lawn just staring at his house. you could hear the roar downtown of the street fights coming down and the riot that was happening. there were 5000 kids downtown and there were 25 on his front lawn. i asked what made you come to his house instead of going downtown? they said i'm going to downtown next. i just wanted to come here first. it may have something to do with youth. >> we are in overtime. we have time for a two quick questions. >> great panel. it would be wonderful to ask you all qutions. but i will ask one. you work for an interesting hybrid beasts. could you explain how that works? could you explain who aljazeera english is and who aljazeera is and what the overlap is?

what is this beast? al jazee started out as an arabic channel. in 2006, it launcd english. they have two separate buildings and have separate staffs. i think the editorial decisions they make are more for an arabic-speaking audience. and for the english channel, it is more what is of interest -- i don't want to say a western audience because we do have viewers in india and others. >> it is astonishing what you can do on al jazeera english cannot be played for the interested parties in the arab world.

anyway. -- in a way. >> i don't work for the channel anymore. i cannot speak to their decisions at this time. i can only talk about the editorial decisions on the english channel. bahrain in the dark was only aired on the english channel. >> my name is harvey simpson. i am a world war ii and korean veteran. when we won inermany, we put our military colonels and captains in charge in every town and village. the germans cooperated in all cases. now you have a situation where religion is involved in ts war

in iraq. there have been fighting each other for a thousand years. do you think anything we have done theire be successful? i feel like everything we have done there has been a complete waste. i have one more question about afghanistan. we have been in afghanistan for good reason. we defeated the taliban and have them on the run. now we leave 10,000 men and concentrated on iraq. how do you feel about that? had we not gone into iraq and put 60,000 people in afghanistan, wcould have defeated taliban. by decreasing our troop strength, they are back. i think they will always be back. again, religion is involved. i do not feel that, in these types of wars, we can win any of them.

>> so what is the question? [laughter] >> do you feel that in fighting the stuff of wars, like in iraq where religion is involved, can we ever change the nature even when the war is over? the shiites and sunnis have been fighting each other for several years. >> if you were 22 now and wearing the uniform that the men and women are wearing their now, you would not sound very different from any of them. i will rely on someone else's words. a photographer who lost his legs and afghanistan. i had gone to iraq in 2006. we were laying around one night

and we had seping bags. he said, you know, we're just a passing the storm -- a passin dust storm. i think he believed it could i think a lot of peoe do. how do you fight a war in a place like this? it is a lot different than the wars fought in your time, where it was countries we were fighting against. if there had not been iraq, we would have defeated the taliban once and for all -- i think that, if we had not gone into iraq, afghanistan would have been different. would we have defeated the caliban once and for all? i don't think so.

-- defeated the taliban once and for all? i don't think so. this gets to what are you trying to do? this is a whole conversation. i would not give a silver bullet to a question like that. i would say don't sit on a hornet's nest in the first place and then you will not sit around wondering why your having a bad day. [laughter] >> iould like to propose a round of applause. [alause] thank you all for coming.

today's third prize winner selected article i. >> i have roots in israel -- iran and many beautiful people live in there.

but definitely, many people would get killed if a war a full blown war is between the u.s. and iran. >> the president has given the ability to be the commander in chief under article i -- ii of the constitution, they did not want the military controlling the government but rather the civilian leaders of the country being in control of the military so this commander in chief power was something that was important to them but then as a check to that congress, would be the only entity that would be able to formally declare war so as commander in chief he could order troops and movements but the congress would be the only ones that could actually declare war. in jefferson's administration he sent the

native toy deal with the barbary pirates in north africa without a formal declaration of war, the first deck lars of war came during madison's administration and he very reluctantly was drawn into the war. it was spurtd on by warhawks an members of congress who felt like the national reputation an prestige was being sullied d by british on the high seas so early on you have presidents that are dealing with congress and determining how military power should be exercised and who should be in control and i think the founders wanted it that way. they wanted this relationship to be one where the branches would be watching over each other, and for the purpose of not just derailing a program or trying to bring down a president or bring down a party or win the next election but really to safeguard the liberties of the american people. but the end result is we haven't had a formal

declaration of war since we declared war on germany and japan and that axis in world war ii so we have been involved in a lot of military actions since then but none of them going to the process of formally declaring war so congress has on numerous ole occasion tried to even bring lawsuits against the president to determine whether or not his actions were constitutional or legal. >> and this is the headline a lawsuit filed against obama when u.s. operation in libya, congressman kucinich why did you file suit in federal court? >> well, this is a constitutional issue. and any constitutional issues have to be brought to the federal court if they're in dispute and you want to get a major issue resolved. in this case, it's our contention that the president of the united states violated article i section 8 of the kongs tugs

when he proceed to order -- constitution when he proceed to order an attack against libya. >> as an american i'm thankful for article i section as i feel protected from one person declaring war without proper discussion. however in recent history, presidents have initiated military action against countries without declaring war, therefore bypassing both houses of congress an circumventing the voice of the american people. as an iranian i'm concerned that a president now or in the future may initiate military action for political or defensive purposes. without consulting congress the president may not consider all the consequences of a war against iran. in addition to this regarding the authority of the constitution and the voice of the people. >> one person making a decision is definitely not

wise, especially if that concerns sending young people to war. entering a war should be a decision where many people get involved in that decision. such as congress, which is is composed of representatives of people. >> ever since the conflict in libya has brought this to the forefront of national debate. member of congress have perceived what they see as a failure of the current administration to obey the constitution. >> the constitution was designed to be a check on the power of our government. hence the term enumerated powers. each of the three branches has very limited powers with congress having its own unique role and pourts, one of which, -- powers, one of which is the power to declare war. my focus this morning will be on the abrogation on the

constitutional and statutory powers of the president in regard to his action on libya in other words the author sayings to use military force is given to the president by this body and none other and it is in accordance with our constitution we are here asserting our sworn constitutional duty and tell the president he does not have the support nor the authority that he claims to have in order to continue military operations in libya. >> however some contend that the action taken in libya was necessary based on the circumstances, even without congressional approval. to illustrate the gravity of the situation i asked my partner to use his skills with motion graphics to dramatize some war related images. >> there's a definite danger to people living in the city that were rising up against gaddafi. he was invading. he was going after them so that quick action had to be

taken and he found a way to do it without breaking the law. he didn't officially declare war on him. he just helped nato do whatever they needed to do. >> do you think that doors did constitution? >> spirit of it? no. letter of it, no. he didn't declare war. >> technically we know it's not a war but we both know what's going on so don't you think there's a loophole to go around what the constitution said? >> like i said it did live up to the spirit of the constitution but in one time it was justifiable because lack of action would have caused more harm. opinions may differ but the constitution is still the final law of the land. >> and if we -- it's not only for peril at this

moment but it sets further precedence about what shall be the united states policy in yemen, in sudan, in syria, any place around the world. we don't pay attention to this, if we don't contemplate the wisdom of the founders in dividing the power within the government, then we are in danger of losing our country. >> go to student cam.org to watch all the winning videos and continue the conversation about the documentary at our facebook and twitter pages. >> next a forum on regulating technology and innovation. after that the weekly addresses with president obama and michigan congressman fred upton. >> our specific mission is to work to see to it that human rights remain

essential components of american foreign policy, and that when we are evaluating our foreign policy moves globally, human rights can never be the only consideration but it has to be part of the dialogue. >> katrina lantos sweat is -- swett is ceo. >> when it relates to the war on terror and up the coming issue of whether or not the u.s. congress should pass the accountability act which is we don't need to go into the details of that policy issue but whether or not we are going to stay on record as saying human rights matter. they matter in russia. they matter in china. >> more with katrina lantos sunday night at 8:00 on c-span's q & a.

>> earlier this bill congress debated to bills to stop online piracy. the issues of regulating technology and innovation were discussed recently as stanford university law school. you'll hear from facebook ceo ted ullyot. this is just over two hours. >> i would just have one quick story to slip in. as we were trying to recruit somebody at one point from a law school out in the east in the boston area, and i said to the person who works in the area that of course you should come here because this is the center of the unipercent for everything that you care about and there are so many things that are happening. it's not that something that's happening anywhere else but to not come here is sort of like saying some small town in scotland

instead of going to manchester or london during the american revolution. you have to make a decision, do you stay in boston or do you go to the new capital and join the new government and if you are far sighted you go to the new capital and join the government and become john adams and our major historical figure well remembered 250 years later and if you're sam adams you choose to stay? boston and you become a beer. [laughter] >> so what goes on with respect to the regulatory state is a matter of enormous concern. what government can do that will enhance or impede the growth of technological innovation an invention is obviously hugely important and that's what the panel will discuss. i'm going to quickly introduce everybody and pose a question and give everybody about ten minutes to talk about it and then turn it over. so i'm going to do this in

order. start with richard epstein who hardly needs drewiski. -- introduction. he has certainly been one of the most important, he's a major scholar in too many feeds to list but it includes constitutional administrative law, law economics property and many more. he's also i should say speaking of someone who was his student a great teacher and mentor. just quickly by way of background here his bachelors from columbia in '64 then a bachelor in injuries prunes and yale in '6. he did not get o'supreme court clerkship when he was interviewed for chief justice warren he was asked when opinions didn't he agree with and he said where should i begin? [laughter] >> not calculated to get a

clerkship. he taught at utes and moved to the university of chicago where he was from 1972 to 2009. he is now at nyu. richard is also one of the rare academics who made the transition to becoming a public intellectual but did so without giving up his deeper scholarly work or reputation among people who value scholarly work and his courage is shown by being on this panel as well as several others, tony falzone to my immediate left, your right for me is executive director of the fair use project and a lectureer in law at stanford law school. the project was started about six years ago that is designed to clarify and expand the boundaries of fair use in copyright. tony came with a really strong background to do this sort of work. he was a '97 graduate from

harvard law school clerked in california and litigated ip cases before coming to stanford law school in 2007. while the directing the fair use project he was won a number of important cases against the likes of the joyce estate and yoko ono and for that one who are on beatles fans it didn't matter what side he took as long as he beat yoko. some day i'll show you the press releases i want to put out but nobody would let me. he argued in the supreme court this year he has repeatedly been recognized as one of the top ip lawyers in both california and the country. next, mark lemley is the william h. newcomb director of law school in stanford. he earned his ba in 191

clerked for dorothy nelson on the ninth circuit spent several years in practice before joining the faculty where he stayed until 2000. he moved to bolton in 2000 and stanford in 2005. there was no question that he is the leading academic in the field of pat ebts but he may also be the leading practitioner in the field as well. he is positively posnrian in his capacity to get things done so while publishing books and articles he's also a founding partner and main answer the a healthy practice having argued countless case in district courts of appeals. the list of awards mark has earned over the years is actually in fact like too long to read. so, what i wrote is just think of every award that's given to lawyers that you might want some day to earn and mark has received it a

number of them on multiple occasion. then at the far end here peter thiel former the head of clarium capital a henl fund but much more. peter earned his ba and jd from stanford the later in 19926789 he's an original in all respects as a kid he was one of the highest ranked chess players in the united states although i gather jean mayer can give him a run for his money while at stanford he founded the stanford review at a time when there was little outlet for students. he clerked for judge edmund sen and co-founded pay pal. the rest is well known. peter created a place for himself as an innovative hedge fund manager and venture capitalist with aniston issuing eye for ventures including most

famously and now in film facebook. he also created a place for himself as a poub intellectual and is also well known for his support of the singulrity institute and the thiel fellowship for young entrepeneurs which is for young people who may be better served not going to college. he teaches an occasional class at the law school as long as i can persuade him to take the time to do so and the way i think of that class is the world according peter thiel and i don't actually care what he does. seriously, the idea is if you have a law school, and you can put extraordinary minds in front of people and just give them the chance to intract that's a good thing for them and that's why we try to get peter to teach as often as we can. lastly and speaking of people who are at the heart of the on going technology and information revolution,

is ted ullyot who is vice president general counsel and secretary of facebook. he earned his ba from harvard in 1990 followed by a year in france and then a jd from the university of chicago in 1994. ted then clerked for judge michael ludig in the fourth circuit and justice scalia on the supreme court he was a lawyer at kirkland in ellis and moved to aol time-warner in 01 and became the general counsel of aol europe. he joined the bush administration in 2008 first at the white house and chief of staff to attorney generaling the gonzalez returned to kirkland following the end of the administration and joined facebook in 2008 where he currently is. so with that let me open this up and say i'm just going to pose a question that you know, gives everybody a chance to talk a little bit about the issues

that we are dealing with here and i think we will again start alphabedcly. so we will get people to reflect really on what is the relationship between technology and the regulatory state and how if at all should government regulate technological process innovation and all the good things that we hope to get out of technology. >> thank you very much forgiving the first chance to do this and what i will do is start with a question and then try to give an answer to the question. there is certainly a very powerful question about figuring out the relationship of technology to regulation, but there are many regulations that one can think of which do not get you involved with the so call regular la tri -- state, and why don't they fall into the larger categories of

regulations. the first point is every system of law needs a system of regulation even in purely competitive markets you have to stem establish a system of property rights, you need a statute of frauds in order to make this go and you have to have taxes to support it so the thought that there is in free body i out there is if not a myth it's a mistake but the key features under these circumstances is what is the point of the system of regulation. what it's designed to do in virtually all these cases is to fort fi by reverse engineer a system of competitive markets so strong property rights protected by regulation statute of laws protection against inducement of breach of contract and use of force against contracting parties all drive you very much in that kind of position and i don't think there's anybody who can quarrel with the fact of regulation in these kinds of areas or treat it as a sign of regulation in a regulatory state.

when we come to technology there are two important fields i'm going to discuss and each of them requires some deviation or at least some modification of the earlier positions and the two types of systems that you're going to refer to are in fact the intellectual property system which for these purposes is copyright patents trademarks and secrets and the network industries having to do with railroads telecommunicationss and so on and the issue is what makes these special what's going to be the kind of regulation we ought to welcome and what kind of regulations are part of the regulatory state we ought to be concerned about so let's turn to the intellectual property act. now what is so clear about intellectual property is it is not simply enough to allow people to take first possession of property so 1970 we start with the patent and copyright act and the question is what bhaix these statutes at least in large measure the kind of

long term successive value. the first thing is neither are meant to be technologically forcing in their domain so with respect to the patent statute the law gives a system whereby if you file first or invent it's a battle which of these two things actually matters. then there will be an examiner who will decide whether or not this patent is going to be valid and if it's protect what happens is it falls into the sphere of ordinary property rights protected at least used to be by damages and injunctions which is the intellectual analog toward the for thes and trespass an allows you the ability to sell which is the power of disposition associated with these kinds of rights and by virtue of the fact you have a decentralized system the only real questions that you want to have with respect to this system is just how it is that you make it as effective as possible and dealing with this thing i

think the 1952 patent act which was the act before this act this past year did a pretty good job trying to figure out what kinds of advances, what kinds of subject matters were eligible for patent protections what level of advance you needed to get that protection and so on down the line. there were certainly controversial features about this system and the bay case which weakened the injunction relief cases and the ability to create various kinds of licenses i think were negatives with respect to its operation. the thing one fears with respect to property rights under the patent system is there will be a variety of mistakes one of them is you could lengthen their terms unduly which i think mark is going to talk about in connection with copyrights and ted which i'm opposed to. i o'don't think that's a risk in these cases but you could make the cases so that

you no longer understand their boundaries. this would be a reexamination provision which strike me as a huge mistake an also requires the freg mentation of patents business meds orders patents start to get special treatment. i think the simplicity and robustness of the system were correct. on copyrights again you need some system of registration but there you don't need a system of examination and the two systems of course have widely parted grounds on that the question ofdoer built of intellectual property under the copyright system is subject to genuine tension because copyright patents for software are generally and for shakesperian sonnets they not to be longer but you should be careful so that things like the patent term extension act is a kind of mistake and i think for the most part we have tried to keep to the privateized model and the more we can

stick to traditional property the better we will be. with the question of how you deal with technology under network industries, again for a whole variety of reasons it's always been the dominant and correct position that when you're dealing with institutions that have monopoly elements that cannot form truly competitive types of situations, that you must have some system of government regulation and the question is what form of system is going to be appropriate and in this particular situation the choice of methods can make a huge difference. i'm just going to give one example of a kind of regulation which came a little too soon an created trillions of dollars in losses because it managed to get the wrong solution. i'm thinking of the 1996 telecommunicationss act because to the extent you're trying to figure out how you run one of these systems if you suppose that the local exchange will remain forever have a monopoly power which means that you'll have to be complicated in the way you introduce new entities and allow one company to buy network elements from another you've managed to

capture the elements of the essential technology in 1996 but by 1998 it was clear that the implicit assumption of that act the dominance of the exclusive power of the local exchange carriers were wrong and when you started to allow the government to force the sale of particular network elements at bargain prices you created all sorts of distortions in that market which in this the end helped nobody. so the great question that you have to wore by when you're dealing with this market is exactly the question what's the form of regulation that you want. and in that case, the mistake instead of having the government supervise interconnection agreements which could have been done easily they went to this system of forced exchange that dominate it. now in a new age and what happens in this new particular age is with the crime of the local monopolies under these exchange carriers you get a system which becomes a really plausible type of arrangement that is instead of trying to force people to interconnect you could let people build other kinds of

networks and in the course of using those particular networks enter into competition one to another where in many cases there may be some need for interconnection but in many cases there will not be as for example with a lot of these networks which are designed to transmit usage amounts of data and so forth so the question is what's the appropriate system of regulation and i think the fundamental postulate runs as follows:. if you could conceive of a way in which technology allows for the creation of competitive networks you want to treat this no longer as a monopoly industry what you want to do is treat it as a competitive industry an let these people determine the traffic they take over their networks and the prices they are going to pay for the traffic in question. this means in effect if these alternative networks are available the last thing that want to do is impose any kind of network neutrality requirement on these systems because that becomes a very funny kind of

well transferred from those people who put the pipes together to those people who want to push content over it. one of the things we can say about a neutrality system is the value of the information is relatively homogeneou there isn't much to be lost by having a pro rata systems and in many cases that's what firms will do. if it turns out they don't engage in discrimination but when we saw at & t throwing in the towel and starting to put limitations on the maximum amount that any given customer could throw through a network there are serious capacity con traints because as they make the pipes larger there are people who find larger things to send over the pipes so nobody would have thought of sending hundreds of movies over the pipes in 1990 but now that you have pipes big enough to do it the company will come. and at this particular point the different shaigs --

difference in rates seems important because you want to give higher prices stow the network on the other side could start to organize itself so the difficulty you get in running one of these things is you have to answer the question is this something that looks remotely like a competitive industry and if two or three carriers say yes one clearly not and so forts and the dominant strategy in this particular area is not to try to have heavy handed government regulation which sets prices and mandates that will make the technology industry look like the health care industry that they talked about at lunch where you have mandatory service and so forth what you want to do is the opposite to try to find ways in which you can expand the opportunities of entry so can you reduce the number of opportunities or needs for having direct kinds of control and i think in effect that the way in which this particular choice is going to be jude dated -- judged in is whether this

nation or other nation's will be able to keep up the energetic drive. every time you regulate tough stuff on the guys who are the pipes you're going to help the content providers but you're going to retard investment on the other side. i think voluntary arrangements will figure out the way to structure that kind of interaction and i think we don't want to go to the regulatory state to run that issue. >> most people you cut off mid-sentence, richard you have to cut off in mid-paragraph. that's a compliment. so tony again same question to you, how should the government think about regulating technological progress? what's the role? >> a couple of general observations and a couple of specific examples. i think no. 1 technology can benefit tremendously from government involvement. regulation may be part of that involvement, but if you think about it just in terms of regulation, you obscure some points and when you talk about the framework of

regulation you're in this paradigm where technology is a private good and the question becomes what is the government going to do to restrict your private use of that particular technology and i think what obscure is the fact that technology is very often a public good, that is, something that's going to be underproduced by the private market and so to get back to the network that matters the most around here you talk about the internet, well that began as a creature of government funded research. it became a platform a piece of infrastructure that laid the groundwork for all sorts of innovation that nobody could have possibly foreseen in the 60s and 70s when the government was funding the research that led to the internet. nobody could have predicted the wealth that it created or the innovation it was going to help foster but once the internet grows up you have problems that you have to deal with and one is network neutrality, so the question there is whether and to what extent we are going to let the people who own the infrastructure adopt practices that are going to

favor or disfavor certain types of data applications content or certain users. the stakes there are particularly high because that is where we decide whether the internet is going to remain an open platform where new people can inoh investigate without permission and whether we are still going to see the kind rapid production. if you let the public make rules there you're going going to get the innovation that let's everybody in whether they have permission from the incumbents or not. when it comes to network neutrality and the innovation at stake i ask is there a good market solution there, i don't think there is and since there's no market solution that's a good place where the government interconvenience and its role is to regulate i guess keep the structure open so that new entrants

can come in and you have room for new innovation that is not limited by what we already see on internet. if you take a different question that the minnesota poses one of privacy, you have a different question i think kind of a different answer and the question there is whether you're going to regulate what information web sites are going to collect and how they can use i. there i see a much bigger potential for market based solutions. i think you can think about disclosure, you can think about competition in whether it's in technology or the development of applications that are better or worse at protecting your privacy. there are some barriers. i think the information costs are very high for users. i think a lot of users don't really fully understand some of the privacy implications of data collection. i think it's difficult for them to make trail offs and really make the balance that a market solution is going to require but the fact is it's at least possible to imagine market based solutions to privacy

problems, so what do we see here? well with the new do not track proposal that we saw from the white house, in the past few weeks i think you see what is in some ways the worst possible of all world's and that is because the so not track proposal you do not see is really much more like we are going to let some people track and some other people not track, the problem being that it utterly confuses consumers. if you have regulations that ostensibly prohibit tracking but actually permits tons of tracking i think you lull the consumer into a false sense of security that prevents the market solution from implementing itself. so in that respect i think that's an example where regulation can really foul up what might otherwise by a perfectly plausible market solution, and government regulation is often at its worst when it takes on this sort of pervasive an permanent oversight

function. so, what i would say is if you believe technology is a public goods that's going to be underproduced there's a symbiosis between the inveras -- innovators and government. government is best when it cultivates technology an gets out of the way. sometimes getting out of the way means not just government getting out of the way but if government playing a role to make sure that incumbents don't stand in the way of new inventions and new innovations that is going to grow technology and develop it even further. >> so mark actually i'm going to pull knew a slightly different direction. >> i want to answer these questions. >> you can do that and sometimes i'm hoping you can get to you ground this a little more and in particular things that have been happening so we get a

little less abstract and a lot of this comes from conversations i've had with mark so you've often talked about regulatory turn in ip enforcement online sopa, pipa, the government starting to seize domain names, you have government mandated or encouraged efforts to have isp's monitor content of subscribers and so on and the debate over network neutrality though different reflects the same. so being a little more, what do you make of all that, what does it address, can we draw conclusions about it, can we get government to regulate when we want and not when we don't want? >> right, so i think there's a consensus at least so far on the panel and my guess is on the whole panel that starts from the idea that historically and certainly today, technology has fluor issued where market entry is

free. if in fact people are free to come up with a new idea that's completely different than anything niblack has done before that everybody says won't work and launch it into the marketplace we get a lot of money and we change the world so what we don't want from government is a mother may i regulatory regime. right? if we've got a regulatory regime that says, i need permission to get into the market, i need permission to do this new thing then we've got a problem because now we are receipt lying on the government and not the innovater to do this. one thing i want to add and i think richard would sign on to this but would lead to us directions different directions, we also don't want a private individual who has a mother may i control over market entry. the problem is not just that governments might get to decide as gate keepers who can enter the market. the problem is also that particular incumbents can

and have an incentive to impose those restrictions if they have the ability to do so and it's important to remember because it quite often gets lost in the rhetoric around some of these debates. it is not the case that private decision making is efficient. it is the case that market decision making is generally efficient but market decision making is generally efficient largely because of stupid or short sighted private people get thrown out by people who make the right decisions so for the market for private decision make to go work there's got to be a market that's competitive and if we have a mother may i regulatory regime either government imposed or incumbent imposed we are not going to get that. so get to the specifics examples of that larry has raised, intellectual property, i think is hard from this perspective because you can look at

intellectual property as richard does and say, oh, it's a property regime. it's something around which parodies can freely contract. property regimes if we are libertarians are good so more intellectual property is better. you can also look at intellectual property rights and say this is a government restriction on what people can do with their own physical property and their own ideas. government restrictions on what people in a marketplace are bad so libertarians ought to think ip rights are bad. the problem is at once the basis around which we can contract and allow the spread of new ideas and it is a government regulatory invasion into the marketplace that can restrict what people can do. what i think we have seen in intellectual property in copyright and patent in the last few years and maybe the last few decades is a turn increasingly towards the regulatory side of

intellectual propt and away from the kind of free and open licensing, and in part you see that if you look at the statutes. right? if you look at the copyright statute as it ex-igsed in 1975, and you compare it to the copyright statute that exists today i think it's four or five times as long. there are large parts of the copyright section that really are regulation. they regulates rights they set what you can do and so on. the copyright is moving in that direction, most provisions of the patent act is definitely a step towards the regulatory piece. but i think we see it not only in the statutory framework. i also think we see it in the way the law is being applied so in copyright law, after you know 15 years or so in which government more or less sometimes by being physically restrained kept

its hands off the internet, we see greater and greater efforts pushed by copyright owners to try to impose regulations on what it is that people can do online, because the copyright owners are rightly concerned that there's a lot of copyright infringement online but rather than sue for copyright infringement the move has been instead to say you know what? let's decide whether or not can you put your web site up at all. government has seized and shut down in this country 450 internet domain names and all of the speech contain thereon without getting an adversary hearing to say there's copyright infringement much less the entire site is, that's regulation, that's a mother may i regime. suddenly you're not in business because the government has decided your web site is not appropriate. we've seen efforts by the government and by private parties to push technology

mandates. your web site will be permissible only if you adopt certain types of filtering technologies to strip out improper material. in those cases too i think we are moving away from a regime in which people are free to put what they want on the internet, and towards a regime in which we try to impose antiregulation. >> i think we see something similar in patent law and it's here a little more troubling and here i know i'm going to disagree with richard. patent law is supposed to increase innovation. right? the goal of the system is encourage innovation, innovaters by giving them economic rewards. it should worry us that our fastest developing most innovative industries the ones that are generating the most innovation an money by an large hate patents. they view patents as a tax as a cost of innovation not a benefit of innovation and

they view them that way largely because they are happily innovating in a world in which they are not restricted by the law and when the law shows up it shows up to limit what they can do, not to encourage them or help them to get economic benefits, right? so in the information technology industry in the software industries where there are lots of patents and where most of the patent lawsuits are currently filed the most innovative companies will tell you patents are largely a problem for us and the people who are filing those patent suits are either people not in the market at all the so-called patent trolls or the people who are on the market decline. they're yahoo! asserting against facebook has happened this week, right? here are a bunch of patents you've got to license from us. the industries which really do need patent protection and the reason we need strong patent protection for certain industries the pharmaceutical and biotech

technology cal industries need patent protection because they're regulated industries. the reason we have to have strong patents in the pharmaceutical industry is because the government says you can't launch a pharmaceutical product until ten years have review have gone through and you've spent $900 million and now you need to get it back. how do you get it back? we guarantee you insulation from competition for some substantial period of time so can you make back the money we made you pay. i think that once you take that regulatory system for granted and might or might not be a good thing, we are then stuck with some need for a patent system like that but it's far from ideal because it's moved us i think in a regulatory turn. right, it's about limiting market entry in the service of furthering government regulation. all right 6789 the other pieces of what larry asked me and we've heard both from richard and tony is about network new retaliatory --

neutrality and i think about thinking about this mother may i network drark make network neutrality a problem because it is government regulation in the service of oppen tri in the service of not letting people stand as gate keepers to prevent market entry. and i'm really on board with the goal of network neutrality. right, the internet works precisely because if you have a new idea, all you have to do is right code and put it on the network and no one can stop you from doing it. we do not want to lose that and there were powerful people who want to impose limits on that principal and they are by and large incumbent in these industries, particularly in the transmission industry. that said i'm also quite a bittner have you about the idea that the government is going to get it right if the government sets a series of rules to make sure this openness continues, and so,

i think the sort of hard trade off we are left with in this kind of regulatory turn in some sense is the extent to which we impose structural limitations, we keep saying, you know what, if you're in market a you can't be vertically integrated into market b or impose very simple bright line rules even though they're inefficient at some level you must carry all traffic add we don't care whether you've got a good grault that network management requires you block that traffic. you can chargeable different price but you can't discriminate against who you are chargeabling because if we don't adopt those kinds of rules, those sort of structural separation rules the alternative may be either from the government or powerful incumbents who continue have significant market checks on them, mother may i rejel that i think we are seeing increasingly taking place.

>> peter i want to ask you some more speck questions building off what we've talked about so far because you've spoken quite a bit in a lot of contexts on innovation an fall and on the death of innovation in certain industries. clearly it's still happening in the ghaul in computer space and then obviously you've talked about there were other areas where innovation seals not to be happening so much anymore transportation agriculture places in which there were bursts of it in the past so you know the question is why not? is there something different about technology or are we doing something wrong? >> yes, i think the wide question is a very difficult question to answer, why questions are difficult to answer but perhaps it's good to start talking about the

what and i believe the what is we are in a world of in which we are no longer living in a technologically developings situation at all, i think at that point something more or less broke in this country and the western world more generally, that put us into a zone where there's much slower tech logical progress. i think there's an important exception with computers internet financial innovation, two areas we had computers and finance where we have a lot of innovation in the last 40 years, finance is probably going to be less going forward. i'll get to that in a secretary. but i think it is worth reflecting on how all the other areas have slowed down and that this is everything from transportation to energy to biotechnology, agro tech on and on down the line and the most literal

version of the question, are we moving faster, is the transportation question and if you think about every decade from 1500 on people moved faster. this was a basic measure of how you determined, faster sail boats, 19 century faster railroads faster planes culminating with the concorde in 1976 decommissioned 2003 and today i'd say travel speeds are around to about 1960 levels when you include the low tech airport security systems that plagued people. the official reason for the slow down in transportation has to do with high energy costs and this points to a much greater failure in energy innovation. at this point we have never recovered from the oil shocks of '73. oil prices today are higher than they were during the carter catastrophe during the late 70s, clean tech has

become base lick a toxic word for money losing investments in silicon valley, and of course, you know you look at all the other areas the nuclear industry was dead decades before fukushima and would be almost borderline immoral to study it as a future. if you look at warren buffet perhaps the smartest investor of our time, his biggest holding is in the u.s. railroad industry which is basically a massive bet that the transportation energy consumption patterns of the 21st century will involve return to the 19th century. 40% of what gets transported on rail is coal and so buffett is making a bet that after oil we will go back to coal sand railroads. and i think there is a lot of reasons to think that that's the basic trend that

you're on with respect to that. the crisis in energy the last decade has grown to a commodity crisis. looking at a basket of commodities, simon happened to win the bet that decade, if you reran the bet from 1993 onward, erlich won every year and we are living in an a malthusian world where there's scarcity because there's no way to keep pace. 60s increased food production over a hundred percent, it has massively slowed down in decades so when you see the world through this prison of technological deceler asian it gives a perspective of what's going on so events in the middle east where the so-called green revolution is attributed to the information age and how

twitter is helping connect the world or something like that, i think has to be seen as a direct result of massive technological failure triggered by food prices that have risen by 50-100% the previous years and it's what happens when a desperate people become more hungry than scared. bionaumg we have had by all rights there should be tremendous progress in biotech and again we see this pattern of significant failure, about one third as many drugs in fda trials today as there were 15 years ago, the business pharma companies have started firing all the scientists who have not been able to get things through an increasingly onerous set of regulations and our expectations for the future in all these areas have been dramatically reduced. it will be inconceivable for the u.s. congress to declare war on alzheimer's comparable to the war on

cancer in 1970 even though something like 40% of the people have incipient stages of dementia and i think something like this can be repeated in many different areas. if you ask people whether they believe that we are living in a technologically accelerating era and most people think that is no longer the case and i think that somehow forces to us call into question this narrative of technological acceleration. there are important exceptions in computesers and finance and i would submit the why explanation for this tale of two world's the computer and financial world where there was a lot of progress and everything elsewhere things were badly stalled is that basically computers and finance were fairly lightly regulated in the last 40 years and everything was very heavily regulated and we are living in a world in which bits are unregulated and the world of

stuff is heavily regulated and when people say we need more engineers in the u.s. you have to start by acknowledging the fact that almost everybody who went in ink nearing did very badly the last few decades with the exception of you computer engineers. in stanford in the 19 80s it was a bad decision for people no went into mechanical engineering chemical engineering nuclear engineering petroleum engineering, astroengineering, the reason the rocket scientists went to work on wall street was not because they got paid more there but also because they weren't allowed to build rockets. [applause] >> and supersonic planes so on down the line, so my, i think there were many different variables that might have come together. my own sense is that we have to think about the very heavy regulatory differential and this has

been a big driver of the sort of heavy environment aleman at allty has driven the regulation of the world of stuff. and the world of business has progressed because it's been regulated. so the thought i would give you is if you thought of a company like senger and you said we have to actually take that through fda approval before we allow them to produce the game and we have to see whether we have the phase, we will skip the animal trial but let's go to phase two and three trials and you test for efficacy and safety so you test is it safe for people to use so you have a double blind test with lots of people and then you have to have a test for efficacy. does it actually improve brain functioning and if it doesn't do that you can't do it and if you change one line of code you have to start all over from scratch,

and you would not have a video game industry in this country or any entertainment industry, so i think there's been sort of a catastrophic set of government policies have basically destroyed most of technological innovation and we see this in manifesting itself in an economy in which you have stagnant wages, median wages flat since 1973 and increasingly a broken political system which is becoming a zero sum political system when there's no growth, there's basically a win err for every winner a loser for every winner and obviously the political system finds it much harder to craft compromises where everybody comes out ahead because there's no way to craft such a compromise and i think that's the basic technological understanding of what's happened. i think we have been in denial that's been manifested in bubbles that have predicated on continued

progress that didn't quite happen. i personally think that even the idea of science as a public good is not quite accurate, and some important ways the government palisades a big role in destroying science as well and to give a libertarian account of the history of science we had some talented scientists that did good work in the early 20th century n. the 30s and 40s the government was able to accelerate science on a one-time basis by taking those talented scientists, giving them a lot of money and having them produce more. probably the single biggest thing they produced was the nuclear bomb. and again i think it would be interesting to see what people on the left think of that as the single illustration of government funded science. the "new york times" op-ed on the day after hiroshima in 1945 made arguments similar ones to science

being a public good and i'm quoting almost verbatim that beam who believed science was a private matter and wasn't a public good had a lot of answering to do because did army had directed sign at this time, had been able to give a great invention to the world, the nuclear bomb, and this contribution had been made in three short years, where as prima don a scientists would have taken a half a century to make that progress. i think the tail end of it science best politicized and you have to fight to get government money. just like the idea of a philosopher king is an oxymoron. i think a scientist politician is an oxymoron. great scientists are different from politicians and when you politicize science you destroy it altogether. we have a hundred times as

many scientists as 1920. if there's less rapid product the productivity is less than 1% of what it was in 1920. i think that's the rough math. i believe that it would be helpful to have a very comprehensive discussion as to how we get out of this sort of situation we find ourselves in but i think the first step is to acknowledge that we are finding ourselves, that we have been base lick in a desert for something like 40 years and if you want to get out of the desert you have to acknowledge that you're in one and not in some sort of enchanted forest. [applause] >> so ted that leaves you, so whatever that would be, but actually i would be curious to get your perspective as someone who is literally on the trenches of all these questions in the most immediate sense so let's step back again to where we started and you

know, you're sort of take on government regulation and its effect on what you're trying to do with technology. >> sure and i guess i should start by saying, i love having this guy on our board because it makes some of the most interesting board meetings, some of these principals coming to play. great to be here by the way. peter and i are in the minority. in silicon valley generally an facebook. in you're ideological leanings. anyway, i think you know i agree with mark that i agree a lot with what peel have said so i won't take too much time here but i will try to give a little bit of a practical reflection. i think the question as i saw in the program, thank

you larry, was something along the lines of tech logical process require regulatory guidance i'll with peter on this. i think emphatically not other than as ripped kibd it off with a basic rule of law that property rights apart from that we get into problems when government, whether through legislation or regulation tries to go beyond some the basic police and apply industry specific an sector specific rules. i think for example for the suits, contract disputes are fine. those are issues that we can deal with all the time and i trust that regime is broadly applicable to many industries and can solve for example a problem like net neutrality without referring

to a framework of laws that determine certain types of pipes and natural monopolies or unnatural monopolies or private mother may i situations as i think mark was saying so i think that's the main problem when regulation tries to get too specific. so that i think the, if the question is just technological progress require regulatory guidance, no but from a company perspective not just facebook but everybody in the valley thinking about at careers at sullivan and cromwell and kirkland working on some of the telecom stuff in the mid90s i think the reality of course is the company must deal with the reality in america today and in the world today of a robust regulatory estate and robust regulatory framework. that's the reality so we can talk on the practical level i think, i would be with

peter of course urging extreme caution among regulators in the computer and tech and internet sector today. a few things in particular come to mind on that that i think are real channel for regulators and why resorting to general principles of law and long-standing frameworks. there's the complexity of technology an soft where these days. you i did work for aol time-warner and you think how aol usced to shift product. but there are more discrete shipmentss, today their code pushes literally every day. we push code every day. there are new lines of code written every day at facebook there. are new products rolled out

and subtle changes to products rolled out, constantly and it's very hard for some people in different parts of the company to fully understand what exactly is going on with a product. most of this is irrelevant to -- it's just background, it's irrelevant to users but it affects how things work, how the product actually works. you have to be very in the weeds to understand this at the company to understand this. it's very difficult almost impossible for regulators to get a good grasp on this and i think that's different from ten years ago in soft wire given the constant code push you see today and that style of just push, i think engineers working constantly and adopting an attitude of hey let's push it out there and just keep refining it and making it better instead of just waiting in the old aol style to ship an old aol 3.2 disk and have everybody work toward the deadline to ship the disk so the complex

did i and ever changing nature today is a reason for an even more caution than normal. there's also of course unintended consequences, my favorite example of this in our world is the vppa, the video privacy protection act. enacted in the wake of the board hearings -- borrick hearings. some reporter from independent paper went to his local video store hoping to find some interesting rentals and paid the five -- a declared $5 kohl will find something salacious and of course he did not.

-- the clerk $5 hopinh g to find something salacious and of course he did not. to publicize those unless he gets advanced intent from the user. move forward to today. no one is going to video stores. reid hastings -- reed hastings had that recognition that nobody is getting dvds to their house anymore. people like to date -- to do things on facebook and netflix, learning what their friends are renting on the web sites. if larry says i want to rent films from netflix and tell my

friends what i'm watching because i think these are great, the problem is we and blockbuster and netflix have been hit with class action lawsuits. the air saying if a user clicks yes i want to participate, that is technically a violation. my favorite example of how quickly a law that is targeted at this can become obsolete and fresh tree new development. this would help the studios market their films and gain traction and excitement about their films. and the statute is scaring people. so that is an example of the

unintended consequences. i understand that regulatory caps have been around forever but i think it is more complex today. every company, even facebook, we are trying to defend yourself against legislation your competitor might be pushing or regulation. all of those are reasons for the shortcomings. i would strongly support what tony said about market-based solutions in the privacy rahman -- the are available more so than others today. in our sector alone, for the of

people have come after us and tried to position themselves as great alternatives to us on a privacy level. on the basis that they provide better privacy protection. i think that is the right solution to that. social networks and the advance of technology generally have made consumers more able to protect their interests on things like privacy today. users, consumers are able to criticize, organize, complain and punish companies for actual problems with actual bad experiences rather than theoretically bad experiences. pat had this thing the other day. back to be publicized and out there on all of the blogs within hours and the ceo will apologize and change course curry quickly.

-- very quickly. another point i would make is critical to any riddick -- regulatory state is a judicial review. i think that is something -- it is interesting to me thinking about the importance and difference in agencies like the whos are a routinely challenge. other agencies are rarely challenged. the sec -- some of the chamber of commerce attacks.

that has been beneficial to them. that aggressive challenge and robust judicial review makes the agency better ultimately. the sec keep trying and they keep losing some of these but little by little, they are getting better. i think that the view is very -- review is very important. you can understand why no one wants to challenge an sec rule. they fear what the next step will be. ftc, there is a similar scarcity of challenge. i think effective judicial review is an important piece.

and international harmonization. we operate essentially in every country except dictatorships. we would love to operate their but we're blocked by the countries in question. we are forced to deal with a myriad of hundreds of countries rules addressing the same general area. that is a major check on innovation. >> thank you. we have a question. >> i have a million questions which i will happily ask. let's let the panelists talked to each other for a moment. >> i want to make a comment about what mark said.

the battle over the internet stuff, it may turn out to be monopolistic but it may become more competitive and dynamic element is what inclines me towards regulation. i thought this was a panel about technology and the high-tech industry. but i have had the misfortune of teaching environmental law and the fda law. the level of public in it -- ignorance is simply too much. what pam said earlier on, just get over, i cannot get over it syri. [applause] let me give a specific story as to why. when the fda was founded in 1906, it cannot regulate the manufacture drugs within the state. it got that power in 1938. peter was talking about progress. i will talk about insulin as one of these particular things.

insulin was invented by a man who can only be described as a lunatic. he eventually got the support of a great company at the time. this is the progress -- he figured out in a dream what to do. he was relegated to a basement laboratory. every system he made, he managed to screw up. he finally got the formula and promptly forgot it. nonetheless, from the time he first got this idea to the time that insulin was on the market, it was less than three years. the first and people who took it, most of them died. by the time they got to 1930, it was in widespread general use. let me mention what the chief -- what the treatment for it was.

a woman was down to 49 pounds at the age of 15 when they finally got insulin to her. it was like lazarus rising from the dead. she lived until 73, started to gain weight, married, had several children and managed to sell at minister. the fda had only one rule to play in the story. would they try to get your ethanol to do the isolation, it was barred by prohibition and it took the rockefeller family to get influence to do this. they thought it would do just as well as ethanol. the basic position on dynamic production is that one invention that took three years contributed more to human beings and their welfare then every single advance with respect to diabetes in the 90 or so years following.

those of all the very important but in order of magnitude difference. would you have to do in technology is understand that the first generation get a huge gain and the next time, at 10 times as much. the fda has kill that cycle. because of this notion that it will protect people from the only things that can save them and because they come with the view that unless you can prove to our satisfaction that individuals cannot make a judgment. here is what -- a justice wrote an elegant opinion which says people do not have a right to use a drug which passes a phase one title. the question was whether he can read the fda by giving it the power to control trivial activities and the voluntary networks of private organizations will give you 10 times as much information on an updated basis. this is essentially one of the

longstanding public disgraces which causes huge losses with respect to innovation, huge amounts of suffering. requires companies to say apps and nothing -- absolutely nothing. and patients go against the professionals. that is what is at stake in the larger issue about regulation. unless we fix that thing up with the fda, the epa and so forth, we are confined essentially to long-term mediocrity. the rest of the world as a little better than we are on some issues and worse on others. but this is the central issue of our time. we have locked ourselves in, carrying through with this fiendish regulatory program where everybody knows best for what individuals should do accept the individuals themselves. my late mother in law -- by the

time she figured out a health problem, knew more about the disease than most of the physicians who treated her. one of the things that you do when you stop this kind of information is all this knowledge that comes from the accumulation of the system going upward is killed in favor of a bunch of bureaucrats. this is what we have to fight about. the individual mandate -- what really matters is the long-term follow-up technology. to pam, i cannot forget about it. thank you. [applause] >> go-ahead. >> this ties into peter's

question. he talked about some of the problems we have had in innovation and what he called the what. the why story -- peter suggests the problem as regulation and richard picked up directly. not here to defend the fda. i think that richard may be right on this although i will note that there are some compelling stories on the other side that got the fda involved in the first place. the trade-off -- [unintelligible] i think there are circumstances in which decisions that individuals may have significant effects on other people in the world. whether small pox or the like,

there are circumstances where we care how individual decisions affect everyone else. the broader question, i agree that the fda has made innovati andion in the -- innovation in the drug industry harder. how can we map this slow down in a formally innovative sector to regulatory sclerosis? i am not sure that is necessarily there. there are things we want to know. one is -- we do have substantial acceptance. -- exceptions. it is a bleak picture that peter painted. but if you look at the computer and financial world, there is a lot of value and the wealth created here that was on a manageable -- unimaginable 40

years ago. we have had productivity gains in lots of industries that seem like they're not innovative industries, whether the steel industry or anything else largely because we have had computer innovation. we are innovating maybe in other areas as well. we have seemingly interesting movement in robotics, nano materials. 10 years from now maybe we will say that was the dawn of the space era. something we all have thought has been dead but may be waking up. there are two other points on the why question that give me pause. the time frame that peter identifies as when innovation stopped is largely speaking the time frame in not which regulates and started getting

really heavy and the government started getting involved in our life. for the most part, it has been the opposite. the reagan revolution try to back away from too much regulation and while i do not think we have in fact reduce the size of government in any meaningful way, it does not seem like there is a linear relationship between amount of regulation and slowdown in these industries. the final point is a regulation is a national thing. technology presumably is not. one thing that is worth asking is, where are all the other countries that we might expect to be picking up the slack? you can tell similar stories for some of those countries. but i remember in the mid

1980's when everybody in the country was convinced that by 2000, we will all have to speak japanese because japan will be eating our lunch. they're driving technological change, the u.s. is falling behind and it will be disaster. now they say the same thing about china. maybe that will be to 20 years from now, maybe not. if the store is regulatory, you have to do a fair bit of questioning about why different countries with different regulatory regimes do not seem to be innovating in places that we are not. >> let me give a few answers to the questions he raised. the basic dichotomy as well of this versus world of stuff. stuff was regulated by the epa. i believe that was founded in 1970. i think that would be the signal

-- a single issue i would fly. -- flag. i think the fda became relentlessly more onerous as the decades past. major inflection point with the fda. all sorts of other areas we can point to where the load went up quite a bit. i was not debating about tax policy. in my opinion, we are at a point were marginal tax rates are not the most important thing to read if you were to reduce tax rates marginally, that does not solve the problem. you need to construct hundreds of new nuclear reactors in this country very quickly. i would not mind having slightly higher taxes if i could have the freedom to spend the other money on things up like to spend it on.

i am living in a country where the effective tax rate is 100%. i am not allowed to spend any of my money on innovative drugs, supersonic private jets and on and on down the line. i would say -- i think there was an important slowdown that took place around that time. you can map it onto a series of other things that shifted culturally, from science fiction as a literary john recollect. technology is described as things that are dangerous are do not work. when was the last positive sci- fi movie? we need to take this issue very seriously. the measurement question of how we measure this thing is hard. i suggest an economic measure.

there has been deceleration in wages. the international question is interesting. there are good reasons to hope we will head towards a more multi polar world. but the reality is that most of the world is not really need to innovate. the emerging markets are poor countries and they can do well just by talking things that work. that is basically what the developing world is doing. it is becoming developed. it is convergence theory of globalization to r. he should open a mcdonald's in china. the only place for people need to innovate in the developed world is japan, europe, the west, all of which suffer from a heavy regulatory load. we are not living in a world of hundreds of countries where people are free to do what they can. i think the shift in the language from first world and

third world which is the way the dichotomy existed in the 1960's to a developing world is another illustration of this technology slowdown. first world versus third world is agnostic on the question of globalization but positive on technological innovation. development is bullish on globalization and bearish on technology. the developed countries are those countries were by definition nothing new can happen. >> i have to resist. this is quick. it relates to the longer-term flow of innovation. not so much about the why are the what but the what to do. it occurred to me that the teapot a great innovation that peter talked-about -- epoch of great innovation that peter talked-about -- the internet,

nuclear bombs, there is a substantial amount of government investment there. you can say is become politicized but can become de- politicize or does the government does withdraw entirely? there is a distinction between investment and regulation carri. you cultivate, and best and then get out of the way. what i want to think about is whether the problem is we spent so much money doing regulation badly. that we wasted the money we might be able to use to invest sensibly and poisoned everybody's reaction to any government involvement whatsoever. if you spend too much time focusing on how bad a condition can be which it very well can be and often is, there are other rules for government to play in

investment. i think they tend to eclipse what i think is some potential for a positive role to play by the government -- deregulation but not deinvestment. >> if you have questions, now would be the time to start lining up. >> one sentence on the point. i am inclined to that view as well, that the government has positive things to do although i will note that the government expenditures in science and technology are by and large in the industry's where we do not seem to be seeing substantial innovation. the government spends lots of money in medical, pharmaceutical, alternative energy and so forth. not in software for internet research. >> that is because they have to

offset the difficulties on the regulatory side. the book you should read -- he got it right. the one sentence version, we run into the patent system. otherwise do with it what you will. that i think is what you have said. that is the way i best understand it. the question is how much of it comes private, how much of the public. what is interesting, since that time, as you look at public investments, they have all shifted from basic infrastructure to transfer pains. the switch over is just enormous. most of the innovation programs on infrastructure and disguised

programs that get other things built. the damage done, we have yet to live down. >> let me make one last point on the question manifest and multiplied. >> on the question of whether government can do something positive on the technology and science area by investing, it strikes me that it depends a great deal on who is in the government to do that. if you look at the people in the u.s. house and senate, by the generous count, about 35 of them have a background in science and technology. the rest were living in the dark ages.

i think that, if you want to have a technocratic government, you need one has fewer lawyers and it as a basic first cut. [applause] and we have a very interesting instance with the whole clean solindralure any cylind failure. the substantive question, does the son sex the work, it seems like nobody has any -- does the science actually work, it seems like nobody has any of that. it is a question that seems to be beneath and above both peoples' dignity to think about. as a libertarian, i have no problem with lawyers being in government. but you're a little person who believes that government should

be driving science, then you should have some powerful form of action for having government heavily dominated by scientists and technocrats. >> i am curious about seeing so many silicon valley firms supporting it neutrality. i wonder about this because i cannot understand the limiting principle of free said that the the telco's are a monopoly. maybe we should force people to get a on face the impaired how

can we have a limiting -- on facebook. how can we have a limiting net neutrality? but b>> in a matter of weeks, ty will become life magazine and everybody will to away at the sides and take pieces and so forth. when mci basically decided to enter into business against the bill a step toward monopoly, they created a lot of shipment of information from st. louis to chicago. these guys did not need the network interconnect committee and they wanted high level security.

once they were able to break off and the subsidy system that was created by the old network of began to crack down. therefore, we have to prevent this break off from taking place. that is one of the problems you get with the medical mandate. if you actually understand how the government dignifieidentifis -- etition >> mci did do exactly what richard said. they created a dedicated line. you would make a local call in st. louis. they would pass it to chicago and they would make a local college chicago. at&t found out about this and

they started to shut down all of mci's local numbers because they did like the competition. the way mci managed to survive was to file a lawsuit against at&t saying that there was a monopoly. if our justification is just that this is a monopoly and therefore we should regulated, it is hard to distinguish that from google or facebook or a number of other things. i think you need a conceptual justification that is a little bit more directed at difficulty of entry. if you're to distinguish the two, it has to be on the question of something structural about the telecommunications infrastructure and the network of people have created that makes it difficult for some it to come in and enter if you're doing something and efficient.

-- something inefficient. we have people who have less control over the network and we need to worry less about it. i am not persuaded we're there yet because all of those possible means of communication depend on government licensure at one stage or another. you have to get the spectrum from a government for the wire permission from the government. in the world in which we had 10 different ways -- my phone call to go for me to you, i would not worry about it. >> i think there's a lot to what you're saying could think there's less unanimity among silicon valley people on that neutrality. i think the industry got a little down the road before

thinking through some of the issues that you raised youhear e team prepared. -- that you raised here that would seem apparent. >> there is not necessarily agreement. there is a compelling book called "the unit, architecture and innovation -- the internet, architecture and innovation." it goes a little bit beyond the correction to antitrust laws. >> we have been having this debate that net neutrality for close to 15 years. the innovation seems pretty healthy.

i think the kitchenette neutrality impaired -- the case for net neutrality improve the seams better now than before. >> we are just about to impose net neutrality realistic, but we never did. because of that, people are afraid to exercise it. >> university of michigan. i would like to view the rest of the panel's opinion on this. given that both lawyers and judges don't have technical background, can they make good technological regulation that if not, should we encourage technological pioneers to enter politics? >> right now, you have steven chu.

[applause] you need people who understand the sound principles. if you get a guy who is a technology which iwiz. peter is qualified to serving congress because he has also been in business. >> so you want more lawyers in congress. >> no, i want people to understand the business of government is about. i don't care what the label is, i care about them knowing something. the amount knowledge that he managed to accumulate in 14 years in college can be described in a single digit -- zero.

>> let's go over here. >> i appreciate your willingness to say regulation may be should come down, but maybe investors should be stepped up. my problem is who is doing the investment? a bad economist looks at what is seen and a good economist looks at what is on scene. but when the government invests, hit is not treating wells. it is having to steal the welfare mothers who would actually create it in other places before -- still the wealth from others who actually created in other places. i feel like the fast pace -- i would trust mr. tilt to allocate resources to keep up with technological progress. >> you should not leave it all

to the market and you should not leave it all to the government. that would be a disaster. my point is that there are certain public companies that i think the government may play an important role in some businesses -- in some instances. as far as stealing money, the government does not steal money to provide for national defense. the answer to lots of bad regulation being to throw up your hands and deregulate everything, i think not. there are instances of bad regulation that we need to fix and deregulation is part of the story. >> the right way to think about it, it seems to me, is this. our research -- are research universities valuable? >> they take government money

and use it to do basic research that a private company will lead to because it is a 20-year pay off, if anything, down line. there may be ways to do that without government funding if you can find some other cross subsidy. if we are to charge tuition high enough -- should government be competing with private enterprise to fund research? no. are there areas of science that i don't think the market will generate research into the level that we might actually benefit from? yes. >> if you! look at it, there is real evidence on this on how the -- if you actually look at it, there is real evidence on this. it turned out, for the most part, they did quite well. when you do big signs, you

cannot use that. you have to figure it where you use $3 billion to put a reactor in some place to another. at this time, it turns out that it is effective delegation against the illinois delegation. you need government guys -- on the university side, since the technology is too expensive, is figure out how it is you can pool joint ventures. the session, -- essentially, they had each of the university's pay for a fraction of the pot. the system because the highway and the pods become the cars. now you have joint financing for the public good. you do not have to be a complete cynic of the government support.

this is a guy who organized sides in world war ii. they knew what they were doing. there is no reason we cannot learn from this today. >> i am a 3l in the evening division in springfield, massachusetts. mr. teel annunciated a very interesting dichotomy, the world of high finance and energy of in which you have light garment regulation and great results. and you have heavy regulation and poor results. have you fit the world that works? either use the technology into that theory -- you consider it

to be highly regulated? how would you change the regulatory scheme to make it better, more productive, etc.? >> of would be in favor of going back to the 1950's-1960's level of regulation in the world of stuff. even if you were in favor of government doing things, there are many cases where the government regulations are stopping the government from being able to do things it would like to do. i had a conversation a few years ago with people in the obama administration on why the -- on the stimulus bill and why they could not build any infrastructure. they wanted to build clean technology windmills east of chicago. but no windmills could be built.

the high-speed rail in california cannot be built because you have zoning rules. it is important for us to understand that there is no regulation, like regular session, and sort of moderate and heavy and insane and many of these things on the spectrum. we do not need to ask all the pure libertarian questions about should we have privatized nuclear weapons program and should reprivatize roads. we don't need to deal with those problems.

>> i don't know that i have much to add. but the world of bits is certainly less regulated. >> there is something about the world of books were you have to realize that it is a cautionary tale. we had these geese laying all of these golden age in technology and the geese have been killed and what is the computer use? goose?puter deuc it is the only thing that is left. everything else has been killed off. >> i think pete is wrong about one thing and i will tell you why. the environmental regulation, to some extent, is different from

many others. you're concerned about things that were actionable. whatever you want to think about the health care levels of innovation in 1950's, san marino is now one of the things that you praise. the thing about the clean air act and the environmental regulation that, you cannot answer the question by saying pro or against. one of the huge blunders that they all make, which is the thought that their grandfather all technology and they would regulate new technology. this is the fundamentally most expensive word in the environmental protection act. it completely disrupted the transmission cycle from old to new transition pared down regulation on new stuff was horrible and the biggest area of litigation under the new statute was what kind of modification to keep over here it

you don't allow new stuff to come in under the old things. they replicated common-law rules in which damage was created by externality. it was punished because it was dexter. it did not matter if it was a new or an old plant. rabbit dannon order magnitude. but when you? we do regulate, there is no substitute for knowing what is going on inside an industry -- but when you do regulate, there is no substitute for knowing what is going on inside and industry. every area you care to talk about is fatally flawed in the

way they decide to put this together. it turned out not to be a two- year issue, but a 40-year issue. >> going into the two industries, computers and finance, the financial industry, in the lack of regulation, created systematic risk. is it simply restrictions on innovation or are there broader risks? and to the point of rule-based regulatory system, given the slight mismatch between the way regulation is passed and technology is built, how can legislation be developed that is flexible enough to address some of the issues we talked about and others that will arise in

the future? >> i think this is a very hard problem. anytime you have to interview -- and you cannot avoid intervening at some level -- to me, by and large, and i believe this is in one with which richard was same -- gee, we're just agreeing all the time -- it seems to me that we're generally speaking better served with common-law and flexible rules than the tells -- than detailed legislative sets the parameters because congress can get them wrong because they have a vested interest in doing particular things that might not be efficient. and in part because they just

don't change. for example, in the patent system, i have argued along with dan burke that the way we need to account for the very different characteristics of the pharmaceutical and biotechnology industry and the information technology industry is not by passing legislation that is specifically tailored to each of them, but by having general rules that the court can actually apply with some sensitivity to the needs of different circumstances. >> the key illustration on that is on adjunctive release. the common-law rule was to delay innovation. you have this mosaic in the business, the thing that is patented, we give you six months in which you pay a royalty. as a classic illustration. you do that for him, but you don't do that to a guy you want

to infringe on lipitor. >> on your first question, it seems to me that -- we are starting to see that there were two mechanisms by which we tried to regulate the internet industry. one is hollywood, which has a very powerful lobbying machine that is pushing very hard to try to restrict the freedom of the internet precisely because they view that as a real danger point for them because a lot of the stuff that crosses the internet is pirated. it does not go away with the defeat of sopa and pipa. it will be back. the other thing that people pay less attention to is a harder problem because you have to worry about it at some level, it is never security. the real nightmare story for computer regulation is some serious the destructive infrastructural attack that takes out something critical,

either the airline network or the electric grid or something of that nature, and not just that it is destructive in its own right, but computers are largely unregulated area that goes away. >> my name is henry nickel. a number of you have touched upon this issue of the global marketplace. i was wondering if you could comment on the creeping danger of harmonizing with foreign law and expanding federal regulation. speak specifically of recent controversies that relate to european demands that the u.s. demand a data privacy regime like one that exists in europe. is this a danger? what is the magnitude? and how can we reconcile these types of demands from foreign governments that we expand our regulatory regime?

>> when you talk about harmonization, what you actually see is not so much harmonization, but rationing off. it is a one-way ration again and again and again. in the copyright sphere, when you see a move from the united states with domestic copyright policy and move into the bern convention, you see the minimum standards of protection. so every country has to provide at least this much, but it is free to regulate more and more and more. the imbalance that occurs there is that you protect more and more, but would you leave out are the safety valves that are designed to make sure that the regulations don't go so far as to kill the golden goose. in copyright, that is creativity and expression. you give copyright and you give limited rights, but you leave

the safety valves that allows people to use the material. those of the protections that are supposed to protect critically important public speech rights. harmonization is a recipe for eroding the basic balance that we have worked for many years to construct. >> by having harmonization, they allowed the department of agriculture to nationalize production and create cartels. what happens in europe is that the wrecking of the markets by harmonization has created 30% to 40% unemployment in various places. when you have a common market that is open, that is the big part. if you have the protective barriers to keep everybody else out. that is what has happened in