that is one thing that one might want to worry about. and if that is the case, then obviously, in a world with all kinds of fragmentation, the problems could be much worse.

>> we have some outstanding resources from other areas in the united states. there are not too many to analyze, but what we have found is that in general, the market does come back very quickly. i would be glad to send the advisory group that paper, if you like. >> one more question i would like to ask. it has to do with you mentioned, the frank-dodd bill. are there issues that you have raised that you think interact with what we should be doing? >> i cannot speak for the sec, and as you know, the cftc largely swings in the raf foreign exchange derivatives, which we call futures now -- swings in the area of foreign exchange derivatives, which we call teachers now. i think the market structures will play a tremendous role. as you know, congress enacted a

bill that says all standardized derivatives, that which can be cleared on a platform has to come to a clearing house. there are various estimates, but it would seem to be the majority of the over-the-counter derivatives in the marketplace by far. and those have to be traded in these transparent trading venues and these can be swapped executed facilities. we are in the futures market, which people have pointed out has been less fragmented than the securities market. this over-the-counter derivatives market may have multiple trading by forms. in fact, there could be dozens. the bill actually fosters competition among trading platforms. i think it will be helpful as you are thinking about fragmentation and market structure issues. congress has dealt with a broad policy. there will be swapped execution facilities.

it would be what people call many too many. there is trade transparency, but -- it is what people call many to many. there is trade transparency, but it is there to enhance market efficiency and enhance trade transparency. that is part of the goal of the statute. i think it would be helpful to have your advice. not that he might not have advice on clearing houses and other things, but it is clear that other types of issues might arise. >> one in particular that was raised this morning, which is, the bill encourages trading on exchanges and clearing houses come on -- and clearing houses, but 0 also over the counter.

-- but also over the counter. there was a concern raised to that how you organize the transparent parts can affect the magnitude of the trading that goes into the dark pools. a it seems to me that is one of them. >> absolutely, i think congress addressed part of that and said that even the bilateral transactions that are not on the reporting after reporting a real-time basis as well. we have to sort through the sec in terms of how to do that. but in terms of what is on the executions of these facilities, congress has determined that it will be multi-party to multi- party. it appears at least that

congress addressed that and said, no it has to be multi- party to multi-party. it might be addressed right there in the statute, in a sense. but those will be subject to interpretation, obviously. >> i guess i'm wondering what we could do that would be useful and perhaps, maybe the question is, what is actually feasible in terms of the various incentives of the liquidity that we have talked about today. things like trading cancellations differently from just having them freely available. changing the structures that are

to some extent under the supervision -- the supervision of the exchanges and the set. what is the scope here? >> i would hope that you would help the two commissions on things that are within our authority and jurisdiction. the sec and cftc do not have taxing regulation authority. i believe best to stay with things that are within our authority, or if you think there needs to be a change in the law related to our specific authorities -- >> when i used the word "taxed" i meant charged for cancellations. >> i think the wonderful thing about advisory committees, and

this one is yet an esteemed group, is that we are not looking to limit you. if you have a consensus, we want to hear that. the immediate thing is the events of may 6 and cross-market issues there. and obviously, some general market issues. there is lots of other advice along the way, too. only so much is feasible and doable in a timely way. and a first report from the advisers, the aid of view. susan? >> -- the eight of you. susan? >> i guess i was wondering about the september report in that there are recommendations coming out of that, you know, relating

to circuit breakers or different types of orders, some of the market rules of trading kind of stuff. what other issues is the commission interested in having a look at? >> are you saying that what could the advisory commission bust?get beyond tha -- beyond us? i think i understood your question. >> yes. >> it would be good to hear from the advisory group about what types of things they think ought to be looked out. that would be very helpful. >> this group was set up immediately with the may 6 event, but chairman shapiro and

i have been talking about it since the presidential transition. doddthen acting chairman do has suggested that we enact this, too. and we have want with congress to get this committee authorized -- we have worked with congress to get this committee authorized because we could not spend money on this in the cftc or the sec, so we had to change a lot for an appropriation. it is a great country. we did have to work with many members of congress. we do look for this to be a committee that goes on to talk about emerging risks. one of the things that came out of the crisis in 2008 is to have an outside a group of experts advising these two market regulators. it brings some harmony, but beyond harmony, what is the next thing on the horizon?

you have some commission into service with the specific task of may 6, but it is much broader than that. it is what you see on a rise in and what are the things that you think that nation's two market regulators should be -- you know, but that is past october. >> based on discussion this morning, it is very clear that there have been changes in the structure and performance of these markets in very recent years. which affects both the liquidity of the markets, and incentives of very -- various market participants to gather information. we have talked about those who are doing fundamental research to get their ability to extract returns for those investments.

in some ways, it seems to me that one of the questions is not only question of stability, but also of efficiency of these markets. with respect to the issues of the fundamental rules that these markets play and -- in helping the economy get better. i think that should be an important focus. >> the concept release is all about that. to some extent, we want to make sure that we are not duplicating what they are doing, but moving beyond that as well. certainly, those issues are there. the sec has got that on them. it has been out for three months, four months.

hopefully we will be able to add to that as well. >> to make a quick comment about staffing, we do not have an identifiable staff that reports to us. i presume that the sec staff and the cftc staff are available to us. i would hope that we would aceive from the joint staff's summary of suggestions that have been made so that we would not be starting from scratch into a camera when we receive a document from you. >> -- in september when we receive a document from . >> i think the suggestion. jim and jim, right? aren't you the of official committee staffs? jim and tim just got out. just what are the things that outside market experts, or the

panelists have suggested, that is what you are really saying. >> yes, and so we can consider those between now and it when we receive the report, so the report has some relevance for us in terms of the kind of suggestions we might make. that would give us an opportunity to collectively come up with any other suggestions that others might have. and i would hope that we would have some kind of suggestion for the papers without having to have a meeting. >> in compliance with the act -- >> i understand that. you have given us some documents that have been helpful. some sets of testimonies, but i would also would urge the staff to give to us, if it is available to them, any written papers and documents that may be

helpful to us in making decisions and evaluating suggestions. this is, as you know, an extremely difficult subject matter, and a technical one, and we need all the help we can get. >> excellent suggestions. with that, i think of supposed to turn to the administrative side, we need to discuss the minutes of the june 22 meeting. is there any discussion of the minutes? they are in your binder. do i hear a motion to move? >> so moved. >> do i hear a second? all in favor? susan? any opposed? it looks like the eyes have it. -- it looks like the ayes have it. i guess we can adjourn. i just want to thank my fellow commissioners on the panel.

there has been a terrific dialogue today. i would asked if there is any other committee business. so, i would guess, not declaring any other business, i would declare this committee adjourned. the committee is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] . .

jx>> president obama spend a pat of the day and was, today. he started at a battery plant talking about energy jobs. -- president obama spent part of the day in wisconsin today. the president also holds fund- raisers in the los angeles. his comments at the battery plants are just over 10 minutes. [applause] >> thank you. thank you so much. thank you. thank you very much. please have a seat. it is wonderful to be at zbb energy.

i have a couple of people i want to of knowledge. first of all, you're one of fowl governor. please give her round of applause. [applause] someone who is fighting on behalf of wisconsin families each and every day, russ feingold. a great friend and someone who has been doing great work over the first couple of years in congress. please give her round of applause. [applause] thank you, erik for giving us a

wonderful tour. please give him a round of applause. [applause] the reason i am here today is because of this plant you are doing more than just making high-tech batteries. you are pointing the country toward a brighter economic future. that is not easy. we have been through a terrible recession, the worst we have seen since the great depression. this recession was the culmination of the decade that felt like a sledgehammer on middle-class families. the better part of 10 years, people were seeing stagnant incomes and sluggish growth and skyrocketing health-care costs and skyrocketing tuition bills, and people were feeling less secure economically. few parts of the economy were hit harder than manufacturing. over the last 10 years, the number of people working in

manufacturing shrank by a third. that left millions of skilled hard-working americans sitting idle, just like the plans were sitting idle. that was before the recession hit. obviously wanonce the recession took hold, and millions more struggled in ways they never imagined. there is nobody here that has not been touched in some way by this recession. certainly a state like wisconsin or my home state of illinois can tell a lot of stories about how badly hit manufacturing was, particularly in the midwest. there is some that suggest this decline is inevitable, but i do not see it that way. i know neither do you. yes, times are tough, but we have been through tough times before, and if we have made it through because we are

resilience. americans are resilience. we do not give in to pessimism, we fight for the future. we work to shape our own destiny as a country. that is what we have been trying to do since i took office. we have been fighting on all fronts. inch by inch, but by the book, mile by mile to get this country moving forward again and going after every single job we can create right here in united states of america. we are investing in 21st century infrastructure. roads, bridges, faster internet access, high-speed railroads, projects that will lead to hundreds of thousands of private-sector jobs, but will also lay the groundwork so that our kids and grandkids can keep prospering. we'll cut taxes for small businesses that hire unemployed workers. this is so we can expand and buy

new equipment and add more employees. we have taken emergency steps to prevent layoffs of hundreds of thousands of teachers, firefighters, and police officers and other critical public servants in our community. i did the governor will testify that we have made progress because everyone has pulled together. -- i think the governor will testify that we have made progress because everyone has pulled together. these folks would have otherwise lost their jobs because of state and local budget cuts. at the same time, what we have been trying to do, and that is why i am here, is to jump-start the homegrown clean energy industry. building on the good work of your governor and others in this state. that is why i am here today. because of the steps we've taken to strengthen the economy, zbb received a loan that is helping to fund the expansion of your

operations. already it has allowed you to retain nearly a dozen workers. over time the company expects to hire about 80 new workers. this is leading to new business for your suppliers, including mgs plastics and other suppliers and wisconsin. they are also planning to take advantage of a special tax credit to build another factory in southeastern wisconsin so we can create even more jobs and opportunity. erik's confident you can expand because you are seen rising demand for advanced batteries. all of this is part of the steps we have taken in clean energy, steps that lead to job manufacturins in manufacturing. modernizing the electric grid so we have more sources of renewable energy and we can use it more effectively.

we expect our commitment to clean energy to lead to more than 800,000 jobs by 2012. that is not just creating work in the short term, that will help lay the foundation for a lasting economic growth. i want everyone to understand, just a few years ago, american businesses could only make 2% of the world's advanced batteries for hybrid and electric vehicles. 2%. in just a few years, we will have to 40% of the world capacity. hear it at zbb who are building batteries to store capacity and you have been able to export batteries around the world, and that is helped leading this new industry. we have heard about manufacturing jobs disappearing overseas, but companies like this are showing how manufacturing can come back right here in the united states of america, right here in wisconsin. [applause]

lnow, obviously we have a lot more work to do. the damage that was done by this recession was enormous. é8 million people lost their jobs. 750,000 lost jobs a month i was sworn into office. 3 billion have lost their jobs by the time we took office. -- 3 million have lost their jobs by the time i took office. some have been out of work a long time. i said before and i will say it again, my administration will not rest until every american who is willing to work can find a job, and a job that pays these wages and decent benefits to support a family. what is clear is that we are headed in the right direction.

bña year-and-a-half ago this economy was shrinking rapidly. the economy is now growing. a year and a half ago we were ";losing jobs. we have now added private sector jobs for seven months in a row. that means the worst mistake we could make is to go back to doing what we're doing that got us into the mess that we are in. we cannot turn back, we have to keep going forward. [applause] i will be honest with you, there will be a big debate on where we go. there are people in washington right now that think we should abandon our efforts to support clean energy. they made the political calculation that it is better to stand on the sidelines, then work as a team to help american businesses and american workers. they said no to the small

business tax cuts i talked about and they said no to clean energy projects. they even voted against giving credetting rid of tax breaks to companies that are shipping jobs overseas. my answer to people that have been playing politics is they should come to this plant. they should go to any of the dozens of new battery factories or the new electric vehicle manufacturers, the new wind turbine makers or the solar plants that are popping up all of this country, and they should have to explain why they think these clean energy jobs are better off being made in germany or china or spain instead of right here in the united states. when people looked up the hoods of the cars of the future, i want them to seek engine stance made in america. when new batteries to store solar power come off of the lines, i want to see printed on

the side "made in america." i want them made right here in america. that is what we're fighting for. that is what this is about. [applause] so zbb you are part of that process. you are on the cutting edge. you will strengthen the economy. these have been a couple of very hard years for americans. we're not completely and out of the woods yet. there will be more tough days ahead. it would be a mistake to pretend otherwise. we are heading in the right direction. i am confident about our future because what i have seen in this plant and what i see when i talk to workers like albio. what i have seen lall across this country. -- i am confident about our future because what i've seen in this plan and what i see when i

talk to workers like you. there is nothing we cannot achieve when we set our minds to it. all we have to do is harness the potential that has always been central to our success. that is not just how we're going to come through the storms we have been in recently, that is how we will emerge even stronger than before. i want to sit and youtuay thankk and zbb for hosting us. thank you very much. god bless you. god bless america. thank you. [applause] .7÷@[music playing]

national captioning institute] [captions copyright national cable satellite corp. 2010] date. >> the president heads the campaign trail today for three straight days of campaigning. joining us as a reporter to talk about the president's schedule. where does he go today? guest: the president is going to wisconsin. he will end the day in california. there are competitive governor's races. he will be focusing near los angeles and on the house democrats. nancy pelosi has been putting out messages saying, have a chance to meet barack obama. they are hoping he will be able to raise millions and millions of dollars for the party. host: this fundraiser is for

candidates across the country? guest: there was a little dustup between house democrat leader nancy pelosi and robert gibbs. they said the democrats might lose the house. policy will be on stage with barack obama saying -- pelosi will be on stage with barack obama. this was scheduled a long time ago. the dustup happened the two about weeks ago. -- happened about two weeks ago. there are 37 seats that are up. whoever controls these governors sees will control congressional districting and will be in a real power position. tuesday is primary day in

washington state. guest: the president is not popular there. his ratings are about 40%. you will not see any big time rallies there. the real intimate setting their and he will have speeches talking about the economy. he can defray the cost of these and make the taxpayers pay for them. host: how is she doing in this race? guest: she is doing ok money- wise. the big problem for her is that 18-year incumbent. governors will be able to

distance themselves from the president. they may not have a voting record that ties them to some of the more controversial aspects of the president's agenda so far. but look at the language. how he will frame the democratic agenda and his tenure so far and how does he framed the republicans and how we ties them to president bush. host: she is having him come out to her state. guest: that is because he is not that unpopular in washington. barack obama is still the candidate who tracks voters -- who attracts surrogate voters. they are pivotal -- they were pivotal in electing him in 2008.

money is the motivator. mojo.will be gagt he will try to give the candidates a boost. host: where will they be on wednesday? guest: he will be in florida. there is another competitive race for governor. you have some senate races, a primary there involving jeff green. one of the things that will be interesting with these races is how much he campaigns for kendrick meek. the real focus is alex sink. host: heat will go to columbus, ohio. guest: all of these governors

races are hyper local races. whether it is health care, double digit unemployment. the unemployment rate in ohio is something like 11.6%. the stimulus package is being debated there. whether or not strickland has been good. these are pivotal states on 2012 as you saw them in the previous campaign. that is why obama is devoting so much time in these next days. he will be in five states over the next three days. host: you have written about whether or not michelle obama will be hitting the campaign trail. a lot of candidates want her to come to her state. guest: she is the most popular democrat in the country.

her numbers stand at about 66%. there is some concern about her recent spain trip. things they can roll her out in close races. she can be a counter on to sarah palin, focusing -- we know that sarah palin is focusing on our mama grizzlies. her issues kind of dovetailed nicely with health care. she will talk about her pet issue which is childhood obesity. she can be comfortable talking about that and also campaigning for democratic candidates. in the way we have seen her so far. host: what is the downside of michelle obama getting out in campaign 2010? guest: the downside is that

being out on the stump will politicize the first lady. this 66% approval rating, her being seen could eat into that. in 2012, she may not have the same kind of popularity among independents and she may not be able to boost her husband's reelection campaign. they are also afraid she might say or do something that republicans or opponents will ceasseize on. host: how much in dollars could she bring in? guest: michelle obama could bring in 20 million dollars for the party. that is roughly half. the dnc wants those voters back

out there. that is roughly half of what michelle obama could do. she retains that of the 2012 campaign. she will be able to bring out the surge in voter, independence, and she will be able to connect with >> in the $780 billion stimulus spending signed into law over year ago, more than half of the total has been committed to states by the federal government to spend on stimulusvv>5 proje. that is up 3 billion from last week. 275 has been paid out for their projects. you could learn more at c-

z!n8 >> thank you for joining us today. all the ways that we are fighting for the middle class. this week as students head back to school, families prepare for

+ the stronger protections enacted in the areas of student lending, health care, credit cards, and finance. the act establishes a new independent watchdog agency. it creates a national consumer will have, for the first time, a single, toll-free number to report problems with financial products and services. it allows consumers free access

to their credit card score. if there score unethicall negaty affects them, in reform's mortgage lending, eliminating many of the hidden fees and abusive practices that traps so many families with loans they could not afford to repay. foreclosures. those of us who paid attention

astronomical numbers. rit limits prepayment penalties. and one of the things i always thought was tremendously unfair -- i do not talk about it a lot, but for the 14 years immediately before coming to canada ports congress, i spend on one of the predecessor boards that was a predecessor to bankamerica. i was always amazed at some of

what was considered to be regular banking processes that could have a tremendous impact on consumers. while we were doing all of this, our republican colleagues strongly opposed establishing the consumer financial protection perrot, as well as ending the provisions ending a lull us for wall street -- republican colleagues strongly oppose establishing the consumer financial protection agency, as well as ending the provisions for the bailouts. in 2009 congress passed and president obama signed into law, a credit card holders bill of rights. that is a piece of legislation

that protects consumers and cracks down on excessive fees. it contains three separate implementation dates. the final day, the dean months after enactment, takes place on august 22. next week the last of the new credit card protections will take effect. that will include the banning of unfair rate increases. these are penalties that require credit card companies reconsider the interest rate hikes they have in place before the new law took effect. many of you may recall we got complaints earlier that many credit-card companies started doing things in anticipation of what would be prevented and 15 months.

when it came to time to stand for the middle class, house republican leaders voted no. these new restrictions recently implemented by the federal reserve will save the united states consumers at least $5 billion this year alone. i mentioned earlier about my bank experience. i remember one day we were all sitting around the board room talking about what we could do to improve the standing of the bank, and i raised an issue of overdrafts. i found out that deaay, overdrafts were the biggest

moneymaker we had in the bank. today, and in the zin this new l prevent things like a $35 penalty every time you swipe at th debit card if there is no money in the accounts. you may not even realize it. two or three of these purchases at a department store in one day all could add up to less than $50, but when you look at the cost of the penalty, you could incur a $200 penalty very easily. these are the kinds of things we

are bringing to a close today, but i have with me two young people that are headed back to school. one is emily syncheny. she has an auto immune disease that required her to see several specialists. her pre-existing condition and health care costs were limited her career aspirations. thanks to this, she will be able to stay on her parents' plan when she graduates. with that, i would like to ask family to come before us. >> good morning, everyone. i would just like to share with you a little bit today how

health care reform has seriously impacted my life. i will start at the beginning. when i was 17 i started experiencing a lot of odd symptoms and none of my doctors could figure out what was causing them. after two years of a lot of specialists in the week-long stay in the hospital, i was finally diagnosed with a rare auto immune condition that only 15,000 americans have. qg you can imagine, it was a lot to deal with as a young 19 year- old. my parents have wonderful health care. in my condition, because of the health care it was completely covered. after i started to recover and things got better, i slowly

realized that just because i had good health care coverage under my parents, did not mean being chronically ill wasn't going to impact my life. when your health care is tied directly to the job you hold, your career opportunities become a lot more limited than you might imagine. all of the sudden i could not take a couple of years off before i went to law school because i would drop off my insurance plan. i had to be careful not to ever drop off an insurance plan because i am diagnosed with the disease. thankfully, with the passage of affordable care act less spring, none of that is an issue for me anymore. the dependent coverage clause has been a godsend for me. it gives me the buffer time to figure out what career i want to pursue. take a couple of years and wait to go to law school or grad school, and that is something

that is invaluable to me and has really impacted my life. the decisions i am making now will impact my life on the road. it has made it so i cannot be denied help ensure that any point simply because i have a disease that i cannot control. that has changed my life in so many ways. i wanted to share with you today how much it has positively impacted me, but i am not the only american that has been possible impacted by this legislation. i am one example of the millions of americans who have been impacted by this legislation. that is why we need to pull young people into this conversation about health care, because young people are the most affected. we're the generation that is the most uninsured. i want you to think about all the different ways that young

americans are affected by this reform. in is really important, and other than to take this opportunity to saving due to congress for taking this issue and doing something about it. -- i would like to take this opportunity to say thank you to congress for taking this issue and doing something about it. we will not always be young, and in my case, not always healthy. this is one of the best consumer protections i think congress has enacted in a very long time. i am extremely grateful for it. thank you. >> thank you, emily. our college costs have soared in recent years, and increasing by 40% in the past five years. students graduating from college

have more debt than ever before. many of the students are holding off on going to college or skipping it all together because they cannot afford it. with the college cost reduction act, we have cut interest rates in half on subsidize student loans over the next four years. we converted all new federal student lending to the stable, effective, and cost-efficient direct loan program. it is a more reliable lender for students and more cost- effective for tax payers. we invest in $750 million to bolster college access and support for students. it will increase funding for the college access college grant

program and will also fund innovative programs at states and institutions that focus on increasing financial literacy and help retain and graduate students. we made federal laws more affordable by investing $1.5 billion to strengthen the income based repayment program. we invest in t2.55 and minorities serving at institutions to provide students with support they need to stay in school and graduate. we invested 36 billion over 10 years to increase the maximum annual grant to $55,000 in 2010

and 59 by 2017. starting in 2013, the scholarship will be linked to match the rising cost of living by indexing the consumer price index. i am also pleased today to be joined by sarah harrah, a pell grant recipient in california. the increase is helping her pay for college. this event today provides her with their first opportunity to come to our nation's capital. >> thank you for having me today. my name is sarah, and i am with the u.s. public interest research group. i am here today to talk about why this reform is going to shahelp me pay for school.

on march 20, 2009, and of my freshman year in college, my father unexpectedly passed away due to a stroke. and on top of losing one of the most important people in my life, this tragedy has led to a financialt( crisis for my famil. i got a call a week after my father's death from my mother telling me that she could no longer afford to keep me in school. unable to pay my flight back home, i missed my father is a general and work multiple jobs like to continue to go to school, but thankfully the pell class has helped me stay in school. because of this reform now i will be able to continue to stay in school and achieve my dreams to receive a bachelor's degree in english literature and become

a teacher. i am so happy to be here today because the college cost reduction act will help millions of other students be able to afford school and stay in college during of financially difficult time for them. this legislation will help half a million students, will prevent half a million students from losing their pell grant and prevent another 8 million students from getting it cut by 60%. on top of that, it will help students make it easier for them to pay back their student loans after they graduate. and today is actually my father's birthday, and i am incredibly happy to be standing here to talk about how of the stronger pell grant program will help support me in my educational career and helped many other students and america. because of this legislation, i

will be able to stand with my head held high on the day of graduation and stand on the stage and look up at the have and and tell my father his grlittle girl made it through. >> thank you for being here. we will answer any questions you have. >> [inaudible] >> i think the president made a statement clarifying that he was talking about religious freedom in this country. i grew up pentecostal. i recall as a child, because we were not considered mainstream and religioin religion, the larr

baptists did not the u.s. and a wholesome way. my father was a minister. i learned a lot in that little parsonage. one of the things i learned was religious paulson tacceptance. today pentecostal is a lot more mainstream. i think over time we will be able to view it a broader array of religious freedoms in the way we ought to. when it comes to where and how any structure, any sanctuary should be billeuilt, we have wht

we call community standards. community standards should be left up to the community. so the decision on permanent for any building, be it a mosque or a church for what ever or be it air pressure store or a liquor store, those things are left up to community standards, and i think in this instance that is what the president has said. >> [inaudible] >> i think it is the president of the united states çóarticulatingri and the part of tolerance of on thek+ii part os people.

>> there was a report today that one-third of cinemas funds that were supposed to be spent on> we had a lot of debate when we were putting together a recovery act as to what was the meaning of shovel-ready. for a project to be shovel-ready in meet all of the various tests, it has to be met at state levels for granting permits. we're sitting on the shelves of any state transportation department, you do not go out

and do bids and other purchasing right away and that sort of thing on a dream. you do that when you have the money to do the project. i think what we're suffering from here is the fact that there is a big difference in what we do appear in washington and how it gets where the rubber meets the road in the communities. sure, i am frustrated with that. i am frustrated that a lot of the things are taking place of the state level, when it comes to this especially. what is to say the money will not be diverted to another project that will still have to go through permiting as well? i do not think we should do that. i think we should recognize the

fact that there permiting process, the bidding you must do in order to award the programs, will be there no matter where you are. and maybe the next time we will be a lesless energetic and how e define trouble-ready. >> there has been more talk that the economy appears to be going back into a slowdown. that the concerns that there are those that want to have a lot more money directed to spending, infrastructure, and less to tax breaks. some of those people are now saying we see that the economic effect has been limited, the jobless rate is still high, and so that is indicated in their concerns. do you agree with that? >> i was one of those. you may recall, the stimulus

bill or the recovery package, what ever you want to call it, left the house with a much bigger number. the reality of what came out of the senate said in. we got a smaller bill out of the 8ú"hpì(lc@&c+ and direct advancements out of the senate. that is what we are currently living with.

we're taking a look at the vcclause within the bill that a lot of the states have rendered themselves ineligible for the money because of what state decisions that took place. these said that since we are thinking about what we're talking about putting the bill together. -- these are the things we are talking about when we're putting this bill together. what i am saying is i thought a much larger percentage should have gone into the direct project, rather than the tax credits.

i do believe it would have put more people back to work much more quicker. >> would you like to see more of legislation and what do you have in mind? >> i have in mind the highway bill, the transportation bill. i really believe we should find a way to get the transportation bill done. and has always been a big job creator. not only are true -- are you creating big number of jobs, but you are providing a tremendous service. i represent a state that has been determined to have more than 6000 bridges and in this repair -- in direpair. i would love to find a way to get the highway bill or transportation bill done so we can fix those things. that would be a tremendous

benefit to various communities, and also create a lot of jobs all over the country. thank you. i think what we're trying to do is take away profit. profit is what drives crime. >> tonight, intellectual property theft on the internet. "the communicators" on c-span2. "the washington journal" summer series continues this week. tomorrow, the impact on banks. a new topic every morning this week at 9:00 eastern on c-span.

last month, airline industry representatives went before the house transportation committee to explain baggage fees. among those testifying over the next two hours, the president and spirit airlines. >> the subcommittee will come to order. we're meeting today to discuss airline fees. i intend to give a brief opening statement and call in mr. pe

trie to hear his opening remarks. we will have both set to a clock 45. we were just notified. what i think i will do is first welcome everyone to the hearing today. i want to the banthank the famis according with us today and the steadfast support for improving the industry. with that, in order to move things along so we can get to our witnesses, i will enter my statement into the record, but before i recognize you for your opening statement, i would ask unanimous consent for about two weeks for all members to revise and extend their remarks. with that, my entire statement will appear in the record. without objection, the chair recognizes mr. peet ttrie.

>> i ask unanimous consent that might statement be entered into the record. >> let me now recognize our witnesses today. first, dr. gerald beginning hgi. mr. robert gilford. mr. ben bouldousa. mr. dave redly. mr. kevin mitchell.

mr. colin more. on behalf of the interactive travel services association and consumer science as well. with that, i will now recognize dr. dillingham. we would ask that you summarize iyour written testimony that you have submitted and tried to summarize your statement in 5 minute so that we will have time to ask questions. with that, the chair recognizes dr. deleon. -- dr. dillinham. > >> a full report was published this morning on the website. the study addressed four four

questions. first, what are the nature and scope of these fees? second, what is the potential impact of such fees on revenues used to help fund faa through the trust fund? third, how they affected the number of objects bags and mishandled bags? lastly, what processes are available for refunding government-imposed taxes and fees to passengers who did not use a non-refundable ticket with regard to the nature and scope of the ps? starting in 2007, airlines began to charge for many services for which separate charges and not previously exist, such as first and second checked baggage is, carry-on bags, meals, blankets, and seat selection. prior to 2007, the flying public considered these were included in the price of the ticket.

since these services were unbundled the revenues have become an important part of the process of many airlines. in 2008 and two dozen 9, the u.s. passenger airlines posted operating losses of about $4.4 billion, however, during the same time, airlines supported fee revenues of at least $7.9 billion. the $7.9 billion represents only a portion of the revenue that was generated from optional fees. according to airline officials, the seas are based on a combination of factors, including the cost of providing the services, competition, and consumer demand. i think it is worth noting that the fees are not accessed equally. for example, the business class does not play for certain services such as checked bags and early boarding. in addition, airline optional fees are not fully transparent.

specifically, they do not require the disclosure of most of the fees by airlines or ticket distribution channels that are used by consumers. therefore, consumers cannot readily compare the total cost of flights offered by different carriers. with regard to the potential impact of these fees on the trust fund, the irs has determined many of the fees that have been established by airlines are not related to the transportation of a person. therefore, they are not subject to the 7.5% excise tax. however, if check bags these revenues had been subject to the tax on domestic travel, it would have generated $186 million. less than 2% of the trust to fund revenues for 2009. with regard to the questions on checked baggage issues, since they have established the fees, a number -- the number of

checked baggage and the rate of mishandled bags have both declined. according to airline officials that we talk to, airlines have generally not changed their policy or compensation methods. . .

to buy, mr. chairman. >> thank you. the chair now recognizes mr. ripken. >> thank you for the opportunity to appear before you to discuss airline fees. secretary ray lahood is committed to protecting the interest of airline consumers. the department has implemented a number of initiatives to further that commitment. last december, we established a new foundation and consumer protections double tax several persistent pernicious practices, including lengthy tarmac delays and lack of consumer information.

in the last year, we issued 37 it cease and desist orders against airlines and agents assessing more than $3 million in civil penalties. we are very focused on the impact of new airline fees on consumer. we believe that the proliferation of these fees any matter in which they are presented to the travelling public can be confusing and misleading. many travelers still expect that the basics of air travel are included any ticket price. that is no longer the case. the published fare does not clearly represent the actual cost to travel once the new fees are added. these are services that used to come included in the affair, like checking bags, carrying bags on board, and now even getting soft drinks. it is difficult for consumers to compare fair offerings and make rational decisions based on the cost of travel. we believe consumers should have

complete information about the full cost of their trip. we believe that information should be presented in a clear, straightforward way so that consumers can make informed decisions. the department recently issued a notice of proposed rulemaking that would apply these basic principles of transparency in fairness to the airline industry's new fee structure. here is what we propose. first, it would require true, full price advertising. advertise to get to be required to include all mandatory charges. did you have to pay a charge to fly, -- if you have to pay a charge to fly, it must be included in the total price presented to the consumer. second, we propose that airlines optional fees be fully disclose on website. we mean charges for things like

checking baggage or seat assignments so that customers can choose to avoid and still fly. we would also require more detailed disclosure for fees related to carry on and check bags and that such fees be a permanently agreed to buy the consumer would note opt out requirements or shenanigans. we proposed to require reimbursement of baggage fees when the backs and not delivered or delivered on time. we are seeking comment on a proposal that airlines report both the full fare plus the mandatory charges as well as what we refer to as full fare plus, which could be the full fare ticket price plus the cost of baggage charges that consumers are traditionally used to seeing included in the charge of the ticket. we have not made any determinations about what the department thinks is appropriate. the upper part -- the department proposes to require airlines to

provide their global systems complete and updated information on ancillary fees. among other key provisions, we also propose to increase compensation for bumped passengers. our proposed rules addresses most, but not all the recommendations of the general accountability office. one recommendation and report involves a tsa feet to cover the cost of screening and related services as well as other fees proposed by government agencies. these fees are beyond the scope of our current rule making, we would be happy to work with you on this issue. we're committed to acting swiftly. i want to think this committee

for invigorating our consumer protection program. your support have been in -- have enabled us to redouble our efforts to protect consumers. we are committed to the mission that you have given us. we look forward to working with you. >> thank you. you made mention of secretary ray lahood nd action that he has taken thus far. we applaud him for his swift action and look forward to working with you on these issues. the chair now recognizes mr. baldanzo. >> thank you for the opportunity to appear today. spirit airlines is based in the fort lauderdale, florida. we carry approximately 65 million passengers a year.

-- 6.5 million passengers a year. we believe that separating optional customer service is from the fare better not essential to transporting a passenger allows the customers the choice to purchase services or not. this benefits the traveling public. this increase -- this generate tax revenue. no additional tax should be imposed on the cost of these ancillary services. over the past decade, the industry has lost $60 billion in light of weak economy and reduce demand for air transportation, as well as uncertain fuel prices, imposing additional taxes on the industry and passengers. it will be counterproductive. in 1978, congress passed the

airline deregulation act. we take this policy to heart. our goal is to offer consumers a real choice in selecting an airline for their travel needs great since 2007, -- travel needs. since 2007, in every month that we serve, it in -- it disciplined affairs. the impact was clearly demonstrated when our pilots went on strike last month and other carriers, including low- fare carriers, immediately raise prices. jack bloom raised its round-trip fare in the fort lauderdale area -- jet blue released their fair from under $200 to over $600. in an effort to make air fares as low as possible, in 2007, we

unbundled the charges for checked bags. we lowered our fares to adjust. this chart does not apply to such items as medical equipment and baby strollers. carry-on bags have become a nightmare for character -- burk customer boarding. they lead to costly flight delays. we believe it is unfair to charge those customers for extra services they did not use. the carry-on fees for most passengers is $20 or $30. we also lowered its check to back charged to encourage passengers to check their bags. the total cost to the customer to travel romaines far lower than other airlines. as a group, low-fare carriers pay a high percentage of ticket prices.

much of the tax burden is in charge a spread on a domestic flight, these include an additional excise tax up $3 -- a 4.3 since per gallon commercial fuel tax. on a 300 mile trip, the customer could pay a total of about $35 in taxes or 20% of the fair. we have bill lowest fares in the industry, are lower income passengers are already effectively playing the highest taxes of the total fair. this is unfortunate. average fare is under $85. most of the industry is well over $100. our passengers pay over $11 in federal excise tax between the ticket price and the fuel, or 13%.

the primary impact of charges for nonessential ancillary services would be to raise prices for all consumers and dampening travel demand. at a time when the industry has serious financial issues, it would be counterproductive to employ yet another tax burden. they are not charges for the transportation of any person. the handling of checked bags imposed higher labor costs of the airlines, which does not -- but does not touch air-traffic control. these include but the direct cost for the time of the reservation agents, and the potential lost revenue for montana seats. -- for empty seats.

we had the highest ancillary revenue. we believe this is highly misleading. it is higher than other carriers simply because our fares are so low. we have the same average fares as american airlines, are ancillary fees will be 14%. over 70% comes from ticket sales. of the 25% of the revenue that could be labeled ancillary, about 60% is related. the to% is from baggage fees. -- a 50% is from baggage fees. we are certain that our choice to unbundle services has had minimal if any-of fact on the excise taxes. are lower fares have enabled

where people to fly, despite the difficult economy. imposing excise tax will dampen the public's ability to afford to travel. we believe that customers deserve to have access to as much information as is reasonably available. our website provides all of the information on all of these charges. this makes it easy for customers to comparison shop, to confirm that our total price is still below list. unfortunately, under the policy, airlines must include the federal excise tax as part of the fair. this is hidden from the customer. merchants are prevented from showing customers how much they're paying. i would like to note to of the older is a proposed new rules or recently announced by the dot. after decades of permitting airlines -- the department

proposes to require airlines to include all feet in the advertised fare. this new requirement will further obfuscate the portion of the ticket price going to the government. congress should direct the department to permit airlines to disclose the fares on there website in a totally transparent way. the department proposes to require that all airlines allow customers to hold a booking without payment were allowed to cancel without charges. many of our promotions offer one day sales only. allow the 24, our work -- 24- hour cold circumvent the sale. " and the ticket would -- holding a ticket for 24 hours would take away selling time. most players -- most low-fare carriers do not allow this.

passengers can shop and compare prices before they buy. we believe that ancillary fees, congress must be guided by the objectives established by the airline deregulation act. tax revenue should be generated by promoting economic expansion and taking steps to encourage more people to fly. imposing new taxes must be avoided. such taxes would surely harm competition, raise costs, and slow the industry step recovery. , should look carefully for new rules proposed by the dot, rules that benefit a few customers, but raised the cost for all. thank you for your consideration. >> thank you. the chair now recognizes mr.

ridley. >> thank you for inviting southwest airlines to testify at today's hearing spirited my name is dave ridley. i live in a southwest employee since 1988. i am accountable for the company's topline revenue performance. my responsibilities include pricing, advertising, and the maintenance of our brand image as america's leading low-fare, high customer service airline. today, southwest is the nation's largest airline in terms of domestic passengers. caring more customers than any u.s. airline, which now carry over 100 million customers a year, serving 59 cities and 35 states. we are the most heavily unionized airline in the country. we are the only airline that has not had an involuntary furlough

of an employee since ar inception in 1971. after 39 successful years in the airline business, southwest continues to look for ways to differentiate ourselves from other airlines beyond our consistently low fares and our great customer service. most recently, we chose to make our affordable transparent, and easy to understand the pricing structure a focal point in winning the hearts and minds of the flying public. by not following the industry trend toward nickel and diming of our customers. our overriding philosophy at southwest airlines is to not charge customers for things they have historically received for free. that is why southwest is committed to low fares with no hidden fees. what you see is what you pay. when you book a ticket on southwest, you will not pay a fee to check your first or second back or to carry on a bag, for that matter. he will not pay a fee to check your bags curbside.

you will not pay up to $150 to change your reservation. you will not pay a fee to sit in an aisle or window or ecstasy. he will not pay a fee to make your reservation over the fallen. -- you will not pay a fee to sit in an aisle or a window or exit seats. our position on fees alliance or corporate goals to generate positive financial results with the passion of our people to provide good customer service. we listen to our people. they do not shy away from telling us exactly what they think. our people tells out -- told us that they do not want us to nickel and dime their customers. 11 our people to do what they do best in a customer friendly way is one reason why, since 1987, with the department of transportation began tracking

customer satisfaction, southwest has consistently led the entire airline and history with the lowest ratio of complaints per passengers boarding. this is further evidence that our policy of not nickel and diming is not a gimmick. it is good business and makes our people feel better about who they are and what they do. due in large part to our bags fly free campaign, southwest has experienced a domestic market share shift worth close to $1 billion. as a result, our customers, employees, shareholders have been the beneficiaries of this decision. while we are not fans of fees or services that historically have been part of the base fare, we believe strongly that the decision on whether or not to charge a fee for an airline product or service is a business decision best made by each individual airline. southwest make conscious decision to limit our customers exposure to what we view as

unreasonable and annoying fees. that was our choice. other airlines have chosen a different business model and should have every right to do so. however, we do think the federal government should focus on ensuring the full disclosure of any and all fees to consumers. making sure that air fares are advertised fairly and honestly. only an informed consumer can make apples to apples a fair comparison which allows them to shop for a flight that best meets their needs. to protect the travelling public, of the should be disclosed to consumers wherever their tickets are sold. we generally agree that the fee related elements for the d.o.t. would achieve this goal. on behalf of southwest airlines, thank you for this opportunity to testify. i would be happy to answer any questions. >> thank you. the chair now recognizes mr. mitchell. >> mr. chairman, thank you for inviting business travel

caulescent to appear before you today to represent customer and corporate managed travel interest. today's hearing is critically important because of the potential for consumer of be used in this fast-changing marketplace for airline services. we're not against unbundling as a matter of principle, but is opposed to the actions of full disclosure of all i on fees and charges, such all consumers cannot make genuine apples to apples comparisons of all airline fares. without timely and complete airline disclosure of an increasing array of add-on charges, the global distribution systems, and travel agencies, consumers will become as economically trapped by airlines as they would be physically trapped during a seven-hour tarmac delay. the need for consumer protection

in this area is accused, but the remedy need not be -- the highlight of the survey results yet -- released yesterday are revealing of a sea change in thinking about government oversight and commercial air transportation. consider -- blunder% of corporate travel managers indicated that unbundling and extra fees have caused serious problems in their programs. 86% believe that airlines absent government rules will not make fair and adequate and readily accessible disclosure other add- on fees and charges at said that travel managers and a travel management companies can do comparison shopping of the all- in the prices for air travel across carriers. 95% support the proposal that the u.s. d.o.t. require airlines to make eye-on data available

and easily acceptable to the travel agency travel. these survey participants are business people who do not generally favored government intervention in the marketplace. however, they see a market failure coming at them with the speed and impact of a fastball to the side of the head. with across the board on bundling, i said government stepping in, consumers will not have the ability to buy would be full price of air travel options available to them. for decades, the transparency of air fare information through all channels has been a marvel of modern technology and has benefited consumers immeasurably. unbundling, without disclosure, threatens to catapult us out of the 21st century and back into an opaque stone age where a

telephone pact -- calculated, pen and paper, were needed to figure out how to prepare airline services. add-on, like checked bags, and our material to air transportation at the way a chair is material to a restaurant meal. the patron is given partial information and essentially trapped into coming to the restaurant. the stakes are much higher at the airport for families and businesses on tight budgets. which is why you are having this hearing today. of significance is that airlines remain at a 35% cost advantage, the low-cost carriers. they cannot offer the kinds of across the board low-cost fares spread there is a motivation

present to obfuscate the true all-in price by keeping fares opaque and resisting efforts to have these and fares displayed transparently for travel agents. the air publishing company has a new data system ready to facilitate the loading of add-on fares in each global distribution system. not a single major u.s. airline has signed on to permanently use this new system because the first airline to do so would likely show all-and higher air fares of 30% or more compared with its competitors. this is an industry where a few dollars can make a difference for a consumer in choosing one airline over another. no one airline can be expected to make the first potentially suicidal move. that is why government help is

needed, to ensure that all airlines jumped together with the benefit -- for the benefit of consumers. airline passengers are without legal rights and remedies because preemption, federal preemption, and the lack of hits -- lack of oversight in this area. the international airline passenger association and its 400,000 members joins us to encourage this committee to urge the d.o.t. to require airlines to make add-on fare data it is easily excepted -- accessible to the travel agency channel. congress could also provide this released in the faa in reauthorization act to senator men and has and his sensible disclosure proposal.

consumers would finally have a batting helmets to step up to the plate. i look forward to your questions. >> thank you, mr. mitchell. the chair now recognizes mr. more. >> thank you, mr. chairman. sabre holdings -- i am representing three groups. the interactive travel association, the trade association for online travel companies, the american society of travel agents, and the consumer travel alliance. trade is to inform and educate legislators about policy decisions. i am responsible for the system that manages the sale of air

travel across all channels where airlines -- it has recently been focused on air travel unbundling. there has been more of the closest thing you will find to a perfect marketplace. consumers have enjoyed access to a near perfect information on air products and prices. the the internet, travelers can shop anytime, day or night, and the prices are also constantly updated. they can book when they feel the product is -- travelers are extremely price sensitive. that perfect model is now broken. with the removal or repackaging of many services from what has traditionally been included in the affair, shoppers have a difficult time finding out the true cost of travel for their

proposed trips. they are left to find out the true cost only when they have completed and paid for the last baggage feet and picked the seats their cells for themselves and their family. we've just released information to outline the impact of consumers from hidden fees. with effective price increases -- it does not have to be this difficult or harmful. solutions are coming on line that will bring back transparency to the consumers. this can only happen if the airline community makes information on ancillary fees readily available. it can only happen if the airline community makes information on ancillary fees readily available, something that we strongly believe the airline should be compelled to do. a broad collection of airline agencies and standard setting

bodies have outlined how the information for ancillary can be shared within the industry. the airline owned fair clearing house has adopted their system to support ancillary fee information with the same level of specificity that airlines have for their fares. targeting the ancillary to specific date, traveler groups, corporations and agencies, and many other variables. we're on the cost of being able to make this information available to shoppers as they shop. at the end of this month, sabre holdings is poised to introduce the ancillaries enterprises into the shopping work flow of the traditional travel agent. in referencing the graphic in front of you, next month, we'll take a step further. enabling -- low-fare search is something you would like into online shopping were you asked

for fares, were york -- for your desired departure or return dates. if they believe they're going to make to check a couple of bags, they can specify that up front. and they're traveling with their families, the system then find the lowest fares that meet the specific needs, inclusive of the ancillaries. given the consumer the total price of their trip with no surprises at the airport. these standards can solve get another problem that today's corporations and agencies have no ability to manage for the money is going. the system can fix that, too. cibber holdings and the rest of the industry are all going down this past -- sabre holdings and the rest of the industry are all going down this path. this will only happen if the airlines are compelled to offer this information to the channels that represent approximately

half of the air travel sold in the united states. i sent this, consumers will select flights only to find that things were not as they appeared on their screen. this is not about compelling in airline to participate. airlines have the choice to participate or not. this does not change that at all. this is unequivocally about the consumer. if the airline chooses to sell, they should show the consumers careful prices, not something that dramatically underscore -- understates the real price. airlines have a powerful disincentive to provide this information to the consumers. this is that last holdout airline the added advantage of appearing lower-priced. this is why the government must step in. we do not believe that airlines will do this on their own. we believe that it is important that those airlines provide the

information in a way that allows consumers to shop with full knowledge of and competence can the travel costs in total. consumers deserve the opportunity to know what to expect what they are buying. the cost of compliance of the airlines are negligible and the benefits are enormous. thank you for your time. >> the chair recognizes the distinctions -- distinguished chairman. >> i greatly appreciate you holding this hearing, mr. chairman brad -- mr. chairman. there are a few issues of more lively interest than the checked baggage he's that airlines are charging -- baggage fees that airlines are charging. hardly a week and goes bite in

my travels i am not passed by passengers, are you going to do something about these days? can something be done? we're starting. we're having a hearing. we started by asking gao to evaluate and report to less -- a report to us -- it looks to me like the airlines are learning from the units of government. it is a back door price increase. if it is not a tax -- is not a tax if it is a fee. it is called a fee, it is not a tax. you could impose these taxes through infinity.

it is just a backdoor financing. customers are paying for meals, pillows, blankets, headphones, beverages, checked luggage. in europe, low-fare carrier proposed a fee for using the bathroom on board the airplane. that did not last very long, but they propose that up front. did you have the premium services, early boarding, early access to over headspace. there is never anybody on board to explain -- you are in row 24, you cannot put your bag in row 3. in 2009, at $7.8 billion in fees.

$2.7 billion was just a baggage. first quarter of this year, $770 million in checked baggage fees. the network carriers are losing money, the industry as a whole reported profit of $12 million. you have additional factors. every airport i go to, i talk to the gsa agents. -- tsa agents. what does this mean for you? well, it means more carry on its, more densely packed carry on, and karen sadr more difficult to screen. it is taking a slugger to screen -- it is taking us longer to screen. we frequently have to have back up to back up the primary screener.

i fly all around the country. those are hidden consequences of this rush to back more money -- back more money. imposing fees for bags. those fees are not subject to the airline ticket tax. as the report indicated, that could be the equivalent to% -- to% of the aviation trust fund. it benefits primarily the airlines. all that would benefit, but the airlines say they have lower ticket prices. if you add in the cost of all

these charges that i listed a moment ago, the ticket prices are back up or they were before the fees. and probably higher. i think the report recommendations of disclosure is a starting point. i want to say to the airlines, who are in a great number here, if they do not exercise restrains, there'll be a continuing outcry from the traveling public. you'll have some kind of regulation that he will not like. if you do not exercise self restraint, you will get pushed back from the travel public. it will come to the congress, and in the congress will act. that is not a threat. that is history.

thank you. >> the chair now recognizes -- >> thank you very much. i have a couple of questions. we are focusing on the fees and disclosure of fees. what about discounts? the strategy of of these airlines seems to have all these fees and then you have discounts and you get free drinks or 101 different purpose. -- perks. is it legitimate to have a strategy that differentiate and

that way so that customers, more or less, get the benefits and charges that they want to pay for rather than the one size fits all? >> thank you for the question. the focus of the department of transportation since deregulation has been to ensure that we can guard against unfair and deceptive practices, on their methods of competition, and to ensure safe and adequate transportation. all we are trying to do is to fulfill that charge. we have a correct will making proposal, which i cannot discuss beyond under the rules regulate -- related to the regulatory proposal. if there are other suggestions that are not included within the scope of the rules that we have

put forward, which is rather broad, we will be very happy to consider them in discussions with you and your staff. >> i am just kind of curious. if you are a customer and you knew you flew four times with airtran, you could get a free first-class upgrade or you could save charges or some other airline, that might make a difference. you might figure, well, i'm taking several trips. it would be better to go with the airline that would charge $5 more, but would give us all this extra discount. you are looking at extra charges, but you're not looking at the other side of it. there is disclosure and it seems to me that a lot of these airlines have a triage -- a strategy to try to capture the business and higher price

customer by giving the individual business traveler all kinds of perks through these affinity plans that the bosses are paying for not realize going into this. he has to choose between two trips. is that what they are doing? is this a problem? is this something we should be addressing here in this congress? >> i think it is a wonderful observation and it is exactly right. i also believe that this was an unintended consequence. you had airlines that were introducing additional fees, but they did not want to anger their most loyal and highest revenue driving passengers. that shows greater loyalty for those most loyal passengers because they had even greater differentiation in the products and services that they could expect relative to somewhere where they are not loyal traveler. that kind of speaks to why all

this stuff is so important. this has made it even more complex than it used to be. that is why consumers are -- this is an incredibly complex process. it is important for the airlines to provide the information so that you can differentiate between those that may be frequent travelers is not in comparison shopping. the citizens are ready to do that. the needed data. >> thank you. this is slightly unrelated to the subjects. we do have a pretty strong rule current main to protect the travelling public which says that if the airline stays more than three hours on the ground, there is a tremendous affine -- tremendous fine. we're starting to hear from the

various carriers that to avoid that, they're asking people after about two hours to get off the plane even though it might actually flights are more delayed then they would otherwise be. people are overall more inconvenienced. i was wondering whether you or the department or people dealing with this rule and is wise implementation would be open to sitting down and reviewing various ideas for fine-tuning it with the idea of ending up convincing rather than inconveniencing the traveling public as far as unanticipated delays are concerned. >> of course, we would be. we just had our first month of comparative data that showed that our three-hour time that delays are down substantially -- tarmac delays. we are investigating those five

and any that we have become aware of that have occurred since then. we're always looking for ways to improve on regulatory responsibilities. we're very happy to work with you. >> just wanted to let you know that the gao has been asked to evaluate the impact and implementation of the rule. there is only been a month of data to this point and we are waiting on a little more time to pass so that we can have something to base our study on. we will be looking at that as well. we are hearing from various people in the industry -- a big fine concentrates the mind. there are some ideas that people think they have said they would like to evaluate to implement and it a way that would benefit the traveling public more than a

rigid one size fits all approach. there are some unanticipated consequences. when they get near the three hours, they get everyone back in the airport and they will have to sit there for six hours or eight hours waiting for another flight. the airlines are afraid to pay the millions of dollars and they would rather say that money at inconvenience the customers. anyway, this is the concern that they have. it is not a voluntary delayed. they're trying to work with some real-world situations. to say this money, they are

faced with inconveniencing customers are spending $2 million of their money. >> we will, in fact, be looking for unintended consequences as well as we undertake that work. >> mr. mitchell, go ahead. >> the reason why the rule is working so far is finally, the airline's senior management seems to have been made to prioritize this problem. one month of data will not matter. what will matter is that the airlines will have a period of time over the next 12 months to do the enormous work required in their systems and their operations to make this work for the passenger. i would virtually guarantee a year from now, this will be a non-issue. the airlines will address. >> to follow up on his point and question, let me ask, did you say that the department has one

month? >> that was in the month of may of 2010. we can only compare that month to may of 2009. >> to the industry raising concerns about consumers, conversely, have you had any complaints from passengers? >> yes, of course we have. we have a staff of lawyers and investigators to field complaints every day. >> specifically about the five delays during that time? >> we take the reports and make sure we are investigating those by delays, but we also investigate media reports, call in complaints, so yes, we are investigating whether those are actionable delays. >> the chair now recognizes the gentleman from oregon.

>> thank you, mr. share. -- mr. chair. if you unbundled the charge in 2007 and affairs, was at a net to the airline? did you fares as low as your revenue or did you increase revenue? >> with increased revenue because we carried more passengers, -- >> did you realize -- so you did it as a public service? when you begin to charge for people to carry bags on and put them in the overhead, are you going to lower fares again? >> we already have. >> ok. good.

why would you object to a system where a customer -- in the end, i have flown about 4 million miles. people care about whether they get their alive and safely. the second thing is the conditions on which they travel and what they pay for their tickets. they do not care where that money goes. they just want to know how much is the ticket going to cost them. why would you object to a system where people would be able to meaningfully compare what they are going to pay in total to go from a to b? >> we do not object to that system. we have changed -- we have spent a lot of money changing our website so that it is fully disclosed. when you buy a ticket, you know exactly -- >> on the first page?

>> before you pull out your credit card. >> but you are not providing the data to be - >> as customers go to the shopping process, maybe i want to join this club or not. at the end, they see the whole piece of what they're going to buy. >> could you comment on this? i saw you shaking your head. they are not cooperating with the secondary market for in terms of these fees. >> i am never going to get this down. in terms of the data that we would need, that a consumer would need to set up front, i am going to check a couple of bags and i want to be able to preselect my fees, that type of information as not been made available today. there's been no airline that has

said they are going to do this permanently. there has been note airline that says we are doing it expressly right now. >> there is a system that could accommodate this. i think he said that airlines, some are more or less interested, but they are worried about going first. did a meaningful comparison, the bottom line -- maybe they give you the information, but you cannot compare it. they cannot go to a one stop shopping and get this information. >> that is absolutely correct. >> this reminds me in when i was trying to ban smoking on airlines and i would have a ceo say, what it would be a competitive disadvantage.

the government had to stand in and give you a level playing field. a livingn't we create -- a level playing field here? why would we create a level playing field by requiring a meaningful transfer of the necessary data to the secondary marketers? >> proven that our airline is quite different from the airlines -- less than 10% of our customers buy from a third- party intermediaries. 92% of our customers by truck from airlines. the fully disclose what under% to the customer. >> you are not answering my question. why is this going to be a big imposition? maybe you would get more

customers. >> 92% of the customers feel pretty good about our products. >> thank you very much, sir. >> do you have any comment on whether this would be overly burdensome on the airlines? >> based on the work that we have done, we do not think it would be a tremendous burden on the airlines to provide the kind of information in a way that customers can make meaningful comparisons. airlines already have administrative mechanisms in place that would facilitate during -- doing these kinds of things. it would not be free, but it would not be overly burdensome. >> ok. why would we have a comprehensive -- >> we have asked that question

in our current rulemaking. we are requesting that it be a government mandate and are waiting comment. >> the chair now recognizes the gentleman from north carolina. >> good to have you with us today. how would you rate the transparency of current airlines and in what ways could transparent to be improved? >> i think the findings of our reports indicate that the fees are not very transparent. in fact, what mr. rifkin is talking about in terms of the way that the proposals we are making is being developed and put out to the public is closer to a first step in terms of making it more transparent and that the consumers can compare what they're going to be buying from across the website. >> how does d.o.t. define

deceptive advertising? >> our mandates is unfair or deceptive practices that are similar to state consumer protection rules around the country where there is a body of case law that describes when there is a misrepresentation or a misleading assertions. >> how specifically does d.o.t. plan to require full disclosure of optional fees and what would this required? >> in our current rulemaking, we have set forth a whole series of proposals that ancillary fees, baggage must be fully disclosed,

other ancillary fees and the key disclosure is that the total mandatory price must be disclosed the same way by every airline and agent, so that consumers can compare the real price the consumer would have to pay as the final price, that is mandatory for the ticket. >> thank you. mr. mitchell, how will more transparency on the part of airlines and their ancillary fees benefit corporate travel programs? quilted benefit corporate travel programs? " -- will it benefit corporate travel programs? >> it will solve several problems. with knowledge of the fares and fees, they will be able to budget more effectively. they will be able to administer the programs through the

accounting and auditing. they will be able to enforce travel policy. currently, if he is indistinguishable between the eight checked baggage feet and an upgrade for business class, for example. there is a whole host of benefits, including travelers not being surprised at the airport by these fees. there are great benefits that would come from full disclosure and transparency as laid out. >> the chair now recognizes the gentle lady from california, mrs. richardson. >> i realize you're the but ident of spirit, would appreciate not being