toyotas use general motors computers. lamborghinis use chrysler trucks use board don't realize computers. lamborghinis used chrysler computers. people do not realize that foreign trucks and cars use the shirttails of american technology. host: our last caller today on the "washington journal," and i will do it for today's show, but we want to make sure you tune in tomorrow at 7:00 a.m. eastern and 4:00 a.m. pacific, and have a great day. [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute]

>> yesterday's a snowstorm dumped a half foot of snow and left frigid temperatures in the east and here in the nation's capital, despite those temperatures being in the teens of today, thousands of abortion opponents are expected to march and brave the weather in the annual march for life rally held on the anniversary date of the supreme escort -- the supreme court's roe v wade decision legalizing abortion. your unceasing, we will have live coverage of the march here at noon eastern. you can place your comment on our facebook page and send us a tweet, #c-spanchat. afternoon, health and human services secretary kathleen sebelius talks about the implementation of the health care law. she will be speaking at the conference of mayors winter meeting at 2:30 p.m. eastern. on our companion network, c- continue thewe live coverage of the state of the state address, bringing you california governor jerry brown live at noon eastern again on c- span2.

>> i would like to add a personal word with regard to an greatthat has been of concern to all americans over the past year. i refer of course to the investigations of the so-called watergate affair. provided to i have the special prosecutor voluntarily a great deal of material. i believe that i have provided all the materials that he needs to conclude his investigations and to proceed to prosecute the guilty and to clear the innocent. toelieve the time has come bring that investigation and the other investigations of this matter to an end. one year of watergate is enough. [applause] decadesng back at five of notable state of the union addresses from lbj to george w. bush sunday at three :00 p.m. eastern, part of american

history tv this weekend on c- span3. that is all leading up to president barack obama's 2014 state of the union address, live tuesday, january 28 on c-span, season radio, and www.c-span.org . and www.c-adio span.org. next, a look at the impact on relations on self driving cars as well as connecting cars, those equipped with internet assets. we hear from representatives of toyota, verizon, and the global automakers association. first, per marks from david -- remarks from david strickland. this hour-long event was part of the consumer electronics innovators summit in las vegas.

he has been writing side on four things over four years, and a couple of weeks left. it has been a very interesting four years. it rhymes this to be a revolution in what is going on in the automobile industry. i would like to please welcome david strickland. [applause] >> thank you so much, and wow, this is a superstar panel. i need to be staying to learn a little something here. as a number of you may be aware, i will be stepping down at my post as nhtsa administrator in a couple of weeks, but i wanted to share a couple of perspectives. i was told five minutes, and i will keep 25. we first begin our work during my tenure on destruction --

distraction starting in earnest in 2009, 2010, and i remember my decision to make sure that i came to ces as part of the tourar auto show because ces has become effectively the fourth major auto show, and dave schapiro teamteam sc -- and the realized that there is a convergence. with convergence, there are possibilities, opportunities, and also great risks wil. so i'm i have valedictory, if you will, in terms of where we are and what we have seen, and where we will go, i am incredibly happy to see that so many partners are not talking to each other, which was not the case that long ago. you have handheld manufacturers labautomakers and system

form providers, the windows, and the ios's of the world are now in strategic order ships and figuring out ways forward. in figuring out ways forward. speaking of which -- i wish i had planned that, but i really did not. [laughter] that is all good things. that from tell you the part of the agency nhtsa, as a safety regular, and there are other regulatory bodies that will be a part of this space and partnership with nhtsa, the federal trade commission, federal communications commission, we have only one chance to get this right. so i implore all of you to continue on your path of not only communicating at the level that you are talking right now, broader building a

basis of how we attack the problems that we see in the future of connectivity. and it is an activity rate large. vehicle to vehicle connectivity that we are working on at the agency level, connectivity drivers of the vehicle, connecting the driver to the outside world, and how we can innovate all these things safely. i will tell you the one thing that will disrupt all of this -- our hope in vehicle to vehicle can medication, our hope and active safety systems, our push for technology at nhtsa through initiative where we are focusing on increasing belt use, looking to eliminate drunk driving by having the vehicle recognize whether you are over the limit, and reducing human error, which is part of 90% of all traffic crashes. the hope of reducing traffic fatalities to 10,000 people, 5000 people is all based on this technological hope, but we will not attain it if we do not address privacy.

and data and all those components which people hold dear. we are in a really sensitive time in america in regards to these issues, and the power of everything that we are relying on in safety systems and connection will not be attained if consumers don't trust the work of the regulators or the work of industry. request asofficial the administered or at the consumer electronics show is we have to do more, we have to be better, and we have to do it faster. the agency is in a position right now were i have always said we should follow the notion of what wayne gretzky's dad said to him and his years of being a young hockey player -- not go to where the puck is, go where the puck is going. nhtsa has to do that, and we will. i have a strong team that will work. everybody in this room has a

response ability. to uphold these goals, we have to make sure we have the trust of the american people for all these wonderful innovations. hope, and that is my wish. i want to thank again everybody that is in this room and all the partners over the past four years that have made this the most dynamic time in the public that any nhtsa administration has ever had in public office, and u.s. have had the ability to do god's work. planning,lking, keep keep innovating, keep growing, and please keep safety as number one priority. thank you very much. [applause] >> thank you very much. it was murray interesting. we are going to talk about privacy only today. showe been coming to this out to las vegas for almost 25 years now, to technology shows. i've heard innovation revolution

and till was death from hearing it. but honestly, this year, we are really seeing the start of something that will safety,onize travel, david alluded to the idea of zero fatalities if people realistically talk about now, but there is a long road to get there. that is what our storting part -- starting point will be. i will run through the folks on the panel and then get off because we do not have a lot of time. i'm not going to be able to do it in order, either. we have got hear hilary cain frm toyota, kevin lane from horizon, thilo koslowski from gartner, and mike stanton of course on the association of global automakers, andrew brown, fromi, and mitch bainwol, the alliance of automobile manufacturers. since dave was just here in talking about it, and it is a policy kind of discussion, is how can anybody in legislature,

you know, government, keep up with the changes we see? have gotten demos today, but with a brand-new things -- how can you legislate and protect the public, help manufacturers, etc., and can they do that? i will start off with, if you want to start right off, or we can -- >> no, that is fine. the question is, how can we keep up or how can the administration debug with what is changing in the telematics world or automotive world? we have to have a lot of people, i guess. full employment asked to the government because it is changing dramatically. i think a lot of the change is good, and there is a lot of innovation, the cars are getting smarter, yes, the cars are connected, and i think to his last point about safety, it is that the core of the connected vehicles is a safety. there is the technology that has been around for 18 years that will notify in case of an accident. if you think about how many

accidents are reported from the vehicle, from those technologies, it is out there, it is connected. how do they keep up? i think it is things like this. i think there are initiatives where we as an industry need to start coming together. i'm not a believer that we need to throw policy at everything that happens in the car because policy also means stifling innovation. i think the technology that got us to these safer cars, these connected cars, the technology that allows us to a hands-free calling and cars, the technology that connects you to your dealer or the diagnostic, technology can be used to solve some of the things that i think nhtsa is worried about. i agree with 100% -- we do come together as an industry, and we need all the players at the table to figure out how to use that same technology to solve some of those issues.

not that it needed to be in a regulation, but to stretch their thinking about the possibilities , and i think he was very receptive to that. from that point going forward, i but allt just nhtsa government administrations, government agencies that work in need to reach out to industry, reach out to the consumer electronics sector, reach up to academia, because there are a lot of players in this space, and all of us have a piece of the equation, and it needs to be more collaborative. it is not like the old days where we were often our separate corners and then we came out

fighting. i mean, what must happen is that we work together to achieve the best solution for everyone concerned, industry, government, and ultimately the consumer. whatwould like to echo andrew decide about david. he was incredibly accessible, and is, -- this is not have the butcher he -- this is not his obituary here. he is a thoughtful guy and a love of technology that came through his work. david, when he spoke, said the problem of connectivity, and i would quibble with that a little bit. i think the issue here is the opportunity of connectivity. we have this dawn of great new agent safety that connectivity is going to usher in, and the question is -- is the pace of change consistent with the nature of government in the modern world? , think the answer is

unfortunately, maybe not. the process takes two to three years to implement. every show at ces you see dramatic new innovation, so yeah, we always talk about innovation, but to have innovation, it is finding its way into the marketplace now in quickly and it is really profound. i was just that a show a minute ago and i went through the mercedes display, and there is commandsble watch that the system, and that is pretty striking. as a metaphor, and i do not say this to pick on nhtsa, nhtsa does the best they can do with really dedicated public servants , but the distraction guidelines that came out earlier this year were visual, dealing with 2% of the system, did not do with the

cell phone, wearable watches, voice, or just are. -- or gesture. that is a perfect metaphor for the challenge because it is not relevant to the problem that is today. and the way you deal with that is by government serving a very different role. instead of government being a agular, government should be facilitator of conversations between all the various players in the panel and in this room. so the carriers and the manufacturers, software guys, and auto manufacturers. we have got to find a way to pull together so we can produce a product in a car that essay for everybody. we are used to dealing with nhtsa. the other element of the new ecosystem or not and we have to deal with that. >> i think the point that their new city more collaboration among the various players in this field is absolutely right. i also think there needs to be collaboration among those doing the regulating. i think we have seen that more

pronounced perhaps in the last few months, last year or so, where we are talking about privacy. we are talking by the federal trade commission, we are talking about policies, the federal medications commission, and nhtsa and its traditional area. i am not sure there is enough -- i would argue perhaps that there is not enough cooperation and collaboration among those regulators as well. i think we have seen that layout out most profoundly in the vehicle to vehicle mitigation space of late. >> the sec work with nhtsa -- because weth nhtsa are integrating these services. but coming back to the original idea, so would it help with studies like the 3000 vehicles in ann arbor, and that of the to v study, is it something like that, or will should we be doing something like what is in europe, where we do not force a standard, but we put out a star rating for your

car, so if you do not have collision avoidance on the car, gets one star rather than five. those different kinds of approaches to that. >> i definitely would think that is a big piece of it, and i would like to introduce another level of this, which is ultimately the consumer, rights, that will determine if something works or does not work because all of you might reject some of the stuff it does not do what it is supposed to do. i believe the government plays a huge role in really facilitating innovation, not necessarily stifling it. there are issues of getting things done quickly, but at the same time, if there were not any regulation at all, this would be the wild west. maybe everybody in the room knows how to do it right and opportunity but he in danger, there are other approaches i have seen, particularly in it tech companies, not automotive, that would put you at risk. alternately it is the market force that will determine what sticks and what does not stick.

i believe this whole notion about driver distraction, for his apple, which has been a huge topic and continues to be one, will force the automotive industry to become more innovative in how you serve up information and able and summers to consume that content, maybe create content on their own and share it with other people that this will be healthy to bring innovation to the marketplace. if you do not have these guidelines in place, none of that what actually happen, and i think you would see the industry shifting, the mindset you cannot control at all, but if you plant the right seat then create a structure for people to think of what needs to be happening in order to insight consumers and allow them to have the digital lifestyle and be represented, that is what it's really interesting. that has to be the role of the government, and that includes doing some of these demonstrations and testing. >> you mentioned the safety launch in ann arbor, which i think is a great example of how government should engage, and it is a great demonstration, in fact, i think it is an excellent model in terms of engaging or

's, theating the oem tier ones, the academics, other players who have technologies, these communications communities -- the telecommunications communities -- because it is an attempt to try to understand the technology, not only what is possible but what is doable and affordable. and to understand some of the flaws, some of the benefits, and to try to understand that in the context of data. data that will help us assess what is truly feasible and how workable are those solutions. i mean, if you just a step back for a moment and think about this, and the new technology for a connected vehicle that you put into the marketplace at best it's going to go on 15 million, 16 million vehicles in the united aids or maybe 70 -- united states or maybe 70

million vehicles globally. here in the united states come you have what, 330 million vehicles already in the car part? yet you are only producing 15.6 million or 16 million new vehicles each year. how do you really make it effective if it might take you 20 years for the technology to propagate throughout the car part? so regulators need to understand legislating something instantaneously does not mean you fix the problem. in fact, you may cause a bigger problem, and you may increase the cost of the technology. so it is much better, and my mind, to try to work through and facilitates with the players to understand really what is possible. >> can you -- i mean, could you do that with vehicle to vehicle? i start looking at this and thinking well, if i am a major automaker, could i introduce in my vehicles by myself? it would

not work across the board, but it might be the tip of the iceberg to start to get that technology out there. or is this something that there is just no way, it is too dangerous, i could come up to an intercession, getting false -- intersection, get a false alert. is also a very lonely discussion you have come only your car and nobody else, so that is what the government has to regulate some. again, consumers will actually determine if this technology will work or not because if they the value in it, then manufacturers see incentive in putting the technology in their cars, but you have to have regulation around it. i always come back to the aspect of the consumer side, the market side of it, plus technology, and the government can help to actually create innovation by mandating some of those aspects if it is proven that it can affect lives or improve productivity. that is going to be the main motivation for a lot of these technologies. those two aspects and benefits that we can realize and considering that all of us don't -- any country in the world won't see more investments in

the road infrastructure means we have to get better about, smarter about using the existing infrastructure that we have. that alone i think will motivate these technologies. >> i think v-to-v from either driver assist or self driving cars because in one case, you have an infrastructure components, but there is a real role of government, and we alluded to -- we're not get into cc, andestion of the f this is a tricky proposition. on the one hand, we are faced with the opportunity to have massive gains in a fatality rates that connectivity would usher in. it requires a major investment on the part of government, a major investment for manufacturers, a major embraced by consumers, but it also requires a certain spectrum potentially. and this is where the organization, the government, and the modern world that. the dna of the fcc is not

necessarily auto safety, it is wi-fi, if the internet dna, it is a very different perspective on life. so this is a bit of a challenge for us. problem -- ige thought i might have cut off. [laughter] it is a huge problem and quite honestly we expected that david would make some kind of an announcement on spectrum and making sure that the spectrum is available, but the payoff if you look at it, reducing fatalities and injuries by 80%, just look at what you could do as far as reducing gasoline, look at what you could do as far as reducing time that is wasted on highways on all this. it is incredible. the challenge is great. you look at it, and we talked to all of our members about it, and the question is -- are you ready to make the investment? well, what is that investment? is that standing behind your product for 20 years on v-to-v

or v-to-i, and what is that mean, where is the liability? and we go back to the original question that was first raised to me with the then nhtsa administrator reset technology is moving so fast we cannot keep up with it. the problem that the manufacturer has is that they run with their technology, and if the regulation is something that is different than what they have invested in, that is the exposure that they have. so the way we have been dealing with this issue is by having very good communications with not only the nhtsa administrators and others -- we are regulated bumper to bumper. with that seven or eight agencies that are all regulating how we build our products, we need to have that collaboration, and i think -- i forget who said it early on, but you know back when nhtsa was created in the 1960's, it was like hell no, we don't want to go as automakers.

that had to train dramatically for us to come up with a more cooperative arrangements so that we can solve the problems together he cuts no one has all the answers. >> john, quick thought on the v- to-v, vehicle to vehicle and a vehicle to infrastructure, i think the magnitude of lives that can be saved and the property damage that can be prevented and the congestion -- i mean, i think that is pretty clear, but to get to that point, we have got to get the consumer and the driver base comfortable with the concept of connected vehicle where data will be shared and vehicles are going to talk to other vehicles, and that is not a small task. it is no surprise that even today with all the technology, a small share of cars are connected. we have got to get the consumer base comfortable with the idea of a connected car, what the benefits are, what the value is before we can jump to this v-to- i and v-to-v. i think there are some steps we need to take before we get to that point, and that is to try to get greater adoption of the

connected car, try to do the consumer base comfortable with the benefits of the connected car, and try to get greater adoption. that greater adoption includes addressing things like privacy that david mentions. >> that was one of my questions to and during these discussions is -- engineers talking about there is a gating factor, negating factor is us. we all think we are great drivers, but you know what, we are not all great drivers. we get this technology, and the book was this thick. the factor? do we have to retrain drivers like abs brakes times 1000 behind the wheel of these vehicles, or is it incremental? >> just to piggyback on the last thought, we have to take steps, and i just got a new car, and it was this thick, but every page your dvd, so i did not really know how big it is. but there is an education process, and as an industry, we

had make these things intuitive. but i think -- especially with the next generation buyer, they do not need at this thick. they won't read it, they get a, they grew up in a connected lifestyle. as generations go by, i think there is a next edition of -- there is an expectation of connectedness, technology the people grew up with, but we've got to start in we cannot go straight into v-to-v and hope the world is a better place. >> at the same time, you are absolutely right, we have to educate more consumers on the benefits of these technologies, fairlysumers get that quickly. we just completed another study with consumers in the u.s. with the u.s. fickle owners, and we what item to describe really represents, and already today, 25% of u.s. consumers say i want to get that on my next new vehicle because the benefits , 25% of the huge number that

people have not even experienced yet. i think consumers are willing to accept this because i lot of them are influenced by how they use technology in other aspects of their lives. so the cell phone, the tablet that we all use are influencing people with regards of what else could technology do for them. we do have to explain and empathize with them even the automotive context, but at the same time, consumers are opening up to this. that is where the fundamental driving forces for the adoption in these kinds of technologies industrytomotive because consumers are ready to embrace it. from the same study, even self driving cars, and again, that is a technology that most of us have not experienced. if you ever get a chance to do that, do that because it is pretty amazing. there is a 32nd rule that i secondished -- a 30- rule, you freak out, what is this, but after 30 seconds, then i personally had an aha moment

when i was in a google vehicle where all the seventh of it was cutting us off, and he can't really relax and reacted very smoothly. i could never have done this, and i love driving. at that moment, i realized the machine could be better than me. [laughter] i think a lot of consumers will have that. in the study we did, 38% of u.s. consumers say they would want to get self driving vehicle functionality in their next new vehicle. 38%. driver went like you want to hear her -- from the driver -- hilary -- >> you want to hear her first? >> no, go ahead. >> we have two very dynamic sets of issue. s. is is a time, the other connectivity. the connectivity sets of issues are being driven quite a bit by the smartphone and consumer electronic devices, we all want

to use and stay connected. on the other hand, we have this desire to be autonomous because of what we have seen from the google the vehicle. but quite honestly, we have been automatingof general fund some of the vehicle for years. all of a sudden, these two very dynamic sets of issues have accelerated their case, and they are converging at the same place on the vehicle. what is happened is you have a lot of entities now saying all right, how do i react to that? that is not my traditional sort of scope. so now they are challenged with ok, how do i deal with the spectrum issue, whether it is a cc and nhtsa in terms of -- fcc and nhtsa, how do i deal with 4g lte, etc., etc.?

so you have a lot of dynamic issues. when we realize in the industry is whatever we put on a vehicle, we wanted to be safe. number one. it cannot fail, it cannot go to the blue screen of death, it has got to operates linsley -- it has got to operate seamlessly. on the other hand, we want to respond to our customers, the ultimate consumer that is going to purchase those features and functions. all of that is possible, but we need to do it in such a way that it is effective and it is affordable and we truly can benefit from it. we do not want to have our technologies legislated or mandated that drive us to a solution that ultimately will not pan out because we won't survive one failure. we wanted to be done right. secondly, the industry needs the opportunity to continue to innovate so that we get proven

solutions that work and we understand the ramifications. so we are on that pathway, but in the meantime, you know, we got the smartphone, we got the andets, now we got iwatches wearable devices, all of those things that present new challenges to us. ask one of the things i would like to offer up, at least in spaceto-v and v-to-i we're talking about right now, i would argue that a lot of the regulatory uncertainty that exists right now is actually stifling innovation, and on a couple of fronts. an automaker, probably not going to deploy this technology in our vehicles if we do not have certainty around what will be the end result with the spectrum discussion that is under debate right now. it is very different if we are forced to share the spectrum, our technology might be very different than it what if we had the certainty of the spectrum for our use and only our use.

so there is uncertainty there. there is uncertainty about whether nhtsa will mandate this technology or encourage this technology or do nothing about this technology, and that is a very different proposition for auto manufacturer based on what they decide to do. if it is mandated, ok, we are all in. if it is not mandated, we as a company have to make a decision, are we going to deploy it on our own knowing that our toyota vehicles will only communicate with toyota vehicles, hope that technology stays the weighted so that when other companies, online, then our cars are all talking to each other. right now, i think all the auto companies are sort of froze and then -- frozen until we have certainty about what this landscape is going to look like a going forward. >> it strikes me that again in europe, they are sort of looking not vehicle to vehicle but getting those standards so that you have information that is further down the road, what we think of as pro-data, but they are not there yet.

it also strikes me in talking with all the automakers -- there are a handful of major automakers that if two or three decided to do it, that was sort of establish a de facto standard. thatver anybody said after , you know, in terms of the i don't know if anybody is willing to do it, but there is a lot of bartok, i guess. at any rate -- doesn't he want bardd anything -- a lot of talk. does anybody want to add anything before i ask something else? underlying talk, a scuttlebutt before the show and during the show about who controls the dashboard and what happens when you want to make those connections at the moment, and a lot of rumors about what companies may try to do in terms of taking over that dashboard, you know, whether a certain company with a certain kind of fun is going to make your than itd look different

did before. and whether that is really a great idea or not. there is also a blackberry effect. why would i do that if i don't even know that phone is going to be here in five years? it may be wickedly popular now, but -- and i don't know how open you want to be by that discussion or how much of that is going on, or if that is just not an issue as far as your concerned here. >> i'm not speaking from an automotive perspective, but it is interesting in your point of a few ready steve jobs book, which i encourage you to do because it is enlightening, there is a section in there about his strategy against an opentrategy of technology. he talks about the one industry that is right for opportunity to own the entire express is automotive. he has done it in his industry, and the apple industry, but the one remaining industry is automotive for you can control that experience from and to and -- end to end, and i you have connected cars, you start

opening the doors for summary, as john described, to control the dashboard. if you believe in his philosophy a look at the success that controlling the ecosystem end to end, it is a solid argument. but both models have been successful. so to the last question, john, i think there is going to be a point where somebody gives up the dashboard and it yields to somebody that provides a great user interface. i can't ask me about all the time -- why can't you just pop it in and run the vehicle? so at some point, there will be that case, but i think that will be a conscious strategy to move away from owning that experience end to end. my guesses are it will probably be somebody that needs that that versus wo do has brand parity with one of those survivors -- versus a somebody that has the brand parity with one of those survivors.

about controlust but employees you can have over the dashboard -- but influence you can have over the dashboard. that is where the tech companies are interested in the automobile. that is the last piece of the puzzle that would allow them to interact, including when you are mobile sitting in your car. i think going forward, and this relates to what kevin said, that may be not just the auto industry would come to a some level like smart phones and other devices. maybe the car would become the coolest device out there. because think about this -- at the end of the day, a car is just to provide you with information. it has a physical vision, a get you from point a to point b. my phone phone cannot do that. will see.will, we cannot d that is why i honestly believe the automotive industry, that is why this discussion is so imported at this point, that the automotive industry in two to

three product cycles will be so much more involved and so much cooler than anything consumers have seen that eventually this whole idea of having tech companies on top and the car companies working with them might be turned around. that is obviously a big division, but i honestly believe you can do this because the car has so much more real estate that you can put technology and, you have much more of a controlled environment, know when somebody is driving or sitting in the car. out with myet ge cell phone, and that is so much more fascinating than any other device via form. the car will become the ultimate mobile device. >> i can continue dashboard confessional's here. [laughter] companies inop 20 a recent bcg study -- bcg did an analysis of the most innovative companies in the world, and nine of the top 20 were autos.

the auto spent about $100 billion a year on r&d, overwhelming private investment, not public investment. that is producing cool cars. i think this is an undervalued understanding in our society that the pace of change really is rapid. i think thilo has got it right on. at the same time, there was an ihs study where they are talking about the pace, and i think this is going to what andrew said about fleet turnover -- they talked about selling 230,000 yeardriving cars in the 2025 in the world. we talk about self-driving cars like they are here tomorrow, but 230,000 in market place of about 100,000,010 years from now, in 20 years from now, they said, 11 or 12 million units

sold in a larger base, and roughly a quarter of those in the u.s., roughly a quarter of all cars in the u.s. sold in 20 years will be sdc's. so part of this is a slow and gradual because of fleet turnover, and on another level, it is immediate, and this is the olness factor were it in some cars you can buy a car that dc, and youlike an s have essentially an sdc, which is better than an std. [laughter] i think i will leave it at that. [laughter] >> good call. i would like to make a comment that first of all, i think the stuff you just mentioned is way too conservative. i think i see sdc technology being deployed much faster.

that in probably three years now, four years now, you will have cars that are self- aware. truly autonomous or self driving. that means they can actually interpret what you do as a driver and whitespace you are in and look at the surroundings of what happens and put that all together, analyze it, collect the information, do things automatically for you. we will make it easier for you to go through your life. i think the progression of and is -- of innovation the automotive space will happen way faster than many of us realize. does that mean that all of us in 10 years from now will have self-driving cars or even driverless cars that i can send out and do my shopping and i do not have to go to the grocery store anymore? no. that is not going to happen, but you will see steps in between that, very closely. it is much more a question of how culturally and from an ego perspective we allow things to happen. there was an interesting discussion today from audi where they talked about piloted driving, and they talked about

who is respond with, and the answer is right away the driver. which kind of shows you that those legal aspects are probably the biggest hurdle, not the technology. >> just to make it one on that, too, and i would recommend everybody to go out and see what bosh is doing, the dilemma of how much control the driver will see to the technology is totally unknown. i mean, it sounds great, but a number of our members, including is where is too, joe sixpack? if he going to be able to pay for it and the liabilities associated with it? technology will happen quickly, but i think consumer acceptance is a big issue that has to be dealt with. >> as mitch pointed out, if you review some of these cars now, i spenti have to admit, we

on the highway, it has lain sintering, i know it does, it has adaptive cruise control, i know does come i take my hands off the wheel and it follows the highway. i am not doing anything. of course, if i hit the next car, it is my fault, but that is why i wonder how much those incremental steps, and then it will just be a natural thing for people to move to that. you just saidwhat reminds me of something else, and that question is -- there is some backlash to this whole movement, and that backlash looks at airline pilots is as waited second, when we switch all these systems to automated systems and fly by wire or drive by wire, look what started to happen. pilot falls asleep or something happens in the airplane, and all of a sudden, we have problems. i do not know how to teach somebody to drive if their car basically had all these things in it, and would we have to retrain them every week, and is that something that people are

looking at now? atwe may go back and look where we started with the regulatory side of things, and the industry has a tremendous with beingxperience regulated on the product, but when it comes to regulating behavior, it is another whole ballgame. i spent like six years on mandatory safety else use laws, and i took hundreds of millions of dollars in a concentrated effort for education plus enforcement. today, i'm not sure where that is going to come from, and you are going to have to go through the consumer side of it where the big risk for the somethinger is you do or by regulation you do something that the customer does not want. go back to the interlock lock on safety belt in the 1970's for those that remember. people were cutting their safety belts out because the government mandated that they be put in and you do not start your car without your safety belt. -- that argues for a more

gradual rollout, although i think the problem will be that technology is coming so fast, companies have a great deal of risk, and this is with the suppliers and the regulars, to try to get it right the first time with no guarantee. again, you have that this regulatory uncertainty out there as well. we talked -- i would argue over the last couple of years, blue in the face about the various policies, obstacles and challenges that exist in autonomous vehicles. we know what they are. i mean, we know there is a liability question, we know what these look like. now it is time to turn the conversation to what are the answers to these obstacles and get the ball rolling so that we can actually start to deploy these technologies. because until these questions get answered, and we know what the framework looks like that we are going to be living under in the future, we are not going to do anything. >> welcome it if the other guy's fault.

>> john, i wanted to interject a couple of points. most of our discussions or comments have been around passenger vehicles, and i would just like to remind all of us, let's not forget about commercial vehicles. applications may be more straightforward in the sense that commercial vehicles have professional drivers, and they have a very defined route, beginning to end, and it may be a better platform for initially establishing not only connectivity more broadly but also automated operations. so let's not forget about that opportunity. and then the second, and i would wee to make is the fact that are looking at what is immediately in front of us and saying all right, how are we going to control this invasion of center stack and the vehicle. well, i think we need to step back and dig about the broader issue, and the broader issue is

one of mobility. mobility in the sense of being connected to things, but more broadly, as our society becomes more organized, it changes the context by which we transport ourselves, transport goods, and it may mean different types of vehicles and aatforms, which could become great opportunity for connectivity and autonomy. as we move forward in time because if you look at what some gators --cess the prost and that they caters are saying, we are going to be more organized. certainly there are sectors on the east coast and the west coast, even in the midwest, where the expectation is that by band for reasonable, the between cleveland, detroit, and

chicago as an example will be more and more urbanized than it is today. and that will mean a different and of mobility, of goods services and people. so in that context, if you take the blinders off and think about it and that future, what does connectivity mean, what does automation mean? to my way of- >> thinking, i drive a car, i cannot imagine letting my vehicle do that, but is that the kind of thing you are thinking of? certainly on commercial vehicles. in europe, they concluded that project last year, and it was his vessel, but with respect to our own personal transportation, i mean, we may be willing to comes a transfer pot that to our home, pick up up, and at some stated time takes this to our appointments and comes back and picked us up and then goes

off wherever it needs to go. that is a different mode of mobility of transportation. and certainly our young people, you know, given their declining proclivity to want to drive would be more susceptible those kinds of things. we need to think about what that future might mean in terms of what we regard today as transportation. it may be entirely different. so while we are focused on dealing with the issues of connectivity, and i'm not trying to minimize them. we have so that big issues there. as well as on autonomy. we need to keep looking to the future to say alright, how is this going to move from where we are, where we want to be into that future of tomorrow? >> i've only got a couple more minutes. catch people right after. well, you can catch some of us right after.

>> [inaudible] >> i would like to let them get going, ok? in terms of that connectivity, too, part of the expense, the investment, not all cars have what is called an embedded modem now. looking for, that looks like that is exactly what is going to happen. if that part of the waiting to see whether there is a regulation and not wanting to stretch margins, etc.? or is that is going to happen very quickly in the next couple of years anyway and get that kind of connectivity? willdefinitely believe we get the connectivity because consumers have been asking for it. what of the few things that car manufacturers to french it these days because most consumers differentiation on classical automotive features is not that easy to do anymore. yes, if you are an enthusiast, you can tell the difference between suspensions, maybe the engine, responsive acceleration

and so on, but for the average consumer, it does not really matter. what he taught what the younger generation, they're not as interested in cars as much. this is the opportunity for the automotive industry to reignite the fascination that comes along with an automobile. mobility and being mobile use to mean one thing for a generation of people, probably most of us here in the audience, the next or duration of the different definition of mobility. the car has to fill that need as well going forward. there are big implications of this pulls up to take it further, what you talked about, the whole idea of urbanization, that people come to the city center because that is where ,hey work and play and have fun might be influenced by mobility as well fold up if i have a car that drives itself, does not matter for live close to the city. i can live further away and do whatever i want anyway. it is a really big implication of this, the connected vehicle is here to stay. there is no question about it. i anticipate that by the end of this decade, 70% to 80% of all

new vehicles will give you the option of being connected in your car because everybody wants to continue with a digital lifestyle as soon as you get into your vehicle and to not stop that because it is part of our lives. this appleack to question, but it is also a question about standards and again, every manufacturer has a different interface in their car , you can touch us on, you cannot touch others, some work well with voice commands, some are terrible with the voice commands. of noise over the last five years about some kind of standard. is that just a nonstarter still in the automotive business? or will there be some coalescing around some kind of -- like the guidelines that could become mandatory in 2016? >> and i jump on that one, since i was chairman of the technical standards board for the society of automotive engineers, i know standards very well. anyink the key is that in

standard, any guideline, you do not want to legislate the technology. you do not want to say this is the way to do it. i think what we have learned at industry knows how to work for the key standards that are necessary to enable the introduction of innovation in our industry. i think what we need to do is what we have always done, and that is to collaborate, work together, find out what the real issues are, established with the necessary standards and guidelines, then allow us to drive the cost down but at the same time to facilitate innovation. because you get the best solutions when we are able to compete against one another. us too allows differentiate ourselves based on our brands. and so what is necessary in the area of connectivity is yes, we need some guidelines, ultimately some standards, but that is not

something you dictate. that is something that i think we can work towards, we need to work towards, and get some of those fundamental foundational elements established. that will help us move forward a bit more faster. toi think you have differentiate between safety applications and connectivities that are just for fun. if you are talking about where the screen is or how long you need to adjust the dial or how i think voices, performance-based guidelines make a lot of sense. it is the way to go. >> navigations -- all the nav systems have to react within two seconds or something like that. >> that would be great for us, but it does not happen. >> just as a reminder for those of you that don't follow it, the industry as closely as we do, we say tell us what it is that you want us to do. do not give us a design standard, do not tell us how to do it, tell us what you want us to get complex, and that then

creates that flexibility and competition that become so important. the other thing is that the planning process on your new year,e runs in a good three years to four years out in the future, so the other thing we likelk about this is to say that is a regulation, a, we know what the regulation requires us to do, get less -- it gives us the lead time that we can face it in production cycles, and then finally that we have the flexibility to compete with each other to a published the objective. regs are -- when they are printed one stable, they serve a purpose. i do not want anything we say to be interpreted as anti- regulation. all that said, regulations do take two years to three years to produce, and the rate of innovation is faster than that, coherentwant nimble,

policy, that makes sense, it does a to be guideline-based entities to be multi-sensor base. carriers, auto designers with the carriers to be together. > how long from start to finish until how long it was mandatory? >> by the time -- mike was around when it happened -- by the time they impose regulation, it was basically done on a marketplace. >> it was already accomplished before the relation -- >> but remember, the creation of the technology started years before, so there was a lot of learning that occurred before you got to that regulation and got to that standard. so you still need to anticipate that. there is one other factor, and that is we are no longer just a nationally-based industry. we are an international, global

industry. ndmean, all of the oem's a suppliers are global organizations, so the one thing we cannot afford, and the consumer cannot afford, is having different standards, different guidelines, in different regions of the world. it only serves to add cost. we want this to be affordable. it also will add complexity, which means you have to have more complex designs, which can add some challenging issues. while we are focused towards north america, we need to do the same thing on the global basis to ensure that we have a set of guidelines and standards that work consistently across the globe. >> mike, you look like you wanted to say -- >> no, i am fine. >> ok. two other issues, and we just have a few more minutes that i wanted to touch on, because you

mentioned enforcement, i remember seatbelts, and i still drive with people that do not want to put them on, believe it or not, and so that is what happens. the texting is the most obvious one, the $150 fine walking down the street in manhattan, and i can copy people going by me that her texting while they are driving, of every age, not to generational at all. is that something that is ever going to really help us? it is not really matter what we are going to do enforcement control the driver, restrict certain things. >> people want to still be able to communicate with other people , and in my eyes, it we have to figure out a solution that would allow you to do something like this in a safe matter. -- manner. saying you cannot do it period is not going to cut it. then they violate these laws and put people into danger. we study consumers to help us predict what is going to happen in the future. we know that in the u.s., 89% of

all vehicle owners are concerned about distracted drivers from using the internet in a car or being on their phone. 47% what do use mobile applications while they are driving on their phone. the problem where technology plays a big role. the guidelines -- you can do what you typically do inside the vehicle. how we get them, as they came up earlier, that is where the do when you get inside the vehicle. i want the car to be smart drivingo differentiate versus sitting at his side -- at a stoplight. i think that is where innovation needs to set in. maybe the car can send out text messages. machine tweets. that is the mission of communication innovation.

>> i think this goes back to the behavior issue we talked about earlier and i think technology is going to have to solve the issue. you look at young people. they are constantly in connection. they want to be connected. they will not differentiate between driving and being stopped at a light. you get to the enforcement issue -- many of the laws are secondary enforcement, which means police cannot stop you for texting. even if they pull up side-by- side, they cannot do anything here yet -- they cannot do it on thewhere is criteria of importance to the police? it is really down there low. i think it is wonderful the technology is moving so quickly, that we have all of this conductivity and everybody really enjoys it. now we have to make sure that technology takes care of it,

plus education and responsibility for individual users, but i do not think that is where responsibility is going to be in the long run. >> texting is the perfect metaphor for the failure of governments, not because they are not trying, but the rate of innovation. is texting,e here which is not addressed. how do you deal with it? you get the stakeholders in the room. you go into it. to use technology to solve the problem. we cannot exercise prohibition. that is going to fail. >> that would be getting iphones, to coordinate tablets, cars, everything. it is gradually coming together. i want to wrap things up. we want to thank you folks very,

very much for the discussion. i think it is very helpful. becauseways helpful it's getting toward a common goal. i would like to thank everyone for coming today. there are still a lot more days left. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] >> and we will have more from the innovation policy summit in just a moment. we want to let you know within the hour we will be taking you for thewashington annual march for life rally. thousands of antiabortion activists are expected to brave participate ind the march on the anniversary of

the supreme court's roe versus wade decision. you can join the conversation online. #cspanchat.tag kathleen sebelius will be talking about the implementation atthe health care law live two: 30 eastern. on our companion network c-span2 , we bring you a speech from california governor jerry brown. he will be laying out the priorities for his state. at noontoday live eastern on c-span two -- c- span2. on thescussion focuses government for role in start ups . they talked about a range of issues including immigration reforms, andt

bankruptcy. it is an hour. >> ok, i think folks are trickling in, so we will get started though we do not go over. welcome, everyone to our startup innovation and policy panel. this panel,ed about mark cuban favorite it -- so this is a really big discussion. we hope what we will accomplish with the panel has ramifications for all businesses, whether they are small brick-and-mortar, tech businesses. a wide-ranging conversation, and we are looking forward to it. what i am going to do, i like to put a face to the name. i will have every panelist introduced themselves. two minutes about your company what you're doing. we will start with clara. everyone.

i'm clara bronner -- brenner from tumil. companies like hand --which is a crowd standing cut funding tool for the homeless. we asked them to do funding, mentorship, anything to help their businesses grow and scale to cities across the u.s. >> hi, chet kanojia. i am the founder of -- founder in online aereo, television platform. >> david liebner. vegas for 17in las years. i have a small technology company here. we have built seven platforms. currently i am the founder and ceo of itsonme, which is a mobile lifting -- gifting

platform. we allow global revenue to be spent locally. we allow people to break down of geographical regions. if you want to buy your body a drink in new york -- your body a drink in new york and it is his birthday, you can do so now. >> hello, everyone. my name is mara lewis. founder of thed company called stopped at. i am also the managing director in memphis, based tennessee. >> hello, i am jake schwartz, the cofounder and ceo of general assembly. our vision is to build a global community of individuals empowered to pursue what they love, and we do that through three main ways.

trainingest in class and practical skills to help people be competitive in the 21st century, we provide access to opportunities that give people confidence, skills, and freedom in one's career. we do that in the context of a network of active shooters, entrepreneurs, and other businesses. we are mutually invested in each other's success. we have eight campuses around the world. we are growing even more next year and the year after that. we have lots of exciting programs and web development in u.s. design, product management, data science, digital marketing, and we also offer a lot of those same programs for fortune 500 companies as well as an internal capability to link tool.

-- building tool. >> hi, there. i'm josh mendelsohn. thanks for joining us today. i am watching -- i'm wearing two hats. in sanmy day job as a vc francisco. before that, i was a political hack. but i am one of those who helped to cofounder and organization called engine. engine is a nonprofit that focuses on helping to represent the voices of startups and entrepreneurs and government. it is an organization with about 500 members all over the country. we spent a lot of time helping educate members of congress and their staff on various issues. they are doing it all at the state and local level. youre to get some of insight into the issues that are impacting your companies across the country, and even here in nevada. >> i want to remind you, if you

are going to tweet about the panel, please feel free to use cps2014 hashtag, but also, i'm sure you've seen it -- ips2014, because these are policy panels. what is the single most powerful thing the government could do to encourage innovation? i would say keep an open mind. entrepreneurial. think about how we could potentially work in your community. the example i would throw out as rockford, illinois. a year ago the mayor approached betsy -- etsy, which is an online platform for's and

high inrockford had employment, but a history of manufacturing. the mayor said, how can we think of interesting ways to repurpose these skills that are community already has? they created a program alongside to teach members of the community how to use skills they already have, to essentially become etsy sellers. that's not something you would think about off the bat. i would just throw that out there. >> the question was? what is thepinion, single most powerful thing the government can do to encourage an ovation at the start up level? >> i'm not sure they can do much. probably a little bit around the idea of bandwidth to me. especially anytime you look at companies like ours or other companies, cheap

internet access is probably the best thing they could do. not much? >> not really. silicon valley and has shown as there is no shortage of great ideas or great people to create those ideas. so, two things. financial policy and regulation. regulatory policy. let's say if they would get one of them right it would be beneficial to us. but 99% of all businesses are of -- theough a lack government -- a lack of patents. the government could put policies in place to look at patent control. they could look at financial and regulatory policies. expectations are low? >> they have to look at

financial policy. >> ok. >> i think growing entrepreneurs is something the government could really assist with. getting involved with startups d.c., it is complicated. however in powering entrepreneurship, teaching individuals to take their ideas to the next level, how to implement them, how to apply for various accelerator programs -- i think the government can help for localg nonprofits communities and governments. so, it is individual cities and how states can create workshops and environments where people in, learn,can come get access not just to monetary resources, but mentors and team members. a lot of this is happening organically in high growth potential cities. however there's a lot of places in the united states where this is not happening.

you can have hackathons, workshop processes. who do i need to work with? i think those are fundamental skill sets. i think that is definitely something the government could help with at a local level. they can step away and let the governments create their own partnerships. that would be really valuable. think when you talk about government, you can think of it as a bunch of different types. you have cities, states, differentovernment. a policy organizations as a part of that. there are a lot of stakeholders and a lot of different interests. i think each level, the way they can help drive innovation are totally different. we have been lucky to meet with

tons of different government leaders at all different levels. i have had meetings with crazy ukrainian oligarchs who want to know how to make facebook happen in tf. right? it's funny. everybody was to be silicon valley. what i tell them is silicon valley is a 20th century concept. the future is about -- it is decentralized, globalized. there will be hubs and clusters that happen all over the place. ga, wer perspective at think that talent is one of the biggest drivers of the clustering. local stakeholders especially -- in the federal can help by fostering the process and getting out of the way. make sure you are enacting policies at all different levels to make sure your town or state is a great home and a magnet for great talent. that also involves making sure the people are

retrained for the 21st-century, making sure that people have the those that are needed for industries that build employees. one of the general assembly's main purposes is to do that. why is one of the reasons our second city after new york was not san francisco. that was london. that was sending the message this is a global phenomenon. we have individuals that are overeducated and underemployed in all of the cities all around the world. my fellow panelists have made a lot of good points. what i would say as an overarching theme is smart regulation. governments want to protect their citizens. there's a lot to understand the contours of the law and what that would mean. what we try to do as part of make a control with the latest developments. the things you are seeing on the show floor here. what that means for regulatory

policy, what would happen now or in the future. what you are seeing now is becoming mainstream. the things that we care about now, as a set of entrepreneurs, we talk about this working for , clean tech, a lot more i.t. so the internet. that creates a lot more issues we spent time thinking about. you already see ideas on copyright. there are more coming. also ideas like patents. talent.ortantly, it is we believe immigration plays a large role in that. we also things like technician policy and how we are thinking thingseater reform to like digital privacy, digital due process. they all really matter. are going to hear is this general notion of

government matters. it is here. it is not going away. government is fundamentally good, i think a lot of people would want to argue. ultimately it is all of us working hand-in-hand to say how can we take protective measures for citizens while at the same time allowing them to have the best service possible through innovation and invention? consequently, that is where we are headed. i think we will spend time talking about patents and immigration, which are two very real issues at both the federal and state levels. we are seeing smart regulation being talked about. we are seeing good policies put in place. >> i feel like you are wiggling? [laughter] we work with a lot of specifically focused entrepreneurs. they have identified priorities they have been unsuccessful solving on their own.

i think a lot of people are interesting and promoting government as the font of great ideas for entrepreneurs. we have not want that to be the case. where they excel is working as a pr group for startups. the chief innovation officers, chief technology officers of the cities get a lot of height right now and are not the ones identifying new capital for startups and they are not the ones connecting them to important dollars the wonks or them navigatehelp the complicated space. what they are good at is sending tweets. i do not mean that in a negative way. they do add a lot of legitimacy to people coming up with unusual business models. we have a startup called handup, which is crowned -- crowd which isor homeless,

an unusual idea. when people in the community started asking what is the city doing to think creatively about solving these problems. i'm sure many of you have heard that st. louis has problems and that space. he was able to point to handup. importantlike it is to say -- one of the notions i of entrepreneurs will accidentally adhere to is the idea that government should get out of the way. government does not have a role here. it can't help. it can only hurt. i am of the belief that is pretty naïve. in our portfolio, we help early on bringing entrepreneurs to d.c. what we are finding emigrates staff -- what we are finding

great staff understand the technologies. they just do not understand yet what regulations are in place that keep the road from occurring. it is hard to say what you don't know or what does not exist yet. at the same time, playing with these examples, you can look at companies that are as sophisticated as possible, and having engaged more ,unicipalities early on changing that space. the same goes for housing. at the same time -- i will actually point to jake and ga. they are really great at coming into cities and being ambassadors. really helps where you then find that instead of political officials worrying about the regulation, they are instead worrying about sitting down and finding out what doors they can open. can ignorethink you

government. government is a stakeholder at the table. it has to be part of your plan. especially when you're going after entrenched industries. municipalghting a monopoly, right? aereo. how is the fcc doing for aereo? [laughter] deeply entrenched monopolies and shaking them up. when that happens, monopolies do not take that lightly. they have invested titans of money and governmental relations. have invested tons of money i and governmental relations. crazy at doing that. they have been very successful. the interesting thing as a startup, having to be that smart about your public policy. ihave ahead of the blick --

have a head of public policy. >> how old are you guys? >> we are three years old. is the newying, that era. if you want to play these industries that are involved in building something really meaningful, it's probably incumbent that you have to disrupt. you are going to have to have people on your side of the governmental level. -- to me, the question of government is policy. policy is not a short-term issue. policy takes generations to take effect. if i do a quick hole here, how many people are in the sinus -- sciences or engineers or tech people? how many on the panel? so, there is sort of the problem, writes? -- right? economy is knowledge driven by scientific creativity and reform. we culturally do not

encourage that. there are not enough kids. on top of that we have immigration problems. even if we fixed immigration in its current form, what would you have? in? we3000 people coming need millions. policies antiquated. asked forhese guys forgiveness before they asked for permission. got they got traction and into the empty structure and municipalities -- >> but they had the government on their side? >> sure. but they had to break all the rules and create and be entrepreneurial. government has to create the way through policy, through patent reform, through financial resources to be able to create these is mrs. and break the rules through antiquated models.

we are a mobile gifting platform. uber was breaking into taxicabs -- they have so many relationships in power, it's hard to get past them. i have taken possession of that fear. the model is antiquated in our eyes. it is a digital gift card. there are a lot of policies that are in place that need to be brought up to date. >> more engineers and less lawyers. that will fix the problem. [laughter] of education, i think there's a fundamental lack of people in general in stem .ields it's a problem everywhere, whether you are in san francisco

or memphis, tennessee. you have to find the talented individuals to build the systems, the hardware. there is a serious lack. in terms of understanding this law, that is the place the government can step in and say at a high school level, why is this not part of the curriculum? why is it a 100 are sent requirement to memorize the periodic table, but there is no understanding of what html is? people are using these applications as part of their regular lives and are completely missing a regular understanding of how the things they are engaging with actually work. think if we can leverage the government to get more curriculum into the schools at an earlier age, earlier time, we will see changes in terms of maintaining and growing talent in america and in our own country. again, i think immigration reform is really important and something we are taking steps

towards working on. i think we have to think about what are we doing here to foster changes and drive them forward? that is really in the stem fields. i would love to see computer science as one of these science options in a high school curriculum or a language option. the government choose to choices to force different curricula into schools moreach kids to be engineering mindset or they created financial opportunities for investors and people to create more startups and be more entrepreneurial, who is going to teach more kids how to be engineers? i start a startup that has access to capital they can teach millions of people to code and create an app or program. forget the school system. people will find that opportunity and take advantage

of that opportunity for themselves. are describing ga's model. we are not accredited. people cannot take massive subsidized loans for our programs. at the same time, people are signing up in droves. me, what we are talking about -- we are talking about the pace of change. it's incredibly fast. accelerating every day. this infrastructure for the government is not really kind of to deal in that timeline. they are just not set up for that. they barely kept up with electricity as part of the acceleration of time. think about that, it is about understanding, you have the stakeholder that is really slow, really lumbering, the holes into a lot of entrenched interests. thato you deal with them

helps you get what you want which is more innovation? >> i'm curious why everybody is example.er as an they have made a name for themselves as being especially adversarial. obviously they have had relationships with different municipalities, but uber has taken it upon themselves. in my mind, a lot of the startups that we hold up to work with our entrepreneurs have taken a much different approach. obviously some of that is asking for forgiveness and going direct to the consumer because you do need them to advocate on your behalf. but i think there are other examples of startups that have done a better job of collaborating and been more successful because of it. they are different negotiation strategies, whether you will be aggressive or collaborative area that is what your leverages and what you need

to have happen. supper that seems to be the central question of the panel. do you work with government? do you collaborate with them initially? or do you take a battering ram to the door? and once you are in, you start negotiating. >> asking for permission. that would be death to most start up companies to ask for permission. it would be almost impossible. i agree with you there. part of white engine was created -- so full disclosure there -- but it was -- part of white engine was created -- so full disclosure there -- but it was to help startups. fundamentally they realize they will create jobs and they do. those stats for themselves out time and time again. engine has amazing economic stats. it has produced work

voluminously. when you go in and explain, this is what we're trying to build. this is how we can create opportunity, you do find a willingness to engage. i think there are many good examples we don't talk about as much. we do not talk about how square foot a lot of efforts to get into taxicabs as an experiment to see how that would go. you could say that about the mobile payment industry broadly. i think uber, and they are an engine member,, they get a bad rap. some geographic entries they may not have handled as well. for everyone, there are three geographies they went to that went really, really smoothly. that said, i was in a horrible line for a shuttle. i said, man, i really want and sober. pp.ent to the a it was a neat little prompt.

it said "hey, are you at cs? w uber?u could get an here's why." now they were letting me know i could not have their survey. -- their service. that was fairly lightweight. in defense of uber -- the more you engage, the better result you're likely to have. just say, ands adversarial process that yields terrible dividends on both sides. >> i would agree with that. the biggest gift that startups have been given, and government circles, maybe all the way up to federal, there is a conventional was them that text and startups

and innovation is the path forward and it will save the economy. >> it is true. >> it is true. a dogmaticbecome belief in a way, which means when you come in and you have the conversation that says, i'm doing something different. this is really interesting. here's a potential press release for you about how you are promoting innovation in your community -- they will listen. that is something you can use greatly to your benefit if you understand that is the framework people are working with. --t's not to say that they that there are not entrenched interests that will try to oppose you and find ways. good friend of mine, paul friedman, had a startup that was trying to -- it was essentially to create the -- replace the 3-d college program

-- the community college program. to get accredited, they had to partner with a nonprofits accredited university in ohio. the accreditation body, which is not a government body, but a commission of entrenched interests -- the trade association of incumbents look at that askance and actually decided with no warning, no communication to shut the entire showdown. raise $30 million. had 200 employees. it just went from eventually having a valuation of $100 million to zero in a week. and without any governmental oversight, without anything. it was able to do that. nightmarethese scenarios. as an investor, entrepreneur, you have to be aware of that. not everyone is going to be on your side. fight for survival. a lot of times, it involves

getting advocates inside government. it also involves being really aware of who will be for you and who will be against you. that, atnot usually that in our experience, regulators are code minded. fit a squareng to peg into a round hole. i had a friend who was trying to fill out her transient form, and she had air b&b. she did not know how to fill out the form, because it asks for her hotel. i do not think anyone would deny offers a lot to different communities. how do you accommodate that? it is not like they do not want their taxes. that stuff is not taken into

consideration. >> i want to go back to this question of talent. talent capital, -- you all have said tell it and capital -- >> and regulation. >> talent, capital, and regulation. is there some merit to the idea that government can help incubate talent? i heard you, david, say let startups to that. so, is there a place, do you think? is there a place where government can go beyond pr, maybe do some things to help incubate at home talent? since immigration reform alone will not come close. >> a policy that fosters entrepreneurship. i mean, if the local investor who is investing in real estate or a bar or restaurant or some has aisk opportunity

sense that would allow them to create jobs and an opportunity for the community, if those tax incentives were there or policies were there for that person to do so. orstart a downtown project salt lake or memphis or all these different faces to allow people who are in these communities, who influence those communities now to be more part of creating new businesses and new offices -- >> what about your employees? i assume you do not want to hire just any entrepreneur -- >> sure. >> what about those that are not entrepreneurs?

i think the talent goes where the opportunity is. if people are going to unlv and getting degrees, but the opportunity is at cisco, local government has to create the opportunities. especially if they are getting loans in nevada to go to school in nevada and going to san francisco to pay off those loans, there needs to be better policy to create talent, foster talent, and keep that talent at home. >> i think innovation in general -- bound byced geography. i live in san francisco once a month. we have an abundance in san francisco. the resources are not just their and other parts of the country. there are hubs that have investments in accelerators and mentors being a huge one as well -- there is a big draw for companies and innovators to go

to the technology and innovation hub. like i said, it's happening everywhere. you have the angels and local, high risk companies. this is a big thing. you go to people who have made angel investors in the community, to potentially involve -- invest in startup companies, why you should invest in a textbased, it's a whole new conversation happening. this is a place where government can, in and creates different incentives -- government can come in and c reate incentives. maybe investing outside your comfort zone. boston, austin, chicago. putting government grants into

local communities and saying "build your ecosystem." this thing. we need to distribute the resources financially broader, d.c. firms. i think that is definitely 100% an area people should get involved then. there are so many talented entrepreneurs. there are lots of startups. there's revenue. traction. i can go to an accelerator. tore is a calculated risk get those resources. what happens to the entrepreneur's vision question

mark they have a drink the company, but cannot know where to start. i think that's where the government can create these local incubator accelerator workshops where people can come i and and build entrepreneur -- entrepreneurship across the country from the ground up. >> i think the u.s. has done a phenomenal job of creating a positive environment. i don't know if people remember or recall -- in the late 1970s, regulations give rise to scale venture capital. there was a gross amount of misuse. the tax interest and capital ridiculous.olutely the logic just does not add up. thing the government has done is a tremendous amount from the incentive perspective.

what we keep coming back to is just new talent. talent is -- two things. capital and talent. there is a ton of talent out there. there is no shortage of capital. there is a shortage of talent. >> weight. the challenges, with all due respect to our capitalistic systems, government institutions creates scale impact. i come from a model where in the night raid you pick your discipline and you had to excel or die and that was it -- in the ninth grade you pick your discipline and you had to excel or die and that was that. a >> when you talk about talent speaking about what new york city has done so well with administration, there are three things they pushed hard for. they pushed for broadband, obviously.

you can go to another country. it is embarrassing. you do not realize until you go to another country how bad the u.s. broadband structure is. if done a lot with real estate. there is a lot around fostering that. then it is around talent. and they have done things like .aunch buses m.i.t. getting more kids to graduate to come to new york. this is about more liquidity for the system. the watt inputs that they can use to create whatever they're going to create. they are not picking winners. they are not trying to hold somebody's hand. they are trying to give a little helping hand. --hink one of the biggest one of the things the federal government has done in the last .ear there are two major things. all of these kids under 26 10 be on their health care -- their parents health care plan and

start a business. that is huge. and there are changes where you month by onbucks a to a health care plan. interestingo organizations and startups and new pools of talent. as we think about that, health care is one of them. education is a much longer battle. were talking about school districts that are fragmented. each of them is basically governed separately. that is not an easy battle. a lot of innovation will come outside the system. better, youct is can go out and buy it and that is a beautiful thing. access to funding and the amount of talent available varies dramatically depending on

the sector. if you work with urban impact entrepreneurs, social entrepreneurs, we get two thirds of the talent cool from not the bay area. -- the talent cool from not the from nothe talent pool the bay area. we did a study of entrepreneurs a year ago. about a third qualified is what we would identify as urban active entrepreneurs. there's a huge disparity. a lot of it has to do with the not that they are creating physical products or services or they're working in the new economy business which investors are more reticent to take on. yes, invest your money is out there. in terms of where it is being erected, i do not think it is being spread is -- evenly across the ecosystem. when you think about the

--munity, i think creating taking into consideration the investors your partnering with is really important as well. >> identifying all of these concepts, i think there is a success/failure story worth sharing. anduch ingenuity talent innovations have come from public universities and one grant universities. and for work they -- and for majorthey had innovations. they were graduating grad students who went out to innovate and invent even in private industry. late, manye found of of those same institutions have set up licensing component that have really quashed the ability to talent there to continue want to invest with the university system. we forget this.

of illinoisty deserves a ton of credit for the browser and the internet as it were. when you look at the pace and rate of animation, it changes dramatically. sure, it'srol -- really wonky. government interaction even in that space. i use that as a segue to say we are educating people in public institutions. but we are not educating people and allowing them to stay in this country. it is the proverbial handing them a diploma and asking them to leave. there's a lot of will to see immigration reform occur, but not a lot of way. then coming off of that though, we have to then remember, in a lot of these metros, again, let's talk about where we are in nevada. for jobs are created

every time you hire someone in the high-tech sector. you have a lot of ability to generate wilson responsibilities and abilities far beyond computer science or mech-e or e- e or whatever it is. you are able to create an entire population with these jobs. there is the short term in the long term. the short term is we need immigration reform. we need it now. there's a time of talent we are sending out of this country. there is a ton of talent that wants to come into this country that can't. then we need to think about public education. the government fundamentally is at the core of our public education system and how does this industry work with the government to help it better adapt to market conditions? ,ne of the comfortable examples

why don't we let the market determine demand? personally, i think is a lot of truth to that, but we all know it's not that simple. things set up to perhaps avoid short-term market situations. we need to take a step back and say, ok, what have public universities done for us? what are some of those great stories? how do we allow them to work for us? then you can find that a rising tide really does float all boats. us,'m really proud of because we have not talked about patent stuff, but there is only 10 minutes left, so i kind of think we should. in this scheme of talent and capital where the patent issues for aow terrifying is it

start up immunity in general -- community in general? [indiscernible] >> [indiscernible] talentsed to be it was access to capital. over the last few years, we have had patent trolls. found a business model. for them, it's a very viable is this model. just a quick summary. patent trolls tend to be nonpracticing entities that have acquired intellectual property is, perhaps a defunct company. oftentimes patents are very broad. not well defined. they can apply to lots of different things. and they have built up business out of sending demand letters to companies large and small, from fortune 100 to small mom and

said some very scary letters that essentially say, we know you have a scanner that allows you to e-mail yourself a scanned document. patent. violated our coffee shop owner, we know you have free wi-fi to rid you are violating our rights. what tends to happen, they will settle. it --s no way to look at this is extortion. it has become an ever increasing scourge. one of the worst examples we well,ound is in fact -- actually, maybe it's not even the worst. but there are bad ones every day. for some ofg a bell the folks here. thousands of demand letters were sent. oftentimes when you have to settle, you have a confidentiality clause associated with it. you can't talk about it.

you can't share. so, it's hard to know that thousands of these demand letters went out. people fell for it for a couple hundred bucks, but a couple hundred bucks adds up. >> do you think that that is a deterrence to an entrepreneur? how urgent is patent reform? i bet you're going to say something? >> i have not paid anything -- any attention to the issue. i do know a little bit about litigation. the issue, the structural notlem we face is necessarily just patent laws. the problem is most of us cannot afford, in a typical patent which runs 15, 20 million bucks. something in that range. not many companies can't afford that. i have not paid attention to the as oneatent troll issue

should. i have been lucky. the stage of on entrepreneur or you're talking about. early-stage entrepreneurs we work with do not think about that. they're too busy trying to figure out how to hire somebody and water local regulations. to be honest the majority of regulations they deal with our municipal or regional and they're not thinking about it is not toatent. say it is not important. but they are not thinking about it and it is not deterring them. maybe from growing the company, but not starting it. >> something i worry about is what the overall exposure is. i are topartners and wonky, but we actually watch the patent filings to see what we need to avoid. or at least be careful about it. yeah, sector does matter to some extent. when it starts hitting our

users that is really freaky. because that is not then just about our company. that is about those millions of people using the product. >> if the government created better opportunities for businesses to protect themselves from the patent trolls, or would be a way for them to fight back. i would think, you would have a plan, maybe a 10-year plan. you would save up a certain amount of money and open up a coffee shop and you might get sued by a patent troll or a cease-and-desist commit basically shape down to be paid off. they do not actually want to go through with it. it's just a shakedown. if the government creates a way for you to fight back against them outside of just the soancial industry, businesses can group together or have some sort of method to be point out that these patents are overreaching, too removednd they would be

-- it would change the shift. it's everybody. it's not just the tech industry. everybody has to wake up. everybody has to tell someone. of how ay stick aggressive these guys are getting in getting away with it has to be stopped, sooner rather than later. it needs everybody's support to do so. can speak to patents in terms of -- i work and out the rhythms. when you are building an algorithm is a technology company, you are building it because you think it's a good solution. you're not necessarily wondering, i wonder if this is technology someone else is already done? you are coming up with a typically on your own. so, you figure you're the first one writing it. typically at a later stage maybe

you backtrack and try to figure out, are other people doing it? if they are, unless they have a big symbol next to their product , what their product is called, you do not necessarily think about it. advocate fora huge open source. i think open source code is one of the most amazing and incredible opportunities we can leverage as developers of technology, developing applications. just a huge of a huge benefit. yes, i believe in patents. there are definitely things that have to be patented. for technology and this field, we innovate off of each other. we take one idea and add elements and do different iterations. say, is it dead when you can't. no one can create something

having to do with it. but does that speak to the policies that need to danger not change. i would love for everyone to take a step back and say, do i need to patent this? can this be open source? can we all innovate as a society? take steps in that direction, maybe the whole problem will be solved. >> look at the stats. the people who do fight these patent trolls and litigate, i read a stat -- i that 92% are successful in beating the litigation. youoth sides that tells something. that tells you that these people are overreaching and the patents that have been issued for all of these things have been too broad. so there needs to be reform on that. if you are fighting that many, you are winning that many. there needs to be reform for and owners and business owners large

and small to have a roadmap and pushed back -- pushed back. >> i read when you go on your iphone and you pull down to refresh, that actual action is a patented action. but it became part of the typical user experience where users on mobile devices learned when you pull down, you are pulling down to refresh. feel liket does not something that should have been a patented user experience. but it was, and it created a lot of controversy. again, i am pushing and advocating. take a second look at what you are filing a patent on. it could create that are innovation and share and create the user experience for different devices. >> you are an idealist. [laughter] >> we have about five minutes left. i would like to get bastions from the audience to read or do

we have any? -- i would like to get questions from the audience? or do we have any? there are a couple. there's a microphone in the audience. sit tight. it's coming around. lost 2.9 million dollars in patent litigation costs -- $2.9 billion? >> [indiscernible] those suits to get disproportionately targeted. it is a real problem. >> i understand there is a panel just that.m >> special preview. >> no, please. you could argue the overarching great panel.ces the past policy topic that did

not come up, i have seen academic studies that show bankruptcy, as far as how fast it fails and gets going again, because often times start ups try once and twice and again before they get the major company. in your rep, one of the biggest it takes-- in europe 6-10 years to fully discharge bankruptcy and leaves a stain. i was wondering about you guys is dots. i was question about your thoughts around that. of financialea policy that is important to start ups. no one has. no one will cop to it. benefits is you do not have anyone else's money to lose. that makes it a little bit