senators, let me start by thanking you for your support of the people of the fbi stop when i became director, one of the the impactssues was of sequestration. thanks to you, we now have the resources to rehire and fill those positions, to be the nsa -- national security organization that we need to be. national security remains our top priority. counterterrorism and intelligence. a few thoughts about cyber. it has been in the news. it touches everything that the fbi is responsible for. i tried to explain to folks that it is not a thing, it is a vector. we have connected our entire lives to the internet. it is where our children pay and where our banking is stop health

care and critical infrastructure. soon it will be where your refrigerator is and things you wear in your car. ouruse we have connected whole lives, the people who would do is home -- harm, that is where they come. for our children, as secrets, our infrastructure. it cuts across every responsibility that the fbi has. i was in indiana and someone was responding -- reminding me of the great vector change of the last century. it was the combination of the automobile, which introduced a new kind of crime to this country. criminals can travel very quickly. it was important to have a national resource to respond to that. i was reminded of it while they were talking to me about john dillinger. i said in response, john dillinger could not do 1000 robberies in the aim day in all 50 states in his pajamas halfway

around the world. that is the challenge we now face. it is a internet, challenge that we are trying very hard to respond to and attract and retrain great people and given the technology they need to build relationships with the private sector that are vital to us. they will get the training and equipment that they need to respond. you saw this week, two of the products of that work. the hard work being done and the scope of the challenges. the charging of people over the world, and collaboration with 18 different law enforcement organizations. the challenge we face is that it blows away normal concepts of time and a. -- space. it requires us to shrink the world. both of these cases illustrate our commitment to reach around

the world and make clear to people that we will not put up with this and that although the neighborhood has become dangerous, we will treat these burglaries for what they are. we will treat them as seriously as someone kicking in your door to steal your stuff. we are very hard to make sure that that is a rarity. priority.dy -- counterterrorism is something that this committee knows very well. i continue to focus on al qaeda and its off spring. its progeny throughout the middle east and africa are viral and best purulent -- virulent and intent on doing harm to americans here and abroad. virulence across the continent and syria.

these are coming to serious to build new relationships at some point, they will flow out of syria. there will be a terrorist diaspora. thisw everyone on committee remembers the diaspora we faced out of afghanistan after dj howdy involvement with the soviet. you can connect it directly to 9/11. we in law enforcement and the intelligence community are determined not to allow lines to fromawn between an outflow syria and future 9/11 incident. the big change i discovered in coming back to government is the emergence of homegrown violent extremists in the united states. those people who can be inspired by al qaeda to kill innocents. in --ternet offers them access to poisonous information.

in this form, i cannot say much about counterintelligence it remains a huge part of our work. we saw a reflection of it in the work we did to reduce the indictments. our counterintelligence mission remains at the forefront of our work. because we face nationstates that are determined to steal our information and because they can do it through the vector that i mentioned. we are a national security and law enforcement organizations. on the criminal side, we are working with corruption and white-collar crime. we are trying to protect kids and fight gangs and violence. the last thing i will say is about the wake of recent disclosures about government surveillance. it is hard for me to find the space and time to talk about what i do and why i do it. i believe people should be suspicious of government power. i am.

i believe this country was founded by people who were suspicious of government power. people should ask me, what are you doing and why. i needi can explain why the ability to execute lawful court orders to intercept communication and why i need the ability to track a bad guy through a cell phone will not it helps me save children and rescue kidnap victims and a number of other things. those details are involving the courts and congress and tremendous amount of oversight. hard for us in the current windstorm to find a decent time, i am determined to do that. let me close by thanking you. the magic of the fbi is its people. we cannot have a lot of stuff. we have amazing people. they are working national security all over this world, 24 hours a day. that is the great joy of my work. i can see them men touched the

work they do. i know you feel the same way. i look forward to answering your questions. >> thank you very much. i was struck by a number of things that i would like to ask you. i'll open this session. it may make sense not of the hearing, but as a general briefing. we will find a time when you and those senators on both sides of securele can meet in a room and go over some of these issues. >> i would be open to that. cyber.talked about that is something that worries me. you areno question that example of john dillinger today could be sitting offshore.

it is still huge amounts of money. earlier this week, the department of justice indicted five chinese military operatives. they were stealing trade secrets. , severalcan companies bus wreck were in the white house, and we discussed several things. there were increasing that -- the rats. everything from our steel company store high-tech companies. they were trying to figure out a way to improve. in whichred a hearing they testified. several of our members on both sides of the aisle worked on a proposal. can you elaborate on your efforts to curb trade secrets and steps. can you tell us, are the tools

that you have, are they adequate? >> thank you. i agree very much of what you said. we face an enormous challenge. it was illustrated well on monday. a nationstate was engaging in fact. why build it when you can steal it? from talkingrned, to the private sector in my time on this job, there are two kinds of companies in the united states. those who have been hacked by the chinese and those who do not know they have been hacked by the chinese. it is a problem we are responding to with a lot energy and working with a lot of partners across government. tools, iof statutory have the authority that i need. the challenge of these cases is that they are resource intensive. they require technology and training. that is why i focus on those things. >> the committee discussed at length national security

agency's use of parts of the patriot act. aside the nsa's use of security15, national is based on the same relevance. require judicial approval. i would hope that nsa letters are not being engaged bible collection. bulk collection. can you confirm that they are not doing bulk collection? the reason for the basic building block records of counterintelligence. may are not used to collect records and bulk.

>> you have any intention of changing that? >> non-. >> i understand that you are planning to move the director of intelligence. you'll do analysis for the bureau as a whole. raise isquestion i that the investigations are broader in scope. they may rely on expansive data collection. i am concerned about whether privacy and civil liberties and those sort of questions. traditional domestic policies may not warrant such a shift. agents have not developed basic criminal investigation

skills necessary for more traditional crime solving. are you addressing civil liberties concerns? ensuring that this emphasis will not involve the expense of trading agents to fulfill basic law enforcement? >> i can assure you on both counts. to start with the second piece first, i intend to direct that all new agents do criminal work at the beginning of their careers so that they develop both the tools and techniques of law enforcement and also the mindset. one of the great gifts of the fbi is that we have a respect for the rule of law and the fourth amendment and the fifth amendment and the sixth amendment. there is nothing like criminal work to drive it into the fiber of an agent.

respect to what i intend to do on the intelligence side. i will make sure that we are using intelligence, whether it is criminal intelligence or national security intelligence in the appropriate way with due regard and careful regard for civil liberties protections that we are so passionate about. for me, it is about making sure that my criminal investigators are being thoughtful and taking advantage of the same smart and to seey panel what they might be missing a network. >> one last question. i mention this to the other senator. , federal prosecutors have successfully convict the more than 500 terrorism suspects in our courts. that is a big number.

we have a small handful in a military commission. that has been mired in controversy. a military commission defense lawyer is defending someone at guantánamo. -- alleges agents representingre september 11 defendants. they had some questions about the defense team. i have a very serious question. was it the fbi who try to recruit somebody on the defense team? do you have anything you can

tell me about this? >> is a matter i am aware of. i do not mean to hurt the feelings of my friends, but their reporting is not always accurate. a pending matter, i cannot comment on it. i can only assure you that we are being carpal -- careful to make sure that the judge is fully aware of the circumstances. >> let me suggest this. as this goes on, keep in touch with me. you are a prosecutor. i was a prosecutor. that any aspect of the prosecution team tries tuneful trade defense team, that crosses the barrier that should not be crossed. one that i have dealt with throughout my career. i take it as seriously as you do. i cannot comment on the matter.

>> the first issue i will bring up goes back a long time before you were director. it happened last month. by severalached female whistleblowers from the fbi. each had previously worked as a supervisor. that was where the rest of the colleagues were male. these women allege that they suffer gender discrimination. against. retaliated that was when they tried to report the abuses. one was a large claims that she was disciplined for allegedly being "emotionally unstable." she was also accused of being "unable to work with others." there was a hazardous material

suits. another whistleblower claims that she was denied a job when she was running first out of six candidates because her male supervisor claimed that she was "emotionally fragile." that was following a divorce. i'm offering these whistleblowers to the inspector general and asked them to determine whether these cases may be part of a pattern that the fbi needs to address. a general question that i do not -- that a long answer to will you make sure that the fbi fully operates with any review. >> absolutely. that is the answer. >> i want to ask you about terrorism and fisa.

you are someone with a rigorous history of questioning the constitution. and the debate over the reform, some are calling for changes. this is the fisa provision that targets the provision about foreigners. seven 02ble is section to the counterterrorism mission? do you have any concerns about whether it is legal? >> it is extraordinarily valuable. it goes beyond that. it keeps the american people safe. i do not have concerns about its legality or constitutionality. gets back toion something i brought up in my testimony about the inspector

general. all theles a person to records. that is government-wide. it relates to your department. it requires a review of the the departmentre is not violating civil liberties. lastng up to my question november, the inspector general testified at a senate hearing that the department of justice impeded his access to a grand jury. in march, i requested documents concerning this dispute. last week, the inspector general provided documentation showing that the f e i resisted reviving others, even though groups within the doj had provided access to records when were ousted. -- when requested.

i would like to have this added to the record. comey,s clear, director that the fbi's refusal started around 2010. obviously before you became director. we do feel very strongly that 2001 through 2009, the fbi promoted the idea with routine at -- provided routine access to these records. this predates your time, but do you know what >> i do not. i am not aware that there was a policy change. >> the second question. according to the inspector general's office, the refusal cooperate delayed access for 14 months. you think generally,

that is consistent with the legal right to have access to records? >> i don't know the particular, but on the face, it strikes me as too long. i meet with the inspector general because i think what he does is important. i'm not aware of that issue. an issue thated we were cumbersome with our approval process and have asked the general counsel to make it faster. i ame bottom line is hoping you can commit that the f fbiwall stop -- that the will stop stonewalling. i know you have only been there a month. -- 10 months. fromed to squat brace and the standpoint of the general statutes -- wewe will not doing the --

will not do any stonewalling while i am director. >> thank you. i have about two minutes left. the chairman gives me equal time. i understand that the department of justice is seeking to change the rules of criminal procedure to make it easier for the fbi to break into computers for evidence especially in cases where the computer's physical relation -- location is unknown. i think that is extraordinary power that i'm not sure americans understand. butnot saying it is wrong, it ought to raise concerns. you explain what this change could mean for the fbi? and what safeguards are in place to make sure the fbi is not unlawfully intruding into computers of innocent americans?

>> thank you, senator. the proposed change to this rule of criminal procedure has known -- nothing to change the standards the fbi must meet before it gets a warrant to search a computer. we still have to make a showing under oath to establish probable the device contains evidence of a crime to nothing changes that bedrock detection. this is about which judges you have to go to. it does away with traditional notions of space and time. this is about trying to respond to the internet brett by allowing judges in one jurisdiction to pass on that and issue a warrant if the computer is not in the jurisdiction at the time. about an arcane question of venue and not the subsidence of protection that is important to the people.

>> i'm going to submit a question on the ebay five b5 program.e i would appreciated if you could put these questions ahead of the others the department has not answered. i yield. >> welcome, thank you for being here. congratulations on a banner day for the fbi and the department of justice is today. between the credit squeeze plea -- suisse please for facilitating tax cheating. the conviction of abdul hamid hamza.abu in the indictment of the chinese pla officials on the cyber

charges. in view of the black shades take down. yesterday was a great day for you for attorney general holder and the fbi. you andlations to congratulations on the indictment of the chinese military officials. as you know, i have repeatedly pestered and hectored witnesses why the score was zero in terms of indictments on this issue while the administration was telling us we were on the losing end of the biggest transfer of wealth in history. you have put some good points up on the board. there were is a predictable squawking -- there is predictable squawking from the chinese.

could you explain why this is different? >> i have heard some of that same commentary. the notion that this can somehow be dressed up as a national security matter. this is stealing, theft. this is not about one nation tate trying to understand the actions of another. this is about enterprise stealing it from somebody who devoted millions of dollars to building it. it employs lots of people in this country to make those things. rather than make it yourself, it is stolen. is burglary. it is no different than if somebody kicked in the front door and marched out with file cabinets. >> the other question is how well organized we are for the cyber effort. which, as you have said, is a thesector of danger for

american public. we have to be adaptive in responding to it. you mentioned john dillinger and the highway system provoking a change in the way we went at traditional crime, particularly the bank robbers of that era. it required new structured. you are now the head of one of those new structures, the federal bureau of investigation that was set up because highway patrols were left at the the border. came toy, when aviation the world as a new science and industry, the military had to change its structure. as a subset of the signal corps of the army grew into the air force. an institution we are proud of.

as i look at the department of i see thed the fbi, national security division, icy counterintelligence and criminal and cyber, all working in this area. assurances wehe have recent really received -- recently received. to better manage the ability to manage cyber threats, doj has integrated functions into a cohesive effort that fuses the legal authority and to coordinated action. that make the question whether we are structured right. that should debate the question whether we are structured right. that makes the question whether we are structured right. i am interested in the question should structure

ourselves looking forward to this continued vector, this continued danger. topicr that is a discussed and analyzed by the council. >> i can't speak to the council. i can remember sitting here the details of it. i know what is being discussed throughout the government. especially by me. i'm trying to figure out, given it touches everything i am responsible for, and my deployed and organized in the right way? the answer is, i think so. toon't know enough about give you a high competence answer right now. >> and conceivably even a high competence answer would not be right in five or 10 years during which the most important thing we are -- tenures from now. >> the most important thing we can do is get everybody to share

everybody's reacting in the right way to the different dimensions of the threat. >> next is the senator. >> thank you for your service to the country. tonk you for your commitment cooperate with this committee and congress. not always been the case with the administration, but i appreciate the approach you bring to it. it in your opening statement, you mentioned al qaeda inspired terrorism. by theyou are inspired facts of the found hood -- fort hood attack. do you agree with the intelligence community's assessment that he was inspired by al qaeda to conduct that attack? >> yes or, based on everything i have read. i was not in the office at the

time, but i do. >> i appreciate that answer. it seems almost obvious, but for some reason people want to call it workplace violence. these strike me as wrong and misleading. ba -- va.n to the i know we have been shocked with the revelations starting with the phoenix va hospital. dismay.k and there is a story in the newspaper that says the number of veterans facilities being investigated for problems has more than doubled to 26. each day that goes by, there is another revelation. allegations of destroying evidence. perhaps secret waiting lists. it will dying because they did

not receive the treatment they are entitled to. i know you agree with me that to live up with your commitment to the veterans, we have to get to the bottom of this and solve systemic and cultural problems underlying the crisis. to start with, we have to get to the facts. the serious allegations and reports that have been made. the inspector general testified last week that the office was cooperating with prosecutors in arizona. to determine if any of this conduct warrants criminal prosecution. the scope of these allegations demands the expertise of your agency. the fbi has to be part of that. i would like to ask you three questions and they are all related. if you could respond to each. are you willing to support the specter general's investigation?

what assets does the fbi have that can be brought to bear in a matter of this nature? some whistleblowers have come thatrd to be report - evidence is being destroyed in spite of congress and in order by the va. what can the fbi do to make sure the evidence is preserved for an appropriate investigation and perhaps further proceedings? >> thank you senator. this morning, the fbi has not been asked to assist in any part of the investigation. a ore were asked by the v justice department, what we can bring to bear our great people with periods. am always focused on making sure evidence is preserved.

the destruction of evidence is something we take very seriously. this particular matter, we are not yet involved in. >> who would that request come from? from the attorney general? the president? >> in my experience, it would typically come from the va ig. it could come from prosecutors at the department of justice, asking us to help. if we are asked, we will do everything we can to assist. >> we don't want to get snarled up in the red tape and bureaucracy. the point is, if you are asked by the appropriate authority, you will respond. >> of course. >> thank you very much. >> thank you, senator. director, thank you for your testimony. welcome to your first oversight committee. upon your review of fbi operations after taking the helm, i would be interested in

your findings regarding the partnership between the fbi and state and local law enforcement. i have focused some of the conversation efforts on the vital and valuable partnership between the fbi and federal law enforcement. both in prepared testimony and your work. these have highlighted the valuable areas. i want to know what you would think of the most critical resources and programs that advance that partnership. what you think we can do to better support that partnership. >> thank you, senator. i agree. the partnership we have with state and local law enforcement is vital to everything the fbi does. there is nothing we do alone. that is one of the ways in which law-enforcement has gotten better in my career. from terrorism to protecting children to cyber, the task forces we have with state and locals are essential.

i have been making it my business in my nine month on the job to travel the country. to speak to state and local law enforcement and say, thank you. formed these task forces and may give us their stars. they send us their stars. the partnership is vital across my responsibilities. about is a need for digital literacy changing. it used to be you would execute a search warrant and find paper. in a drug case or assault case. now you find it from drive -- find a thumb drive or ipad. they need help coming better cyber investigators. i'm working to get with the secret service to see if we can push training out to state and local law-enforcement.

to help the departments around the country whose -- who are called on for assistance. >> thank you. as you work your way around the country, the 30 cities road to 40 or 50, i would be grateful. law enforcement is playing an important role in helping us respond to a dramatic increase in violent crime. i want to applaud your focus on intellectual property theft. both in your spoken and written testimony. i want to applaud the bureau for securing five indictments against chinese actors that stole trade secrets. i think it is important this is the first case brought by the department. of the cases enormous. i want to hear from you how many agents are assigned to investigate.

as the challenges the fbi is facing in working effectively with other countries. simply want to thank senator hatch or his leadership in cosponsoring the act. director, the number of agents and challenges you are facing working internationally. >> thank you, senator. i think the number of agents we have specifically designated as intellectual property trade secret focused is something between 50-100. i cannot remember the exact number. he will -- the number working the threat is larger because it touches my counterintelligence responsibilities and the entire cyber division. i have hundreds of people addressing this problem. the challenge we face is the world is as small as a pin hand with -- pinhead when you are

facing a cyber challenge. shanghai is next door to wilmington. we need to get better at understanding the threat, working well with each other, and building relationships with war and partners. the that guys have shrunk the world. we have to shrink the world. that is why i am looking to see if i can expand the footprint internationally to put more cyber agents abroad to build those relationships. the bad guys do not recognize the borders. >> i think that is a great idea. i look forward to working with you in close partnership. able to pass are our bill and strengthen your resources, we can do a stronger job of defending america's innovation. >> senator sessions? talented. very we have to expect a lot of you.

you know how to do it. the complex cases that have been discussed, you do -- you any bureau deserve credit for. the fbi is the greatest law-enforcement agency they air is -- there is. but you are a national leader. i am concerned about a few things. i want you to get a little perspective here. article street journal -- you seem to make light of marijuana use by those who want to work for the fbi. you say you have to hire a great work force. kids wantme of those to smoke weed on the way to the interview. do you see that could be interpreted as one more example

of leadership in america dismissing the seriousness of marijuana use? our abilityndermine to convince young people not to go down a dangerous path? >> very much, senator. i determined and not to lose my sense of humor. there i was trying to be both serious and funny. i was asked the question by a guy who said i have a great can today for the fbi. i said, apply. i watched philosophical and funny. usingead set against marijuana. i don't want young people to use it. it is against the law. we do have a three-year ban. i did not say i will change the band. -- ban.

>> i appreciate that. i think you should understand your words can have ramifications out there. the american medical association just last october said cannabis use in adolescence causes persistent impairments. use is associated with increased rates of anxiety, mood, and psychotic thought disorders. that is the ama. i am very concerned that the leak that was used against the administrator, who expressed concerns about some of the to attackwas used her. theyea indicated -- indicated they could move it under your leadership. did you have anything to do with that? >> no. >> thank you.

high official, probably in the department of justice, attempted to attack her and discipline her. with regard to -- senator grassley has written, and i have i see there was a conviction he pled guilty to. the account he probably violated. campaignoney to a above the limits by moving money. i don't think he ever fully did i do -- denied that. we would like some specific answers about that case. looking at the data we have seen -2006, not a single

charge was made. 2013, only 24 were charged under the statute. three a year. i have never seen the movie. tos was an individual known challenge the president. there seem to be no corrupt financial dealings. i want to know more about how he turned out to be the one who got charged. did you personally review that indictment? >> no. wouldn't you normally know if you're fbi is working on a case and bring that kind of indictment? >> not necessarily. say you haveines to ask washington's approval even at the local level

involving someone of high profile. i can't remember exactly, but it is not about members of profile. if you read the department of justice thing. say, i am not and of the belief that prosecutors fraudaud -- prosecution -- bank embezzlement in 2009 -- >> we can have another round if you like. >> i apologize. you are right. i am over time. >> some of the senators have to go to a hearing. you, mr. chairman. my apologies, senator sessions. and foru for being here your service to our nation. thank you to your family.

most particularly, your wife for her service to our state of connecticut. i don't know if you are still residents of connecticut, but hopefully at least for a couple more months you will be. thank you for the great work you have done so far. jobs in one of the best the nation. not only because of the mission, but the great people who work for you. i want to thank them through you for all they do to keep our nation safe. focusing on the subject raised by the senator, i have been dismayed and outraged by some of the revelations about the secret records to read destruction of records. false statements. these are allegations but they may have caused injuries or deaths among our veterans in phoenix and 20 locations. i know you have not yet been asked. would you agree the legend --

the alleged criminality race so that has been raised so far would provide a predicate for the fbi investigation? >> i don't know more than what i have read in the newspaper. it looks to be a significant matter. but we haven't even been asked to take a look at it. >> would you agree if there are credible and reliable indications of full statements to federal officials, distraction of federal records, obstruction of federal investigation, all of them have been alleged. there would be sufficient etiquette for an fbi investigation? >> yes. >> would your involvement depend on your being asked by either

department of justice attorneys or the inspector general? >> yes. in nearly every circumstance of we won't jump -- on it without being asked to be involved by the prosecutors or the agency. >> my view, for what is worth, is only the fbi has the resources expertise and ofhority to do the kind investigation that is vital to restore and sustain the trust and confidence of the american public. our nation's veterans. in the integrity of the veterans administration. i will be making that view known to the attorney general of the united states. i have informally and indirectly. i hope you will be involved as

director of the fbi. personal will devote attention to the matter. let me turn to another matter that is close to the heart of the administration. gun violence in our country. the fbi is responsible for enforcing laws to try to make our nation safer from gun violence. would it be helpful to the fbi in its investigation and prosecutorial duties to have a prohibition against illegal trafficking? >> illegal trafficking in drugs? >> of guns that are stolen or otherwise legally possessed. >> i don't think i know -- my reaction is a criminal prohibition on gun trafficking would be useful, but sitting here today, i think i have done cases involving straw purchasing

any legal transport and lrafficking -- and illega transport and trafficking of guns. >> enhanced penalties might be helpful. >> yes. for thesorry imprecise question. let me close. my time is limited. the national background check uniforms well as the crime reporting system are critically important source of information. i hope that they could be reliable to provide and inaccurate data about gun violence. they are hampered by a lack of dissipation by local agencies as well as the breakdown of data within those systems. i hope perhaps the fbi can do more to make them more useful as

sources of data on gun violence. >> thank you, sir. >> thank you. >> senator hatch. >> thank you. i am a big fan of yours. iowa's have been. -- i always have been. you are a good man with the ability to be able to do what needs to be done. it is an overwhelming job. we don't always provide you with the facilities and capacity to be able to do it as well as i know you can. let us know what we can do to help you more in this work. it is important. there is no bigger supporter then i. han i. humantatement identifies trafficking as a priority issue. victims end up as prostitutes or

part of a pornography trade. including child pornography. the screen court held that the statute requiring restitution to theims is not suited for kind of child pornography crimes we see today. i introduced a bill to amend the restitution statute so it works for child pornography victims. i hope more will join us. i hope investigators, prosecutors, and judges will understand the unique nature of the crimes and the way it harms the young victims. harmthe internet, that literally never ends. you have made a case for how called gated it is because of the internet in so many areas of anti-crime. ucd connection between crimes. >> yes sir, very much. >> the computer collective

called anonymous is best-known for denial of service attacks on government, religious, and corporate rep sites. this website. -- corporate websites. since much of this information is legally accessible, targets cannot prevent their personal information from being obtained by members of the public. how is the fbi approaching this? >> we see that kind of behavior. the trick for the bad guy is to get you. any e-mails like a knock on your door. the trick is to get them to open

the door. they are trying to use false information. something they know about you. to get you to locate -- click on the link. we see it in hack to vest hacktaviost- behavior. the chinese criminals. >> i am sure you are following the current debate about sentencing reform. especially the push to lower sentences for drug offenders. this was addressed by the dea administrator. based on her personal background and law enforcement experience and current leadership with the dea, she said mandatory minimum sentences have been important to our investigations. then we received a letter -- signatories included two former

u.s. attorneys general. two directors of the office of national drug control policy. 21 former u.s. attorneys. includes officials from both republican and democrat parties. chairman, i asked of that letter be traced4 -- placed in record. objection, i will also place in the record a rebuttal. criticisms about the smarter sentencing act. fear itact says, we will make it more difficult to build cases against the leaders of organizations. you served a stint. you agree with the administrator and the doj officials,

or do you take another position? >> similar to michelle, throw my career, mandatory minimums were an important tool to andpacitate bad actors create incentives to cooperate. i have used them extensively. >> my time is up. >> do you have any concern about the fact that is somewhat that a lawyer, stockbroker, well respected wall friday afternoons, the regular routine where somebody comes in with their $200 worth of powder cocaine. if you are caught, you will be told my goodness gracious. week doinge you a

some kind of public service. helping clean up the local park or something. a minority kid in the inner-city, you buy $200 worth of crack cocaine, you get a mandatory minimum and go to prison? you will never get a job when you come out? you see a problem with that? both concerns me most -- because i am concerned about disparate treatment of people and the perception that the system is not fair so i think it is important both be taken seriously. >> senator graham? >> thank you for coming today. i appreciate the leadership you are providing at a difficult time. are you familiar with the case of bin laden's son-in-law? >> yes. >> how long was he interrogated

before read his miranda rights? >> i don't know sitting here. >> can you get back with me on that? >> yes. >> is it the policy of the obama in administration -- do we have enemy combatant interrogations available to us under the law? >> do we as a matter of law? >> as a matter of policy. someone like him could be held as an enemy combatant you agree? >> i do. >> did we choose to do this? >> no. >> you believe that one good way to defend the nation is intelligence gathering from high-value targets like this gentleman? >> very much. >> i would suggest to attorney general holder that we are abandoning enemy combatant interrogations. we are at war. i hope we will reconsider that policy. sequestration, briefly.

if we do not change it, what will it do to the fbi? >> it will return us to where we were when i became director. unable to fill vacancies. spend money on gas to interview people. it's a big problem for us. >> it would really reduce her capabilities at a time when we need them the most? >> i agree. >> you mentioned syria as a potential al qaeda presence. do you agree with the director that it represents a direct threat? >> yes. >> do we have a plan to deal with that? as a nation? >> yes. >> is that classified? >> yes. >> i'd like for you to believe me about that -- briefed me about that. i think the next attack is going to come from someone trained in syria. >> the senator was not here earlier when director comey

agreed to set up a time for a briefing, classified briefing. >> thank you. that will be helpful to the committee. benghazi, how close are we to catching someone who attacked our consulate? >> i'm not in a position to say. >i know the answer but i'm not n a position to say. >> fair enough. he is widely known to be one of the ringleaders. i don't know if you can say if he can be -- has been charged or not. this person has been interviewed on cnn. times of london. reuters. press can have access to this person, why can't we capture him? >> and limited in what i can say about the matter. i can't comment. sometimes the international media can get access easier than law enforcement or the military. a would someone like --

former gitmo detainee -- one of the members or founder of all an enemy would he be combatant? >> i don't think i can say. if it is thew policy of the united states to read them their miranda rights if they are captured? can we hold them as enemy combatants? just get back to me on that. if we could use a drug take them out. -- ager ronin to take them out. -- a drone to take them out. do you think a u.s. it's an could become a combatant under ae law of war -- could become combatant under the law of war? >> i don't the guy am expert

enough to answer that. >> my view is they can. you have had americans side with the enemy and have been treated -- there were at least one or two who were held under that authority when i was deputy attorney general. policyink these are big issues. you agree homegrown terrorism is one of the things that keep you up at night? >> yes. >> the enemy is actively trying to penetrate our backyard? an american citizen would be a valuable asset to al qaeda? >> extremely. >> they are trying to recruit people in our backyard. is generaly, petraeus under investigation regarding classified information? >> sub and also i cannot comment on. -- something else i cannot comment on. >> thank you very much for your service. i appreciate what you are doing for the fbi at a difficult time. to all your agents out there who

are fighting on multiple fronts. you represent the front lines of defense. thank you. >> think very much. >> thank you, mr. chairman. good to see again, director comey. i think of you as my law school classmate. i'm very glad you are the director and pleased with the work you are doing. i know you brought up human trafficking. i was chairing a here men about retirement -- chairing a hearing about retirement. i wanted to ask you about this. is a horrendous crime that gets overlooked. it it has been overlooked for too long. we are finding statistics in our own country where we have learned that 83% of victims are from our own country. we see women being trafficked from other places. predominantly mexico. a few weeks ago, i was leading a has with cindy mccain who

been focused on this issue. we met with your counterpart with the federal police as well as the attorney general of mexico and others. i know they are starting to engage in this issue and pass legislation. work with their law enforcement on persecutions. i wanted to know what the fbi is focused on what this issue. there is some prosecutions that have been brought federally. versioneading a bill that passed the house yesterday along with four other sex trafficking bills. have focuses on younger victims. many of the victims -- the average age is 13, under 18. the bill creates incentives for harbors soreate safe they are not prosecuting the young victims.

they are giving them help. getting them to testify against the john's and pants. which for too long we have been neglecting. that's part of the equation. i wonder if you could comment on this issue. prosecutions in places like the birth occurred at oilpatch. dakota the north oilpatch. >> this is a scourge that has many dimensions to it. involving children, people trafficked within the u.s. people trafficked by drug trafficking organizations. americans traveling overseas. ourre attacking it through civil rights program. our violence against children program. we are trying to send the messages you just talked about. being a pimp or exploiter of young people or women is a very

serious offense. we have two meet people hard. nuisance just a social offense. we have to treat the victims as victims and get them help. help prosecuting the pimps and exploiters. it is something we take seriously. >> i also wanted to thank you. you have been of help in cases in minnesota. we had a major drug bust in our state involving heroine. we have a new u.s. attorney. workingaken this on, with law enforcement, primarily bea. -- dea. i wanted to thank you for that and ask you what you see in increase.he heroine

the correlation with prescription drugs. those kinds of cases as well. >> thank you, senator. i care about it everywhere i go. i have been to 27 field offices and will visit the rest he for the end of the year. i will be in minneapolis in a few weeks. state and law enforcement raise this question with me. i have seen intelligence -- analysis that the country is heroin withe deadly consequences. overdoses are up. it is a dea lead. i have told my offices, ask what you can do. if we can contribute, lets contribute. >> i appreciate that. with the work that went on on the federal level, the number of

clearusts, it sends a message where our state is. i appreciate the help you gave. the last thing i wanted to mention is i am going to the floor to pursue my effort with senator graham to get a federal bill passed. seeing metal theft spreading throughout the country because of the price of copper and other metals. as we approach memorial day, brokenc companies are into many times. we have seen houses explode because people explode the pipe to read all the bill does -- most scrap that all dealers are honest. it does what many states have done. it says you have to write a check if you're going to get more than 100 bucks of scrap

metal. it makes it easier for law enforcement to track down these people. we don't have a situation where where they are stealing metal and bringing it somewhere else. we have not seen a decrease in the number of deaths. believe it ise we a federal issue. i want to raise it to your attention and have you watch over the cases. at some point, we will have a break and everyone will wonder why they were listening to the scrap metal dealers and that of law enforcement. enforcement. law two veterans groups. -- to the electric companies. that is my last speech on that for now. i am sure you will hear about it again. >> thank you very much, senator.

>> thank you, mr. chairman. for your service on behalf of the country. what you do is important. it affects a lot of americans. is a lot you do that protects americans from harm. i want to talk to you about the electronic communications privacy act. this is a law that was enacted in 1986. there are some interesting ramifications that this law has. it is something of anachronism in our legal system. it allows the government to e-mail,he contents of once a particular e-mail has ripened to the age of 180 days. this was in 1986. i was in ninth grade at the time. idle the guy had ever even heard the year -- word e-mail.

it was not a means by which anyone stored information at the time. people primarily communicated and then deleted. or they would print it if they wanted to keep it. the paper record would have been treated differently. the electronic remnants of the e-mail would be subject to subpoena by the government and could be obtained without a warrant once it ripened to 180 days old. i don't think too many people raised or even imagined too many concerns at the time. partly because most people had never heard of e-mail. there was no such thing as cloud computing. at least now we know now. , people communicate a lot of information by e-mail. they transmit a lot of information into the cloud.

we live in a different world in which there is a reasonable expectation of privacy. one in which most americans would not draw a real distinction between their expectation of privacy in their papers, houses, effects, and persons -- and their e-mail. most would kindle their e-mails to be part of their papers or effects. recognizing this anachronism in the law. the potential for abuse. and iends chairman leahy have introduced legislation that would get rid of this neck and is him in the law and required the government to obtain a warrant before it wants to go after someone possibly e-mail. it would not -- go after someone's e-mail. there is a report that was

released a few days ago by the white house calling for updates to the act. it said -- it recognize the increasing role of technology. it suggested the e-mail, text messages, and the cloud should receive elections. -- protections. with the f b i policy and practice regarding the use of after e-mail and cloud storage? >> thank you, senator. we do not do it. we treat it as information that people have a reasonable expectation of privacy. we obtain a warrant without regard to its age. that's our policy. the statute may be outdated, but we are doing it in the right way. >> to your knowledge, there are no circumstances in which the fbi would choose to take the subpoena route. read itugh they could

to allow that. >> i think that is right. i think our procedures required by policy we obtain a probable cause based warrant from a judge , no matter how old it is. i don't sit here knowing i am wrong, and i will correct it. but i think that is our policy. >> would you see any distinction treat e-mail and something on the cloud? or text messages or anything like that? >> no. where aware of any reason the fbi uses subpoenas to go after data on the cloud? >> i'm not aware. i think we treated like the content -- whether an e-mail or text or cloud form -- the stored content of the communication is something we treat to a warrant. >> i see my time has expired.

i have more questions i would like to ask. i will communicate them in writing. i would like to echo the concern raised by senator sessions regarding the domestic sousa case. dsouza case. this is something like brought against a critic of the administration, that raises eyebrows. a lot of us have questions about that. whether the appropriate levels were requested from washington. to what degree washington was involved. thank you very much. >> senator jarden. thank you. we had a hearing in my committee.

i understand senator hatch raise the issue -- i would like to ask for observations or comments on the issue. senator lee and i cosponsored the smarter sentencing act. to the fiveding percent increase in federal incarceration -- 1100% increase in cost -- we are estimating our federal prisons are 40% overcrowded. as we pay more for incarceration, we have fewer dollars for law enforcement. prevention, treatment of drug addiction. we have the highest rate of incarceration of any country on earth. what we are trying to address is the question of making the individual decision. the bill that senator lee and i

have introduced, which is passed out of this committee, does not eliminate mandatory minimums. for all crimes, it maintains the top level in terms of mandatory minimum. for a specified category of note, drug offenses involving violence or gangs, we reduced the low end of the mandatory minimum to give deese questioned the judge. we think this is a way to address a body of offenses which are not a serious violent threat to america. but need to be dealt with. any much more specific and personal way. -- in a much more specific and personal way. it is within the discretion of the judge to.choose the sentence . we don't want to lessen our

concern about drugs in society. we want to do this, as we said in the bill, with a smart approach. what is your response? >> i didn't mean by my answer to senator hatch to be criticizing any piece of legislation. he asked me whether they had been a valuable tool. my answer is yes. i don't have a view on what the exact mandatory should be and the incentives that flow from that will be. what you are saying makes sense to me and prince paul. it is always -- makes sense to principle. >> one of the aspects addresses an issue for which i plead congressional guilt. increase theto sentencing guidelines on crack cocaine over powder cocaine. it was ame we did it,

full-scale congressional panic over the arrival of this new, cheap, addictive narcotic that destroyed lives and babies mothers were carrying. we said hit it and hit it hard. with a 100 to one disparity. orther it should be 100-1 1-1 which i happen to endorse, we have reached a congressional compromise that 18-1. the bill addresses the people serving prison sentences under the old guidelines for crack cocaine. it does not treat them as a class. it only allows each individual to petition for reconsideration of their sentencing. i had a man in my office age of 17 in the rockford, illinois, he was convicted of drug conspiracy and sentenced to a life sentence plus 10 years.

he served over 20 years in the federal prison system. average cost, $29,000 a year. of a seriousple mistake made by a teenager paid for with a major part of this life. what is your thought about those still serving under the 100-1 guideline? >> idle to get thought about it carefully enough to give a good answer. drug enforcement is not a big focus of the job i am in now. as prosecutors and investigators, it is always important we look back and see if there are ways to do things better and smarter. >> last question. your predecessor and i worked on something that came as a shock to me. fbi computer system as it was was totally inadequate, did not have access to the internet, did not have

ways to reference and search, and had no capacity to transmit documents or photographs online. 9/11 wereuspects of identified, photographs of the suspects were sent to the fbi offices in overnight mail. could not be sent by the computer system. your predecessor labored long and hard to bring back computer system into the 20th century, let alone the 21st century. where are you today? >> thank you, senator. one of the many gifts i in heritage from bob mueller is the investment in that kind of thing, the technology. i worked on the 9/11 investigation as an assistant u.s. attorney in virginia, so i know what you are talking about. thank you for the support of that. we have made good progress, not good enough, and the bad guys are investing in technology. we've got to keep up with them. i have to attract great people

and equip them and train them on the best stuff. great strides, but the legacy of neglecting it so long as we are not where we need to be yet. >> thank you. thank you, mr. chairman. >> i remember that time very well. the fbi, my 12-year-old neighbor could e-mail them. and i'm glad there has been improvements. senator cruz? >> thank you, mr. chairman. irsnt to talk about the targeting of american citizens. persistentview as a stonewalling from the administration on this matter. it has been 372 days, just over obama, since president attorney general holder both

publicly stated they were improperat the irs' targeting of conservative groups and individuals. indeed, president obama said at the time he was angry and the mirkin people have a right to be angry. if he was telling the truth, that the american people had a days ago,e angry 372 the stonewalling and lack of action that has occurred for over a year gives the american people they write to be even more than angry. one year ago tomorrow, lois lerner, the senior official who led this targeting, pled the fifth in front of the house of representatives. yet, despite the passage of time, very little has happened. nearly a year ago, when you were before this committee for your confirmation, i asked you about this investigation. was,tated at the time it "a very high priority to the fbi."

today,e to ask you comedy victims or alleged victims of improper targeting have been interviewed by the fbi? >> thank you, senator. because it is a pending investigation, my description of it 10 months ago remains accurate. a great deal of work has been done by the fbi. but because it's pending, i cannot talk about the particulars of the excuse would have done. >> have you interviewed more or less than 10 alleged victims? >> i can't say, sir. >> you could say that has been the consistent answer from the administration. victims say they have not been interviewed. when the president of the united states stands up and says the american people have a right to be angry, one, we have a reason to expect in investigation will be thorough and there will be some accountability. the answer from the fbi and

justice for over a year is it's pending investigation and we will tell you nothing about it. let me ask a second question. it over a year, has a single person been ignited --indicted? >> i can answer that because it's public. there have been no indictments. >> you have also pledged to lead vigorously this investigation personally, regardless of the political consequences. i understand you have a difficult job. there is a reason that your job to give-year tenure, your position meaningful independence from the pressures of public text. can you tell this committee to date how many white house employees the fbi has interviewed in this investigation? reasons i said, i cannot tell you who has been interviewed. >> the american people have no right to know what has happened, other than to say nothing has happened. >> let's be fair, that is not what he answered.

he answered appropriately, the same way that appropriately similar answers are giving during the republican administrations and we accept them. >> mr. chairman, you are welcome to accept them. i would note that this came insignificant request -- in significant regard at the behest of democratic members of this. i understand there is not an interest among some members of this body and wording of that. again, you are not responding to what i said at all. said was anhat he appropriate answer based on the reasons he said. it has nothing to do with how i feel. i don't like targeting of anybody, but what mr. comey said was a correct and appropriate answer. >> i would note for the record that when i introduced a aboutent to the committee

targeting american citizens, the chairman and every democratic member of this committee voted against it. the attorney general has appointed to lead this investigation a major obama donor who has given president obama and democrats over $6,000. do you see any actual or apparent conflict of interest in that? i don't think that is something else i can comment on. >> do you think it would have been appropriate to trust john mitchell to investigate richard nixon? impossiblethat's an question for me to answer at this point. >> it's an easy question to answer. it would not have been, and the attorney general has repeatedly called on a special counsel with the meaningful independence, and i would urge you to join that call because the integrity of the department and fbi matters beyond the political urgencies of the moment. one final question.

both you and the attorney general have repeatedly told this committee the investigations, the vigorous investigation, despite the fact nobody has been indicted, despite the fact many victims have not been interviewed. four days after attorney general holder sat in the seat and said it was a vigorous investigation, the president of the united states went on national television and told the american was,e categorically there "not a smidgen of corruption in the irs." the president's statement and the attorney general's statement four days earlier there was an ongoing, there is investigation are facially inconsistent. i would ask you as the head of the fbi, which of those statements was true, which of those statements was false? you isthing i can assure the fbi does not care about anybody's characterizations of a matter. we care only about the facts,

and we are passionate about the facts and are independent. >> mr. comey, you have been a lawyer long enough to know when an answer has been nonresponsive, and you have not answer the question. >> the senator's time has expired, or and i appreciate the director being here. i am stand our votes in a few minutes. if others have questions for the record, they can be submitted. thank you very much, mr. comey. as i told you we do except at this job, i appreciate the fact of your record in both democratic and republican administrations. i appreciate the fact you were willing to step forward in this position. i was also one of those who bill thatward the made the term of the director of one, a a non-partisan

seeding that of the president. i think that was a good move for law enforcement. we stand in recess. thank you. >> thank you, sir. [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute]

does care.

today. one is -- or two sections of our discussion. one will be presentations, one will be a panel discussion about what to do about it.

let pe first thank you to coming to this briefing on the ip transition what it means that america's telephone networks are essentially merging with the internet and how to regulate that. we have an interesting panel here today but let me introduce for those who don't know what the ip transition is, it's something that most of you probably have already gone through. you probably have already switched to using wireless phone for most of your needs or maybe you get voip from your cable provider or from a telephone company that is providing service through something other than the plain old system. so that transition isn't scary for most people but there are many people who haven't made that change yet and what we're talking about here today is finally transitioning those old networks into essentially being part of the internet. so we have here today hank and david from respectively at&t

and verizon who are going to explain what their companies are doing and what it means for americans, why they're doing it. and how it might offer better services. and then two experts who have been studying the transition jody griffin from public knowledge, out in front and articulating five basic values that they think should guide the ip transition. the f.c.c. seems to agree with them. the question is how to implept those values. and professor christopher yu from the university of pennsylvania law school will offer his perspectives on what tools the f.c.c. has today. so i will remind everybody watching that we're discussing this on the ip transition hash tag and we will take questions from the audience first after the initial presentations about what the ip transition is and then after our panel discussion among our experts today.

>> it's a pleasure to be here today to talk about the ip transition. but before we do what i want to talk about is another transition that's been occurring and that's directly related, and that's the transition of our networks from copper to fiber. of course it's generally understood today everybody knows that fiber to the home is the best broadband network possible and one that many are striving to obtain. when verizon started to roll this out ten years ago it wasn't so obvious and we got a lot of questions about why we were doing this. who needs 30 mega bits per second? but everybody knows today that we need much more than that which is why we're now up to

500 per second over the fiber and much more to come. so fiber is an important part of the ip transition and a basis for the ip transition. but the transition of voice from copper to fiber doesn't depend on ip and that's what i wanted to talk about for a few minutes. so fiber started in the telephone network many years ago. there aren't many in the room old enough to remember can disbergen's commercial and the pin drop. but what differentiated sprint's net work at the time was that it was all fiber and as a result the sound quality was noticeably superior to the existing long distance network. it was initially deployed in the long distance networks and then in the interoffice facility net works but fiber in the loop has also been around for a while. what i have for a slide is the picture of a central office and i'm showing the cop yer

connection from the central office to the house. this is the basic building block of the telephone network. in the central office there is backup power provided with diesel generators and batteries what power that copper loop to the home. and that's how basic voice was provided. fiber was introduced into that loop many years ago, 30 years or more, with digital loop carrier systems. fiber went out to a remote terminal that was out in the network somewhere and then from there copper connections were driven to the home. again, the power was provided at the remote terminal. there was commercial power there and then backup was provided through battedries primarily because you can't have big diesel generators out in the neighborhoods. that fiber is pushed ever closer to the home with new networks now. we have fiber to the node or curb. these are even smaller boxes in the neighborhoods that have fiber coming to them and then

use copper to provide that last connection to the home. again, with battery backup engineered for a certain period of time typically eight hours. and then finally fiber to the home. and here that optical network terminal is right at the customer's house and again battery backup is provided there for use storing power outages and what not. so how did fiber to the home, how did we start rolling out fiber to the home. we had our existing copper network that literally went to every home and business almost 100%. and we started by the easy thing to do is in the new build to just deploy fiber there rather than deploying copper. and we did that in some cateses. but the real significant thing that we did differently was to do a fiber overlay. and so where we had existing copper we ran a brand new network that was fiber that went past every home or business. and then as customers ordered the internet or television

service, we would connect them with a fiber drop wire to the house install the electronics on the side of the house and provide the service. so that -- we began that about ten years agent we've now built our fiber network to pass about 18 to 19 million homes and businesses. and the results in the marketplace have been very interesting. because what it shows is that the transition is actually well under way. i have a chart here that shows for those areas where we've deployed fiber where we have fyyose available more than half have left our network completely. they've gone either wireless only or getting service from a competitor such as cable. about 40% of the homes in those markets are getting our fiber service and less than 6% are on the copper network. so that copper network that was built out to serve 100% of the

customers that over the past 10 years has shrunk by more than 94% so it's less than 6% are on there. so as we look at why these remaining few have not moved over, in many cases it's because of concerns that the fiber is more expensive and they're going to have to pay more. and it's true that the way that we were deploying this was if you ordered the television service or the broadband service that was when we would install fiber. but that's not the case any more. and people who just want their basic telephone service over the fiber can now get that for no additional costs and for no install lation fees, the same monthly price, the exact same service in fact. and so i have a chart here that just shows for basic telephone service -- now, we have a fyose digital voice, an ip based

voice service. that's not what i'm talking about here. i'm talking about a person's plain old telephone service. they can have that moved from copper to fiber and get the same voice quality actually better because it's less vulnerable to interference static on the line and those sorts of things. 911 works exactly the same. health monitors, security systems, fax machines, all of these things work exactly the same because it's the exact same service. and there's no change in price and greater reliability. and again, i talked about the power and backup battery backup capabilities. that's part of it as well. so we're now reaching the tipping point where we have so few customers left on the copper that it really makes sense looking at how we can complete that transition and move those remaining customersen in a way that's acceptable to them but it has to be done from the copper over

to the fiber. and with that, i will turn it over to hank to talk about the ip transition. >> thanks, david. and thanks for inviting me to be here. that was really i think a great intro because when people ask me what is the i.p. transition that sort of the shortest sound byte version of an answer i have is that it is a transition from narrow band to brondband. and i think your discussion really brought out the broadband part. i'm going to talk a little bit about the pact switching part and what that means. at at&t we've been talking about the ip transition for what seems like a long time now. we filed our petition with the f.c.c. asking them to authorize trials of the ip transition back in nober of 2011. but actually the f.c.c. started talking about it before we did. in the course of developing the

national broadband plan in 2009, the f.c.c. sought comments on -- lltsdz it wasn't called the i.p. transition they called it the sunset of the legacy phone network. and in the plan that they ultimately adopted, they basically noted that the ip transition was inevitable because it would not in the long run be sustainable to maintain two networks. what are those two networks? what are the differences between them? that is what i would like to talk about for a few minutes here. really, at the highest level the transition from circuit switching to packet switching is a very fundamental change in networking. a circuit switch network, that's the traditional network, works by reserving capacity across the network. so between whatever users are using the network for the duration of the call. a very smart engineer once observed that the vaval -- that really circuit switching is useful to do when the relative

cost of transport is low as compared to processing. and so what moore's law has done is of course relentlessly lowered the cost of processing. and so this particular guy larry roberts back in i forget the 60s or 70s kind of predicted that the transition was inovettable because the cost was going to drop over time where the cost of transport would not change as fast due to the cost of civil engineering. so we're in that world today. in the circuits switch network you reserve capacity ton an end-to-end basis. what packet switching does is instead of reserving capacity it breaks communications up nool into small pieces and sends them independently across the network where at the other end of the network they emerge miraculously magically and are reassembled into a coherent stream. in a sense that's the

transition that we're undergoing in the i.p. transition. what technology perspective, the traditional phone network technology is quite old. so circuit switches, circuit switch transport, ss 7 signaling, these are the technologies that ultimately will be sunset. the interesting thing is what they're being replaced by is actually developments are happening so fast there that it's changing. in effect we are now at the same time as we are making this i.p. transition we're also changing the core of the network. we're moving from a network where we had specialized -- this is a fancy engineering term for you -- boxes. we had specialized boxes used to provide services to a network -- and now i will use a fancy term. i hope it's not too bad. where what we have is something called network function

virtualization where the functions, instead of being dictated by the pieces of equipment, will be software base, and offthe shelf routers will be able to provide any of the services that were previously provided by these specialized boxes. so this is a tremendous change in networking at the very core that's going on at the same time as we're making the transition to i.p. ultimately, the i.p. net work from a consumer perspective is a much better network because it's not designed for a single use. i mean, the phone network was really designed to do one thing which is provide telephoney. the ip network can provide an infinite number of uses and people take advantages of them every day. think of the ways you communicate, whether text messaging, video chat, social networking platforms like facebook. there's an infinite number of ways in which people are able to communicate using ip net

working. so the transition is a great boom for consumers from a technology perspective they have moved from dumb receivers or terminals of telephones to basically computers. customer equipment of the i.p. network. whether a small computer like a phone or a big one. david really laid out how the traditional network is descaling in terms of it was a network built for close to 100% of the population that's now being used by a spall fraction of that. we see similar trends on our network and do not expect that to stop any time soon. so our view is the i.p. transition is inevitable. it's well under way. what we want to figure out in concert with policy makers, public interest groups, other companies, is that how do we complete the transition in a way that works for everybody as best as we can? this is not something that's

going to happen tomorrow. this is going to take several years to do. at&t has targeted 2020 as our own internal target for hoping o sunset our t.d.m., circuit switch networks and we look forward to working with the policy makers, other companies, public interest groups to figure out how to make this transition as smooth as we can. >> ok. so i want to pause here and take questions from the audience about the i.p. transition, basic issues at play before we get into our panel discussion. but let me just ask you. maybe if each of you could just to clarify if you could just explain what the differences are as you see them between the two paths that your companies are taking, that will perhaps help set the stage for our discussion. >> so i wouldn't say that they're so much different paths. they're just different areas of

focus at the moment. our network is going -- undergoing the same transition from circuit switching to i.p. that hank talked about. and so the things that he talks about in the transitions that he talks about are happening. they are inevitable. and they are ultimately to the benefit of consumers and to the internet eco system as a whole. i think the difference is that we are so far along now in the copper to fiber transition that i think it's important to accentuate the differences there and the fact that, yes, most of our customers over the fiber prefer to get the i.p.-based communication service. but for those customers who don't want those, who want to keep getting the same old telephone service that they had in the past, that option remains, too. and i think that helps to remove some of the concerns that people may have that people will be left behind or that there are capabilities that won't be available. and so that's the main reason

inl i think for changing the point of focus right now. >> so just to clarify, because at this point i can it's lost for a lot of people. so even as you're transitioning, you're still planning to offer a circuit-switched telephoney service so there's two different dimensions here of the physical infrastructure and the way that the service is delivered. is that fair? >> that's absolutely right. and as i said, the vast majority of our kestmers prefer the new i.p.-based rich communication services. but we didn't want to require people who weren't quite ready to move in that direction on their own. we didn't want to force them to do that at this point. so we wanted to continue to make the plain old telephone service at the price with all the features and what not that they're familiar with available to them. >> i agree totally with david.

at the same time as we are working on planning for the sunset of the circuit-switched net work and the platform of system that is support it, we're seeing the same forces driving fiber deeper and deeper into networks generally. so whether we're looking at the business customer segment, the consumer segment, or wireless, in every one of those areas the market is going to continue to push fiber out closer and closer to customers for the simple reason that fiber provides greater performance and band width than any other physical medium. >> so in our panel discussion jody is going to start off by laying out some of the concerns that she and other consumer advocates have had. so we'll get into those. but for the moment does anybody have any questions on what the i.p. transition is, how it's going to work, the differences here to the extent that they're relevant? i'm happy to take those now.

anyone? if not, why don't we just get started then. so jody, you have done a lot of work in this area. why don't you give us a little historical perspective here and take us back to the kings bri commitment in 1913 if you would like. and if i may put in a plug for our previous program, which i think you'll also find on the c-span archives, was on this very topic. last fall was the 100th anniversary where there was a department here the of justice dropped a lawsuit against at&t. we had a debate at that point i think that harold was on that panel from public knowledge about in the long term was that really the best way to protect consumers and, or how do we apply those values in a world

where you no longer have one system, you have competing systems, cable companies and wireless companies and at&t and verizon. so you can start wherever you want there. kings bri public knowledge, up to you. >> ok. well, i will start by thanking you for having this panel and having public knowledge on it. i think since you've already described the commitment, i'm going to start with values, which was mentioned earlier, because that's really been a big focus of public knowledge as this debate really got under way at the f.c.c. and with at&t's petition to start trial. so from public knowledge's standpoint, we've -- we have have identified basically five fundamental values that underlie what the u.s.'s policies have been for basic communication service, which up

until now has really been basic voice service over the traditional phone network, and we think that it's important to identify what those values are and understand what it means to achieve the goals set out in those values ahead of time. because i think otherwise you'll just as we move into this transition it will just become a battle of the wish list between the various stakeholders and there won't really be any guidesing principles to figure out where do we want to go and how do we know when we've gotten there. so for us the five fundamentals were universal service, which includes basic buildout, in the past we've handled this with implicit and explicit subsidies. it also includes things like disabilities access, making sure we're getting to everybody not just based on geography but also what are their needs in

terms of a basic communications service. second, we had interconnection and competition, interconnection policy actually in the past has play add role as universal service as well. so you'll notice there's some overlap between the policies in terms of which of these five fundamental values that serve. but interconnection is also an important competition policy nowadays. and local number portabilities. so making it easier for people to switch from one provider to the other is important in order to keep their phone number. 's a big disadvantage to switching if you can't take your phone number with you. so that's important. third, we had consumer protection which is we see as privacy rules and then just basic protection against fraud and being able to have a place to redress your complaints in a meaningful way for us it's been the f.c.c. and depending on

what state you live in there may be redress available at the state level as well. and fourth, we've had network reliability. so for us we see this as two components. one is what happens during emergencies. you know, during a hurricane, after an earth quake, how do we make sure that the network is as robust as possible before the disaster strikes and then how do we get it back up as quickly as possible afterwards. and then a second part of reliability is just kind of the basic day-to-day how do we make sure that the network keeps functioning? i think up until this point the u.s. has done a really good job of making sure that we have a phone network that everybody can rely on in a way that we kind of take for granted now because it's just always been there and we know that you pick up a phone you're going to hear a dial tone you're going to be able to call someone. that call is going to go through. they'll be able to pick up,

you'll be able to hear each other. it's very basic stuff that i think is just part of the network. >> i have to interrupt here. have you used a cell phone recently? >> i have. and i've also had dropped calls. when we were planning this panel, my cell phone dropped. >> with dial tone sometimes you don't know the network is changing. >> the traditional phone network has been very reliable. it hasn't been perfect but i think it's reached the point where people can just assume that it's going to work because it so often does. and then there's also just basic mechanisms, like how does the numbering work. who takes care of that? you know just kind of these things that we don't tend to think about and i think that it's good that you don't have to think about it because it should be seamless from the consumer perspective. and finally we have public safety which is 911. in this area we have more

recent legislation so i think we're a little bit ahead so to speak than certain other areas of the transition. but there's certainly the question there of how do we make sure that 911 service will continue to be reliable? how do we coordinate the work between the federal government and the state and local governments to make sure that we're seizing new opportunities to make it easier for people to access 911 and at the same time not losing any of the reliability that we had before. so those are the five fundamentals that pk articulated. we've seen other players also articulate very similar fundamentals. at&t put out some that were very similar, the f.c.c. put out some very similar. which i don't say to mean that anybody is copying anybody else but i think that we're all arriving at the same conclusion. because it's just that's what the basic values are. so i think that's why you're seeing multiple stakeholders

with different incentives as we go into the transition coming to the same conclusion about what are the basic principles that are guiding our network. so i can -- i could talk for hours but maybe i guess i'll pass it back tor you. >> i think that helps set the stage. we haven't mentioned one important part which is that there is right now a set of trials going on at the f.c.c. has authorized. christopher, do you want to just give us a brief update of that? and then we'll turn to the larger policy debate. >> sure. i was going to try to step back and try to see if i can clarify the issues on a little bit of a broader level. so when we began our communications network, we had first came across actually with tell graph but we had voice communications first via wires and then we had radio, audio communication over the air waves and it became video. and they didn't meet. so we had one transmission mechanism dedicated to wires and voice spectrum and video.

so all these things started chipping away. so we saw first cable television. we had a way to do video over wire. now, it used a different mechanism for what we call encoding but a special way to communicate that wasn't compatible with phone communicae that was not compatible with phone or over the air. then we sought saw wireless telephony with voice over the air. the internet is putting together not just media but the means by which we communicate. any of those can be voice, video, e-mail, gps -- mapping services. whatever you need it to be, that uniformrun across a protocol called the internet protocol or what we are calling ip. we used to have separate networks dedicated to different applications. one network just for voice, one just for video and one just for e-mail. if you are on the